The Importance of an Assignment Policy
Globalization has led to a significant rise in the number of international assignments being orchestrated by global companies. Yet, with increased costs, legal risks and personal complications, can an International Assignment Policy really have an important effect?
International assignment is on the rise, very simply for the reason that organisations around the world are going global. Whether for career development, transferring skills, filling a crucial vacancy or providing specific expertise on a project, assignees are required for various reasons. Yet, with all of these different reasons, assignment locations and types of assignees, how can a company maintain any sort of order and consistency? The answer can be found in a well-constructed international assignment policy.
Some might argue that an assignment policy isn’t warranted. Well, if you’re already spending the 2-5 times more on an assignment employee than a local employee, it’s worth the time and money. Ultimately it will save you a lot of each in the long run. There might be some organisations afraid of assembling a policy due to a lack of experience in global mobility, but with the help of lawyers (advised anyway) and other global mobility specialists, this can be a much easier job. So, then there’s the next fear: a static and expensive (although great as it covers everything) assignment policy. But with some flexibility, this is far from true. Flexible assignment policies have been rising in popularity, allowing core benefits to be included in all plans, but lowering costs while maintaining transparency and a solid framework.
The assignment policy has a great many advantages. For large multinationals especially which could have 50 or more home or host countries, a policy can ensure that each of its locations is operating correctly. With approximately 75% of the companies surveyed in the KPMG International Assignment Policies and Practices Survey 2013 concerned with issues of global compliance and payroll, it is no surprise that assignment policies are of the utmost importance. A policy will allow a clear and thorough construction of the mobility process, to ensure that key elements aren’t missing and that tax, benefit and payroll issues are all formalized. Employees are also less likely to negotiate their assignments, using past examples to leverage their own assignment package whilst adding embellishments of their own. Without a policy, soon enough the benefits being offered assignees can be growing exponentially, along with the cost.
So what needs to be considered? First and foremost, it’s important to get the definitions right: business trip, short term assignment and long term assignment all vary from company to company. Then there’s cost – this needs to be considered and calculated well in advance so that everyone involved can sign off on the expense. Tax and changing legislation also pose big problems. As well as having an assignment policy in the first place, it’s important to have an up to date one. Ensure that the policy is regularly updated with regards to immigration, data protection and tax; otherwise there could be some nasty financial surprises around the corner. Finally there are the benefits of a policy to consider. You need to be competitive as the ‘war for talent’ is still raging and how else can you convince your employees to consider work in areas that could be dangerous or more rustic than they are used to? Different types of assignment will require different benefits, but different types of assignees will also require this flexibility. The ‘typical’ family is in decline, with the KPMG 2013 survey reporting an increase in divorced, split family and same sex marriage assignees, so be prepared to be sympathetic to a range of personal needs.
An international assignment policy acts as a checklist, legal safety net and a rulebook for any company moving personnel internationally. For those attempting assignment without one, I wish you luck. You’ll need it.