Study: Expatriate Use Rising, Durations of Stay Falling

February 8, 2005 ( - The number of companies sending employees to work in different countries is on the rise, although the average length of stay is shortening, according to a new survey.

According to the 2004 Worldwide Survey of International Assignment Practices and Policies, conducted by OCR Worldwide, 41% of American companies saw an increase in the number of expatriate workers in their organization, up from 26% in 2002.

Along with more workers going abroad, however, is the trend of shorter stays. Excluding Japan, half of the participants in the survey use assignments of up to three years; however, three-quarters usually have expatriates on short-term assignments of less than 12 months. This figure is up from 66% having short-term assignments in 2002, and 59% in 2000.

An OCR Worldwide press release attributes the practice of short stay durations as being caused largely by an urge to avoid having an entire family move. On short-term stays, 79% of families do not relocate with the employee, according to the survey.

A home-based balance sheet approach is the most common way (73%) of compensating expatriate employees according to the study. As was the case in 2000 and 2002, almost all employers (94%) pay goods-and-services or cost-of-living allowances to employees who relocate out of country. Due to this and other factors, 87% of employees maintain a standard of living that is comparable to what is seen at home. Many companies pay an incentive to take such assignments, although these vary by region, according to the study. For those in dangerous places, 62% receive an extra allowance for the willingness to travel.

Over half of employers are reviewing, about to review, or have recently changed their expatriate program, with cost-effectiveness (44%), short-term policy development (35%), and competitiveness (31%) the major reasons cited for reconsideration.

The study looked at 874 multinational companies in 24 industries, with half based in the Americans and the rest spread among Europe/Middle East, Japan, and Asia-Pacific.