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As few as one in seven companies have specific emergency plans for each country to which they have assigned staff. KPMG's latest 2012 Global Assignment Policies and Practices (GAPP) survey reveals that just 13 percent of 577 human resource professionals surveyed in companies worldwide have specific emergency plans for overseas assignees.
This number has declined over the last decade, from 21 percent in 2003. It is a surprising trend given that companies are increasingly operating in a world fraught with risk. At the same time, less than 10 percent encourage their assignees to complete wills or document arrangements for child custody in case of emergencies while they are on assignment.
"Given the rise in geo-political turmoil over the past few years and the increased prevalence of natural disasters, one would expect this practice to have dramatically increased rather than diminished," says Mr BJ Ooi, Partner and Head of International Executive Services.
"Based on the high cost of reactive evacuation and assistance services in times of crisis, it would seem that this would be a prudent area of focus for companies with overseas assignees under their care,” he further added.
The survey also indicates that industries that tend to operate in higher-risk locations — such as Energy companies — demonstrate a higher likelihood to have country specific emergency plans. Energy companies are also much more likely to have contracted an external service provider to manage emergency evacuations or assistance during a crisis (51 percent versus an average of 33 percent).
Other key findings:
- the number of mobility programmes which cater for unmarried domestic partners of the opposite gender rose from just 24 percent in 1999 to 55 percent in 2012
- the number of programmes that include same-sex partners has risen from 17 percent to 49 percent (from 1999 - present)
- companies headquartered in Asia Pacific are much more likely (77 percent) to have no limits or caps on allowances over and above normal compensation, versus those in the Americas (55 percent)
- companies are starting to take a more granular view of tax reimbursement policies in order to achieve a mutually beneficial arrangement with their assignees.
"As this trend increases, we will likely experience implications for companies offering international assignments and their global mobility managers," says Mr Ooi, “Expanding the definition of family could help companies become more attractive for new employees and help with retention of existing staff. At the same time organisations could likely see an increase in the cost of mobility per employee as more couples become eligible, thus requiring an extension of spousal benefits such as work visa support and job search expense allowances."
He added, "However, it is notable that governments do not always follow the broader definition of 'family' and there may be a mismatch between assignment policies and immigration regulations."
Cost of living and tax equalisation
A growing number of organisations with international assignees are looking to tweak their mobility policies and practices in order to enhance their competitive position in the marketplace. One area where significant divergence is becoming clear is in the treatment of cost-of-living allowances.
While 58 percent of all companies have no limits or caps on allowances over and above normal compensation, companies headquartered in Asia Pacific are much more likely (77 percent) to have no limits, versus those in the Americas (55 percent).
Almost three quarters (73 percent) of companies offer tax equalisation policies, meaning that their employees on international assignment pay no more or no less tax than they would have paid had they remained in their home jurisdiction.
The practice is more prevalent in the Americas than in Asia Pacific or Europe. But while tax equalisation policies have remained fairly common since 1999, the survey indicates significant changes in how they are being managed. For example, over the past 10 years, companies have become 50 percent more likely to expect assignees to pay any tax due on share purchases.
Seeking expertise
Almost three quarters of respondents (72 percent) suggest that the main objective of international assignment programmes is to support the organisation’s business objectives and create greater adaptability to changing business requirements.
To achieve this goal and drive greater efficiency into the assignment process, many companies (48 percent) now outsource parts of their international assignment programmes to gain access to a service provider's global resources and expertise.
Mr Ooi concludes, "As these adjustments to mobility policies and practices continue to evolve, we anticipate seeing a widening gap in the competitive positioning between regions, industries and companies." |
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