Neglecting spouses can sabotage expat assignments

India – The rapid global growth of India-based multinationals has resulted in increased employee mobility. However, expatriates' spouses are threatening to derail the international assignments.

Spouse dissatisfaction is one of the major factors causing the failure of international assignments for companies in India, according to Mercer’s Expatriate Management Survey - India report. Only 20% out of the 40 largest corporations in India surveyed have policies which provide support for spouses of international assignees. While policies on expatriate spouse support are increasingly being addressed, it still ranks low on companies’ list.

Rupam Mishra, who leads Mercer's global mobility practice in India, said, “Softer issues such as spousal support measures and repatriation planning still often take second place to daily operational aspects of international assignment management”.

Besides spousal dissatisfaction, the study also shows Indian companies are finding a major challenge to strike a balance between the competitiveness of expatriate packages and tax differentials. Only 44% of respondents compensate their international assignees for the different tax structures. As a result, many companies plan to reduce costs with short term overseas assignments and reducing or eliminating expatriate benefits and allowances. Hiring local staff in that particular country, instead of assigning an expatriate, is another highly used alternative to address their high international expenditure, said Gangapriya Chakraverti, business leader of information product solutions for Mercer India.

Other than restructuring their international assignment policies based on the nature of the assignment and the importance of the role within the organisational framework, India employers are also diverting their resources. Mishra said, “Many employers have been co-sourcing or outsourcing some elements of international assignment administration, to allow them to focus on other strategic imperatives.”

Yet not all perks are being slashed for expatriates, especially if they belong to the top management. The survey revealed all senior executives are guaranteed education allowances and are eligible for a car allowance as compared with fewer than 50% of international assignees at middle and junior management levels.