increase

World has more expats than it did 20 years ago, new research shows

by Ray Clancy on May 23, 2016

Expats are changing, with more companies sending employees abroad on assignments, leading to a growth in overall numbers, new research has found.

On average, well over 50% of companies have increased the number of assignments in any given year although over the last 20 years growth has been slowed by economic shocks such as the Asian financial crisis of 1998, the economic downturn following September 11th and the global recession of 2008.

But overall there are more expats than ever before, according to the analysis from international management firm ECA International, which also points out that as well as the total number of expats increasing there is growing complexity in terms of the number of home and host countries involved in an assignment.

continents-world

One of the main ways companies are responding to this increased diversity is by using different salary or policy approaches, depending on the circumstances. The percentage of companies now using more than one policy has increased from 11% in 2001 to 26% today.

However, there are still few women being assigned to jobs abroad. The research found that the proportion of female assignees doesn’t reflect the diversity seen in the general workforce, although numbers have increased from 7% in 1994 to 12% in 2001.

Since then, however, they have only increased by a negligible amount. The percentage of companies who have specific initiatives to encourage female assignees has decreased from 14% in 2004 to just 2% today, with most companies commenting that they continue to treat male and female employees equally.

“Although this may be the intention, it is evident that this is not reflected in the actual numbers of assignees. Clearly if companies do wish to increase their available talent pool, to include more women may require a more concerted effort,” said Mark Harrison, manager of the remuneration services team at ECA.

The research shows that expat age profiles have not changed much over the last 20 years. We have also seen little change in the age profile of an assignee over the last 20 years. Expats being sent abroad are still most likely to be men aged 35 to 50.

A substantial change detected is the increased use of alternatives to the long term assignment. In 2008, nearly two thirds of international assignments consisted of long term assignments, typically around three years. In 2014, that figure fell to just over half and is predicted to fall to just 45% in 2017.

However, shorter term assignments of one to six months are becoming more prevalent, now making up over 20% of all assignments. In fact, these assignment types have several advantages that may be helping companies overcome the barriers that have been preventing the diversity of assignees from increasing.

“They lend themselves well to career development moves and can therefore certainly help companies with their goal of sending employees on multiple assignments and targeting younger employees,” Harrison explained.

But short term assignments can be expensive and may require more efficient planning and tracking, both for the success of the assignment and also in compliancy terms. Short term assignments should only be used where they are appropriate to achieve the aims of the assignment, the report suggests.

The report says that generally speaking, globalisation has been the key driver behind the changes. Technology has also had a significant impact while cheaper, faster and more reliable transport links have made short term and commuter assignments, as well as business trips, much more viable.

“It is clear that sending employees to work overseas is more popular than ever before but while organisations have the desire to diversify their international assignees socio-demographic profiles, they are evidently still some distance from achieving expatriate gender equality and enabling mobility for a wider pool of employees,” the report concludes.

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