Companies re-examine international assignments

by 01 May 2008

SHORT-TERM ASSIGNMENTS and extended business trips are increasing as companies take a more global approach to doing business, a KPMG study has found.

Employees are on the move as international mergers and acquisitions, global start-ups and multinational projects force companies to work across many borders.

As many as 93 per cent of companies already use extended business trips, lasting more than 30 days but less than 180 days, and in the next 18 months, those companies are expected to boost extended trip usage by around 33 per cent.

Short-term assignments, which last between six and 12 months, also continue to trend upward, with 90 per cent of companies surveyed using this option and 38 per cent expecting their use of short-term assignments to increase over the next 18 months.

But at the same time, when it comes to compliance issues surrounding extended business trips and short term assignments, most companies conceded that their track record is poor. In most cases, companies make business decisions first and worry about tax and financial concerns later.

The results highlight the need for businesses to understand the high compliance risks when dealing with international assignments, according to national director of KPMG’s global mobility advisory services practice, Sandra Cittadini.

“As more companies transition to a global approach and conduct business in regions all over the world, international assignment programs need to change to fulfil the business needs required to move their workforce globally. This requires flexible yet consistent policies to ensure competitiveness as well as compliance,” said Cittadini.

While companies have utilised extended business trips and short-term assignments for some time, the survey revealed that 88 per cent and 94 per cent of respondents were concerned with compliance risks associated with extended business trips and short-term assignments respectively.

Of the companies that indicated that their extended stay business travellers may create a compliance risk for the company, 87 per cent were concerned to some degree. “This shows complacency amongst businesses with risks and there are multiple risks to consider; risks to the individual, reputation risks, immigration risks, tax risks and financial risks,” said Cittadini.


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