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International Assignment Solution: The Value of Foreign Assignments to Your Organization

Once a business embarks on a global mobility strategy, there must be some method of assessing the value of a foreign assignment.  The reason for the foreign posting will usually be some business challenge that requires an international assignment solution, by sending one or more employees abroad.

In this third article of our series on international assignments, we will investigate how to identify the business benefits of assignments, manage risks and preserve value by avoiding common issues.  In many cases, ‘value’ will go beyond simple bottom line calculations, and can include many hard to measure variables.

The Lifecycle of an International Assignment:  The Value Assessment Stage

The first two stages in the lifecycle of an international assignment discussed in previous articles were the initiation stage and the goal setting stage.  Part of the initiation stage was the evaluation of the cost of an international assignment solution.  This article will cover the value assessment stage, which in reality is what justifies the often high expense of a foreign assignment.

Continuing to use an example of a US company sending new salespeople to China, the value of this decision will revolve around specific business benefits.

The HR department has selected the best candidates and begun to plan the assignment.  At this point, the new assignees are being oriented to their roles and preparing for relocation.  The VP of marketing and sales has the budget for the assignment, and is surprised at the high projected cost and knows that there will be questions about whether the expense will be justified.

The fact that there is already a sales team in place should mean that new assignments are less costly, but these assignees are entering a new region in the country.  Also, the short notice of the assignment meant having to send candidates with previous China work experience, which means a higher compensation package.  He begins to assemble a list of potential business benefits to the company from the assignment, in addition to reaching an expanded sales goal for the country.

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Business Benefits: Identifying International Assignment Advantages

The value of a foreign assignment may go beyond reaching specific objectives.  There may be advantages when a company relies on multiple international assignments in a single country, that can add to overall business benefits.  So, an executive trying to make a case for an assignment, might compile the following items to supplement their reasons for sending more employees to a country.

Cost Reduction From Multiple Assignments

When a company commits their mobility strategy to a single country, there can be a cost reduction per assignee which makes it possible to add employees and expand business activity.  This is due to the fact that payroll, work permits and other employment processes are already in place, and the incremental cost per new assignee is lower.

Talent Development

There is a distinct business benefit to having skilled and experienced employees available for foreign assignments.  Investing in top talent through international assignments can have a lasting effect, especially since many companies are challenged to find suitable candidates for those positions.

Increased ROI

One less obvious advantage of an assignment, is the return of the employee to the home country with an expanded range of skills and experience.  This allows the company to evaluate ROI based on their overall HR effect, and not just the results from one foreign assignment.

Reduces Compliance Risk

If a company routinely makes posting to one location, then there should be a reduction in compliance risks.  The requirements for immigration, payroll and employment will be well known and accounted for by the branch office or third party employer of record in the country.

Fits Growth Strategies

Not every international assignment solution brings an immediate return, and will have to be assessed against the backdrop of a global growth strategy.  Even failure to make a sales target could still bring valuable information about the viability of a market, which could not have been discovered without the on-site visit.

Managing the Risk and Preserving the Value of Foreign Assignments

Foreign assignment risk is any element that may erode the value or success of the assignment.  There are a few key areas where a company can manage risk, and make sure that the value is maintained before and during an assignment.

Due Diligence and Research

Pre-departure research on the host country and legal compliance can help avoid any delays or problems once the assignment begins.  Because each country has different rules, this is a necessary step for every single foreign posting.

Expat Satisfaction

One of the leading causes of assignment failure is expat dissatisfaction or issues with their family.  Many of these problems can be alleviated by attention from HR and efforts to ease the orientation, relocation and transition of the assignee.

Overlooked Issues

There are several issues that can be easily overlooked when planning an assignment, which are out of company control and could erode the business value.  These can include security issues in high-risk locations, unforeseen currency fluctuations and regional political instability.  Assessing external threats to assignment success is a necessary part of preserving the value.

Use of an Employer of Record Service to Support International Assignment Solutions

The priority when developing an international assignment solution to meet global objectives is the rapid deployment of skilled employees to critical areas. One of the most cost effective methods to accomplish this is through the use of a GEO local employer of record, which can fulfill all of the legal, administrative and regulatory requirements for host country employment.

A GEO service is just as effective for one assignee as well as entire teams, due to the use of established providers in the host country.  This step removes the need for a company to create their own local corporate entity, as the GEO provides a local employer of record that meets this requirement in most countries.  In addition, the GEO’s local partners offer a full range of expertise in complying with the unique host country rules for payroll and immigration.

When a business enters the value assessment stage, one way to preserve value and minimize risk is to use a GEO service to handle some of the more problematic and costly aspects of foreign assignments.  This removes much of the uncertainty when entering a new country and can support the expat to achieve their assignment objectives.

Get in touch to find out more about how an Employer of Record solution can help your company

The information in this article is subject to changes in local legislation.

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