The localization of international assignees to their host locations has grown in recent years, and recent findings from benchmarking studies conducted by Worldwide ERC®, the workforce mobility association, indicate that this practice will continue to increase. Worldwide ERC® surveyed HR and mobility professionals from 115 companies at meetings in China, Europe, and the U.S., and found that nearly half of all respondents have a formal localization policy.
“While localization can be defined in a variety of ways, our survey looked at two specific types,” said Jan Hatfield-Goldman, Worldwide ERC® VP, Research and Education. “One type is international assignees whose terms and conditions have been converted to those of local employees, and the other reflects permanent cross-border moves or ‘instant localizations’ in which employees are localized from the outset.”
Why do companies choose to localize international assignees, or to make permanent the local status of transferees or new hires moved across borders? Usually, the answer is found in one or all of these reasons: to contain costs (employees on local salaries and benefits packages may be less costly to the company than international assignees with their accompanying mobility allowances); address a business necessity (e.g., employee retention or the type of work a company is doing in a particular location); or employee equity (to resolve fairness issues and differences in compensation when one employee is local and one is an expatriate).
There is a growing trend in the number of companies with formal policies. In 2004, only 26 percent of companies who had localized an employee at one time or another had a formal localization policy, and today that figure is nearly 50 percent. Nearly two-thirds of respondents with formal policies in 2007 had only just adopted a formal policy sometime within the last three years. Over the next five years, respondents anticipate that the number of localizations at their companies will increase, with nearly two-thirds predicting a rise.
Read the full 2008 Global Benchmarking Survey: Localization.
Worldwide ERC® networks workforce mobility professionals and HR innovators, and is the recognized industry authority on relocation and international assignments in the U.S. and major global traffic areas. Worldwide ERC® is headquartered in the Washington, DC metropolitan area, with offices in Brussels, Belgium and Shanghai, China. Contact Worldwide ERC® at +1 703 842 3400, or visit www.WorldwideERC.org