Mercer’s International Assignments Survey 2005/2006 captures the latest international assignment practices and policy developments. This survey, based on input from approximately 200 major multinational firms, keeps you abreast of the latest trends in International Assignments.

This report provides a wealth of information on the best practices of leading European, North American, Latin American, and Asian & Pacific firms.

Increased transfers over the last two years

Results indicate that companies have increased the number of transfers over the last two years, with a higher rate in transfers to and from locations other than the Headquarters.

Only 12% of participating companies are relatively new to expatriation and have been sending employees on international assignments for less than five years. Seventy-two percent of the participants from Europe, 61% from North America, 54% from Asia & Pacific, and 48% from Latin America have had expatriates for more than ten years.

The proportion of female expatriates is slowly increasing and today stands at 13% whereas, five years ago, it was only 8%. The biggest increase is reported from Latin America where five years ago an average of 1% of expatriates were female, whereas now this is 11%, higher than in Europe where the proportion of female expatriates is currently reported at 10%.

Regardless of geography or business unit, 72% of the European and 66% of the North American participants apply one single global corporate policy and make adjustments only to ensure compliance with local or regional legal requirements.

Home Country Approach

The Home Country Approach remains by far the most popular compensation approach, used by two-thirds of companies worldwide. North American firms lead this trend with 82% of companies using a Home approach compared to 40% of Latin American firms.

Roughly one in four companies pay the whole salary in host country currency; another quarter pay in home country currency; and one-fifth of the respondents split salary payments between the home and the host currency.

Over one-half of European companies apply negative cost-of-living indices – American and Asian & Pacific companies generally do not. More than 90% of respondents provide a cost-of-living allowance for traditional long-term assignments. Less than 20% of the companies report having made changes to their COLA policy in the last two years.

Premiums

Three-quarters of companies provide mobility premiums for long-term assignments. For nearly four-fifths of the companies, the amount of the mobility premium is linked to the salary level. Seventy-one percent of companies use separate payments for mobility premiums and hardship allowances. Despite efforts to save costs, companies are not in reality reducing mobility premiums. Sixty-one percent of companies pay the mobility premium on a monthly basis or in line with payroll. Eighty-three percent of companies have been holding their current mobility premiums for inter-regional transfers stable.

For Latin American companies, it is not customary to provide Rest and Recreation leave in hardship locations. One-quarter of the companies provide this leave. Companies typically pay for assignees’ transportation (car rental/train) and accommodation costs during Rest and Recreation leave.

North American companies are less likely to provide free housing, whereas this is more common among Asian & Pacific and Latin American companies.

Other benefits

Most of the European companies provide some kind of assistance when an assignee’s children stay in the home country to pursue their studies. Nearly all companies provide education benefit with Asian & Pacific companies taking the lead.

Companies most often apply a host country company car policy. In Latin America, the company car constitutes an important part of the assignee’s package.

Just 5% of the companies surveyed indicate that they do not grant any home leave. North American companies are the most generous in terms of home leave expenses.

Spouse support

While the majority of spouse support policies of European and North American companies also cover non-married or same-sex partners, policies of companies in Asia & Pacific and Latin America do not. Fifty-two percent of the companies have already sent married employees on traditional/long-term assignments without being accompanied by their family.

Non-married partners of the opposite sex are covered by 53% of the participant companies and non-married partners of the same sex are covered by 43% of the participants. Sixty-five percent of European companies and 53% of North American companies but only 6% of Asian & Pacific companies and none of the Latin American companies cover non-married partners of the same sex.

Assistance: Before, during, and after the assignment

North American and European companies tend to provide more pre-assignment support than Asian & Pacific and Latin American companies. Nearly three-quarters of the companies provide language tuition and six in ten companies provide cross-cultural training.

Whereas the majority of Asian & Pacific, European, and Latin American companies guarantee assignees a job upon repatriation, the vast majority of North American companies do not.

Localization and return on investment

Putting an assignee who used to be on an expatriate package on local status in the host location is a sensitive topic. As this often raises retention issues, companies generally handle this on a case-by-case basis.

While the majority of companies indicate having at least a fair estimation of the cost of their international assignments, only a few are in a position to measure the benefits and ultimately ROI.