Mercer: Expat assignments highly valued by multinationals

05 March 2014

The number of expat-assignments will rise in the coming two years; this follows Mercer’s international investigation. Mainly this can be ascribed to the global economic recovery, and the international mismatch between bid and ask regarding talent.

In the annual recurring report ‘Multinational Employers’ Mercer analyzed the expat-policy of large multinationals. The edition from 2014 shows that organizations are gradually leaving the economic crisis modus behind and focus more on opportunities for expansion. From this, 50% of the organizations point out that, in contrast with past times, upcoming two years more managers will be stationed abroad. This increase concerns all types of occupational send outs, both in the short-term and in the long-term.

''On a global scale the improving economy forces small and large organizations to fight for hiring the most suitable employee.  To both employer and employee, international working experience is a prerequisite'' as quoted by Ellen van Arenthals, Expat consultant at Mercer.

Expat opdrachten weer in trek bij multinationals


A big difference with previous years is that organizations expect to become more critical towards the match between foreign roles and the added value of placing an expat.

''Compared to previous years, organizations' focus will be aimed on fitting international assignments to strategic- and operational goals, more and more. That is ofcourse a risk consideration being made from a HR-point of view, but also, time, effort and financial issues are important. An international placement should bring about the most ideal yield possible. An assignment that does not fit an organization’s goals or the employee, is a waste of time.'' Says van Arenthals.


Conclusively, large multinationals report they want to cut wages even more. Looking at costs associated with sending an expat, this is not surprising: the total costs of moving an employee and family abroad, accommodation and compensation easily weigh up to three basic monthly salaries. This is what makes an international placement, even though often unavoidable, a financial risk. ''The traditionally splendid send outs make way for alternative send outs where reimbursements are matched with the kind of send out'' predicts Mercer's advisor.


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High employment drives deals to access fresh talent

09 April 2019

The UK continues to have a historically low unemployment rate, resulting in a tightening employment market and demand for recruitment services. The industry topped £12.3 billion last year, while valuations continued to rachet up. There were were 32 firm acquisitions in the recruitment services space last year, up significantly on the previous five-year average.

Labour markets globally are tightening, particularly in developed economies. At the same time, access to top talent is becoming increasingly difficult to source, as demand for that talent continues to rise. Higher demand has been one of the key drivers for acquisitions in the space. New analysis of the recruitment M&A market, from consultancy firm BDO, looks at current trends and future projections for activity in the segment.

The UK employment rate has grown considerably over the past decade, with the number of NEET decreasing, more women joining the workforce, and older people continuing to work, among other trends. Participation rates hit more than 75% in 2018, up from around 73% in 2014. The unemployment rate dropped to 4.1% last year, the lowest level in more than 40 years.

UK Recruitment Market


The recruitment industry has enjoyed strong growth over the same period, with revenues increasing from around £8 billion in 2014 to £12.3 billion last year. However, the growth rate for the industry is expected to stall for the coming years – the firm is projecting annual growth of 0.1% to 2024. The stall reflects deep seated uncertainties stemming from the future of the UK, from migration to internal employment in an increasingly uncertain future.

According to the firm’s analysis of market trends for UK listed FTSE recruitment companies, their performance over 2018 outperformed the wider FTSE market by a significant market during some months – the end-of-year uncertainty hit both recruitment and non-recruitment firms with relatively equal strength. The drop partly reflects market sentiment about the future of the UK.

FTSE Listed Recruitment Firms Average EV/EBITDA Multiple


The study also considered the multiples growth, average EV/EBITDA multiples, over the past year – which has shown considerable ups and downs. The yearly average multiple of 10.4x was above that of 2017’s 9.9x – although a 26% drop at the end of the year was significant. The drop was tied to the relative volatility in macroeconomic conditions affecting the globe, though another major contributing factor has been Brexit and political instability.

Global M&A

The global recruitment M&A market was particularly active in the UK, with 32 deals last year – a five-year high, and well above the 17 recorded for second-place US. Deal activity in the UK was focused on expertise and capacity in industrial and technical sectors, reflecting skills shortages in those segments. The US was largely focused on healthcare-related M&A, representing 25% of their market.

Overall, of the 92 deals in 2018 (a 21% drop on 2017) generalist firms were the most in demand, at 25% of the total, followed by education at 14% and engineering & construction at 13%. Software saw relatively low demand, at 2%.Investment into the UK by country

In terms of investments made into the UK, domestic investment continues to be the most dominant, accounting for 24 deals. Japan made three deals, although Brexit is seeing the country become increasingly nervous about investment. The US accounted for two deals. The longer-term trend shows that domestic investment is up on 2017, hitting the highest level in five years, while the US has reduced its M&A investment into the UK.

Commenting on the results, the firm noted, “The latest report shows the recruitment sector remains strong and continued to grow through 2018 despite facing many challenges. Notwithstanding the personalised nature of these services, the market continues to evolve, seeing traditional recruitment firms utilising available technology along with new entrants showcasing innovative platforms.”

Related: High UK employment masks troubled economy.