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Global trends in healthcare from Integra Global

The cost of a failed international assignment

Sending employees on international assignments is more expensive than ever before, with the Worldwide ERC estimating that a long-term assignment can cost a business upwards of US$1 million over three to five years1.

Despite the expense, international assignments are still seen as a useful and necessary investment to many organisations.

However, a big concern is that more and more of them result in failure and wasted resources. In fact, nearly half (42 per cent) of assignments either fail or don’t last the full length of time they were scheduled2. This percentage is estimated to jump to about 70 per cent in undeveloped countries3.

So, with such a varied success rate, how does a failed assignment affect a business and what does it cost in real terms?

Administrative woes

It’s important to note that a failed international assignment doesn’t just incur a financial cost. First and foremost, there is a lot of administrative tasks that need to be carried out to end the assignment early.

For instance, in the short-term, the company will need to assist the assignee with their repatriation back to their home country. This could involve booking their flights and facilitating the relocation of all their belongings. An early finish could also result in negotiating and paying off accommodation contracts and any other fixed-term agreements that were made for the assignee, including car rental or office space. If the employee is returning to their previous role back home, often they will also need to be given a new contract of employment, that must be negotiated and agreed by all parties.

While a lot of these tasks would need to be carried out anyway, having to action them all urgently and ahead of schedule means that other work will need to be put on hold.

Replacing the candidate

Depending on the length and importance of the assignment, a replacement for the assignee may also need to be found. Sourcing new candidates for an overseas role can be a lengthy process, once the necessary screening and testing is carried out to ensure that they are right for the role.

In addition, most employees willing to move away need to be given significant space to get their personal affairs in order. A new salary and benefits package will also need to be negotiated, along with a timeframe for delivery. There may need to be a short-term replacement elected to bridge the gap between them actually reaching the assignment. If the resources aren’t available for this, it could cause big problems.

Morale and productivity

Following the immediate admin challenges, a failed assignment can cause a number of issues for morale and productivity.

Losing a key member of any team unexpectedly is likely to affect all members to an extent, especially if they were working in a close capacity. If the assignee is a senior member of staff, with a high level of responsibility, their absence could leave a big hole in the leadership of the department. Awaiting a replacement could lead to a big drop in productivity and focus, or potentially the assignment being left on hold.

Beyond this, even once a replacement has been sent to their new location and met their team, it takes time to get them up to speed and learn their job role. Any necessary training will need to be scheduled and carried out, while they bed into their new environment and cultural surroundings.

The bottom line

So what do these effects amount to financially? There have been a number of studies into exactly how much a single failed assignment costs a business, with varying results.

One study published by Prevent and commissioned by the International SOS Foundation suggests that most assignments costs between US$570,000–950,0004.

Mercers ‘Worldwide Survey of International Assignment Policies and Practices’ estimated that a failed assignment can cost a company up to $2 million5.

The key learning from this is that sending talent on international assignments is a necessary and worthwhile endeavour, but an expensive one if it goes wrong. While there’s never a guarantee that it will be a success, companies should do everything they can to mitigate the risk of a failure and avoid putting a strain on other areas of the business.

There are a number of strategies that companies can implement to greatly increase the likelihood of a successful assignment, which should be incorporated into a rigorous mobility programme.

Click here to read more about why internationals assignments fail
Click here to read more about how to plan a successful international assignment


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