Ilene Dolins of GMAC Global Relocation Services examines how companies can
better prepare employees for working abroad – with a little help from the firm’s
latest Global Relocation Trends Survey
The way businesses operate across borders is changing rapidly and only
companies prepared for these changes will survive and thrive. Companies with
high levels of success in their international assignments are the same ones
that have integrated US domestic and international programmes into a single
global HR programme. They have embraced a global perception of their entire
workforce.
GMAC Global Relocation Services (GMAC GRS) conducted its eighth annual
Global Relocation Trends Survey in November and December 2001, in co-operation
with the US National Foreign Trade Council (NFTC) and the SHRM Global Forum.
Participants represented 150 companies that conduct business worldwide, and
those responding were senior HR managers and international relocation
professionals, primarily from US-based multinational companies (83 per cent).
The survey covered such topics as the impact of current events on expatriate
programmes; the shift away from long-term assignments; outsourcing relocation
programmes; changes in the expatriate population; female expatriates;
assignment success; retention; and the impact of technology and communication.
The ‘pressure point’ of this survey was not the events of 11 September, but
the global economic climate and its impact on individual business sectors with
significant expatriate workforces or global operations, says Bill Sheridan,
senior director of the NFTC. Sectors most affected were technology, telecoms,
power and utilities and financial services, the latter because
"cross-border deals were drying up", Sheridan tells globahr.
Since the survey tracks global relocation trends over eight years, many
companies use it to benchmark their own policies and programmes. Sheridan says,
"Employers still look to what’s happening in their own individual sector
to decide what they should be doing."
A key figure in the survey was the amount of revenue the participating
companies realise outside their home country. At 44 per cent, that figure has
been consistent for the past few years. With almost half of business growth in
other countries, the need for global talent that is trained and interested in a
global assignment becomes more important than ever. As a result, companies can
no longer count on finding the right person when a need arises. They must
anticipate opportunities and ensure that people who are eagerly awaiting the
opportunity for a global assignment have been well trained.
Dave Whitwam, CEO of Whirlpool, reinforces this: "The thing that wakes
me up in the middle of the night is not what might happen to the economy or
what our competitors might do next – it’s worrying about whether we have the
leadership capability and the talent to implement the new and more complex
global strategies."
Ever-changing world conditions demand greater preparation, responsiveness
and flexibility than before. A prime example of how quickly the world can
change was 11 September. A question was included about the impact of those
tragic events on global relocation programmes, and 96 per cent responded that
no impact was felt. Because the survey took place just after that event,
however, it may have been too soon to tell if changes to relocation programmes
would be affected. Indications are that changes are indeed taking place as
companies institute stronger security measures; review ‘danger’ locations more
carefully; and put crisis management programmes in place for unforeseen
emergencies.
Overseas assignments
Companies appear to be taking a more cautious approach to making international
assignments, but there does not seem to be a reduction in expatriate activity.
While expat activity continues to increase, only about a quarter of the
survey’s respondent companies had an increase in their expat populations in
2001, compared to nearly half in the 2000 survey. Another 39 per cent expected
activity to remain at the same levels, 7 per cent more than in 2000.
E James Simon, president and CEO of GMAC Global Relocation Services, points
out that in addition to the challenges put forward by 11 September, "the
world was already experiencing financial pressures that were leading to a more
prudent approach to global expansion. However, companies recognise their growth
opportunities outside their home country, and [in] global expansion and
consequently, international assignments continue to go hand in hand."
Changing perceptions
The survey results revealed some disappointing outcomes. HR professionals
will likely need to focus even greater attention on ensuring that company
leaders perceive global assignments and human capital costs as hard-core costs
of doing business instead of as non-essentials. HR issues, such as identifying
pools of potential candidates for global assignments and conducting
intercultural awareness programmes, ranked much lower on scales showing how
respondents’ companies prepared for global expansion than "determining
business objectives and needs" and "evaluating programmes to ensure
needs are met".
To change the reigning perceptions the HR professional must play an integral
part on his or her company’s strategic planning team. A failed assignment can
cost a company three to five times the employee’s annual salary. And not
attracting first-choice candidates can interfere with the company’s objectives
in a particular country.
Jack Welch, former CEO of General Electric, says: "Headquarters at GE
doesn’t run companies. It runs a school that teaches how to run companies, and
does it so well that GE maintains a huge trade surplus in talent. That’s my
job. We spend all our time on people. The day we screw up the people thing,
this company is over."
To develop a proactive global relocation programme, an understanding is
needed of what motivates people to be successful. When asked when and why
expats leave the company, 6 per cent said during the assignment; 13 per cent
within one year; and another 13 per cent within two years. In GMAC’s
experience, the numbers are actually higher, reaching perhaps as high as 40-50
per cent within two years.
Unfortunately, the way organisations are structured, the human resource
professional responsible for sending someone out and bringing them back no
longer has responsibility for tracking the former expats. An astounding 49 per
cent of respondents didn’t know what would happen when they returned home.
Global fluency is critical to a successful international assignment and
central to this is understanding cultural differences and having the ability to
adapt to them. Global organisations are only as good as the global talent of
each employee and their ability to recognise how profound changes in world
markets affect all operations. Individuals need to understand the uniqueness of
different cultures in the way they approach business issues.
Most companies (69 per cent) provide cross-cultural preparation of at least
one day’s duration. Forty-four per cent provide training for the entire family;
21 per cent for the expat and spouse; and 4 per cent for expats alone. When
cross-cultural preparation is available, 67 per cent of expats participate. When
asked if cross-cultural preparation is mandated for employees going on
international assignments only 30 per cent said yes.
The selection process
When selecting people for international opportunities, it is important to
carefully select and assess those who will go on assignment, and equally
crucial to keep in mind that someone who might be successful in Brazil might be
a poor candidate for Singapore. As HR professionals know all too well, people
are often selected by a business manager based on their availability and
technical skill. In response to a survey question ranking assignment
objectives, on a scale of 1 (least common) to 5 (most common), filling a skills
gap ranked highest (3.1), followed by launch a new endeavour (2.8), and
technology transfer (2.7). Management expertise and transfer corporate culture
ranked below these (2.2 and 1.9 respectively).
Companies need to provide a variety of assignment opportunities for the
"new traditional family", where the spouse/partner does not
necessarily join the expat on assignment because of their career path or
personal issues related to children’s education, elderly parents, and so on.
There are also more ‘significant others’ – both same sex and opposite sex.
Forty-four per cent of respondents include provisions for significant others in
their relocation policy, up from 30 per cent in the 2000 survey.
Those companies that adapt their programmes to meet the needs of this new
‘family unit’ will successfully meet their global business challenges. More
than half of the respondents indicated they are exploring alternatives to
long-term assignments, for instance. For them, the chief reasons are cost
effectiveness, obtaining first-choice candidates and dual-career couples. Other
approaches companies are taking as an alternative to long-term assignments are
expanding their use of business travel versus relocation, training local
employees and project-related moves.
Other highlights include:
The number of female expats increased to 16 per cent, up from 13 per cent in
2000, and is expected to reach the 20 per cent mark in 2005. In the 1995
survey, however, respondents had anticipated the female expatriate population
to be 20 per cent by 2000. The latest results may reflect more realistic
expectations of the growth in the percentage of female expats than in the past.
During assignments, most married expatriates are accompanied by their spouse
despite what appears to be a negative impact on the accompanying spouse’s
career. Before assignment, nearly half the expats’ spouses are employed, and
during assignment, only 14 per cent of spouses are employed. This is consistent
throughout the eight years of the survey. The primary reason is that work
permit/visa issues prevent spouses from working in many countries.
When comparing the careers of expats with careers of employees with no
international experience, 36 per cent of respondents reported that expats
obtain new positions in the company more easily; 36 per cent said they are
promoted faster; and 24 per cent said they change employers often. Only 25 per
cent of expatriates had previous international experience, compared to 44 per
cent in last year’s survey. This could be interpreted several ways: perhaps
there is a smaller pool of experienced candidates, or maybe more people are
reaching out for a first-time global assignment.
Conclusion
Companies with a long-term plan for leveraging the value of their
"human capital" will find they have the best candidates to choose
from for global assignments; supportive, positive families; career path growth;
and as their company expands globally, they will have a cadre of leaders with
the training and international experience necessary to take the company into
the future. What companies must ultimately look at, says the NFTC’s Sheridan,
is "their investment. Is the employer maximising their investment in their
expatriates?"
Weblinks
www.gmacglobalrelocation.com
GMAC Global Relocation Services
www.nftc.org
National Foreign Trade Council
www.shrmglobal.org
SHRM Global Forum
What to focus on
– Provide training programmes before offering international assignments.
Create a surplus of global talent, trained and eagerly anticipating a global
assignment when one is available
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– Select candidates carefully – look beyond technical expertise.
Do they have a supportive family? Will their personal attributes help make the
assignment successful? Are they interested in a global assignment?
– Provide employee/ family support – a supportive, positive
family can make or break the success of an assignment. The company needs to
provide programmes from the beginning to long after the return home, including
cross-cultural preparation, home finding, settling in and repatriation
