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HR executives see risks in 'stealth expatriates'
April 5, 2005
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Danbury, Conn. -- More than three-quarters (78 percent) of human resource executives responsible for employee relocation and global assignment management believe or suspect that they have "stealth expatriates" in their organization. The phenomenon refers to employees who are working in other countries outside organizations' formal global mobility programs and without the knowledge of human resources (HR). Respondents pointed to tax penalties, visa/work permit issues, and a lack of ability to track their workforce, as the most common issues stemming from the stealth expatriate trend.

To gain insight into the stealth expatriate trend, Cendant Mobility and Worldwide ERC conducted a survey with organizations in the Americas, EMEA (Europe, Middle East, and Africa) and Asia-Pacific, with participation from CIPD (Chartered Institute of Personnel & Development) in the United Kingdom. A total of 216 international HR practitioners completed the survey, which concluded at the end of 2004. More than a quarter (27 percent) of respondents viewed the stealth expatriate trend as having increased in the 12- to 18-month period leading up to the survey. Key findings from the survey include:

  • Respondents cite that the most negative consequences that companies experience as a result of stealth expatriates include tax issues (29 percent), visa/work permit issues (24 percent), and inability to track workforce (19 percent). Respondents also cited instances of employees being denied access to countries, resulting in project delays and complications;
  • When asked how stealth expatriates were typically discovered in their organizations, "chance" led the list (45 percent) followed by tax and immigration providers (17 percent), special projects designed to identify these employees (15 percent), and travel booking departments (11 percent);
  • Leading reasons why stealth expatriates exist: lack of understanding of global assignment programs (25 percent), perceived to be less costly (19 percent), considered faster or more efficient to bypass HR (17 percent), open borders with the European Union (11 percent) and an increase in use of alternative assignment types (10 percent); and
  • Despite the high levels of experience with stealth expatriates, a significant majority (83 percent) of respondents indicated that their organizations did not have systems in place to track or uncover stealth expatriates.

"Even with growing awareness of the ramifications, taking the 'stealth' out of the stealth expatriate issue is not an easy task," says John Arcario, Executive Vice President of Cendant Mobility. "The tools that can help companies track their employees, such as targeted policy support and online tracking and reporting, are effective only if the assignees are captured in the system. Complicating the matter, companies are discovering that the origins of stealth expatriates are as numerous as the ways in which they are discovered, pointing to the difficulty in controlling the trend."

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