With so much complexity and compliance, not to mention uncertainty (particularly with projects and start-ups), surrounding global working, companies need to convince and reassure their employees that everything possible has been put in place to make the assignment successful and worthwhile to them, their career and their family,” argues Susie Inwood, International Assignments Manager for BG Group Plc.

However, in return, the company needs to be able to see a payback on the costly investment of an international assignment. Depending on the richness of the home (and host) country benefits, the total cost of an international assignment can be anything from three to five times gross base salary. Setting caps or ceilings on allowances controls the costs and are an imperative in setting any policy.

Meanwhile, with an effective, transparent and flexible international HR policy in place, a company can have comfort that the “value add” in terms of payback on the investment can be achieved within known parameters.

Unfortunately, many companies still underestimate the complexities involved in managing international operations – complexities such as external markets, compensation strategies, intercultural adaptability and more involvement in family issues (dual careers, education and, increasingly, responsibility for ageing parents). There is evidence to suggest that business failures in the international arena may be aligned to poor management of human resources.

Preparation is Key
One of the key challenges is to balance the business driver of a swift and efficient mobilisation of an assignee with the lead times required for proper pre-assignment medicals, HR, Tax or Security briefings and maybe a familiarisation visit. Immigration requirements can build in further delays whilst lead times on shipping can easily be 6-8 weeks or longer. School places may not be immediately available or not for all the children in a family, which is an additional stress factor. You will need to decide from what age to offer school fees’ support, what ceilings to set on your contribution and whether to provide return tickets for children at boarding school or college or university to visit their parents. However, you would be well advised not to offer tertiary tuition support.

One approach is for the assignee to commence the assignment ahead of the family and fly back to accompany them out at a later date. This may also provide an opportunity for some cultural orientation, such as those provided by Farnham Castle, so vital if an assignee and his or her family are to adapt and settle quickly into their new environment. By mobilising the employee ahead of the family unit, the spouse, partner or children have more time to prepare.

Global activity is increasing and there is a scarcity of talent in many market sectors, particularly the buoyant oil and gas sector. If competitive and comprehensive international policies are not put in place, with a shortage of good quality international managers in the future, potential new recruits (and, indeed, existing assignees) will go elsewhere. It is not unknown for a company to have to delay a project because of the difficulties in staffing up in key roles, particularly in more challenging locations.

Value Your Assets
The impact on a company of not being able to deliver on its business strategy because of an inability to source competent, mobile employees is an issue not only for human resource professionals but for line management involved in the selection, management and, most importantly, the retention of international managers. In addition, a number of employees will fail to settle and leave the company soon after repatriating with a consequent loss of return on the company’s investment in terms of their skills, knowledge and experience.

Importance of Managing Repatriation
It makes good financial sense to put almost at much effort in helping returning assignees adapt and re-integrate into their new role as it does when mobilising them overseas. Regardless, good practice is to repatriate assignees to their home country even if, by mutual agreement they elect to move on if no suitable, challenging role can be found for them. It is worth bearing in mind that, how a company is seen to treat its assignees, before, during and post-assignment, will influence whether or not potential assignees will put themselves forward for an international assignment. For “failed” assignments, assignees should be made aware of their shortcomings which led to the early termination but thereafter they and their families should be handled with sensitivity to keep their self-esteem intact.

Be Consistent
Good companies strive for consistency in their ways of managing people on a global basis. Yet, in order to be successful, it is necessary to adapt those policies to individual and local needs. Limited trade-offs may be appropriate. Such flexibility and pragmatism can be greatly appreciated at a time of stress and uncertainty. Any “out of Policy” exceptions should be tracked and, if appropriate, worked into the formal Policy. This breeds confidence in the Policy and in the integrity of the company, as employees know they will be treated fairly and consistently. This also reduces efforts to negotiate side or special deals!

Create a Specific International Policy
Domestic policies should not be adapted. Rather, set out your international policies, ideally by topic (and with an index for ease of reference). A comprehensive Policy might include the following topics:

• Introduction – types of assignment and guiding principles




• Preparation: selection, medical assessment, HR, Tax, Security or Cultural Briefings, & language Training etc




• Assignment Salary and Expatriate Allowances




• Tax Equalisation and Hypothetical Tax




• Share Plans




• Relocation




• Travel




• Housing




• Education




• Holidays




• Cars




• Unaccompanied or Single Status Assignees




• Localisation and Tapering of Expatriate Allowances




• Medical




• Emergencies




• Other Matters




• Appendices




• Index

Define the Terms of the Assignment
Assignments vary in length – short term (typically defined as between three and 12 months), long term (typically 12 months or longer) or commuter (with more frequent trips home). You will need to set definitions for what payments will be made for what duration and determine at what point you will tax protect expatriate allowances.

Compensation strategies can be complex: for instance, how do you manage currency fluctuations? Some companies keep assignees on their home based payroll and pay in home country currency whilst others offer some or all assignees partial or total net compensation in a hard currency. Most set exchange rates annually but keep a watch on sustained fluctuations at which point an interim adjustment may be appropriate. You may also wish to consider cost of living allowances to compensate for a higher cost of living; again, set a cap on the index and the base salary and review at least one per year.

There are legal issues to consider such as establishing a legal entity in the host country and ensuring that each contract of employment is on the correct headed paper and signed by an authorised signatory.

Pensions also need to be considered. Are you going to keep everyone in his or her home country scheme? What about external new hires from countries where you do not have an entity? Maybe you need to consider setting up an international offshore pension plan for them? Will you allow members of a UK pension plan contribute up to 100% of taxable earnings when this could lead to not only the loss of the assignee’s hypo tax withholding but also a payment to match the tax relief the UK employee would have enjoyed if resident and liable for PAYE plus a potential host country tax hit on that payment! Again, you might want to consider setting a cap on AVCs.

Consider a Spouse Support Programme
Should you do anything to assist the spouse or partner? You may wish to consider a Partner Support Programme to provide a tax protected lump sum allowance per completed year of assignment to acknowledge that a spouse or partner may be giving up their job or taking a career break and would like to undertake further study or change direction. Remember – statistics show that the highest rate of failure is where the spouse or partner or family do not settle and “failure” does not just mean an early repatriation: many assignments limp on to their scheduled end date but optimum value add is lacking due to distractions at home. Your Policy will of course not preclude same sex partners but you should be open that certain countries may not grant visas for same sex partners or for that matter unmarried partners.

Health
What needs to be provided? As well as pre-assignment medicals (and regular medical renewals), it is good practice to offer private medical insurance including medical evacuation should it be necessary. If your assignees are going to more challenging destinations with limited or developing infrastructures, a review of medical facilities should be undertaken before families are permanently assigned and steps taken to identify suitable clinics or specialists.

What about travel?
Do you have a business travel policy? Are you going to align your international assignments travel policy around that or something different? Define class of travel precisely – a fully flexible ticket for annual Home Leave can be close to or more than a business class one, unless you specify point to point or by the most direct route or no unforced stopovers. For other travel, consider specifying semi-flexible economy return tickets, which still provide for changes subject to a modest fee. Should you negotiate route deals or specify carriers? Should any carriers be excluded on safety grounds? Do you want to encourage the use of low cost airlines?

Back to Basics
From your very first assignee, document the assignment package elements and build from there with all subsequent assignees to create a robust international assignments HR policy; a framework in which the whole international assignment can be correctly and consistently managed.

A luxury is defined as something expensive, which is nice to have but is not necessary; a necessity is something that you need. The question, I think, answers itself.