Your company is opening a new location on the opposite side of the country, and good leadership is needed to get that branch up and running. How will your team accomplish this? Many companies are choosing to send current talent to the new location on a temporary basis. Short-term assignments may be the best option – you can leverage your employee’s knowledge to hire and train local talent without permanently uprooting his or her family. If all factors add up, including cost and alignment with your business plan, a short-term assignment could be your company’s best bet.
Short-term assignments lasting less than 12 months can have significant benefits for your employee and your company. The deductibility of expenses tops the list of financial pluses. These benefits, however, can get tricky, so it’s important to structure your program properly and have a complete understanding of the tax rules. Rules differ from state to state, and once the short-term assignment exceeds a year, expenses cannot be deducted. If you know the assignment will last longer than a year, a professional analysis is recommended to make sure this is the best solution.
Cost is often the highest concern companies have when deciding between a short-term assignment and a permanent relocation. Some cost factors of a short-term assignment to consider include:
- No shipment of household goods (or a very small shipment), often one of the highest expenses when permanently relocating employees
- No home sale assistance, another high cost of permanent relocations
- High temporary living costs
- More travel costs as the employee travels back and forth from home to temporary assignment location
The higher expenses associated with a permanent relocation are typically much more costly than those of a short-term assignment. The sharing of your employee’s talents in a new location and the experiences and opportunities your employee receives often offset these costs.
For a more detailed explanation of the benefits of short-term assignments plus an in-depth look at the results of the survey we conducted on the subject, download our U.S. Domestic Short-Term Assignments White Paper now!