International assignments

What Are International Assignments?

International assignments refer to the temporary relocation of an employee by a company from their home country to a foreign country to fulfill specific business objectives. These assignments are a core component of Global Human Resource Management and a strategic tool employed by Multinational corporations to expand their global presence, transfer knowledge, or develop key personnel. The duration of an international assignment can vary significantly, ranging from a few months for short-term projects to several years for leadership roles or the establishment of new operations abroad.

Organizations undertake international assignments for a variety of reasons, including filling positions where local skills are scarce, facilitating knowledge transfer and organizational development, and strengthening control and coordination between headquarters and foreign subsidiaries. Beyond business needs, these assignments also serve as critical opportunities for career development for the employees involved, offering exposure to diverse markets and cultures.

History and Origin

The concept of international assignments has evolved significantly with the rise of globalization and the expansion of international trade. While the movement of individuals for trade and diplomatic purposes has existed for centuries, formalized corporate international assignments became more prevalent with the growth of multinational corporations in the mid-20th century. Initially, the focus was primarily on transferring technical skills and managerial expertise to new or developing markets. In the 1980s, the scope began to broaden, with increased attention on individual expatriate adaptation and the inclusion of a more diverse range of candidates⁸.

The landscape of global mobility continued to shift in the 2000s, driven by technological advancements that enabled more sophisticated tracking and management of assignments, moving beyond rudimentary spreadsheets⁷. More recently, the COVID-19 pandemic further accelerated the evolution of global mobility, prompting a re-evaluation of traditional assignments and fostering the emergence of flexible and remote work models across borders⁶,⁵. This shift has redefined the role of international assignments, moving beyond simple relocation to encompass a broader spectrum of global workforce strategies.

Key Takeaways

• International assignments involve relocating an employee to a foreign country for a temporary period to meet specific business goals.
• They are a strategic tool for multinational corporations to fill skill gaps, transfer knowledge, ensure coordination, and expand into Global market opportunities.
• Such assignments are crucial for the career development of employees, offering exposure to new business environments and cultures.
• The management of international assignments has become increasingly complex, requiring careful consideration of cultural, logistical, financial, and regulatory factors.
• The trend in international assignments is moving towards more flexible models, including short-term and remote assignments, alongside traditional long-term expatriate roles.

Formula and Calculation

While there is no single universal formula for "international assignments" as a concept, the financial components involved in managing them often require complex calculations to determine the overall cost and ensure fair compensation packages for the employee. A common approach involves calculating the total cost of an assignment, which can include various elements:

Where:

• Base Salary: The employee's standard salary, often maintained at the home country level or adjusted to the host country's cost of living.
• Allowances: Additional payments to cover expenses such as housing, cost of living adjustments (COLA), education for dependents, and hardship allowances.
• Benefits: Continuation of home country benefits (e.g., pension, healthcare) or equivalent benefits in the host country.
• Relocation Costs: Expenses associated with moving, shipping household goods, temporary accommodation, and travel.
• Tax Equalization Costs: The cost incurred by the company to ensure the employee's net tax burden is equivalent to what they would pay in their home country, managing complex Tax implications across jurisdictions.

Organizations typically use specialized software or consultants to manage these intricate calculations, which must account for Foreign exchange rates and varying tax treaties.

Interpreting the International Assignment

Interpreting the success and effectiveness of an international assignment extends beyond merely completing the stated objectives. It involves evaluating both organizational and individual outcomes. From an organizational perspective, a successful international assignment can be seen in the effective transfer of knowledge, the establishment or strengthening of a foreign operation, the successful implementation of Strategic planning, or the development of a global mindset within the leadership team. Metrics might include project completion rates, market penetration, or the integration of a new subsidiary.

For the individual assignee, interpretation of success often hinges on their personal and professional growth, their ability to adapt to the new culture and work environment, and their readiness for future roles upon Repatriation. Key indicators include the development of Cross-cultural communication skills, enhanced leadership capabilities, and increased Employee retention within the organization post-assignment. Challenges such as cultural adjustment, family integration, and language barriers significantly influence an assignee's experience and the overall interpretation of the assignment's outcome⁴.

Hypothetical Example

Consider "GlobalConnect Inc.", a technology firm based in the United States, that decides to establish a new research and development center in Singapore to tap into the Asian market. To ensure the smooth setup and transfer of the company's core values and technical expertise, GlobalConnect Inc. decides to send Sarah, a senior project manager from their U.S. headquarters, on a two-year international assignment to lead the Singapore team.

Sarah's international assignment involves her relocating with her family. GlobalConnect Inc. structures her Compensation packages to include a base salary, a housing allowance to cover rent in Singapore, and a cost-of-living adjustment to account for the higher expenses. They also provide support for her children's schooling and implement a tax equalization policy to ensure her tax burden doesn't increase due to the move. During her assignment, Sarah is responsible for hiring local talent, integrating the new team into GlobalConnect's global network, and overseeing the development of new products tailored for the regional market. This strategic deployment of Human capital aims to accelerate the Singapore center's productivity and cultural alignment with the parent company.

Practical Applications

International assignments are integral to various aspects of global business and Workforce planning:

• Market Entry and Expansion: Companies utilize international assignments to establish new offices, subsidiaries, or joint ventures in foreign markets. Assignees help bridge cultural gaps and ensure corporate strategies are implemented effectively in new territories, facilitating market penetration.
• Knowledge and Technology Transfer: Skilled professionals are sent abroad to share specialized knowledge, best practices, or proprietary technology with local teams, ensuring consistent operational standards and technological advancement across the global enterprise.
• Leadership Development: International assignments serve as critical development opportunities for high-potential employees, preparing them for senior leadership roles by exposing them to diverse business challenges, international perspectives, and complex problem-solving scenarios. This contributes to robust [Global talent management].
• Addressing Skill Gaps: When specific technical or managerial skills are unavailable in a host country, an international assignment can temporarily fill the gap while the company invests in developing local talent.
• Cultural Integration and [Corporate governance]: Assignees can help instill the company's culture, values, and governance practices in foreign operations, ensuring alignment with headquarters and promoting a unified organizational identity. Modern global mobility strategies aim to support a global workforce and fulfill worker preferences, focusing on attracting and retaining talent³.

Limitations and Criticisms

Despite their strategic advantages, international assignments present several limitations and criticisms that organizations must address for effective [Risk management]. One significant challenge is the high cost associated with expatriate packages, which often include allowances for housing, education, cost of living, and tax equalization. These costs can be substantially higher than employing local talent, making organizations scrutinize the return on investment.

Another major limitation is the high failure rate of international assignments. Failure can manifest as early returns, poor performance, or an inability of the assignee or their family to adjust to the host country's culture and environment². The personal challenges, including isolation, [Cross-cultural communication] barriers, and the difficulty for spouses to find employment, often lead to stress and dissatisfaction. Historically, companies sometimes focused solely on technical skills in selection, overlooking critical adaptation abilities, which contributed to these failures¹.

Furthermore, the process of [Repatriation] can be difficult, with returning assignees sometimes struggling to reintegrate into their home organization or find suitable roles that leverage their international experience. This can lead to decreased morale and even departure from the company, undermining the long-term benefits of the international assignment.

International Assignments vs. Expatriate

While often used interchangeably, "international assignment" and "expatriate" refer to slightly different aspects within the context of global mobility.

An international assignment is the arrangement or project itself—the temporary relocation of an employee by their employer to a foreign country for a specific business purpose. It describes the act or program of sending someone abroad. The term emphasizes the organizational objective and the temporary nature of the transfer.

An expatriate, on the other hand, is the individual employee who is undertaking an international assignment. The term refers to a person residing in a country other than their native country, particularly for work. While all expatriates are on some form of international assignment (even if self-initiated), not all international assignments necessarily result in an employee being formally categorized as a long-term expatriate, especially with the rise of short-term assignments, commuter assignments, or virtual global roles. The distinction lies in the focus: "international assignment" describes the corporate strategy and process, whereas "Expatriate" describes the individual fulfilling that strategy.

FAQs

What is the primary purpose of an international assignment?

The primary purpose of an international assignment is typically to achieve specific business objectives, such as expanding into new markets, transferring critical skills, or managing global projects. It also serves as a strategic tool for [career development] and fostering a global perspective among employees.

How long does a typical international assignment last?

The duration of an international assignment can vary widely. Short-term assignments might last from a few weeks to less than a year, often for specific project completion or training. Long-term assignments, which are more common for managerial or strategic roles, typically range from two to five years, requiring significant relocation and integration into the host country.

What are the main challenges for employees on international assignments?

Employees on international assignments often face challenges related to cultural adjustment, language barriers, adapting to new work environments, and managing personal and family integration. [Tax implications] and maintaining connections with their home country organization can also be significant hurdles.

Do international assignments always involve full family relocation?

No, not all international assignments involve full family relocation. While traditional long-term expatriate assignments often include family moves, there is a growing trend towards more flexible assignment models, such as commuter assignments (where the employee travels regularly between home and host country) or short-term assignments, which may not require family relocation.

How do companies support employees on international assignments?

Companies support employees on international assignments through comprehensive [Compensation packages], relocation assistance, cultural and language training, and ongoing support for the employee and their family. Many organizations also have dedicated global mobility teams or external partners to manage logistics, compliance, and provide well-being support throughout the assignment cycle, including [Repatriation].