More Employees Go Abroad as International Operations Grow

June 21, 2006
M ultinational corporations are handing down to key employees more global assignments, a newly issued study has found.

    The study, by New York City-based Mercer Human Resource Consulting, surveyed an estimated 200 multinational firms across a variety of industries on the frequency of their global job assignments.

    Such jobs vary from short-term stints lasting up to one year to long-term missions taking up to five years. The upswing in global assignments, says Mercer’s Gareth Williams, shows companies increasingly need to fill skill gaps at international branches. And they want to broaden executives’ global understanding of operations.

    "I think we’re going to continue to see it increase," Williams says. "Organizations need to become more globally integrated."

    The study’s key findings include:

  • 44 percent of multinational companies increased the number of international assignments from subsidiary to subsidiary over the past two years.

  • More women received overseas assignments during the past five years. International assignments for women working at companies based overseas increased from 8 percent to 13 percent; and grew from 11 percent to 15 percent at companies based in North America.

  • Short-term assignments are widely handed out, but only 56 percent of companies have a policy governing such assignments.

  • Sixty percent of the companies provide cross-cultural training for international assignments, but once in the host country employees are typically left to learn and adjust to cultural differences on their own.

    Mercer’s study notes perceived corporate policy gaps, such as defined assignment policies to manage risks and costs.

    The study found that 84 percent of multinational companies put employees on short-term assignments, and about half of those organizations have a formal policy for such jobs.

    Yvonne Sonsino, a principal with Mercer in London, says employees need help with learning local business customs and culture. When a company invests so much on an employee’s assignments, she says, such training is needed to make sure the mission succeeds.

    Laura Anderson, a spokeswoman for Intel Corp., has fulfilled two short-term job assignments in Hong Kong for the company since 2003. Each stint was three to four months, she says, and involved finding her own housing arrangements. Her job included working with company teams from a dozen Asia-Pacific countries.

    While she had no data on how many Intel employees have been given overseas assignments, she suspects that most of them, like hers, have been short term.

    Intel’s strategy behind her overseas assignments, which she thinks generally applies to other managers and executives given such tasks, was to round out her job skills and bring needed expertise to overseas staffs.

    Anderson’s assignments mirror a trend picked up in the Mercer study: that of women employees getting more international assignments than in years past.

    For Asia-Pacific companies, women account for 14 percent of out-of-country assignments, the Mercer study found, up from 9 percent five years ago.

    The biggest change in expatriate tasks for women, meanwhile, has taken place among Latin America-based companies. Five years ago only 1 percent of their expatriate employees were women. Now the figure is 11 percent. European-based companies have lagged in the trend, with women making up 10 percent of their expatriates, up from 7 percent five years ago.

    What that trend means to Mercer’s Sonsino is that it "may strengthen the need for well-defined spousal support policies" among multinationals handing out international assignments.

    Half of the companies surveyed provide some kind of spousal support as a policy for married employees getting an international assignment, the study found. Others are developing such policies, or handle spousal support on a case-by-case basis.

    Incentive pay to those asked to do a job in another country, called a "mobility premium," is provided by 78 percent of the companies surveyed. But 73 percent provide premiums for long-term assignments, while only 31 percent pay them for short-term jobs.

    Nearly three-quarters of companies surveyed help the employee and family heading overseas by providing tuition for language and cross-cultural training.

    And 60 percent of the companies in the survey, including 75 percent of North American and European companies, help with moving arrangements, visas, visits to the host country, tax advice and accommodations.

    But the Mercer study also found employees and their families are often on their own to figure out how to understand the local business and culture once they arrive at their new post. Less than one-third of the companies surveyed said they helped with introductions to other expatriates in the new location, for example. Mercer’s Williams says that’s most likely due to cost constraints limiting a company to pay for more practical day-to-day employee support.

    In the case of Intel’s Laura Anderson, language and relocation played out a little differently from the study’s findings. Because English is commonly spoken in Hong Kong business settings, Anderson didn’t encounter much of a need to know how to speak Mandarin.

    She says she had to figure out her housing arrangements on her first three- to four-month stint in Hong Kong in 2003. She found that apartments had e long waiting lists and cost about the same as a hotel. So she ended up staying in a hotel.

    But for her second job there last summer, Anderson did her homework on the Internet before leaving. She found a large expatriate Web site in Hong Kong. She found recommendations on the best place for her to stay. All was arranged when she arrived, and was paid for by Intel.

    Globally, 42 percent of the companies surveyed provide free housing, but only 22 percent of the North American companies do so.

    The study found that the companies surveyed know the cost of their international assignments, but "only a few" can measure their return on investment.

    For Intel’s Anderson, the two short-term assignments exposed her to a side of the company’s business and media relations she’d never experienced before.

    In China, a flashy fashion show helped showcase Intel technology, and the press responded with strong coverage. There, unlike in the United States, a special show of some kind wrapped around a core-product marketing event is key to attracting media interest.

    That and several other Asian media relations encounters opened Anderson’s eyes during her short-term Hong Kong assignments.

    "For me," she says, "it was a tremendous growth experience."