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Housing Woes Hinder Efforts to Shorten Stays

Companies that want to increase retention for their valuable overseas employees by shortening their assignments are quickly discovering a major stumbling block: Adequate short-term housing is difficult to come by.

May 16, 2006
Companies that want to increase retention for their valuable overseas employees by shortening their assignments are quickly discovering a major stumbling block: Adequate short-term housing is difficult to come by.

Employers have been bedeviled by failed foreign assignments for years. Attrition among expatriates is more than twice the 10 percent rate in the general workforce, according to a survey by GMAC Global Relocation Services, based in Woodridge, Illinois. The "Global Relocation Trend Survey" polled 125 small and large companies.

Some 21 percent of expatriates leave their companies during an assignment, according to the study. The problem often lies with family matters, such as the strain of being separated from loved ones or having an accompanying spouse who becomes dissatisfied with the job prospects in their new country of residence.

And that’s why companies are trying to reduce the duration of those postings, according to Helen Sharman, vice president of client services at Saunders 1865, a U.K. relocation specialist. The new assignments may be more along the lines of six months rather than the conventional three- to five-year postings that require family relocations. The shorter assignments make it less psychologically taxing to take on the challenge of being an expatriate, Sharman says.

Companies may be willing to change their foreign assignments, but the market has yet to catch up with their needs, Sharman says. The shortage is particularly acute in burgeoning Asian business centers, such as Shanghai, China, Beijing and Mumbai, India.

Frustration with temporary housing overseas seems to be widespread. Some 71 percent of respondents in a recent Saunders survey said they were dissatisfied with accommodation arrangements for expatriates. The company polled 216 employers.

In many cases, the dissatisfaction is attributed to unmet promises, Sharman says. Difficulties can arise if an expat is offered accommodations in a central location but is instead placed on the outskirts of a city, or if an expat is told to expect certain amenities, like a cleaning service or high-speed Internet, but nothing of the sort is available.

Getting out of a temporary housing mishaps may prove to be a costly undertaking, particularly if a lease or contract has been signed. Depending on their size and needs, companies can protect their expatriate employees by dedicating a person to be responsible for vetting accommodations overseas, or by outsourcing the task.

"What is important," Sharman says, "is making an expatriate’s international experience as positive as possible."

Gina Ruiz