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Growth of India-based multinationals raises issues, Mercer study shows

Growth of India-based multinationals raises issues, Mercer study shows
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First Published: Wed, Aug 27 2008. 01 18 PM IST
Updated: Wed, Aug 27 2008. 01 18 PM IST
New Delhi: The rapid global expansion of India-based multinationals and the resulting increase in employee mobility are forcing companies to address policy issues on international assignments, according to a study by Mercer.
Mercer’s report, ”Expatriate Management Survey – India”, is based upon contributions from 40 of the largest corporations in India and addresses India-specific nuances and practices as these companies send employees on international assignments.
The report, believed to be one of the first to survey companies of Indian origin that are experiencing significant global expansion, identifies the latest international assignment policies for managing a globally mobile group of employees.
The report describes expatriate compensation approaches, trends in expatriate allowances and support, and the use of varying assignments which includes short term, long term and commuter assignments.
”Organisations are cognisant that international assignments – and, in particular, those which include family relocation – call for significant investments,” says Gangapriya Chakraverti, Business Leader, Information Product Solutions for Mercer India.
”They would like to ensure that their investments deliver an acceptable return by carefully choosing only the best people for the assignments and making efforts to retain them during and after the assignments overseas,” Chakraverti added.
”Interestingly, companies are also looking for ways to reduce costs where possible by hiring local staff instead of making an expatriate assignment, by reducing or eliminating benefits and allowances associated with international transfer, or by looking for alternative ways to address pressing business needs,” Gangapriya noted.
Many employers have been co-sourcing or outsourcing some elements of international assignment administration, to allow them to focus on other strategic imperatives.
”In order to address ever-evolving business and employee needs, companies are now structuring their international assignment policies based on the nature of the assignment and the importance of the role within the organizational framework,” said Rupam Mishra, who leads Mercer’s global mobility practice in India.
Common challenges
Some of the most common challenges faced by employers of international assignees are those regarding the competitiveness of expatriate packages, issues with different tax structures and of overall cost containment.
This is especially true of companies of Indian origin who find themselves challenged by significant costs, borne to offset international compensation inequity.
While international assignment policies typically contain localization terms and conditions, companies often deal with localization on a case by case basis so as not to de-motivate employees.
Although acknowledged universally and addressed increasingly, ‘softer’ issues such as spouse support measures and repatriation planning still often take second place to daily operational aspects of international assignment management,” Mishra added.
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First Published: Wed, Aug 27 2008. 01 18 PM IST