In many organisations, short-term international assignments are increasingly becoming an essential means of moving talent for a wide range of purposes, especially for project work and career development. Short-term assignments can also be a key driver of mobility success, allowing employees to experience life on assignment for a ‘trial run’ before committing to a longer-term placement.
Employees on short-term assignments typically retain their home compensation and benefits and continue to be paid through home payroll. Practice varies on how to compensate these employees for living costs incurred during the assignment. In ECA’s Short-term Assignments Survey, most participating organisations report providing a cash allowance to cover essential daily expenditure in the host location. For 3 in 5 respondents, the calculation and level of their cash allowances is different for short-term assignments compared to the international business trips they manage.
During an ever-increasing cost-saving landscape, it is important for companies to distinguish between how different groups of travellers are compensated. Per diems, such as those produced by ECA’s Daily Rates Calculator, assume employees are staying in hotels with no access to catering facilities, so paying these to short-term assignees may be overcompensation. These assignees are more likely to be in serviced apartments, and therefore able to cook for themselves and eat more cheaply.
Which approach should you take?
Providing a per diem for short-term assignees may work in some cases but is generally the less cost-effective option. Allowances designed to cover essentials in full, such as those produced by ECA’s Short-term Allowance Calculator, can overcome these issues and give companies an equitable, consistent and defensible approach to apply across all assignees.
Below is a guide to some of the key differences between short-term assignment allowances and business travel per diems:
| Short-term assignment allowances |
VS |
Business travel per diems |
Extended
Typically, between three and twelve months. |
Duration |
Condensed
Typically, between one day and three months. |
Sometimes
The employee generally travels unaccompanied, but some opt to bring their families. |
Accompanied |
No
The employee is unaccompanied by family. |
Simple
Short-term cash allowance delivered via home payroll. |
Delivery |
Admin heavy
Sometimes provided cash in hand; other times, by setting acceptable spending limit on company credit card or through reimbursement against expenses, which require monitoring and approvals. |
Consistent
Recommended that employees in the same location are all paid the same amount but there is flexibility to tailor the approach, i.e. can opt to include additional meals out, travel costs, can be country- or city-specific, etc.) |
Equity |
Variable
If using official standard rates, the methodology may vary between governments, e.g. which expenses are included, whether they are country- or city-specific, etc. |
Able to self-cater
Usually a serviced apartment. |
Accommodation |
Reliant on meals out
Usually a hotel. |
Yes
Employees have access to a kitchen, so the allowance reflects their ability to shop and cook for themselves as they would at home, while also considering they may still eat meals out occasionally. |
Cost-effective |
No
Employees have no access to catering facilities and therefore rely on meals out for the duration of their trip, which can be expensive. |
Smarter compensation for short-term assignments and business travellers starts here
ECA’s Short-term Allowance Calculator produces cost-effective, equitable allowances tailored for assignments of up to one year in length. With regionally based calculations and customisable inputs, the tool helps organisations replace outdated per diem approaches with consistent and defensible short-term allowances across all host locations.
ECA's Daily Rates Calculator empowers you to create fair, consistent, and policy-aligned per diems for your global business travellers, quickly and confidently.
Want to see our calculators in action? Get in touch to learn more or request a personalised demo today.