The days of the gin-and-tonic-quaffing ex-pat stationed
indefinitely on some far-flung shore may be numbered, as companies
consider more flexible and cost-effective solutions when sending
their staff abroad, writes Ross Bentley.
However, despite this trend towards cost reduction, according to
the latest report from PricewaterhouseCoopers (PWC) - International
Assignments: policy and practice 2002 - three-quarters of the
companies surveyed plan to increase the number of employees they
send on international assignments.
PWC issues the report every two years. Since the last report the
main growth areas for foreign assignments have been the US, Western
Europe and China.
"Globalisation is the driving force that is resulting in a greater
level of business conducted on an international level," says
Stephanie Phizackerley, a partner at PWC. "Technology is enabling
companies to aspire to a greater global reach and thus expand their
customer base."
But increasingly, says Phizackerley, companies are starting to
consider other options and packages for their overseas staff.
Rather than sending someone abroad on a two- or three-year
assignment, companies are looking at less costly options, she says.
"Companies are looking at sending their staff out for a short
period of time to set up an operation or a base abroad and then
asking them to manage it from a distance by making short, frequent
business trips and otherwise relying on using new communication
technologies such as teleconferencing.
"This means that organisations don't have to make arrangements for
their staff and families to move abroad and this reduces costs."
Another increasingly popular option is the hiring of local
nationals, whereby for example, a Chinese-speaking Malaysian is
assigned to China as opposed to expatriating someone from a
company's UK or US headquarters.
But for those employees from the UK or US who do go to live abroad
on foreign assignment, Phizackerley says there is a trend to offer
employees a more limited package than has traditionally been the
norm.
In the past a comprehensive package for an employee sent on a
foreign assignment would have included a cost-of-living allowance,
hardship allowance, tax equality, accommodation costs and education
fees for any children.
However, Phizackerley says that increasingly people who have the
opportunity to work abroad on assignment are willing to take a
reduced package because they realise that a stint in foreign climes
is good for their career development.
"International experience will stand many executives in good stead
as they move up through the organisation," she says.
For businesses looking to cut costs on foreign assignments,
Phizackerley says that they should benchmark themselves against
similar organisations in their sector to see how they treat their
workers on foreign assignments. She says that costs can be cut just
through being organised.
"For example, if a company is providing one of its employees with a
living allowance, it should look at leasing a property on behalf of
its employee - the former option is fully taxable whereas the
latter is taxed at a far more beneficial rate," says Phizackerley.
"Today companies are less likely to hand out the one-size-fits-all
package to every employee who goes to work abroad. They are more
likely to look at the specific situation and location."
Stephanie Phizackerley is a partner at
PricewaterhouseCoopers