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Chapter 1: Why assignment guidelines are worthwhile even with few international assignments: Transparency, fairness and efficiency through clear rules.
Companies that only send employees abroad sporadically need to consider when it becomes reasonable and necessary to develop an assignment guideline. However, many companies with limited foreign activities shy away from the effort of developing an assignment guideline (also called expat policy) and prefer to regulate each foreign assignment individually or look for a simple template that can be applied directly to their specific needs.
Nevertheless, companies should create suitable regulations as early as possible for the following reasons. The assignment guideline should also be regularly reviewed and adapted to the company's changing requirements.
1. Establish transparency in assignment conditions and minimize time-consuming individual decisions
Assigned employees are often well connected within the company and actively share their experiences and conditions during assignments abroad. Even if the exact remuneration details are often not discussed in detail, it quickly becomes apparent which allowances and visible benefits are granted to colleagues.
If, for example, one person is reimbursed for housing costs in an attractive residential area while another only receives a small housing allowance, this can lead to dissatisfaction and a negative mood among those affected. In addition, there is a tendency to renegotiate assignment packages, which can lead to additional costs and budget shortfalls for the company.
Am assignment policy that is accessible to all employees not only creates transparency, but also increases fairness by reducing extensive individual decisions and openly explaining the applicable conditions to all assignees.
2. Consider different needs for foreign assignments within the group of companies
A well-designed assignment policy should consider the various categories of assignees to the greatest extent possible. A young graduate going on a six-month assignment abroad for personal career development does not need the same benefits as an experienced specialist who is significantly involved in setting up a foreign subsidiary. If such differences are communicated clearly and at an early stage, they can be understood by everyone and are more likely to be accepted.
Transparent communication of the benefits (e.g. housing allowances, daily allowances) and, where applicable, the obligations (e.g. repayment agreements, tax regulations) for the respective expatriate group helps to manage expectations in advance and save costs for the company. If the assignment conditions are clearly set out from the beginning, most employees who go abroad at their own request for career purposes will understand why they do not receive the same benefits as employees who are urgently needed for the company at a particular location.
However, once expectations have been created and promises have been made by line managers, it becomes far more difficult to explain to employees why they are not entitled to certain benefits. A transparent assignment policy with defined processes and benefits for the respective employee groups creates clarity from the very start.
3. Reducing conflicts of interest by considering different stakeholder views
For the individual business units, it is of course in their own interest to have employees available at the place of assignment as quickly and smoothly as possible. However, operational requirements often do not allow long preparation times. At the same time, however, the HR, controlling and legal departments insist on regulated processes to ensure compliance with tax, work permit, social security and other regulations.
The interests of the parties involved are often in conflict with each other, as an immediate foreign assignment usually does not allow the best possible structuring of the assignment with regard to work permits, tax, social security, remuneration and employment law.
Even with only a few foreign assignments, it therefore makes sense to establish clear processes and define priorities. In this way, repeated negotiations and mistakes that have already been made can be avoided, which ultimately saves everyone involved time, money and effort.
4. Standardize international assignments between affiliated companies
Expat policies are particularly important when foreign assignments are administered decentrally within a group of companies. By standardizing and defining general framework conditions for foreign assignments, these can be structured and, thus, simplified.
If expatriates from different locations are sent to the same assignment location, there should be uniform assignment conditions to ensure largely equal treatment. At the same time, however, the different roles and hierarchical levels of employees must still be taken into account appropriately.
Conclusion
SERIES: The Interaction of assignment guideline and assignment contract
Chapter 2: Assignment guidelines: Key aspects and challenges for companies
Chapter 3: Options for structuring the assignment agreement
Chapter 4: Differentiation between assignment guideline and assignment agreement
Chapter 5: Development of a new assignment guidelines in the company
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
