When a company decides to send an employee to work in another country, many processes are set in motion that the global mobility (GM) team will manage and co-ordinate throughout the lifecycle of the international assignment. In our first post on this subject we followed what happened to ‘Anna Signee’ in the pre-assignment phase, from recruitment and selection through to the preparations for Anna and her family’s relocation to China.
We now re-join the Signee family in China where they are settling in with the help of a destination services provider. The job of the GM team is also by no means finished; in this post we will look at on-assignment management elements, right up to the planning of the end of assignment and repatriation.
On-assignment tasks carried out by GM can typically be categorised as ongoing support, performance management and salary management.
While on assignment, the GM team may assist Anna with matters such as the management and payment of rent and school fees, lease extensions and home leave trips, as well as ensuring the employee and company are at all times compliant with immigration and tax regulations.
In addition, Anna’s company offers a partner support programme through which her husband Ian has managed to enrol in an MBA course. Around a third of companies now provide such a benefit for accompanying partners, which serves as a great incentivisation for employees to accept and successfully complete international assignments by mitigating concerns about partners’ careers and personal development. Providing partner support can also improve the company’s reputation, setting it apart from the competition in order to attract and retain the best talent.
Ongoing support may also involve addressing unforeseen circumstances relating to medical issues or even security concerns. How should a company react to unexpected natural disasters, political tensions or, more specific to this example, increasing levels of air pollution? Whilst throwing money at the issue by increasing Anna’s location allowance may seem like a solution, the company has a duty of care towards their employees and could better support Anna with practical solutions such as providing air purifiers and/or additional home leave or rest & recuperation trips.
At the same time as providing ongoing support, organisations will monitor the assignee’s performance in the host country. Most will focus on technical and organisational performance, whilst some might venture further in assessing intercultural and developmental performance throughout the assignment. A well-oiled performance management system will play a key part in effective talent management and in measuring the return on investment (ROI) of international assignments.
Managing assignee salaries can be complex, consisting as they do of numerous different elements. Typically, companies will carry out an annual salary review as they would for local employees, considering performance as well as inflation and to ensure the salary remains competitive. For assignees like Anna, however, who are paid a home-based package, several additional elements will be reviewed which affect the net assignment salary. The cost of living index will change due to a change in exchange rate as well as a change in relative inflation between the host and the home locations. The location allowance may change as well, either increasing or decreasing according to changes in living conditions in the host location. Finally, the exchange rate will have further impact on the net assignment salary, although how exactly will depend on the currency in which the salary is delivered – that of the home country, the host country or a split between the two (or even a third country currency).
As we all know, exchange rates fluctuate continuously, in some locations more than others. How should companies respond to, as in this example, a sudden devaluation of the host country currency between salary reviews? The company’s policy on managing currency fluctuations will depend to some extent on how assignee pay is delivered, but options include reconciling any losses to the assignee at the end of the year or recalculating the package based on a new exchange rate once the devaluation exceeds a certain threshold.
In addition to salary, the cost of certain benefits may also need annual review. Accommodation and children’s education benefits can together cost more than the assignment salary, so companies must keep an eye on how the values of these items are changing.
Clear communication between the global mobility team and the assignee is crucial. Ideally, prior to her assignment, Anna will have been briefed not only on the company policies and the elements that comprise her salary package, but also on how external factors such as those mentioned above can and will impact her salary. While greater transparency will not eliminate all questions from assignees, managing their expectations at an early stage will potentially minimise kickback from them.
End of assignment
Six months before the end of the assignment, it is time to start preparations for repatriation. Discussions about what Anna can expect in terms of a role in the home country upon her return should have been had already – ideally even before she set off to China – to manage her expectations.
In any case, the time has come to discuss Anna’s future and for the company to assess whether they wish to repatriate her, extend her assignment in China, or possibly send her on another assignment elsewhere. Whichever outcome is decided, new terms and conditions will have to be agreed upon and a new contract and salary package issued. In our example, Anna and her family will return to Canada, which once again triggers the appointment of destination services providers, relocation agents and tax specialists to assist with the logistics of closing down Anna’s affairs in China and moving home.
An all too important post-assignment debrief will then be arranged for both company and assignee to discuss how they thought the assignment went, what could and should improve, what went well and what exceeded expectations. These debriefs are invaluable for GM teams to help them build and improve their pre-, on- and post-assignment processes to deliver a smooth and satisfactory end-to-end experience for the valuable employees that undertake international assignments.
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ECA’s International Assignment Guides help to prepare employees and their families for the realities of an international assignment. There are guides for three scenarios:
Planning to Work Abroad – for consideration before accepting an assignment
Together on Assignment – for one partner to consider the implications of the other’s assignment
Returning Home – to prepare for repatriation
The International Assignment Guides can be provided directly to your mobile population through your company intranet and combine anecdotal advice and worksheets with real-life case studies to raise awareness of issues that should be considered, discussed and resolved before committing to an assignment.