Overseas postings look good on CV

The days of the gin-and-tonic-quaffing ex-pat stationed indefinitely on some far-flung shore may be numbered, as companies...

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

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