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International Assignments Best Served by Unified Policy

Standardization is not the norm, however, despite the ability to reduce costs and minimize the perception of favoritism.

February 16, 2006
Related Topics: Relocation Management, HR & Business Administration
If DuPont builds a paint chemical factory in China, the company might transfer engineers from Mexico and the United States to work on the project. Until recently, the relocation guidelines for moves from each country were different.

    Now DuPont has streamlined 14 different international assignment directives into one global policy, decreasing the chances that ad hoc negotiations will increase costs and stir resentment.

    "If you’re an expatriate working alongside another expatriate and you’re being treated differently, it creates a lot of dissension," says Christopher Tice, manager of global expatriate operations and relocation services at DuPont.

    DuPont has centralized all expatriate programs in its Global Transfer Center of Expertise. Putting one policy in place for the company’s 300 to 400 annual international moves has reduced administrative costs by 30 percent and given globally mobile employees a better idea of what to expect. "They know everybody is getting one package, and it’s all laid out for them," Tice says.

    International relocation can be complex, so exceptions will arise. But instead of individual divisions making decisions on issues like educational compensation for a child going to college, those matters are submitted to a global board.

    Standardization of international relocation, however, is not the norm. A recent study by Mercer Human Resource Consulting found that 25 percent of multinational corporations do not have a benefits policy for globally mobile employees, 30 percent have no formal governance procedures and 11 percent have never reviewed their policies.

    "They’re leaving it to individual negotiation to determine what (benefits) to provide, which can be dangerous," says Peter Blake, a Mercer principal. "You get the snow­ball effect of precedents."

    Maintaining equity in international relocation is crucial because the moves usually involve senior people in a company. "They might be small in number, but they’re high in value to the organization, so it’s important to treat them fairly," Blake says.

    As globalization increases, the definition of an expatriate is changing. "We’re seeing more and more nontraditional assignments," Tice says. "As this international community strengthens, we don’t have people with a home country."

    For instance, a worker may leave her native England and move to the United States, Switzerland and China without returning to England. That kind of movement is making it difficult to determine which country’s laws to use for benefits like pensions. "Right now we’re struggling with it," Tice says.

    Even as some expatriates wander the globe for their entire careers, the number of temporary international assignments is increasing, says Nichola Holt, a partner in the international assignment services practice at Deloitte.

    Sending employees abroad for three- to 12-month projects gives companies flexibility, lowers costs and offers an opportunity to instill loyalty among its employees. For a worker, a limited international stint offers a new challenge that can add luster to a résumé but doesn’t require uprooting a family.

    "It can be a motivating activity," Holt says. "It’s something quite exciting."

    Short-term international assignments also appeal to families that depend on two incomes. One partner can go abroad without forcing the other to find a new job in a foreign country.

    Whether companies are sending employees into the world forever or for only a few months, they are becoming more fastidious in accounting for them. With the advent of the Sarbanes-Oxley law, mishandling immigration, payroll and tax issues can be costly.

    "Companies are getting a lot tighter on controls," Holt says. They "have become a lot more rigid in making sure their policies are documented well enough."

    But the most important dimension of international relocation remains those who are moving. They often are senior executives and high performers. "You’re talking about the key skill sets for the future of DuPont," Tice says. "So you want to make them feel they’re special."

Workforce Management, February 13, 2006, p. 36 -- Subscribe Now!

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