July 18, 2022
Short-term Assignments Can Give High-Potential Employees a Reason to Stay
Counter the “Great Resignation” by offering short-term assignments to your high-potential employees and build engagement
Short-term assignments, whether in the same country or abroad, have been a major trend in relocation over the last few years and we believe this trend will continue in the years to come. Short-term assignments, which are typically less than 12 months, can be a way to attract and retain talent by offering interesting challenges as the employee gains new skills, experiences, and builds a network of colleagues.
While there are clear benefits to utilizing this policy type – especially instead of a long-term assignment that can be quite costly – corporations must maintain compliance with respect to payroll, taxation, and immigration if the assignment is overseas.
In the U.S., a short-term assignment must have a clear start and end date and must be less than 12 months to claim some expenses tax-free for the employer, and in many cases, international short-term assignments can avoid host country taxes if there is a totalization agreement between the home and host country and the employee spends less than 183 days there.
Whether it’s for finite projects, developmental job positions, new business or branch openings, there are many reasons and benefits for sending an employee on a short-term assignment. Instead of tradeoffs, we often see synergy across different priorities, such as when productivity is maintained, headcount is not increased, and high-potential employees are given an opportunity to build leadership qualities.
Benefits of Short-Term Assignments
A short-term assignment costs less than permanently relocating an employee
Short-term assignments can be more cost-effective than a long-term assignment (typically 1 to 3 years) or permanently relocating the employee. In fact, it allows company initiatives to proceed without the costs of selling a house and asking members of an assignee’s family to relocate with them.
A short-term move is less stressful on employees than a permanent move
Unlike long-term assignments or permanent relocation, employees do not typically move with their families during a short-term assignment. Whereas this eliminates some added challenges that could arise from searching for adequate housing, enrolling children in a new school, or a spouse looking for employment, we recognize that living apart from family can be stressful and therefore recommend regular home leave to ensure a successful assignment.
Short-term assignments are great opportunities for employees to grow
Short-term assignments can give your staff opportunities to learn additional skills and gain new perspectives, helping to create a more diverse and inclusive organization. Knowledge sharing upon their return to the origin location is a bonus to going on short-term assignment, benefiting the employee, colleagues, and the company.
Most short-term assignments range between 3 and 12 months; assignments that are shorter tend to be considered Extended Business Travel with some different considerations to keep in mind. There are employers that allow accompanying family members on an assignment that is less than 1 year; other organizations consider any assignment under 2 years as short-term.
Setting up your Employee for a Successful Short-Term Assignment
While the needs of employees will vary, it’s important for companies to have a standard program that allows some flexibility. Setting clear expectations and communicating those to the employee helps achieve success.
Here’s our key advice for employers to consider when creating a short-term assignment policy.
Help employees find short-term housing
Short-term rental agreements with corporate housing specialty companies are often the best option because they are fully furnished and typically offer a variety of amenities to help renters feel at home.
Some of these organizations own properties while others source properties and fill with furniture, and if your organization frequently sends people to the same location, they can set up rotational agreements whereby the accommodations are maintained for your organization and employees can rotate in and out as necessary. This can eliminate the hassle of searching for new housing each time an employee is relocated for a short time. Alternative housing options can include extended-stay hotels or vacation-type rentals such as Airbnb.
Cover all host-location expenses
A short-term assignee retains their home property while on assignment, therefore, the employer assumes responsibility for most expenses, including but not limited to housing, utilities, parking fees, as well as travel expenses in the host location and for home leave visits.
In addition, most employers will provide an allowance to offset the cost of meals and incidentals, sometimes in the form of a cost of living adjustment (COLA) or per diem.* This decision is typically based on the expected duration of the assignment.
Provide benefits that will help employees adjust
Family separation during a short-term assignment is one of the most common challenges for employees, making the power of continued connection critical. Therefore, taking home leave on a regularly scheduled basis throughout the duration of the assignment promotes closeness, and many companies allow family members to visit the host location in lieu of the employee travelling home. We also suggest offering self-directed online cross-cultural training if the assignment is overseas.
Offer resources to help employees acclimate
Whether the assignment is in-country or abroad, Sterling Lexicon recommends providing at least a ½ day orientation tour to ensure your valued employee feels comfortable in the host location.
Employees will appreciate knowing how to navigate in the host location, knowing the location of medical facilities, and knowing how to go about their daily life in a different environment helps people adapt more quickly.
Choose the right relocation management company (RMC) for your relocation and assignment needs
Whether relocating permanently or going on a short-term assignment, the right counseling can help mitigate worry while providing an exceptional employee experience. The right RMC can help develop equitable policies and should have an extensive supplier network to identify appropriate corporate housing within budgetary requirements, Destination Services Providers to manage an orientation to the host location, and online tools to support their stay. Additionally, an RMC like Sterling Lexicon can manage the entire expense process from start to assignment completion.
*There are distinct differences between a per diem and COLA, and are usually applied to different global mobility policy types:
Per Diem: a per day payment structure that is designed specifically for employees on assignment lasting from 1 month to 1 year. A per diem is intended to provide a fixed daily living allowance that is equitable to all assignees in the same host location, regardless of salary level or home country.
Cost of Living Adjustment (COLA): a payment structure that is designed to protect assignees from the increased costs of goods and services at the host location by supplementing their salaries. The calculation also takes into account the longer-term nature of living and working in a host location while reflecting the expatriate’s spending patterns. Data providers offer multiple index options and the ability to customize according to company policies.
Leah Johnson is Sterling Lexicon’s Director, Client Solutions, and has worked in the global mobility industry for more than 20 years. She has held management positions in business development, operations, account management, and consulting, and had the opportunity to live and work in Tokyo and Hong Kong for six years. She initiated destination services in Hong Kong for a relocation management company and directed global mobility for Goldman Sachs in the APAC region. She graduated from Colgate University, earned an MBA from the University of Alabama in Huntsville, and maintains a Senior Certified Professional (SCP) certification from SHRM.