An international assignment of 3-5 years is usually considered as Long Term Assignment. One of the reasons that it is becoming extremely more expensive for MNE’s is due to the nature of the job scope and the International Assignee’s (IA) personal considerations. Interestingly, according to the 2009 Global Relocation Trends Survey [ (Brookfield Global Relocation Services, 2009) ] report, when multinational companies are relocating their employees for assignments overseas these days regardless of short or long term, they tend to dispatch older and more experienced employees due to the low risk of assignment failure.
This is one of the reasons why it has become increasingly and extremely more expensive for MNE’s [ (Harzing, 1995) ]. Following the expatriate demographic provided by the survey, family concerns sit on top of the chart which remain the most overwhelming reason of 92% for assignment refusal and also the top reason for early returns from assignments which recorded at high of 27%. Historically, the top five challenges over the years of the survey have been family adjustment, partner resistance, difficult location, children’s education, and partner’s career [ (Borstorff, 1997) ]; [ (Brett, 1995) ].
These are also the reasons why it is difficult to find the right candidates with the right experience to fill the vacancy for long term assignment [ (Shaffer, 2001) ]. Antidotes for the Poisons – Exploiting Other Alternatives Due to the above dilemma faced by most of the MNE’s, they are now looking at other alternatives which can provide them with the best ‘antidotes’ to the ‘poisons’ that are stinging them. The ranges of alternatives of international assignments that the multinational companies can consider apart from the long term assignment include short term, self-initiated, commuter, and virtual assignments.
Short term assignments This type of assignments can last from a few weeks to months. According to the PricewaterhouseCooper’s survey 2001, there is a sharp increase of almost 60% in the popularity of companies implementing this approach in their respective organizations. This is due to the nature of these assignments which give the companies an ‘instant’ solution in resolving skills shortages and are in general easier to manage [ (Solomon, 1999) ]. Apart from that, in comparison with the long term assignments, short term assignments imposed lower cost to the companies due to the assignment length and duration.
In addition, companies do not need to spend on relocation on their entire employees’ family and it is also a good means to circumvent family-related problems which can be seen in most of the traditional assignments such as family upheavel. Self-initiated assignments Over the years, there is this trend that is growing in numbers where the assignees make their arrangements to find work abroad and are employed on local work contracts. According to [ (Suutari, 2000) ], they have identified a series of distinct characteristics of the self-initiated assignees as compared to traditional expatriation.
These characteristics, which may not be that ‘bull’s eye’ accurate, however does speaks most common assignees may have and practice. These include young and single, be more motivated in moving abroad due to interest in internationalism and poor employment situations at home, working for companies at lower hierarchical levels, and receive no repatriation promises and view their relocation as a more permanent move. The benefit of recruiting the self-initiated assignees is that it can offer companies the potential of not having to undertake preparation.
In fact, the assignees recruited could have been resident in a particular location for years where they are well blend with the socio-cultural of the place. One of the drawbacks is that the assignees are not familiar with the organizational culture which until a certain extent where such familiarity is important will be driven by the nature of the assignment. Commuter assignments This type of assignment involves employees commuting from their home to an office in another country by means of travelling by land, sea or air.
One of the examples would be employees travelling by airplane on a weekly or bi-weekly basis [ (Assignment types explained, 2012) ]. In contrast with short term assignments, the commuter assignments allow company to fill in the skills shortage without disrupting the employee’s spouse’s career or the children’s education or family affair. This gives the assignees the opportunity to work abroad without leaving their home when carrying out their assignments. However, the drawbacks of the assignment are the quality life of the assignees may be affected.
This is due to the likelihood of the assignees returning late from work due to the unspeakable distance of commuting and not to mention the fatigue due to the travelling journey. This affects the communication and the quality time between the assignees and their family which further prolong may affect their emotional and indirectly affects their productivity in the company. Virtual assignments The assignees manage the variety of international activities across several countries which do not require the assignees to be physically relocated to a foreign organizational unit.
Although relocation is not necessary but extensive travel is inevitable. The advantages of a virtual assignment seem to be overwhelming over the traditional expatriate assignment. Firstly, the assignees are less expensive due to their wages are paid on local basis (without expatriate allowance) but perhaps with travel expenses. With the increasing use of video conferencing and other communication development, it has narrow down the possibility of this approach and making it less necessary in the future.
Secondly, there is no need for any special scheme for the assignees such as insurance, foreign social security, and pensions as they can stick back to only local scheme. This gives the company another cost saving solution and as well as cutting on the unnecessary procedure in establishing a new scheme for the assignees. Lastly and most importantly, the assignees work-life balance is not tremendously affected. The assignees do not need to move their family abroad and their children’s education are not affected. The current trend of expatriation 2011
As the global economy continues to improve, more and more companies are increasing their presence in the emerging market where international assignments have become key aspect in the global economic recovery. Following the reliable source from the 2011 Global Relocation Trends Survey published by Brookfield Global Relocation Services [ (Brookfield GRS 2011 Global Relocation Trends Survey Report, 2011) ], China is where they are heading. According to the survey, China ranked the most common new destination followed by Brazil, India and Singapore.
In terms of difficulties, China still sits on top of the list followed by India, Russia and Brazil. This gives a good reflection of the assignee volume going into these locations and the competition for housing and schooling will create delays and difficulties to the relocation and at the same time giving negative impact on the relocation experience. Conclusion In order to draw a bottom line on the above discussion, I personally view that self-initiated assignment would be the acceptable form of assignment from my generation.
The current trend is leaning more towards modern thinking and not being hold back by the conventional belief and thinking. Take for example, the young adult nowadays do not rush through their marriage at early age and the average marriage age have increased to over 30 years old in contradictory with 18-22 years old during the olden days. This has indirectly give an impact to the working trend where employees remain single till the age of over 30 years old and they tend to be mobile and not restricted to family pressure or spouse’s career.
Coming to this modern generation, we are starting to adapt to a very competitive environment where the local market is getting more and more saturated. In order to overcome this matter, we have to go out from our home country to get a well-paid jobs rather than saturating further in the local market. Therefore, this type of assignment is some kind of ‘killing two birds with one stone’ where companies can expect to save cost by hiring these assignees on contract basis and the assignees can expect to earn higher foreign exchange rate wages overseas compared to working in their home country.
Considering the mutual benefits from this type of assignments, in the coming future we can expect to see the self-initiated assignment to gain popularity among the companies and also the prospective employees.