Rheinwerk Maschinenbau: A Second Assignment Wave After 33% Early Returns
Rheinwerk Maschinenbau, a German manufacturer, sent 12 process engineers on 24-month assignments to its new plant in South Carolina. Each package costs 2.8 times home base salary once housing, school fees, tax equalization and relocation are included. Four assignees returned early - two for family reasons, one because the role was redefined mid-assignment, one dismissed. A fifth is threatening to resign. German and US HR disagree about who owns the assignee relationship, and no one can say who approved the last two package exceptions. The plant still needs nine engineers for a second phase, and three current assignees have asked to stay permanently in the US. The CFO wants wave two delivered at no more than 1.8 times home salary. Immigration advised that L-1B petitions were used for wave one, but the plant manager wants H-1B instead 'because it's cheaper'.
1. Diagnose the 33% early-return rate. What in the process most likely caused it, and what must be fixed before wave two?
Read the worked answer
Read the four exits as four different failures, not one 'bad luck' pattern.
- Two family exits: there is no evidence of family or spouse readiness assessment in selection. Family adjustment is the most consistently cited driver of assignment failure, and it is the cheapest thing to screen for. No pre-assignment family briefing is mentioned.
- One role redefinition: the assignment had no fixed objectives or handover. A role that can be redefined while someone is on a 24-month package means the host manager was never accountable for the assignment's content.
- One dismissal: selection criteria were technical only; nothing assessed adaptability or performance in an ambiguous start-up plant.
- The ownership gap is the root cause: 'German and US HR disagree who owns the assignee' plus unapproved package exceptions means no single accountable owner across the lifecycle. Without an owner, none of the above is caught.
Fix before wave two - in this order
- Name a single mobility owner with a written RACI across home HR, host HR, host manager and payroll/tax.
- Add selection criteria covering technical fit, adaptability and family readiness, with a documented pre-assignment briefing.
- Fix assignment objectives and a review cadence with the host manager, signed off before departure.
- Define the end-of-assignment decision point at month 18 (repatriate, localize, or transfer) - the three engineers asking to stay are evidence that this was never designed.
- Set an approval authority for package exceptions.
Do not launch wave two until 1 and 3 are in place; they cost nothing and address the largest share of the observed failures.
2. The CFO wants wave two at 1.8 times home salary versus 2.8. Evaluate the realistic design options and recommend one.
Read the worked answer
Decompose the 2.8x before cutting it. A large share is tax equalization and gross-up, plus housing and school fees. You cannot reduce the multiple by negotiating the salary; you reduce it by changing the type of move and the tax approach.
Options
- Full expatriate (current): ~2.8x. Protects the assignee fully, preserves German social security and pension, but you are paying a premium for permanent plant staffing.
- Localization: host-country salary and benefits, roughly 1.0–1.15x of a US market rate. Cheapest long term, but absolute pay may fall, German pension continuity is lost, and it requires immigrant sponsorship. Attrition risk is real.
- Local plus: host salary plus a housing allowance, one-time relocation, home-country pension preservation and tax assistance for 2–3 years, tapering to local. Typically lands at 1.3–1.6x in the early years and declines. This is the only design that plausibly meets 1.8x while keeping the package competitive.
- Short-term or commuter: under 12 months, home contract retained, no family move - cheapest, but it does not staff a permanent plant.
- Local US hire: most cost-efficient at steady state, subject to market availability and ramp time.
Recommendation: a segmented design.
- Localize the three who want to stay, with a two-year tapering transition allowance - converting intent into a retention asset rather than an exception.
- Use local-plus for the four to five genuinely scarce process roles.
- Hire locally for roles that exist in the US market.
Challenge the metric itself. 1.8x is a per-assignee ceiling, but the correct comparator is total cost per successfully filled role. A failed 1.8x assignment is more expensive than a 1.9x one that completes. Present the CFO with cost-per-successful-placement, and flag that at 33% failure the current wave is already costing far more than the multiple suggests.
3. Evaluate the plant manager's proposal to switch from L-1B to H-1B 'because it's cheaper'. What is the correct immigration approach for wave two and for the three engineers who want to stay?
Read the worked answer
The premise is wrong. H-1B is cap-subject and allocated by lottery. A project timeline cannot be built on it: registration, selection, and the earliest start date all add uncertainty the plant cannot absorb, and an unselected candidate has no fallback that year. It is also time-limited and requires a separate green-card process for anyone staying beyond it. 'Cheaper' compares filing fees and ignores the cost of a plant that cannot start on schedule.
L-1B remains the right primary route for wave two - it fits a German parent sending engineers with company-specific process knowledge to its US affiliate, and a blanket petition (where the parent meets the qualifying criteria for blanket L) can shorten processing considerably and give the flexibility a multi-hire wave needs. Two cautions: L-1B requires genuinely specialized knowledge, which must be documented role by role, and it is time-capped, so it is a bridge, not a destination.
H-1B's legitimate role: as a supplement for roles that are not specialized-knowledge and as a lottery-dependent top-up - never as the plan of record.
For the three who want to stay permanently: this is an immigrant-visa matter, not an assignment extension. Start the green-card process now (including the labour market test step) because it takes far longer than the remaining assignment term. Do not let them reach the end of L-1B status with no immigrant petition filed - that is the classic route to losing the very people you are trying to retain.
Action: move immigration decisions under the single mobility owner, and plan wave two on L-1B with an H-1B supplement; open permanent-residence cases for the three immediately.