Sending expats on overseas assignments could be a huge waste of money for many companies, argues a new report.
Around 60% of global companies believe their expat workers are not worth the money, says the study by international accountancy firm PwC.
Most companies do not know whether assigning expats to overseas projects is cost-effective because they have no financial controls in place to cost or measure their performance.
PwC claims the number of firms sending out expat workers to aid overseas projects is increasing, but few can justify the cost.
Despite this, 90% of companies operating in more than one country plan to increase the number of expat workers by at least half over the next two years – yet researchers revealed only 8% can cost global assignments and just 9% of firms measure the return on investment of flying expats around the world.
Managing expats
PwC gleaned the results from a report on modern mobility that asked 200 expat executives about how their companies financially manage expat workers.
The survey found 30% of executives responsible for managing expats had no idea how many overseas workers their company employed.
The report suggests that expat working patterns are undergoing a change, with an increase in the number of workers on short-term assignments of up to a year.
“Businesses are flying in the right people on short trips to deliver set objectives rather than post expats for several years to a location,” said the report.
“A lot of firms are looking at their financial controls and management of expats. Few have an understanding of cross-border employment laws, tax, and immigration issues that affect their workers and whether their business is complying with regulations in each country where they have a branch.”
Talent swapping
Talent swaps are also highlighted as the next major mobility move for many companies.
Around a fifth of organisations told reported they plan to switch workers between countries on short assignments over the next two years.
Clare Hughes, director of PwC’s global mobility team, said: “Moving people between each country as and when their talents are needed is an obvious move for many multinational businesses.
“Talent swapping allows fewer people to plug gaps rather than post someone long-term whose skills and experience may only be needed now and then.
“However, if organisations do not control their costs, they will waste money overpaying expats when they may already have underutilised talent in-house at another location.”
