An alternative approach to a traditional long-term expatriate assignment is to relocate an employee for the duration of a specific project or task. A short-term assignment usually involves travel for more than three but less than 12 months. The advantage for companies is that short-term assignments are potentially more cost-effective for a number of reasons.
The first is tax related: in most countries, the employee is a fiscal resident (needs to pay taxes) only after spending 183 days in a country. Beyond this time, the company may need to adjust for the tax liabilities of the employee in both the home and host country, which can be costly and complex. Secondly, short-term expatriates are not always accompanied by their family or spouse, so the company does not face the costs of relocating an entire family.
Considering these advantages, short-term assignments have become more widespread. Yet, before your company embarks on this path, you may wish to answer the following questions:
How will the host location respond to a short-term expatriate? Will they work well with the employee, knowing that their presence is only temporary? Will they assume the expatriate has been sent as a "watchdog?" These are key issues, especially in cultures where building relationships in the workplace has a greater significance than in the U.S. Companies can alleviate this by communicating the objectives of the assignment openly and assigning a host country mentor to introduce the assignee to employees in the new location.
Is the project really suitable for a short-term assignment? Can it be completed in a relatively short time frame? Bear in mind that tasks will inevitably take longer in the host country, due to unfamiliarity with the business environment. This is an important consideration because companies may encounter difficulties in extending short-term working permits.
What type of host country visa will be required? While it may be tempting to extend a business traveler's visa in order to circumvent processing hassles, be cautious not to risk deportation for your employee and embarrassment for your company. Each country has its own set of rules and regulations covering non-immigration work permits. Always consult an immigration attorney prior to the assignment.
How will you pay the employee? With most short-term assignments, compensation and benefits are administered from the home office location. Comparable to business travel, most companies reimburse the employee for out-of-pocket expenses, such as laundry, meals, transportation, etc. Many companies also pay their employees some type of short-term assignment bonus, up to 15% of base pay, for time worked in the host location to compensate the employee for separation from his/her family.
Where will the employee live? Usually, there are two options: a furnished flat or a hotel room. The pros and cons of each need to be weighed. While an apartment may seem more like home and be less expensive, hotel living will free the employee from time-consuming household tasks in an unfamiliar location in a language they may not know.
Is the employee the right candidate for a short-term assignment? Management needs to consider issues beyond whether the employee has appropriate technical or managerial skills. Does the employee have adequate knowledge of the business practices of the host location in order to be effective, particularly considering the abbreviated nature of the assignment? The company may wish to consider a cultural orientation program and provide the employee with some language training prior to departure.
How will family issues be accommodated? Will the employee be able to handle separation from family and friends? Likewise, will his/her family be able to handle the separation? It makes good business sense for the company to deal with these issues upfront. Long-term separations can place a lot of stress on the employee and the family, and productivity may suffer.
Generally speaking, in instances where the employee is unaccompanied, companies are more liberal about visits home, allowing for leave every six weeks. Additional vacation days, to be used throughout the assignment or upon return, may also be provided. Some companies even encourage family counseling sessions to teach coping strategies for the long-term separation.
Finally, what will the employee do after the assignment? In today's business environment, where reorganizations are frequent, will there be a job for the employee upon return? Although a 12-month absence from the home office may not seem significant, a lot of changes within the organization can occur. Assigning a mentor and constant communications related to career planning during the assignment can ease the transition.
When this article was first published, Gerald Zukauckas was director of international executive services in the Atlanta office of Arthur Andersen International Executive Services.
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