According to a recent KPMG survey, half of mining industry respondents expect to increase their use of international assignees over the next 5 years. Whether these are experienced expatriate workers or employees new to the game, such assignments can be costly with a high failure rate.
In addition to upfront relocation expenses, there are ongoing costs of housing, transportation, cost-of-living, language and cultural training, kids’ education, and trips home. Employers are also expected to fund any difference in net salary resulting from moving to higher-tax regimes.
Individuals and families often fail to adapt without familiar home comfort sand support. Yet, 47 percent of respondents to KPMG’s survey say their company offers no cross-cultural training, and 39 percent do not screen employees. Repatriation is also often inadequate, which can increase the chance of attrition.
Many companies do not operate a wider workforce resourcing plan, making it harder to coordinate assignments around the world.
A well-oiled mobility machine requires coordination between the potential assignee and the business unit head, Human Resources (HR), Payroll, GlobalMobility, Tax, Finance, and third party tax, relocation and immigration service providers.
Employees should undergo formal assessments for their suitability, with the results used to either inform go/no-go decisions, or as a guide for further training and coaching. Due to favorable domiciliary tax rates, some nationalities may be cheaper to send on assignment than others – as will individuals with smaller or no families.
Failure to comply with local laws and regulations on visas, tax and social security can lead to penalties, deportation and damaged reputations. With laws changing rapidly, employers must systematically keep on top of developments and ensure that all assignees are fulfilling their official obligations.
Mining companies need to evaluate the overall return on their investment in expatriate workers. This calculation involves tracking ongoing costs and benefits, including estimating the ‘purpose’ and ‘business value’ of the international assignment program.
Finally, a smooth, well-planned repatriation can increase the chance of employee retention, with a formal transition process, ongoing support throughout the assignment, regular discussions about future career moves, and a full repatriation plan at least 6 months in advance of the end of the assignment.
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