According to a new survey released in mid-June, the 10th annual Global Relocation Trends 2003/2004 review, conducted and issued jointly by GMAC Global Relocation Services, the National Foreign Trade Council, and the Society for Human Resource Management, the United States is among the top three countries that pose the most challenges to transferring employees and their families.

The reason? The threat of terrorism.

Up to 70 percent of transferring employees will be assigned relocations of one year or less, a sharp departure from historical averages in which only 13 percent of all assignments were for a year or less. Only 51 percent of relocating employees are taking their children along, the lowest percentage ever taken in the 10-year survey, and many companies are beginning to choose employees without children for international assignments to avoid the costs of "host country" educations.

Companies are beginning to question the wisdom of international transfers. Nearly 70 percent of respondents rated their "Return on Investment" as good or excellent, but only 46 percent said they were able to compare actual costs to estimated (budgeted) costs, and nearly 40 percent indicated they were not sure about the value of international experience for an expatriate's career, says a spokesperson. "Considering the scrutiny of other investments organizations make to cultivate management talent -- from management development and executive education to MBA programs," said the spokesperson, "our executives found this somewhat surprising."

"While many organizations believe in the importance of an international assignment to help develop talent and strengthen their companies, it is clear that additional help is needed to demonstrate the economic value and tangible benefits international transfers can offer," said Rick Schwartz, president and CEO of GMAC Global Relocation Services. "This is a topic that an increasing number of clients want to discuss and becomes even more important when international assignments increase, as we fully expect to occur in 2004."

Other shifts indicate that international transfers are being managed differently compared to last year's survey.

Sixty-four percent of respondents said their companies were attempting to reduce international assignment expenses in response to current economic conditions.

More than half of respondents are seeking alternatives to long-term assignments, and more are turning to local hiring.

Maggie Ryan, senior vice president of Global Operations, explains, "While the world economic climate may be a predominant factor in this development, it's also reasonable to assume that political instability in its various forms also contributes to this trend."

China and Japan offer the most challenges to relocating employees because of language, cultural differences, and other reasons, but for the first time the United States came in third due to bureaucratic difficulties and new security measures. International employees have difficulties in obtaining social security numbers and visas, experience immigration restrictions, and they have expressed dissatisfaction with the U.S. Citizenship and Immigration Services (USCIS), formerly known as the Immigration and Naturalization Service (INS).

"This year's survey captures some of the business repercussions involving mobility to the U.S. in an environment of increased security," said Brian J. Glade, vice president of international programs for the Society for Human Resource Management. "Much of this burden appears to be falling to HR professionals to balance the new security policies with the needs of their business."

The United Kingdom, United States, China, Singapore and Germany were the most frequently cited "active" destinations, yet the United Kingdom, United States and France experienced the greatest reduction in expatriate activity.

A similar survey conducted by Cendant Mobility and the Atkinson Graduate School of Management at Willamette University, and co-sponsored by the SHRM Global Forum, and released in early June, found that despite perceptions that an overseas assignment might be more dangerous, only 13 percent of respondents’ reported that they would refuse a future assignment due to world events.

But most prefer to stay here if they can. Sixteen percent of assignees with company headquarters in the Americas are less likely to accept another assignment than peers in other regions of the world.

“Danger often accompanies overseas assignments in volatile parts of the world,” says Lisbeth Claus, Ph.D., GPHR, associate professor of Global HR at the Atkinson Graduate School of Management, Willamette University. “We found respondents whose company headquarters are in the Americas have been somewhat more affected by world events of this nature,” says Claus.

Most assignees work overseas because of the interesting work challenge (27 percent) while only two percent cited salary and benefits as influence on assignment decisions.

“Compensation alone is not the driving factor behind employees’ decisions to accept an international assignment,” said Brian Glade, GPHR, vice president of SHRM International Programs. “Offering employees professional development while abroad or creating opportunities to better leverage the employees’ experiences when they return are cost effective strategies that could make international assignments more attractive.”

President and CEO of Cendant Mobility, Kevin Kellher concludes, "As companies recruit top talent for global assignments they should take note that executives are weighing a number of factors when considering these career opportunities.”

Published: June 21, 2004

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