Category Archives: Global Mobility Services

Localization: Impact on Children’s Education

Author:
Liz Perelstein – School Choice International

Localization of expatriates is becoming more and more common, as companies try to reduce the numbers of assignees and control costs.  Many companies wrestle with the question of dependent education when dealing with localization.  Unfortunately, the vast majority of localization policies oversimplify the issues and therefore do not adequately address employee or employer needs.

Most often, there is either an immediate cut-off of education assistance, or a phasing out of tuition assistance; in either case, the family either has to fund the private school themselves or transition their children into local public or state-funded schools.  Both approaches assume that the local alternative will be adequate for the needs of the family, but there can often be complicating factors.

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Managing International Assignees During a Crisis

Author:
Warren Heaps – Birches Group LLC

With the recent events unfolding in Tunisia, Egypt and elsewhere around the world, a common question we’ve been hearing a lot lately is, “What do we do about the expats we have there?”  The simple answer is that you need  a plan.

In Egypt specifically, the recent events evolved quickly and after more than a week, there are no signs of the crisis abating.   Continue reading

Best Practices for Selecting International Assignees (Part 2)

Author:
Alan Freeman – LOF International HR Solutions

This is the second of two installments on the topic of assignee selection.

In our last posting, we began to list a number of proven best practices for selecting candidates for international assignments.  Here are several more:

Provide an overview of the your company’s applicable policies and processes. You and the candidate need to know early on if there are any “show-stopper” issues or you run the risk of wasting everyone’s time. Be sure, by the way, that your policy and administrative processes are well thought through and developed. You don’t want to be caught building an ad hoc “package” through negotiations. One-off deals frequently lead to lots of ongoing problems. Continue reading

Best Practices for Selecting International Assignees (Part 1)


Author:
Alan Freeman – LOF International HR Solutions

This is the first of two installments on the subject of assignee selection.

A recent question, “Please share ideas on best practices for hiring candidates for an immediate international assignment” triggers a few thoughts.

First and foremost, the organization must definitively establish that it is not possible to recruit local nationals in the location where the job is based. Hence sending a foreigner as an International Assignee is both necessary and can be sufficiently justified to obtain assignment country work and residency permits. If so, then…

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Ten Tips to Develop a Global Code of Conduct – Part 2

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.

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Localizing Expatriates – Trap or Solution?


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.

  • Retirement Benefits – Companies face the issues of different levels of benefits, bridging of service, and shortfalls in both the home and host social security plans. Careful attention and analysis is required to resolve these issues.
  • Health Care – Many expats have coverage under global plans. When localization occurs they switch to local coverage. How does the local plan measure up? What about pre-existing conditions? College-age dependents at home? What if the local plan is not adequate when compared to the prior coverage? Some organizations allow continued coverage under the global plan in these cases.
  • Taxes – Many companies provide tax preparation assistance to newly localized staff (but not equalization). You should also be aware of trailing tax liabilities generated by incentive pay and equity compensation.  In some cases, equalization may be appropriate.
  • Immigration – Laws must be consulted to ensure expats can remain employed legally in the host country, and family members can stay in-country. This is one of the most critical issues to address, since mistakes can result in severe consequences.  In some cases, long-term expats can get permanent residence, which may also provide opportunities for spousal employment.
  • Schooling – Assimilation and adjustment of the family is a key to a successful localization. Schooling for the kids is often the biggest challenge, especially if the host country language is different from the home, or if local schools have lower standards or different curriculum options than the international schools. Many companies provide generous support for schooling during a transition period, aiming to prevent disruption in studies, especially for older students. Consulting with educational specialists, such as School Choice International, can be a very effective way to assist employees in making the best choices.
  • Housing –This is the other major element of the expat package that dramatically impacts the expat and family, and can be quite contentious.  Expat housing standards are often much more generous than local standards, and are located in the most desirable and expensive neighborhoods.  Localized expats may not be able to afford housing in the same locations.  Companies can provide limited assistance for a local move, as well as a shipment of goods from home. Assistance with buying a home is another benefit to consider.

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.

NFTC International HR Conference Report – Part II


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.

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What Kids Say About International Assignments

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?

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Tips For A Successful International Relocation

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:

  • Welcoming and orientation. Provide a point of contact for the newly arrived family.  Offer information, contacts, destination resources, and welcome events. It is also beneficial to arrange repatriation workshops for departing families.
  • Employment liaison. Finding purposeful work for spouses can be key to successful adjustment, and the provision of multiple employment resources should be made available.  Maintaining contacts in the local economy, providing aid in exploring alternatives such as home-based business, and assistance in applying for functional training are all good practice, and help the non-working partner get the best out of life while overseas. In today’s economy, virtual assistants are an increasingly widespread option for professionals as well as administrative work in companies small and large.
  • Education liaison. Most relocation companies provides information and contacts for local schools, but offering managed support programs for youths and childcare resources is also beneficial.
  • Information and resource management. Making resources such as internet and intranet access is helpful in the interim period until home access is established, as well as literature and events in the local culture.
  • Guidance and referral. Offering EAP services such as confidential counseling, as well as resources and referrals for such issues as divorce, spouse/child abuse, adoption, death, and mental health concerns.  Be sure to use an EAP that is sensitive to cross-cultural issues, and is familiar with international assignments.
  • Community liaison. Cultivate relationships with community and social organizations and local resources that can benefit expatriates.
  • Events and cultural programming. Cultural events as well as informative programs and workshops on host-country culture help families to orient and adjust to the new culture.
  • Crisis management and security liaison. Relaying security information to the community. This includes ensuring crisis preparedness, emergency evacuation information through alerts and seminars, as well as rebuilding the community after a crisis.

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!

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How to Develop Effective International Assignment Policies

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:

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