Global Mobility Study Reveals That International Assignments Will Increase

Research by Towers Watson and workforce mobility association Worldwide ERC® has revealed that multinational organizations are continuing to increase the number of employees that they relocate overseas, despite the fact that they anticipate a number of global mobility challenges.

Of those companies surveyed as part of the research, 45 percent revealed that they would be increasing traditional international assignments, with companies that are based in the U.S. being expected to relocate more employees abroad (54%) than those that are based in Europe (26%) or Asia (43%). However, the ERC 2012 Global Talent Mobility Study also indicated that global mobility is becoming increasingly difficult for many companies. According to information published in The Economist, the cost of relocating employees abroad is becoming an increasing problem, with over 75% of companies claiming that a “traditional” overseas assignment, which usually involves relocating an employee and their family for three to five years) involves expenditure that amounts to two to three times the expat’s annual salary. Of those involved in the survey, 69% cited prohibitive costs as a major challenge, 55% high housing costs and 51% mentioned cost-of-living allowances (51%). Discussing the findings, Peggy Smith, chief executive officer of Worldwide ERC, commented: “Having a fluid and flexible workforce is a key competitive advantage for multinationals operating around the world today.

“Particularly in a shaky global economy, companies will benefit from being able to transition smoothly to newer, untapped markets. This driving business need is the reason why we are seeing more multinationals turn to, rather than shy away from, developing an effective cadre of internationally mobile employees (IMEs), despite barriers of culture, language and cost.”

In order to offset the costs associated with relocating employees, Towers Watson advised companies to consider alternative types of assignments that emphasise the benefits of knowledge and skills transfers, but are cheaper: “As mobility becomes more significant for companies, it is important for them to consider all facets of an international assignment,” said Steve Kueffner, senior international consultant at Towers Watson.

“Taking a stand-alone approach will not allow multinationals to compete effectively in the war for talent — they would benefit from having an integrated talent management process, which involves all stakeholders (including the individual to be transferred, who is sometimes excluded, as well as senior business leaders in the home and host countries), rather than just HR. Without this integrated process, companies run the risk of overlooking key issues that might impact the success of the assignment and also not realizing the full potential of their highly skilled IME talent. Given the significant cost of these assignments, these are not issues that multinationals can afford to overlook.”

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