It's a small world, with relocating families moving across nations as well as state lines. Is an international job assignment a steppingstone for better career positions -- or a minefield of professional and family risks that keep employees close to home?
It's an interesting question -- and these days the answer depends as much on an employee's family situation as their ambition, according to a new survey that explores worldwide employee-relocation trends.
The 11th annual Global Relocation Trends Survey -- issued jointly by GMAC Global Relocation Services and the National Foreign Trade Council -- "The 2005 Annual Global Relocation Trends Report" was conducted by GMAC Global Relocation Services in association with the National Foreign Trade Council and other leading global human resource organizations.
This year's study contained 90 questions and reflected responses and data from 125 multinational organizations, both large and small, with offices located throughout the world. Together, these companies managed a worldwide expatriate population of more than 155,000 and a total employee population of more than 4.7 million. For 46 percent of the respondents, the company headquarters was located outside of the United States, a record-high response.
The survey revealed that:
- Retaining expatriate talent remains a considerable challenge for companies and attrition rates were at least double the rate of non-expatriate employees. While respondents reported an attrition rate of 10 percent among the general employee population, they indicated that 21 percent of expatriate employees left their companies in the midst of international assignments. Another 23 percent, meanwhile, left within one year of returning from one.
- When asked to identify the top reasons for employee refusal of an international assignment, family concerns were cited first, followed by a spouse's career. Additionally, key factors leading to assignment failure were partner dissatisfaction, family concerns, inability to adapt, and poor job performance.
- However, opportunities for international assignments are on the rise: Reversing a steady decline since the 1998 survey, 47 percent of companies questioned for the new survey reported an increase in the size of their current expatriate population last year compared to 31 percent in 2004 -- an all-time survey low, while 54 percent anticipated additional growth in the coming year. Last year, only 38 percent anticipated further growth. Further corroborating this trend, 68 percent of respondents reported an overall workforce expansion at their companies.
Since it began in 1994, the annual Global Relocation Trends Survey has shed light on some surprising trends among companies large and small that maintain expatriate workforces. Among them:
- For the second year running, the United States retained its status as one of the world's most challenging countries for international assignments -- behind China and India, due primarily to greater delays in the immigration process, visa issues and security concerns.
- The world's expatriate workforce is becoming increasingly female. Women accounted for 23 percent of international assignees last year, the first time they have constituted more than 20 percent of the total expatriate workforce and up 5 percent from the 2004 survey.
- That workforce also is getting younger: Responding companies reported that 54 percent of expatriates last year were between the ages of 20 and 39, compared to a historical average of 41 since the first survey was done in 1994.
- While 70 percent of responding companies said they required a clear statement of the assignment objective, and 52 percent required a cost-benefit analysis in addition to a clearly stated objective, only 37 percent actually compared estimated with actual costs, and just 14 percent measured the return on investment (ROI) for their expatriate activities.
"This latest survey leaves little doubt that a large and growing number of companies are committed to expanding their expatriate workforces as a critical element of their global reach and success," said Rick Schwartz, president of GMAC Global Relocation Services. "As expatriate workforces continue to expand and, as revealed in this survey, evolve in their makeup -- it will become even more important for companies to bring into sharp focus exactly how their expatriate programs are producing a quantifiable return on investment."
How to Explain the Expatriate Turnover Rate?
The study finds that among the reasons given for expatriate attrition are:
- Expatriates are more marketable and receive more attractive offers from other employers as a direct result of their international experience. The survey found that 12 percent of all employees had prior international experience.
- Expatriates find overseas assignment compensation packages to be more generous than home and jumped from one company to another to maintain/enhance their expatriate status and related benefits.
- Expatriates anticipate a lack of attractive positions to return to in the home country and seek out better opportunities outside their company.
- Expatriates feel out of place and dissatisfied both during and after an assignment, causing them to search for new employment.
Family Concerns Ripple Through Survey
Family issues and concerns, and the impact of an assignment on a spouse's or partner's career, rippled through the survey:
- The survey found record-high levels of spouse/partner employment both before and during a relocation assignment: 60 percent employment before and 21 percent during; the historical averages are 46 percent and 13 percent, respectively.
- 19 percent of employees embarked on assignments without their spouses or partners, compared to the historical average of 14 percent.
- 48 percent of employees went on their assignments without their children in tow last year, compared to 49 percent the year before. The historical average is 41 percent.
- 67 percent of respondents cited family concerns as the main cause for assignment failure, with spouse or partner dissatisfaction as the top reason. Cultural adjustment problems were frequently mentioned, but assignment failures also were tied to a spouse's or partner's dissatisfaction with lack of employment in dual-career households while on assignment.
Among additional survey findings:
- China, India and Singapore were the primary emerging destinations.
- In a new measurement, the survey found that 12 percent of current expatriates were new hires, while 88 percent were employed by the company at the time of their assignment.
- The percentage of married men (53 percent) was the lowest in the survey's history; the percentage of women with significant others (4 percent) was the highest.
- Spouses accompanied 81 percent of married expatriates; the historical average was 86 percent.
- Companies seeking alternatives to long-term assignments (longer than one year) were at an all-time high (62 percent). The chief reason by far was cost, cited by 93 percent of respondents.
- The most popular alternative assignment types being implemented include localizing expatriates (57 percent), hiring local employees (48 percent), short terms assignments (36 percent).
- Assignment "failure" -- employees not completing their assignments -- was most frequently cited as a problem in China, Japan, the U.S., the United Kingdom, Saudi Arabia and Iraq.
- The most common assignment objective was filling a skills gap, followed by launching new endeavors and building management expertise.
- Although formal cross-cultural training was mandatory at only 20% of companies -- the lowest percentage in the survey's history -- 73 percent of respondents rated it as having great or high value in making the assignment a success.
