Multinationals expect to grow their expat assignments

More than 40% of the multinationals expects an increase in expat activity in 2016, research by Mercer among more than 800 multinationals shows. Particularly short-term assignments and one-way transfers are popular.

To gain insight into worldwide labour mobility of professionals working for multinationals, Mercer recently conducted research among 831 multinationals, which together employ around 29 million people.

Currently, 98% of multinationals offer a long-term spell abroad, with 81% of firms doing so for short-term placements, while one-way transfers are supported by 63% of the surveyed employers. Key reasons for expat-placements are, among others, a lack of specific technical skills locally, ensuring knowledge transfer, the provision of specific management skills and facilitating leadership development.

The survey reveals that across the mobility chain, the demand for working abroad is set to increase next year, with a rate that is above that of the previous two years. Short-term placements lead the pack with 56% of multinationals seeing an increase in these assignments, followed by permanent transfers (54%), development and training assignments (50%) and locally recruited foreigners (47%). “Companies are using a more varied range of assignments in order to respond to evolving business needs and changing patterns in the global workforce,” explains Anne Rossier-Renaud, Principal in Mercer’s Global Mobility Business.

The majority of long-term assignees (66%) are those aged between 35-55, while most employees younger than 35 often are assigned to short-term placements (up from 43% in 2013 to 48% in 2015). With an average share of 10% and 7% respectively for long-term and the short-term assignments, the 55+ age category is underrepresented in international mobility.

From a geographical perspective, 41% of multinationals expect more assignments in distant locations. The US, China, the UK, Singapore and Brazil are the countries where most jobs are expected.

Obstacles
Asked for what the key barriers are for moving abroad, 37% of respondents cite ‘family issues’ and ‘dual career’ (the career aspirations of the spouse) as a large or very large obstacle for international labour mobility. The percentage is, however, down from 64% in 2012. The costs associated with moving are seen as the second main barrier, with remoteness of locations also giving professionals headaches.

To support professionals with their mobility, multinationals tend to have all kinds of procedures and processes in place. The report shows that 85% of companies have a policy for international assignments (up from 81% in 2012). The results also reveal a marked increase in companies with multiple policies (64%, up from 57%).

According to Rossier-Renaud, this is due to a trend of greater variation in types of assignments. “One policy is unlikely to fit all, and such an approach can lead to inadequate compensation which again can make it difficult to attract and retain talent. Implementing fit-for-purpose policies, to suit both different assignees and assignments, can be a highly efficient cost-saving initiative for most global mobility functions.”

In practice, however, not all expats placements proceed satisfactorily. The researchers identified the main reasons for failing policies, both at an individual and corporate level. Poor candidate selection is the main cause for financial detriment, followed by difficulty to adjust to the host nation – the clear # 1 factor three years ago, poor job performance and spouse unhappiness, all on a joint second spot with 41 % of the respondents citing this.

The consulting firm also looked at how multinationals are keeping track of the return on investment (ROI) coupled with mobility assignments. The results reveal that 91% of multinationals have reviewed, are reviewing, or plan to review their international placement programmes. However, many of these programmes lack an approach to measure the ROI.

In particular the use of hard numbers, such as metrics, is lacking: 90% of multinationals do not make use of such metrics. In addition, the gap between projected and actual project costs is tracked by less than half (46%) of the organisations, all in all leaving significant grey areas in the management of mobility strategies, highlight the researchers.