Author:
Mariana Villa da Costa – Littler Mendelson
A few weeks ago in the first post of this series, I provided five tips to get you started in the development of a Global Code of Conduct. In this post, we are back with five more tips to help you finish your Code.
Author:
Mariana Villa da Costa – Littler Mendelson
What is a Global Code of Conduct? Everybody talks about them, and they have become a necessity for global businesses in today’s environment, but truly, drafting one can be a big mystery and a lot of work. Who should draft them? A lawyer? Human resources personnel? The CEO? What content should be included? What language?
These questions, and many others, will be answered with my ten tips to develop a Global Code of Conduct. The first five tips are in this post; the remaining ones will follow soon in a follow-up post. Here we go:
Author:
Warren Heaps – Birches Group LLC
Expats are expensive. With more and more focus on the cost of international assignments, companies are looking for ways to reduce expenses. The challenge is finding the most effective way to do it.
I believe one of the alternatives companies should consider is to simply reduce the number of expats! But this is easier said than done.
Localization is one approach which can be used to achieve this goal, but it’s hard to get it right. Let’s look at some approaches and pitfalls when considering localization.
Localization Approaches
One of the most common approaches to localization is to convert the expat to local terms and conditions, and provide a phase-down of expat allowances and benefits. For example, the expat would receive a salary according to the host country salary scale and participate in the host country benefits. During a transition period (usually one to three years), the employee also would get some expat benefits. This usually includes a transition allowance which provides the full net difference for a year, reducing in equal installments to zero after three years. In addition, companies often provide continued schooling assistance for several years.
Some of the challenges with this approach are in the areas of benefits, taxes, immigration, schooling and housing.
Saving on Expat Costs
Localization generates savings for the company when the cost of local salary and benefits is less than the expat package. When calculating the savings, don’t forget to consider the cost of transition benefits (including any tax gross-ups). You may find the savings to be elusive for the first few years.
Useful Tools
One excellent tool to help employers calculate localization costs is the Permanent Transfer Calculator from Airinc. This tool calculates the net differences for all of the key package elements and illustrates the level of transition benefits needed. It is a very useful tool which enables companies to make informed decisions when localizing staff.
Other Considerations
The most common localization options are usually applied in host locations such as the US and Western Europe. It is usually easier to localize staff in higher wage locations, and in developed countries. Some companies localize staff in lower-wage locatio ns in the developing world, but these cases can be very challenging and demotivating for staff. In addition, family assimilation can be much more difficult.
Companies sometimes localize staff only to re-expatriate them a few years later. This is generally a bad practice and causes a lot of confusion, especially for retirement benefits. Instead, look at your career and succession planning and evaluate the chances of another expat assignment in the future. It may be more practical to consider reduced allowances instead of full localization in these situations.
Finally, always consult with your legal counsel when changing terms and conditions for expats. In many countries, laws limit the ability to reduce compensation.
Summary
Localization can be a useful technique to save money and reduce expat costs. Careful analysis and planning is required to make it work, and attention to family transitions is essential for success.
Author:
George Bashaw – Atlas Global Benefits
It is time to unlock the power of hidden benefits. Each year when preparing to communicate new benefits changes, we tend to get bogged down in the delivery of rising medical costs and medical benefit changes. Understandably, medical hits the company’s bottom line and the employee’s wallet the hardest. This singular focus on medical benefits causes us to neglect the communication of other valuable benefits that may directly or indirectly save money for the company and your employees. Prior posts in this series include Enrollment and Billing Audit, Dependent Eligibility Audit, Know Your Claims and Duplication of Coverage.
Secret Five: Hidden Benefits
Hidden benefits are services and benefits that your employees may not fully understand or have no knowledge they exist. They could be stand alone plans or riders on policies. Either way, they have a purpose and can be very useful.
They key is identify your hidden benefits and communicate them properly. Here is a list of typical hidden benefits and some additional information about them:
The importance of an international EAP plan could merit several blog pieces on its own. The obvious benefits of EAP are credit, substance, marital, emotional counseling, and the list continues. Take anyone one of these common issues and multiply the stress of being a thousand miles from home and your support group and you have a serious problem. A problem that needs to be addressed by someone who can support the cultural issues, language barriers, and the exponential stress associated of being abroad. Not utilizing a good EAP plan can create loss of productivity and maybe the loss of your expat.
Some international medical plans come with EAP riders and other useful riders like medical evacuation and repatriation. You have to determine if the rider is adequate for your needs compared to a standalone plan. Either way, it is important employees understand their benefits and how they can utilize them.
Communication
Make sure you take the time to communicate all your benefits each year and not just the changes. Ensure that everyone has a summary of the plan in an easy to follow handbook that can be accessed via the internet. Additionally, you should issue new cards each year for wallets and purses.
My final recommendation on communication is bit outside the box but I have seen very positive results with my clients. I recommend you consider inviting spouses to the meetings or at least include them in the communication. In every home, you have a quarterback on issues like benefits and half the time it is the spouse. Effectively communication with the spouse may pay off in the long run.
Good luck unlocking the power of your hidden benefits. I would love to hear your thoughts on this issue.
More about George:
Posted in Benefits, Expatriates, Insurance, International Benefits
Tagged expatriate, Global HR, International Benefits
Author:
George Bashaw – Atlas Global Benefits
Need to find some savings without cutting something? Pull out your bills and perform an enrollment audit. This blog is part four in a series of simple ways to save money without altering your current benefit design or carrier. Prior posts in this series include Dependent Eligibility Audit, Know Your Claims and Duplication of Coverage.
Secret Four – Enrollment and Billing Audit
I know it’s not very sexy but a sharp eye can find a few bucks with four simple steps.
Step One: Active Employees
Make sure only active employees are on the bill. When an employee leaves make sure they are immediately removed from your plan. If they wish to continue coverage, make sure they are enrolled in COBRA (if applicable).
Step Two: Enrollment Errors
Verify that each person is enrolled in the plan they selected during enrollment and the carrier is billing you correctly. Some plans have more than one medical choice and many plans have various levels of life insurance options where mistakes are easily made.
Step Three: Billing Errors
Once you have determined that everyone is enrolled correctly, make sure you are correctly being charged for every selection. Despite all you hard efforts to renegotiate your insurance rates, you may find out the changes did not make it to the carrier’s billing system, or they were entered incorrectly.
Step Four: International Employees
You may be getting billed for employees who are not covered for thier specific region. It is important that you understand the contractual provisions of all your plans. If you are covering local employees on an international plan, make sure the carrier is aware of their locations and they are included in the plan. I have seen many plans (EAP, long term disability, medical, life, and most importantly war risk) that have country specific coverage exclusions.
I hope you four-step your way into some savings. Please share your thoughts.
More about George:
Comments Off on Five Secrets to Reduce Benefits Cost, Part 4
Posted in Benefits, Expatriates, Insurance, International Benefits
Tagged Benefits, Global HR, International Benefits
Author:
Warren Heaps – Birches Group LLC
Alan Freeman and I both had the pleasure recently to attend the Houston International HR Conference sponsored by the National Foreign Trade Council (NFTC). This is the second in a series of posts summarizing the proceedings of the conference. We hope this will allow our readers to benefit from the learnings of the conference, even if you were not there personally.
Here are some highlights of some presentations at the conference that touched on various aspects of Expatriate Program Management.
Reducing Expatriate Program Costs
Expatriate program costs are an important topic for discussion whenever international HR folks get together. A presentation by Morgan Crosby and Harry Gram of Airinc focused on two areas that have a big impact on program costs – Housing and Alternative Policies.
Expatriate Housing
Housing is one of the most costly elements included in an expatriate package. It’s not uncommon for rental amounts to reach $4,000 to $5,000 per month, or more, and that’s not including the associated tax gross-up costs. In assignment locations with a broad range of acceptable housing for expatriates, the reason for such high costs is often the standard used. By standard, we mean the size and quality of the property, and most importantly, the neighborhood.
Morgan gave an example for London, where a company could save about 15% per year by substituting high quality housing in the London suburbs for apartments in the most prestigious locations such as Belgravia and Knightsbridge. This usually means that expats will have to commute a bit longer to work, and occassionally, it may mean they will be further away from international schools. But the housing in the alternative locations is perfectly acceptable and compares favorably to many different home country housing standards.
Alternative Policies
Another opportunity for cost savings is the use of reduced or modified policies in certain situations. Many companies are introducing development programs to offer staff the opportunity to gain international experience early in their careers. These employees are often very willing to take assignments with fewer of the ‘bells and whistles” associated with full expatriate packages.
Companies can respond to this by offering “reduced” expatriate packages. For example, a lower housing standard; reduced relocation assistance; and efficient purchaser COLAs. And, since the target population for these development programs are frequently young people, they often do not have school-age children, and some may be single, reducing the cost for spousal benefits and education assistance to nil.
Summary
There is an ever-increasing effort to reduce the cost of expatriate programs. These suggestions are just two of the alternatives companies may consider when looking to generate savings.
More About Warren
Developing Markets Compensation and Benefits Group on LinkedIn
Author:
Megan Wu, GMS – Santa Fe Relocation Services (Shanghai, China)
[Editor’s Note: We are delighted to feature this article about Third Culture Kids by Guest Author, Megan Wu. Megan is herself a Third Culture Kid, and is now raising one of her own in Shanghai. In addition, she serves as Relocation Services Manager for Santa Fe Relocation, a leading relocation provider.]
The business of global mobility is all about helping people who find themselves in a foreign country and a different culture. Many assignees are families and with that comes a lot of worry on how the children will adjust to the move and the new surroundings.
When a child is moved from one culture to the next they instantly begin forming their own “third” culture to incorporate all the new and the old that they come in contact with, making them “third culture kids” (TCKs). A third culture child is someone who has grown up in a culture not their own. They feel that they no longer can completely assimilate with their home culture, and as they are a foreigner, cannot completely assimilate with their host culture; therefore forming their own third culture. How each child handles this cultural jumble does of course depend on each child’s personality, duration of stay, age, parental attitude, etc.
I am one such TCK, after moving to Shanghai in 1998 at the age of 15. I have lived in Shanghai for 12 years. Now that I am the mother of a 3 year old girl and facing questions on how to best raise my daughter in Shanghai, I have thought a lot about the importance/disadvantages/advantages of being a third culture child. Since my daughter is growing up raised by an American parent, living in China, she is very much growing up in the “third” culture that I myself have created. and all the benefits and challenges that come along with it.
Cultural Acceptance and Diversity
Growing up abroad has given me a greater understanding of other cultures. I have had the chance to come in contact with children from different cultures in school, and now in an international work environment. My friends and colleagues are from many different countries around the world, opening my eyes to different cultures. I have become more aware of the fact that there are different ways of celebrating, smells, tastes etc. This has given me the flexibility and a sensitivity that can be more difficult to obtain when living “at home”.
Learning and hearing foreign languages is also an important factor in the cultural growth of TCKs. The hopes of many parents is that the children will be able to learn at least one or even more languages while being abroad. This is not so easy. After several years in China, I did not speak more than basic Chinese, as most of my world was based in English – at home and in school. My understanding was more than basic, as Chinglish (Chinese and English mixed) was a common “language” at school and I achieved some comprehension of the language this way. It was not until I began studying Chinese seriously at University that I could combine all the conscious and subconscious knowledge I had to actually advance to fluent Chinese.
Based on my personal experience, and similar experiences of friends, I believe it is critical for parents to ensure that there is some aspect of the TCKs life that is submerged in the language they should learn – be that extra language lessons, a special activity or even just spending time with a maid/nanny that does not speak your own language.
Cultural Roots
The flip-side to being culturally aware and flexible is a sense of lacking cultural roots. Growing up, I was asked if I felt rootless every time I returned home for the summer, but could not quite understand the implications until much later. I always felt that I had stability of where I came from and what I stood for. This may not have come from my culture but rather from my family. Wherever my family was – this was home and I know what social/cultural rules applied. To me this has emphasized the importance of having consistency in the home environment – not only in terms of rituals, but also in terms of rules and values.
It was only upon my return to the US after graduating from high school in Shanghai and starting US University that I discovered what the effects were of my overseas experience. My lack of understanding of common conversations such as TV shows and politics was embarrassing. My gap of knowledge in the modern culture with regards to TV shows, commercials, programs/activities growing up, and that my peers did not understand my experiences, was a constant reminder of my time away from “the norm”. Reverse Culture Shock does exist and in my case, resulted in my decision to embrace my overseas experiences, return to my life a nomad and move back to China. Every child deals with reverse culture shock differently, of course. Some will see their return “home” as yet another adventure.
Social Skills
Going to school in a foreign country puts great emphasis on your social skills but also builds you empathy. At any international school around the world, each student will have been “the new kid” at one time or another. Generally I have found that TCKs will have a sense of openness and confidence in handling new situations simply because they have to! During school they will inevitably say many goodbyes to good friends; they have to make new friends continuously. This can lead to many good friends all over the world that will last for a long time, but can also create a situation where a protective mechanism is built up where “out of sight is out of mind”, leaving the TCK with few friends from a specific period in their life.
Reflections
Looking back I do feel that the advantages of being a TCK far outweigh the disadvantages. I will always be unique. In my role as a relocation professional, I will always have a different way of perceiving the world and a different understanding of the challenges that face our clients, especially the children.
Resources
There are plenty of resources either from the web or books where you can better understand your Third Cultural Kid. Here are a few websites that might provide you with more insight:
Whatever you do as a parent, the most valuable suggestion I can give you is: Tell your child that their life will be different, the lessons they learn along the way as a TCK will be valuable tools in their adult life, and most importantly they are not alone.
More About Megan
Posted in Cross Cultural Insights, Expatriates, Global HR Expertise, Relocation, Repatriation
Tagged expatriate, expats, international hr
Author:
Michael F. Tucker, Ph.D, CMC
Tucker International
Some years ago, Art Linkletter had a featured segment on his television show “Art Linkletter’s House Party” called “Kids Say the Darndest Things.” Bill Cosby hosted a later version, and there were also similar series in the U.K. and Australia.
We at Tucker International have found this to be true today when we listen to kids accompanying their parents on international assignments. The following are some of the things we have heard from them during our intercultural training programs for them and their families.
The Turtles, the Cat, the Dog and the Orangutan
A ten-year old boy going to Indonesia insisted that he was only going to go if his two turtles, cat and dog went… unless his parents promised him a baby orangutan.
Mom’s Happy – Dad’s Happy, What About Me
A ten year old boy had this to say about the ease of the move: “My mom’s happy; she gets a maid. My dad’s happy; he’ll get a lot of money. I’m the only one in our family who feels sad about going. It will be easy for them. They are old!”
My Mom the Grandma
A ten year old girl summed up her feelings about how long she would be away from the U.S.A.: “When I get back, my mom will probably be a grandma.”
Boy Am I Lucky
A teenager’s view of the move: “I hate it. Everybody keeps telling me how lucky I am to get to live overseas. But they don’t have to do it… I do.”
The Pilgrims and the Indians “Over There”
A seven-year old girl from the UK moving to the Southern USA was listening to the story of the first Thanksgiving. When the part came up about the Pilgrim Fathers having the neighboring Indians for dinner on the big day, a look of horror came across her face. The youth trainer asked what “was the matter,” and the little girl replied, “Ohhh, the Pilgrims ate the Indians for dinner!”
My House, My Pet, Am I Next?
A nine-year old boy broke into tears as he was explaining the family’s international move: “My parents are selling my house and my dog, I think I might be next!”
We’re Not Really Moving?!!
On the first day of the pre-departure training program, (the family was departing on their assignment the following week), a twelve-year-old girl was asked how she felt about moving to Switzerland. She said “I don’t know. I haven’t really thought about it. I am not sure we are really moving.”
Some of these stories illustrate the need to provide high quality intercultural training for kids. Young people, generally ages seven and above, are very sensitive to changes associated with international relocation. They are sometimes left out during the international assignment decision and preparation process. It is very helpful to counsel and educate them on how to handle changes that greatly affect their lives.
Intercultural training can reduce fear and stress and create a more realistic and optimistic view about the international move. The results are young people about to become “third culture kids” who are happier, more supportive, adjust easier and have a willingness to culturally engage themselves in the country of assignment.
The best practice followed by many successful organizations is to provide intercultural training for assignees and their families. Many studies show that if the family fails to adjust successfully while on assignment, the likelihood of a failed assignment is high.
Does your organization include children in pre-assignment inter-cultural training? What has been your experience with children of assignees?
More about Michael:
Author:
Matthew Shore – Move One Relocations
[Editor’s Note: We are pleased to welcome Matthew Shore as a Guest Author. Matthew is Communications and Marketing Manager for Move One, a leading global relocation, moving and logistics firm serving Eastern Europe, Asia, Middle East and Africa. He is an expat himself living in Budapest, Hungary, with his wife.]
It’s no secret that the stresses of international relocation on employees and their families can take their toll. The magnitude of its effects can be on par with divorce or a death in the family. Delivering the right support for employees and their families during the first critical months after their move may mean the difference between the success or failure of an assignment.
Focus on the Family
It is often the family of the assignee that experiences the most difficulty when relocating internationally. For example an accompanying spouse who has left his or her friends, family and other support networks to relocate can experience profound feelings of loss and displacement that can persist for long after arrival in the new location. Providing new expats with the means to become self-sufficient and thrive in their new environment is therefore vital for the success of an assignment.
Best Practices to Support Your Assignees
It’s normal and predictable for assignees and families to experience culture shock and other challenges when taking a new assignment. Targeted support for families on the ground at their new location helps to reduce their anxiety, speed up their sense of regaining control, and ensures a productive assignment. It is also good practice to offer support with the aim to keep morale high by offering services that address the full range of all family members’ needs, from orientation and cross-cultural training, to recreation, social integration, security and education, as well as employment options for the traveling spouse. This support falls under eight categories:
Tools such as our city guides, and our online magazine for expats in Budapest can go a long way to address some of these points, reassuring the new assignee and their family that life in the new destination isn’t going to be a total departure from their old life, and that they can and will ‘fit in’ with their new environment.
For me there is a personal angle, too. I moved to Budapest when my wife was offered an assignment here. I can assure you from my own experience, taking the time to ensure that expat families are made aware of the social options in their new city helps a great deal. For example, Move One recognizes that for non-working spouses of assignees – more-often-than-not female – finding a circle of friends quickly can make a world of difference. This is why we make a point of supporting local expat groups and schools with sponsorship and practical assistance as part of a commitment to the local expatriate communities where we operate. Of course, there is added value for us, in terms of brand awareness, to be visible in the local community, but we recognize the importance of supporting these organizations for the greater good of our clients.
There are many new online resources to help families with their moves as well. Are there any steps you have implemented for your assignees that have been particularly effective in helping them adjust? Please share them in the comments!
More About Matthew
Author:
Alan Freeman – LOF International HR Solutions
During a recent conversation a colleague shared some frustration she was feeling. “I’ve read lots of articles and attended conferences where we’re told what we “should” be doing with our International Assignments (“IA”) policies on the basis of what everybody else is doing with theirs. What I’m not hearing is how to go about structuring our program in a way that really makes sense for our company. Where do we start? Who should be involved? What steps are necessary?”
“True”, I said. “We hear a lot about best practices such as keeping the spouse happy, increasing flexibility, controlling costs, keeping exceptions to a minimum and conducting benchmarking studies to find out what everyone else is doing. That’s all well and good but if your company sells luxury consumer goods in the best department stores in the largest cities of the world, do you think that practices that work well for mining companies in rural West Africa or at 14,000 feet in the Andes Mountains will be relevant and useful?”
“Exactly – they wouldn’t!” she said, “so what should we do?”
Let’s start with The Prime Directive. Simply put, your IA policies and program exist to help your company achieve its business objectives by having the right talent, in the right places, at the right times, doing the right things. Clearly, your company’s business objectives define what the various “right items” will be. Is this another way of saying you must start by truly understanding your business? Yes, of course!
“OK, that makes sense” she said, “then what?”
Well, now it’s time to go about structuring your program. A process that has proven to work well follows these steps:
Assemble a Policy Development Team
To often, policy development is left up to a Global Mobility department or single HR staffer working in a vacuum. This generally is not effective. Utilizing teams of key stakeholders provides greater breadth of ideas, broader input from key functions and business operating units, and greater understanding of and buy-in to the end product. The team must be led by someone with significant depth of IA program expertise and include Global Mobility, Tax, Accounting, Payroll, HR Business partners from units that utilize international assignments, etc. Bringing in expert consultants and specialty service providers, e.g. immigration, international tax, global security firms, etc. can pay large dividends as well.
Conduct Benchmarking
There are two types of benchmarking to consider. First, conduct internal surveys of line managers who make use of IAs, and current and former assignees themselves. These groups can provide a wealth of information as to what has been working and what has not. They further can often make great suggestions for new approaches worth considering.
Second, do take a look at market practices through both generally available surveys and, potentially, custom surveys more precisely focused upon your company’s industry and competitors. This can help generate ideas and help gauge competitive positioning. Be careful, however, to not only look at what companies are doing but also to ask how well those practices are working. It’s amazing how many times I’ve heard a colleague say “we do ____” and in the next breath, say “and I’d change that practice in a heartbeat if my management would allow me to!” Another caution about benchmarking is that it’s imperative to consider the policy package as a whole and how the many provisions work together in total. There is a definite tendency toward getting caught up on individual line items and, hence, “lose sight of the forest for staring at the trees”.
Draft a Policy Structure
Put together the first array of policy provisions that make sense given the demographic, geographic and time variables dictated by The Prime Directive. Make sure they integrate and work together in a consistent and holistic manner.
Model the Costs
The first question executive management is likely to ask when the new program is presented for approval is not, “how does it meet our business needs?” It’s assumed that it will. The first question is, “what’s it going to cost?” If you are reengineering an existing IA program you’ll need to show the difference in costs between the proposed and existing programs.
Fortunately, there are many applications and providers that make cost modeling relatively straightforward.
Test Your Ideas as You Go
One of the worst ways to achieve buy-in on your ideas is to keep them to yourself and spring them on someone only at the end. If you communicate as you go through the process, sharing what you’re thinking about and soliciting inputs, that engagement frequently gives the other a sense of having had input and influence on the final product. Those who feel they had input are much more likely to respond positively. Their inputs may well have a lot of value as well.
In a larger corporate environment this could be done via periodic progress update meetings.
Finalize and Implement
In pursuing the steps above, you’ll ultimately obtain approval to proceed. Prepare the necessary communications and implementation materials. If you are reengineering an existing program, you’ll have already determined whether current assignees will be “grandfathered” under their old terms, converted to the new terms, or converted with some sort of buy-out provision.
When you have it all in place, move ahead.
Continually Evaluate and Improve
Finally, when you implement your new program, be sure you’ve also built in metrics and processes for determining how well it’s working on an ongoing basis. You can’t have anticipated everything that will ultimately be encountered and change happens! Be ready to be flexible and make program adjustments “on the fly”.
More About Alan:
LOF International HR Solutions web site
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