Both companies and staff have a lot to gain with corporate relocation. Businesses have many options when choosing their global mobility strategy, and knowing the different types of global assignments can help them decide on their strategy.
With a diverse global mobility portfolio, organizations can maximize their ROI by ensuring they choose the most appropriate and cost-effective assignment, whether concerning the duration of the assignment, location or its overall strategic goal.
Let’s look at the different types of global assignments.
Short vs. Long term global assignments
An assignment is a type of relocation within a global corporation or joint venture that requires the employee to relocate, specifically to another country, and work there for a set amount of time.
We consider “short-term assignments “those that take place within less than a year; and a “long-term assignment” when the predetermined time is greater than that. Short-term assignments are usually associated with specific projects with shorter timelines, while long-term assignments are more broadly strategic. Long-term assignments are quite labour intensive for companies and their relocation partners because of compensation and taxes.
International commuter assignment
An alternative to traditional global assignments, a commuter assignment happens when an employee lives a few days of the week in the country they work in and frequently returns to their home country.
International commuters are not defined by a specific type or length of the assignment. Some are actually classic relocations, with the employee returning home regularly, possibly on weekends or for a full week every month. Others are less organized “frequent flier” assignments in which the employee travels between countries without a fixed schedule (HR – important! You should always have a way of tracking time spent in the destination country). Sometimes, assignee reluctance to leave their family for short-term assignments results in the company choosing a commuter assignment. This may not always be the best solution for the project (should someone else be considered?)
Extended business travel
Extended Business Travel (EBT) is an umbrella term for frequent business travellers – who travel for business to different countries regularly -, and extended business travellers – who travel for business to another country for an extended period.
As businesses attempt to reduce reliance on traditional assignment types, EBT is a way to respond to demands in other regions of the world or even within the same country. Yet, it is important to pay attention to the duration of the stay. Extended business travel is not without its disadvantages. Tracking time spent at a destination may be harder because the rules around extended business travel are looser. There may be health care coverage concerns. And when extended business travel exceeds 183 days, the agreement might trigger tax obligations in host countries. But other destination country rules may trigger tax without crossing the threshold of 183 days. Finally, extended business travel may be exhausting for the employee and cause stress at home.
Is your company thinking of relocating personnel internationally? Strategic considerations play a role in determining whether to create a long or short-term assignment and overall cost and tax ramifications. Employee hesitancy may mean a commuter assignment over a short-term assignment, but commuter assignment can have a lot of hidden costs. Work with a Relocation Management Company to determine which kind of global assignment works best for your particular situation.
One final word about short-term commuter assignments and extended business travel: it is very important to implement systems to monitor employees’ travel. The company and employee may be liable for tax withholding payments or financial penalties. One problem at companies with low global mobility is that short-term and commuter assignments are often decided upon at short notice at the level of the individual specialist departments, bypassing HR. This means risk to the company including reputational risk with government authorities. HR should be at the center of relocation, be it long-term, permanent, or shorter-term varieties.
Let All Points help you with this decision. Contact us to learn more.