While companies continue to explore various alternative policy approaches, 94% of companies currently have short-term assignment (STA) policies in place, according to AIRINC's 2017 Mobility Outlook Survey. This makes STA policies the most prevalent policy within the global mobility toolbox. Additionally, the remaining 6% are considering adding the policy in the near future. When it comes to industries, 100% of pharma and high-tech companies are using short-term assignments.
According to the same survey, in the past year, 44% of companies increased their use of STAs and 55% predict increasing their use of STAs over the next 12 months. Plus has noticed a 66% increase in the volume of short-term international assignments with the most popular destinations being: the U.S., Mexico, Brazil, Japan, China, Singapore, the UK, Germany, Switzerland, Austria and the Netherlands.
Many companies consider assignments between three and 12 months to be short-term, but some have alternative definitions, like one to six months in length.
Why are STAs so popular?
- When structured properly, STAs can save money and be less expensive than long-term assignments (LTAs) or permanent transfers
- Many employees find them more appealing, and are more likely to accept them because they need not uproot their family, especially as it relates to their spouse’s work and children's schooling
- STAs can often be deployed more quickly for project work, transferring knowledge and covering talent gaps
Consider the points made by Shawn Siwek of GTN West about the possible benefits and some of the potential traps of using short-term international assignments.
Short-term international assignments may initially appear to be a simple solution when compared to the complexities of a longer-term expatriate assignment, there are potential traps to consider. To ensure the employee can legally work in the Host country, the Company must review immigration matters before the short-term business travel occurs. Benefit coverage may be different between Home and Host countries. The tax treatment of the employee in the Host country may not be consistent with treatment available in the Home country. For example, payments made to or on behalf of the employee that are nontaxable for Home tax purposes (e.g., per diem payments), may result in taxable wages to the employee in the Host country.