Companies that send employees on international assignments are failing to capitalise on this investment and losing talented staff through inadequate arrangements for repatriation and professional development, says a new report by PricewaterhouseCoopers LLP and Cranfield School of Management.

'Measuring the Value of International Assignments,' looks at return on investment in this area in greater detail than previously attempted. It finds that, on average, 15% of international assignees (often an organisation's top performers) resign within 12 months of completing their posting.

As the trend for international assignments increases, organisations are placing more emphasis on selection. An average of 32% of new expatriates are in the top performance category as assessed by their company.

Surprisingly, the report finds no correlation between higher pay for expatriates and improved performance. In fact, the higher the pay, the longer assignments tend to last with some employees happy to prolong an enhanced financial existence abroad, with little incentive to return.

Only when a post requires specialist skills or senior leadership experience should the employee be able to leverage an enhanced package. International postings are actively sought by many employees and in these cases financial reward equal to colleagues in the destination county - or 'destination pay' - should be a sufficient incentive.

The report clearly shows the value employers give to working abroad. Some 5% of UK managers currently have international experience. This rises to 20% for senior managers and 25% at board or executive level. A recent study found that 80% of FTSE 100 CEOs had experience of international assignments.*

Among the report's other recommendations are that home country managers need to retain a stake in performance assessment, clear finish dates should be set at the beginning of the assignment and more time should be spent on planning for the employee's return.

The resources committed to international assignments are substantial. The report finds each international assignment costs companies an average of $311,000 per year. International assignees are supported by twice as many HR professionals (one to 37) than other staff (one to 70). One participating organisation has one HR professional dedicated to every 15 expatriate workers.

PricewaterhouseCoopers LLP partner, George Yeandle, said:
'One of the worst pieces of news a HR manager can get is that a high performing, newly returned employee is leaving, but this is worryingly common.
'Companies need to plan assignments, be clear about objectives and timescales and remain involved in performance management as much as possible, not just hand it over wholesale to the host country.'

But it is at the final stage, the reintegration of employees that remains the weakest link. George Yeandle of PricewaterhouseCoopers LLP, continued:
'People who have spent two years working in a different ways across varied markets and cultures are not always happy to return to the same desk and the same prospects. In this vacuum of direction, many have a career 'wobble' then leave via a recruitment market in which their experience is seen as increasingly valuable.

'By taking steps to plan the repatriation phase, companies will be able to halt the exodus, retain talent and benefit from the substantial investment they have made.'

Dr. Michael Dickmann, of Cranfield School of Management, said, 'Our research has shown that companies are at risk of losing their expatriate staff because they fail to devise a career path for them when they return from overseas. Much more time and effort must be put into preparing for an employee's return - they need security, a meaningful role on their return, and to see a clear path for their future career development within the organisation.

'Our research has shown that expatriate performance is surprisingly high during their assignment, and again 12 months after they return - it is in the 12 months when they return that they are most at risk of leaving a company.'