18 April 2008
As companies take a more global approach to doing business, there is a trend towards more short term assignments. This is a key finding of the recently released 2007 KPMG Global Assignment Policies and Practices Survey (GAPP), conducted by the International Executive Services Practice of KPMG.
The survey of 348 human resource executives worldwide also revealed that:
40 percent thought that their international assignment programmes are "more generous than they need to be", compared with 38 percent in 2006; and
||49 percent believe that international assignment programmes "take too much time and effort to administer" up slightly from last year's result of 48 percent. |
"Companies with regional or international operations need to better understand the commercial needs of an assignment and consider the expected return on investment," says Barbara Forrest, Director of the International Executive Services Practice of KPMG China. "The benefits of the assignment can then be maximised if proactive planning, including tax planning, is done well ahead of the relocation."
The survey also found that tax and immigration services remain the most outsourced processes.
Short-term assignments (STA) - the way forward?
The survey reveals that the number of companies sending international assignees on STA continues to trend upwards, with 80 percent of those surveyed utilising this option. Furthermore, according to the results of KPMG's Extended Business Traveller- Short Term Assignment Survey (EBT-STA Survey) released in September 2007, 38 percent of corporate respondents in that survey expected their use of STAs to increase over the next 18 months.
"With companies facing increasing pressure on costs and the perception that long term assignments are expensive, it is likely that short term assignments to Hong Kong and China (and throughout Asia) will become even more popular. However, short term assignments are not without problems - and require careful planning and monitoring."
In respect of assignment types, the GAPP survey found that for Asia Pacific Headquartered companies, developmental / training and project / contract specific assignments were more likely to be used than for companies located in Europe or the United States.
The 2007 GAPP Survey found that the programme functions most frequently outsourced include tax compliance (87 percent), assignment orientation sessions related to tax (82 percent) and immigration / work permit assistance (74 percent). When asked to select the top reason for outsourcing, 49 percent of companies said to gain access to the service provider's global resources and expertise, 22 percent said to reduce administration to concentrate on core activities and 21 percent said to improve service quality and efficiency.
Notes to editors:
About 2007 Global Assignment Policies and practices Survey
Since its inception nine years ago, more than 400 organisations worldwide have participated in KPMG's Global Assignment Policies and Practices Survey, a dynamic Web survey. The 2007 date is a snapshot, capturing the results as of January 2007 for comparative purposes. This year's survey also included four distinct data cuts, which included headquarters location, organisation size, programme size and industry classification.
To access the survey, please visit, www.kpmglink.com (registration required).