Shorter-term assignments are here to stay. Lee Xieli finds out why.
Short-term assignments (STAs) are becoming a trend as companies find international assignment programmes increasingly costly and time consuming to administer.
This is a key finding of the recently released 2007 KPMG Global Assignment Policies and Practices Survey (GAPP). Of the 348 human resources executives surveyed, 49% believe international assignment programs “take too much time and effort to administer”, up slightly from last year's results of 48%. And 40% thought their international assignment programs are “more generous than they need to be”, a slight increase in respondents compared to 38% in 2006. And the number of companies sending international assignees on STAs continues to trend upward, with 80% of respondents utilising this option.
“Despite the weakening value of the U.S. dollar, companies have legitimate business reasons to keep investing in international assignments, but it's no surprise that companies also are looking to trim assignment expenses,” said Achim Mossmann, managing director, Global Mobility Advisory Services, International Executive Services practice, KPMG LLP.
Mossmann added, “International assignments are here to stay, so the most forward looking companies would be wise to develop ways to administer them more cost effectively using technology and conducting extensive pre-planning due diligence.”
And according to the results of KPMG's Extended Business Traveller-Short Term Assignment Survey (EBT-STA Survey) released in September 2007, 38% of corporate respondents in that survey expected their use of STAs to increase over the next 18 months.
“The increasing number of short-term assignments requires companies to take a look at their international assignment programmes as traditional long-term expatriate policies often fail to adequately support the needs of the business or assignee,” Ooi Boon Jin, executive director, International Executive Services Practice, KPMG Tax Services, Singapore said.
“As companies worldwide seek to manage their international assignment costs more effectively, this could also mean more international assignments into Singapore which are short-term in nature, typically less than a year where expatriate families can remain back home.”
Global assignments are also no longer restricted to big companies only. With the smaller and medium sized companies getting into the globalisation action, outsourcing have become one important function to help manage their international assignment programmes.
“For mid-sized companies expanding their global foot print, outsourcing can create operational and cost efficiencies which may not be achieved due to limited expertise or technology tools to support their international assignment programme”, says Ooi.
When asked to select the top reason for outsourcing, 78% of companies said to gain access to a service provider’s global resources and expertise and 21% said to improve service quality and efficiency.
What is the single best/most important reason to outsource?
| To reduce costs / decrease internal head count | 5% |
| To reduce costs / decrease internal head count | 21% |
| To reduce administration so that HR can concentrate on core activities | 22% |
| To gain access to service provider’s global resources and knowledge | 49% |
| To gain access to service provider technology | 0% |
| Other
| 3% |
Source: 2007 KPMG Global Assignment Policies and Practices Survey
