In 2022, with the help of vaccines, it is hoped the world will transition out of the pandemic. If this is the case what is the impact likely to be on internationally mobile employees? During the worst of the pandemic some believed virtual, short term and commuter assignments may play a greater role. More recent research is starting to show things may not be changing as much as we once thought.
The 2020 pandemic has impacted every element of the business world to varying degrees. One of the most impacted areas was that of the globally mobile employee. Research from 2018 by Finaccord anticipated growth in every expatriate segment up to 2021. Although updated data on the impact Covid-19 had on overall expat numbers has yet to be released, we know there were short term impacts as business travel virtually ground to a halt.
Internationally mobile employees in 2022
Research by global advisory firm Willis Towers Watson at the end of 2021 amongst 107 multi-nationals indicated that 31% intended to send employees on international assignments in 2022. Almost 75% of these assignments are expected to take the traditional form, lasting from 1-5 years. Indicating that although large businesses have found it very challenging to move their workforce in the last two years, there is a desire to keep talent globally mobile.
To understand what is feeding this desire we have to delve into the reasons behind global mobility in 2022. From a HR perspective it is easy to get caught up in the tactical elements of expat assignments like relocation or costs. For the wider business the objective of an expat assignment usually falls into one of the following:
- Ensuring the right leadership talent pipeline is in place in the destination country.
- Managing an international talent pool.
- Managing skills shortages in important markets.
- Fostering talent diversity.
While the majority of assignments may follow a traditional format, the area has not been unaffected by the pandemic. Some of the changes we may see to international assignments in 2022 include an increase in:
1. Commuter assignments
During a commuter assignment an employee commutes five days a week to a host country to achieve an international objective. The employee spends weekends and holidays in their own country. Recent research by PwC showed that international commuting and short term assignments are second and third growth areas in international ‘move types’.
Commuter assignment challenges
Commuter assignments are not without their challenges for the business and employee alike. From a business perspective:
Tax compliance is a challenge when an employee lives in one country but works in another. Despite the increase in popularity of commuter assignments, many businesses have no formal procedures in place for managing this sort of mobile employee. The majority of companies surveyed by Deloitte indicated that commuter assignments were managed on a case by case basis. This is surprising given their increasing popularity and something that will need to be addressed if it is a long term business strategy.
If your business is hoping to use commuter assignments more because they suit the needs of the business or employee chosen to travel, it is a good idea to put some formal processes in place including:
- Agree and establish a framework for managing commuter employees.
- Be clear on how supports should be provided.
- Train key stakeholders on risk of commuter assignments from a tax compliance perspective.
- Allocate commuter assignment governance to corporate tax, HR or global mobility team so it does not fall between business gaps.
2. Short-term assignments
Short-term assignments (STAs) are typically international assignments that last less than one year. STAs were increasing in popularity prior to the pandemic as a way of achieving international objectives without the sometimes prohibitive cost of a long term expat assignment. Research from 2018 showed that short term assignees are often younger than their long term counterparts and many leave family in their home country, preferring more frequent trips back.
Short term assignment challenges
Although STAs may be more financially viable for businesses, they are not without their challenges. Tax, legal and social insurance contribution compliance is essential. This can be complex, depending on where assignees are going to be working. For the expat themselves, the most common issues include:
- Poor work-life balance while overseas without family and friends.
- Greater difficulty with culture shock without the support of family.
- Social isolation while they are overseas.
- Higher stress levels.
On the plus side, there are many advantages to implementing short term assignments. Research indicates that the majority of STAs are successful with candidates more likely to exceed their assignment goals.
If STAs sound like they might be a good option for your business in 2022, there are some things you can do to improve your chances of success:
- Set your business up for success by improving planning around expat assignments as a whole to ensure the objective is specific enough for an STA.
- Some of the challenges with short term assignments can be mitigated by choosing the right candidate for the role.
- Have a career plan for STAs when they return.
3. Remote working assignments
Remote working was introduced as a temporary measure for office based employees in many countries around the world during the pandemic. Some expats due to start traditional expat assignments began them virtually while business travel was limited.
There is some debate around whether virtual assignments are feasible in the long term, but they offer an alternative where more flexibility in global mobility programmes is required. However, they are not without their risks. Although sometimes employed as a solution to family issues around moving overseas, for some people remote assignments may complicate family problems as there may be a need to work outside of office hours in their home country.
Mercer report additional risks associated with virtual or remote assignments include:
- Damage to company culture
- Cultural misunderstandings
- Tax compliance issues
Growth in Expat assistance programmes
We may have to wait and see whether alternative forms of expat assignment prove popular in the long run. However, what does seem to be assured is an increase in the well-being support offered by organisations for their expats. Willis Tower Watson research indicated that the majority of employers are providing enhanced telehealth and Expat Assistance Programmes [EAP] to their employees. Seventy-one percent of businesses provided their employees support in the form of EAP in 2021 which is a significant increase on 53% in 2019.
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