Top Considerations for Rotational Assignment Programs
Top Considerations for Rotational Assignment Programs

Top Considerations for Rotational Assignment Programs

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Published: Aug 26, 2022

Rotational Assignments (RotAs) are used for rotating employees between company locations – both domestic and international – for short-to-medium duration. However, because of their uniqueness, there are different challenges compared to intra-country moves or international assignments.

Consider the following elements that directly impact successful RotA implementations:

Rotation Reasons

Companies commonly offer RotAs for a variety of purposes, each unique based on business drivers and culture. The primary drivers for why companies offer RotAs typically include:

  • Mission Critical Projects – offering high potential employees the opportunity to acquire expanded knowledge of mission critical functions.
  • Hardship Locations – meeting specific needs in remote / hardship locations where permanent employment jobs are difficult to fill.
  • Employee Development, Engagement & Loyalty – offering employees opportunities to expand skills, knowledge and experience.
  • Attracting Talent – offering new hires work at multiple locations in a short period of time and exploring various positions.

Rotation Durations

Durations also vary by company, industry and purpose. Depending on each company’s scope, RotAs might include multiple locations in succession, whether intra-country, cross-border, or both. NEI has found the two most common average lengths of each rotation segment within RotAs to be 3-to-6 months and 9-to-12 months.

It should be noted that any U.S. Domestic or U.S. citizen involved in an international assignment with a duration exceeding 12 consecutive months makes all benefit costs for the entire assignment a taxable event and there may be an implication from the foreign country that would trigger taxation sooner.

Rotation Accompaniments

Typical RotAs involve long periods away from family and friends, so they are not for everyone. Whether a company supports assignments with or without an accompanying spouse or family depends on corporate culture and the assignment type. It is common, in NEI’s experience, most companies expect employees will be unaccompanied on either domestic or international RotAs and spouses/children are allowed to accompany employees less than half of the time.

Rotation Policies

Attracting qualified candidates is key to assignment success and return on RotA investment. Well-crafted policies can help one’s company increase productivity, retain high value employees, attract key new hires, and accomplish goals. As with traditional relocation or assignment policies, RotA benefits can depend on:

  • assignment length location,
  • company culture, objectives, budgets, etc.,
  • the forecasted number of RotA employees, and
  • U.S. domestic, international or both.

NEI’s experience has found that the most common benefits offered for both domestic and international RotAs include:

  • travel expenses,
  • temporary living for the RotA’s entirety,
  • miscellaneous expense allowance, and
  • excess baggage fees.

Other common benefits include return home trips for domestic RotAs visa / immigration fees and medical exams / immunizations for international RotAs.

Candidates should understand the range of potential post-RotA career options that would be available at the end of the assignment. Likewise, a process should be in writing to clearly explain the ramifications if an employee quits or opts out at any point of a RotA or is involuntarily removed from a RotA.

Rotation Consultations

It’s critical to understand a rotational policy’s nuances and how to help your employee embrace the challenges and make it a winning proposition for all. NEI has considerable experience working with our clients to provide various domestic and international RotA program consultation, understand and integrate any unique nuances and creating policies for them.

If you would like to discuss your company’s rotation program initiatives, please contact your NEI representative any time.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.