During a commuter assignment an employee travels alone to work overseas during the week but their primary residence and family remain in their home country. Typically, commuters work abroad five days a week and return home for the weekend and holidays.
Managing Commuter Assignees
22 March 2022 | 5 Min Read
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In the last decade global mobility has become increasingly vital to business success. As an international HR or global mobility manager you know this brings with it risk and complications for the employee and organisation alike. One of the biggest concers for both parties is expat failure where the assignment is not fully completed or the primary objective has not been achieved.
When consultants looked into the reasons behind expat failure, family issues were cited time and time again as one of the leading causes. It is not hard to see why this would be. Relocating to another country raises a host of difficulties for the expat's family including: culture shock, trailing sprouse syndrome, language barriers, and moving schools.
To mitigate these and countless other difficulties employers are segmenting assignment types. One of the alternative options that has emerged are commuter assignments.
What is a commuter assignment?
Commuter assignments before Covid-19
Commuter assignments existed prior to the Covid-19 pandemic. They were particularly popular in EMEA where many countries are located close together. Commuter assignments helped businesses overcome many of the challenges a full expat assignment might raise including the need for a family to relocate, the cost of a full expat assignment or dual career couples.
That said, commuter assignments usually accounted for a small percentage of a global business’ assignee workforce. However research conducted in 2019 indicated that 70% of businesses believed commuter assignments would increase in the following three years as a result of employee demand and family issues.
In reality, the Covid-19 crises grounded the majority of commuter assignments as business travel was all but eliminated in the majority of countries around the world. Commuter assignees found themselves stranded in their destination or at home working remotely. Despite the overarching view that remote working was successful in many incidences, business leaders also realised the value of face to face interaction. As the pandemic wanes, there is a move to bring back some element of in person business. Instead of a full time move back to the office many businesses are implementing hybrid working.
The question many businesses have is, what does this mean for global mobility generally and commuter assignments more specifically?
Commuter assignments post Covid-19
Despite relaxing restrictions across most of the western world, the path ahead for expat assignments is not clear. Many organisations are still evaluating what the future of global mobility will look like. Some of the most recent research available, conducted by Mercer showed contrasting opinions. Some believed the pandemic would result in a reduction of expat assignments replaced with more remote and virtual assignments while the balance believed the number of standard and alternative assignments would increase.
There were some significant differences when Mercer compared global mobility research conducted in 2018 with that conducted in 2020/21 particularly aound communter assignments. Previously, they were less formal than their expat counter parts. In some businesses commuter assignments did not fall under the remit of dedicated global mobility departments.
Mercer found this type of assignment is becoming more formalised post Covid-19:
- 70% of businesses are now tracking days commuter assignees spend outside their home country this is significantly more than the 56% in 2018
- 57% of companies, up from 35% in 2018, have a formal commuting policy
- 6% more businesses involve global mobility in commuter management than the 55% in 2018
Managing commuter assignees
If your business believes commuter assignments are a good option to achieve its international goals there are considerations to take into account:
1. Are commuter assignments cost effective?
Many businesses believe commuter assignments offer a cost effective alternative to moving an employee and their dependents overseas on a traditional assignment. However, it is important to analyse this carefully as cost savings can be eroded by accommodation and travel costs. Often commuter assignees require fully furnished accommodation in prime locations close to the CBD and airport to facilitate work and travel home.
2. Commuter assignment management costs
The internal costs for managing commuter assignments can also be higher as they require more input from tax, payroll and immigration specialists to navigate the unique situation an assignee is in, living in one jurisdiction but working in another.
3. Create a commuter assignment policy
When commuter assignments first became popular they were often completed informally. Research conducted in 2019 indicated this was changing with 67% of businesses developing formal written policies. Having a written policy is important for managing compliant and cost-effective commuter assignments. Formal policies should include details on:
- Procedures to be followed
- Allowances
- Benefits provided
This should aid your team with cost effective commuter assignment management.
4. Utilise technology to track international commuters
One of the biggest challenges managing commuter assignments is the complexity of administration. As mentioned earlier, the tax and social security compliance can be particularly difficult for international commuters. Mitigate this by tracking the number of days assignees spend in each country. As government scrutiny of commuters increases, accurate tracking of this information becomes more important. It may be worth investing in purpose built tracking software.
5. Manage costs
Further to our first point, if commuter assignments do make sense for your business it is important to manage costs carefully. ECA’s Commuter Assignment Survey shows a significant decrease in the number of companies that cover day to day costs for assignee from 97% in 2012 to 61% in 2019. As commuter assignments are often at the bequest of the employee, there may not be the same requirement to provide as many allowances as an incentive for them to accept the role.
There is no doubt that commuter assignments raise many administrative and management challenges, however, for project work or if cover needs to be provided in the short term, they may make sense for your business.
Allianz – Committed to Global Health
At Allianz, we’re dedicated to supporting global health efforts and ensuring businesses can provide a healthy, resilient workforce. If you are sending employees overseas on commuter assignment, get in touch about our short term international health insurance so they have assess to the best private health insurance while they are away.
