Where’s Our Expat Now?
A lot of HR professionals have no doubt been scrambling to get a handle on their more unruly expats since the publication of a study called “The Hidden Worker: The Reality of Stealth Expatriates.” Based on a survey of 216 international HR practitioners, the study reported that a whopping 78% of respondents either suspect or know that they have employees who are working in another country without being part of the formal mobility program (Cendant, 2005a).
Of course, it’s hard to arrive at hard numbers for such expats; they are, by definition, off the official radar screen. It’s as if HR were engaged in a real-life and potentially costly game of “Where’s Waldo?” with their own employees. An alarming 83% of surveyed companies said they don’t even have a system for tracking such people. In fact, the most common way of turning up these invisible expats is simply by chance, according to the survey conducted by Cendant Mobility and Worldwide ERC with participation from the Chartered Institute of Personnel and Development.
In a sense, this trend is part of a more general one toward shorter expat assignments. Not only are businesses becoming more global, they’re also engaging in more offshoring, international joint ventures and global mergers. To keep things running, managers and other highly skilled employees often have to hop on an international flight to make it work.
This all requires shorter-term expat assignments. In fact, a Prudential Relocation survey of multinationals found that 70% of respondents believe that the number of assignments lasting from one month to half a year will grow through 2007. And assignments of less than a month are also on the upswing (Prudential Financial, 2005).
With the increased need for short-term assignments, it makes sense that some business units would take on a “just do it” mentality and start sending people abroad without going through formal channels. The problem is that organizations and employees can take a serious hit when they become too loose with the rules, especially when it comes to tax and visa regulations (“Taxing,” 2005).
The Economist refers to the tax rules that apply to such expats as “fiendishly complex” and notes that “income-tax liability across the EU still kicks in at very different stages” (“In Search,” 2005). And Jacqueline A. Hauser of Cendant Mobility writes, “As countries become more savvy in tracking workers and recouping money owed, organizations as well as stealth expatriates themselves need to ensure they are in compliance, as both may incur costly penalties” (2005a, p. 34).
Hauser points to other drawbacks to stealth expats as well, such as higher costs (stealth assignments can wind up being more expensive due to taxes) and equitability (stealth expats may not get the same training, perks or benefits as other expats). Another potential difficulty is that HR just won’t be able to understand the issues that lead to failed assignments if there’s no record of them. That’s bad news indeed given the fact that all kinds of short-term global assignments are failing at a growing rate among high-tech companies (Daniels, 2005).
So, what can organizations do to address these concerns? The obvious answer is that HR must do a better job of tracking employees as they move from country to country. It might be able to do this in any number of ways, such as working with the corporation’s travel agent, reviewing expense reports, auditing mobile-phone bills, working with IT and payroll, establishing rapport with overseas staff and scrutinizing foreign activity on corporate charge card accounts (Marino-Nachison, 2005).
One recommendation is that HR do a better job of educating business managers so they’re more aware of the problems and will work within the formal system (Hauser, 2005b; Lewis, 2005). Two approaches highlighted in the Cendant/ERC study (2005b) are the use of companies’ intranets to communicate the potential risks associated with stealth expats and the development of a traveler and commuter policy that incorporates short-term assignments.
But HR needs to listen as well as inform. If features of the current mobility program are viewed as too bureaucratic, unresponsive or inflexible, then companies may need to change them to better suit evolving business needs. Organizations may also need to review their benefits policies for globally mobile workers. A quarter of multinationals don’t even have a benefits policy for such employees, and of those that do, a tenth have never reviewed the policy, according to a recent survey conducted by Mercer Human Resource Consulting (“Multinationals,” 2006).
Given a little time, companies are bound to get better at managing mobile workers. We all just need to learn the rules for darting back and forth across borders in today’s ever busier global beehive.
For much more on “The Hidden Worker: The Reality of Stealth Expatriates,” click here.
Documents used in the preparation of this TrendWatcher include the following:
Cendant Mobility. “HR Executives See Risks in Stealth Expatriates.” Press release. April 5, 2005a.
Cendant Mobility, Worldwide ERC and the Chartered Institute of Personnel and Development. “The Hidden Worker: The Reality of Stealth Expatriates.” 2005 Pulse Survey Report. 2005b.
Daniels, Dennis. “Effects of Short-term Assignments on Families – An Asian Perspective.” Mobility, September 2005, pp. 54-60.
Hauser, Jacqueline A. “The ‘Hidden’ Global Assignee.” Workspan, July 2005a.
Hauser, Jacqueline A. “Stealth Expatriates Are Causing a Stir.” Mobility, August 2005b, pp. 22-25.
“In Search of Stealth.” The Economist, April 21, 2005.
Lewis, Carol. “Career Focus Creates ‘Stealth Expatriates.’” The Times ( London). LexisNexis. May 12, 2005.
Marino-Nachison, David P. “Report: Stealth Expats Challenge International Employers.” Global Forum News. Obtained April 20, 2005.
“Multinationals Lacking in Globally Mobile Perks.” Employee Benefits. ProQuest. January 12, 2006, p. 12.
Prudential Financial. “Global Short-term Assignments: Trends and Solutions.” 2005.
“Taxing Times: Handling Expat Assignments.” Human Resources Magazine, May 17, 2005.
Of course, it’s hard to arrive at hard numbers for such expats; they are, by definition, off the official radar screen. It’s as if HR were engaged in a real-life and potentially costly game of “Where’s Waldo?” with their own employees. An alarming 83% of surveyed companies said they don’t even have a system for tracking such people. In fact, the most common way of turning up these invisible expats is simply by chance, according to the survey conducted by Cendant Mobility and Worldwide ERC with participation from the Chartered Institute of Personnel and Development.
In a sense, this trend is part of a more general one toward shorter expat assignments. Not only are businesses becoming more global, they’re also engaging in more offshoring, international joint ventures and global mergers. To keep things running, managers and other highly skilled employees often have to hop on an international flight to make it work.
This all requires shorter-term expat assignments. In fact, a Prudential Relocation survey of multinationals found that 70% of respondents believe that the number of assignments lasting from one month to half a year will grow through 2007. And assignments of less than a month are also on the upswing (Prudential Financial, 2005).
With the increased need for short-term assignments, it makes sense that some business units would take on a “just do it” mentality and start sending people abroad without going through formal channels. The problem is that organizations and employees can take a serious hit when they become too loose with the rules, especially when it comes to tax and visa regulations (“Taxing,” 2005).
The Economist refers to the tax rules that apply to such expats as “fiendishly complex” and notes that “income-tax liability across the EU still kicks in at very different stages” (“In Search,” 2005). And Jacqueline A. Hauser of Cendant Mobility writes, “As countries become more savvy in tracking workers and recouping money owed, organizations as well as stealth expatriates themselves need to ensure they are in compliance, as both may incur costly penalties” (2005a, p. 34).
Hauser points to other drawbacks to stealth expats as well, such as higher costs (stealth assignments can wind up being more expensive due to taxes) and equitability (stealth expats may not get the same training, perks or benefits as other expats). Another potential difficulty is that HR just won’t be able to understand the issues that lead to failed assignments if there’s no record of them. That’s bad news indeed given the fact that all kinds of short-term global assignments are failing at a growing rate among high-tech companies (Daniels, 2005).
So, what can organizations do to address these concerns? The obvious answer is that HR must do a better job of tracking employees as they move from country to country. It might be able to do this in any number of ways, such as working with the corporation’s travel agent, reviewing expense reports, auditing mobile-phone bills, working with IT and payroll, establishing rapport with overseas staff and scrutinizing foreign activity on corporate charge card accounts (Marino-Nachison, 2005).
One recommendation is that HR do a better job of educating business managers so they’re more aware of the problems and will work within the formal system (Hauser, 2005b; Lewis, 2005). Two approaches highlighted in the Cendant/ERC study (2005b) are the use of companies’ intranets to communicate the potential risks associated with stealth expats and the development of a traveler and commuter policy that incorporates short-term assignments.
But HR needs to listen as well as inform. If features of the current mobility program are viewed as too bureaucratic, unresponsive or inflexible, then companies may need to change them to better suit evolving business needs. Organizations may also need to review their benefits policies for globally mobile workers. A quarter of multinationals don’t even have a benefits policy for such employees, and of those that do, a tenth have never reviewed the policy, according to a recent survey conducted by Mercer Human Resource Consulting (“Multinationals,” 2006).
Given a little time, companies are bound to get better at managing mobile workers. We all just need to learn the rules for darting back and forth across borders in today’s ever busier global beehive.
For much more on “The Hidden Worker: The Reality of Stealth Expatriates,” click here.
Documents used in the preparation of this TrendWatcher include the following:
Cendant Mobility. “HR Executives See Risks in Stealth Expatriates.” Press release. April 5, 2005a.
Cendant Mobility, Worldwide ERC and the Chartered Institute of Personnel and Development. “The Hidden Worker: The Reality of Stealth Expatriates.” 2005 Pulse Survey Report. 2005b.
Daniels, Dennis. “Effects of Short-term Assignments on Families – An Asian Perspective.” Mobility, September 2005, pp. 54-60.
Hauser, Jacqueline A. “The ‘Hidden’ Global Assignee.” Workspan, July 2005a.
Hauser, Jacqueline A. “Stealth Expatriates Are Causing a Stir.” Mobility, August 2005b, pp. 22-25.
“In Search of Stealth.” The Economist, April 21, 2005.
Lewis, Carol. “Career Focus Creates ‘Stealth Expatriates.’” The Times ( London). LexisNexis. May 12, 2005.
Marino-Nachison, David P. “Report: Stealth Expats Challenge International Employers.” Global Forum News. Obtained April 20, 2005.
“Multinationals Lacking in Globally Mobile Perks.” Employee Benefits. ProQuest. January 12, 2006, p. 12.
Prudential Financial. “Global Short-term Assignments: Trends and Solutions.” 2005.
“Taxing Times: Handling Expat Assignments.” Human Resources Magazine, May 17, 2005.