Developmental Assignments: Cheaper Expat Options

Developmental assignments overseas are an expensive, but necessary, cost of doing Developmental assignments are a great way for organizations to develop and engage employees without investing in overly expensive expat assignments.business for many organizations. They help develop leadership talent, open new markets, and serve as a carrot for employees to strive toward. The use of overseas developmental assignments continues to increase in popularity with the improving and increasingly multicultural economy.

But it is a considerable expense. Compensation has to be revisited. Moving and training costs add up. It is estimated that an overseas assignment can cost three to five times the person’s salary. Here are some ways to cut back on the investment while still receiving a return.

Get tax and residency advice

Residency requirements are different for every country. That status tends to affect how the employee will be taxed on their income while they are on assignment. It’s very complicated to master these rules for just one country, much less others in which you have interests. Consider bringing in a financial advisor familiar to doing business in the target country. Mitigating tax concerns for the employee can make a big difference in the compensation package.

Reconsider the length of the assignment

You might think that expatriation costs are the same whether the person is gone for six months or six years, but that’s not true. There are many benefits for keeping assignments shorter than one year. In short, the employee is treated as someone who is away on business rather than an expatriate in the tax code.

That means business and travel expenses are tax deductible. It’s possible that meals and lodging don’t have to be included as compensation, but rather that they can be expensed. It’s very complicated and should be run by a skilled finance manager, but there are definite benefits to developmental assignments less than a year in length.

Consider training alternatives

When employers think about training, they naturally think about costs. That is especially true when preparing an employee for an overseas assignment. But there are ways to mitigate those costs.

Consider assigning the employee a mentor, someone who is familiar with the host country’s culture, well before the assignment begins. Cultural understanding is a big part of global competence and can greatly increase the employee’s chances of success.
Language learning options are becoming cost-effective as well with the adoption of technology training solutions. Students study at their own pace and reach proficiency much faster than with in-person classes.

Want more information about making your developmental candidates global-ready? We and HR.com have just released a new white paper, “Driving Global Readiness: A Road Map”, full of new information about the importance of language learning in employee retention and training, as well as results from a recent survey about how employers and employees view the importance of making their workforce global-ready.

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