By: Helios on May 4th, 2014
Review These Top Considerations Before Sending an Employee Overseas
Most people agree that the explosion in technological advances over the past century has made the world a smaller and more closely linked place. And it’s also changed and expanded the way that people do business and made it easier to overcome previously impenetrable geographic barriers. Despite the ease and utility provided by modern technology, companies still continue to send their employees abroad in record numbers. And they do so for a variety of reasons. Some large MNCs (multi-national corporations) view international work experience as a core competency. Smaller businesses may see expansion into a new market via business development and marketing as critical to diversifying their consumer base. Some companies look to offshore certain parts of their operations to achieve cost savings. If your organization is considering sending even just one employee overseas, think carefully about how you plan to address the following things:
- Benefits: Benefits for international assignees can be extremely complex. If your company is contemplating sending employees abroad, it’s critical that you work with your broker or benefit carriers as early in the process as possible to ensure that you have accurate information. Most American medical plans don’t have extraterrestrial application meaning that the insurance is not valid outside of the US. It’s also common for life and disability insurance carriers to place strict policy provisions on the use of the benefit overseas. For example, in countries with significant security risks, your policy may not apply at all, or it may cancel automatically after the employee has been in country for 6 or 8 weeks. While it’s possible to purchase policies to cover employees working overseas, they can be more costly or require a minimum number of participants, or both! It’s very important to understand what applies for your employees and to communicate their benefits to them clearly. You should consider adapting your benefits guides if you anticipate sending a large group of employees abroad. Many countries around the world mandate certain benefits, which could come into play if part of your strategy involves hiring local nationals. Statutory holidays are also very common so it’s important to consult with a knowledgeable HR professional who can make sure that your company’s policies are consistent and compliant.
- Assignment Length: In the past several decades, many companies have moved away from long term assignments, typically understood as 3-5 years, to shorter and more flexible assignments lasting between 1 and 3 years. Many even utilize temporary assignments of several months. In deciding the assignment length, you’ll want to think about the business need as well as compliance concerns. If your company wants to send employees abroad in order to get exposure to other parts of the business, perhaps 18 months would be sufficient. On the other hand, if you need a high level manager to oversee the establishment of a new business unit or facility, a long term assignment or even permanent relocation would be more appropriate. The length of the assignment affects everything from immigration to compensation to taxation so it’s important to have a plan in place.
- Strategy: Especially in the small business environment, many companies make the decision to assign an employee overseas in a reactive manner; i.e. they have an opportunity, and they find the right person to fill it. While this is understandable, it’s important to have an eye on the future. What if your business grows? Will you send more employees and what will this mean? Will you hire locals? Third country nationals? How will you ensure equity amongst these employees? How do you ensure that your employees abroad remain connected to their domestic counterparts and connected with the company culture and mission? When employees return from international assignments, how will you reintegrate them and make sure that the company benefits from their newly gained experience?
If you haven’t thought about these questions or if you’re not sure of the answers, Helios’ HR experts can help! Our clients have been in your shoes and we’ve helped them come up with strategies and processes that are workable and scalable and that ultimately help their business grow and succeed.