FOR companies sending employees on international assignments it’s important to get accommodation provision right – not least because it is expensive but also because it can have a big impact on the willingness of the employee and his/her family to accept or continue an assignment. The vast majority of companies will pay all host country housing costs but – and particularly with the current appetite for cost savings – this will often be up to a specified ceiling.
Before the assignment begins, our research shows that over 70 per cent of companies provide look-see visits, usually lasting five to seven days for which they will cover the cost of flights and short-term accommodation, at least. Many pay for the partner to go too. These trips can help in allaying any family anxieties about living in a different country as well as ease the process of adapting to a new culture and lifestyle. So although additional costs are incurred the long-term benefits can be invaluable: the employee is prone to be more productive upon relocation and more likely to complete the assignment.
According to our latest research, China is the most common destination for international assignees – and compared to 15 years ago when the US topped the list, there are now a number of Asian locations among the top 12. In fact moves from Europe to Asia followed by intra-Asia moves are the most typically among our clients.
The majority of assignments are still long-term – from two to five years, and for these, temporary accommodation will be provided at the beginning, should it be necessary, by almost 90 per cent of companies. Just over half of companies will provide such housing at the end, too, if the family need to make arrangements for long-term accommodation in the home location. Typically this will be provided for up to a month, prior to the employee and family moving into something more permanent. The host country HR department will usually be responsible for planning and booking temporary accommodation.
However, increasingly, companies are adopting alternative assignment types to meet business needs and reduce the impact of barriers to mobility such as children’s education or partner’s career. Shorter or commuter style assignments often involve the assignee staying in hotels or serviced accommodation for a longer period. The type of accommodation offered will be governed by cost and practicality.
Hotels are more common for trips of under three months, for example, and serviced apartments for assignments up to a year after which the savings afforded by providing unfurnished long-term rental accommodation are well worth it. The accommodation provided will also depend on availability and security issues or whether the assignee is accompanied or not.
A variety of housing-related assistance is commonly provided at the start and end of the assignment, particularly if it’s long-term. This may include home-finding services in the host country, assistance with terminating lease/rental agreements on repatriation, and opening and closing utilities contracts.
This is an editorial contribution by Lee Quane, regional director, Asia Pacific, ECA International. Recognised since 1971 as a world authority in its field, ECA provides knowledge, information and technology to inform, guide and support managers handling compensation and benefits for international workers moving around the world (www.eca-international.com).
By Lee Quane
