Expat Short-term Assignments on the Rise in International Business

Short-term expatriate assignments are growing in popularity at America’s multinationals, according to a new survey by Organization Resources Counselors (ORC). TheĀ 1996 Worldwide Survey of International Assignment Policies and Practices, polled multinational oganizations based in North America, Europe and Asia. It found that 14% of the 67,600 expatriates represented in the survey are currently on short-term assignments.

Short-term assignments are defined as usually lasting longer than a month but less than a year. Two-thirds of survey respondents define such assignments as lasting no more than 12 months; a quarter say such assignments last up to six months.

As business continues to erase borders around the globe, multinationals need to impart corporate culture to local staff and develop international expertise in expatriate managers. ORC Vice President of International Compensation Services Geoffrey Latta says, “Depending on circumstances, the short-term assignment may be an ideal way to meet business objectives efficiently and cost effectively.”

More than three-quarters of the companies responding to the survey distinguish terms and conditions for short-term assignments from those typically used for business trips or longer assignments. To eliminate the need for elaborate expense reporting or full-blown expatriate allowances, employers may provide specially constructed compensation packages built around certain assumptions.

For example, since the employee’s family often remains at home, the employee’s permanent household and associated expenses are maintained in the home country. For this reason, a portion of the base salary is delivered at home to support the home-country household. Expats ususally receive a leased car and furnished housing, including kitchen facilities, at the assignment location. The expatriate does not have to procure large appliances, or eat every meal in a restaurant, so allowances can be tailored to reflect these conditions.