For every cross-border assignment, there's a time and a place, but how long, and where exactly, and what kind of structure should you give it?

Without a doubt our clients have had a hefty increase in global activity over the last few years and despite some pressing concerns (think Brexit, government shutdowns, immigration challenges, increased scrutiny, tax changes, increased costs) most companies anticipate increases in global talent mobility across industries and regions. Additionally, we continue to see clients adding policies to their mobility toolbox to allow for better cost management, expectations setting, compliance, agility and flexibility. Core-flex transfer, expat lite STAs, local plus, EBTs, "hand-raisers" and commuters to name a few of the added policy options.

According to this article in January's Mobility Magazine from Worldwide ERC®, permanent transfers are more popular than ever for getting talent into place. "ECA’s January 2018 Permanent Transfers Survey found that nearly 40 percent of international transfers lasting more than one year are made on a permanent basis, where there is no expectation or commitment for the employee to return to the home country. Four years earlier this figure was only 22 percent. Nearly two-thirds of companies have seen the proportion of permanent transfers increase in the last three years, and a similar number forecast further increases in the next three."

Filling skills gaps and managing operations are two big reasons for the uptick in these transfers onto a local arrangement. While we have been seeing increased usage of transfers since the recession, there are challenges that some companies and employees find with the use of permanent transfers. According to Permanent Transfers: Lessons Learned from Morgan Crosby at AIRINClast October, there are a number of things to consider:

  1. Over time permanent transfers can lead to higher costs and less mobile employees.
  2. The permanent transfer has gotten a bad reputation and employees are starting not to accept offers, negotiating for an assignment instead. 
  3. Back-to-back permanent transfers are causing retirement issues.

With ongoing global talent shortages, we anticipate that there will continue to be solid usage of this type of policy, but employees may be less apt to take transfers if their compensation, tax and ongoing career concerns are not addressed.