How Do I Develop Expertise and Gain Employment in Global Mobility?

Posted on September 17, 2009 by | 5 comments

edit-Alan Biz Mug Shot 1Author:
Alan Freeman – LOF International HR Solutions

One of our readers recently asked, “I have been working in the HR field for the last few years and would like to break into the Expat Management/International Mobility field in Global HR.  What is the best way to gain experience that will make me stand out to an organization that is recruiting global mobility staff?”

First, thanks very much to the reader for posting the question.  We truly appreciate receiving input from and creating dialog with our colleagues.

To begin with a broad response to the question, please take a look at my June 25, 2009 entry, “How Can I Develop Global Human Resources Management Expertise?”.

Since the question focused specifically upon expatriate management / “Global Mobility”, some additional considerations include:

  • Become a member of ERC Worldwide, use their resources, attend their meetings and become involved with their local affiliate groups’ meetings as well.  You also should consider obtaining the GMS certification.  ERC also posts career opportunities on their web site and you should monitor those.
  • If you are based in Europe, or are in Europe frequently, consider becoming involved with EuRA.
  • If you are currently employed in an organization that has a international assignments / Global Mobility program, get to know the staff responsible for the program – especially those with managerial responsibilities.  Take them to lunch, ask their advice, learn what you can from them and, perhaps most importantly, volunteer to help them with their work.  In today’s environment, they’re likely to be rather overworked and would welcome some help!
  • Seek employment in corporations with established international assignment / Global Mobility programs, network with the global mobility management staff in those companies, keep an eye on job postings on their web sites.  ERC’s members roster, their job postings board and involvement with the meetings mentioned above are ways to identify target companies and, possibly, specific opportunities.
  • Do the same as above with the various global mobility service providers such as Bristol Global Mobility, Cartus, Prudential, SIRVA, MI Group, AIReS, Crown, Primacy, Lexicon, Plus Relocation, Weichert, Altair, Brookfield, etc.  There are many more and you can find them via the ERC resources listings.  Please keep in mind, however, that in the current economic climate, the overall relocation business has slowed significantly so hiring in the industry has as well.
  • Seek out and participate in global mobility meeting groups in your area. For example, in Northern California, the Western International Personnel Association (WIPA) and Bay Area Professionals in Relocation Management (BAPRM) have a strong orientation toward global mobility.  There are many other such meeting groups around the country.  Global HR News hosts conferences in many locations across the US and abroad.
  • Consider joining the Forum for Expatriate Management, and the many LinkedIn groups that focus upon Global Mobility.  Track the discussions, and tap into the information and leads that appear in these forums.
  • Keep an eye on job listings at Blue Sky and Signature Source, make contact with the principals in those firms to “get on their radars”.  They are search firms that specialize in Global Mobility.
  • Take advantage of specific classes, seminars and webinars.  For example, ORC Worldwide, AIRINC and Mercer – the top three providers of international assignment package data – offer regular training programs. Also, please sign up for the remaining five sessions of the IOR Global Services webinar series that started on Sep 15 (I’m leading the Sep 29 session).
  • Read, read, read – there is a great wealth of books, periodicals, white papers, research reports, etc. that has become available over the years. You’ll find items on Amazon.com, at the SHRM bookstore, at the World at Work bookstore and within the ERC website.

So to summarize, learn as much as possible about international assignments / global mobility and network with people already working in the field.  The best way to learn, get on someone’s radar, and find out who is hiring, is to hang out with them!

Thanks again to our reader for her question. We ask others to also provide suggestions and guidance via comments on this post.

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Posted in Expatriates, Global HR Expertise, Global Mobility Services, International Expertise, Relocation

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Rethinking Incentives

Posted on September 15, 2009 by | 2 comments

heaps_warren1Author:
Warren Heaps – Birches Group LLC

This post is a bit different from the others that have been written for the Forum.  It’s designed to get you thinking, to entertain you, and to generate discussion.  While not strictly an international human resources topic, incentive pay is a global phenomenon of interest to our readers throughout the world.

There is much written about incentives and motivation.  Organizations spend countless hours fine-tuning their reward programs to optimize business results. Many theories exist to describe these optimal solutions.

But does incentive pay really work?

Recently, a client forwarded a link to a video on this subject, featuring Dan Pink, courtesy of TED: Ideas Worth Spreading . If you are curious  about the answer to this question, or in general, believe that incentive programs sometimes miss the bar, I highly recommend you listen to Dan’s speech.  It’s about 20 minutes long, and it will get you thinking, for sure.

After you watch the video, please add your comments to share with others.

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Posted in Compensation, General, Global HR Expertise

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Impact of Assignments to Remote Locations on Children’s Education

Posted on September 14, 2009 by | 3 comments

Photo Liz Perelstein (2) Author:
Liz Perelstein – School Choice International

As businesses expand more and more into developing markets, companies are often facing new challenges in finding appropriate schools for the children of their international assignees.  In some locations, schools haven’t caught up with demand for international education; in others, there simply might not be any international schooling options at all.  Now more than ever, local schools are an option, but you need to be well-prepared for such an approach to work.

Schooling is a Top Priority
Assignees often state that having access to good quality schools for their children is the most important factor in deciding to accept an assignment.  Parents are more uneasy than ever about relocating with children when international schools are not available.  By gaining some understanding of the local educational system and curriculum differences in countries where you send employees, you will be in a better position to create policies that provide children with access to reasonable education.

Consider these facts:
Some local schools in India consider handwriting so important that teachers may not consider content if handwriting falls short of expectations.

  1. A study by the University of New Hampshire indicates in many European countries, parental involvement is not permitted.
  2. So-called “International Schools” may not be truly international.  Instead, they may be targeted towards local children to help them acquire language and other skills to promote attendance at US universities and/or may exist for children whose parents do not want them to attend local schools.
  3. In some countries, schools “stream” students into tracks as early as 12 years old, and this could affect the ability to gain admission to universities in other countries.  Admissions decisions based on an “entry examination” or prerequisites make this a clear challenge for those who do not have the language or curriculum background.
  4. Religious education is a fundamental part of national curriculum in many countries, such as Ireland.  This may meet an unenthusiastic response from families not accustomed to such arrangements, or those that practice a different religion.  And, even if considered acceptable, students may not have the religious background to fit in.
  5. Special education is handled in varied ways throughout the world, from mainstream educational options in the United States, to China, where few schools have an open-minded approach, and few teachers are taught to teach children with learning or other disabilities.

Language is the main obstacle that many companies are aware of when evaluating local school choices, but integrating families into a local educational system where goals, philosophies and methods are so dissimilar requires a different type of preparation on the part of the family, and a more flexible policy on the part of the company.

Tips for Success:
Here is a short checklist which is useful to help companies and assignees examine educational options for any overseas assignment, as well as for their eventual return home:

  • Before moving a family, allow them time and means to review curriculum of the school in the host country, and discuss it with teachers back home.  Evaluating where a child may be ahead or behind enables parents and schools to develop programs that assist in entry as well as re-entry.
  • Recommend that families bring along books, course outlines and any other aids to maintaining academic skills required at home so that kids can keep abreast of knowledge required for repatriation.
  • Find out the exit requirements for schools in the home country before leaving.  These, in particular, will determine curriculum to continue studying while abroad.   Can these be satisfied on assignment, and if so, what kind of policy do you need to support these additional costs?
  • Decide what kinds of supplemental or alternative education your company will allow to reduce hardship for children whose families are sent on assignment, particularly at key grade levels.  These may include tutoring, on-line courses, summer school, home schooling or boarding schools.
  • If schooling is totally incompatible, is it possible for the employee or the family to repatriate either a year earlier or later, as appropriate to facilitate the transition?
  • Provide opportunity for students to become proficient in reading and writing as well as speaking of the new language well before the move; in fact, as soon as the move is announced is best.
  • Engage a professional who understands discrepancies in curriculum as well as culture to recommend individualized support so that students can be prepared before returning home.
  • Repatriation is always difficult for children, since even international schools teach different curriculum, have different course sequences, and offer different languages and promote different viewpoints when teaching history.   Children who have attended local schools in remote areas may be more significantly unprepared to attend school back home or enroll in university in their home country.  Be sure to pay careful attention to home country requirements before assignments begin.

Conclusion:
School choices for expatriate children are always challenging, and even more so in locations where the traditional choices are limited or non-existent.  Families who have overcome these obstacles and successfully educated their children in local schools find the rewards to be significant.  Children truly learn new languages, cultures and curricular subjects and enjoy an unprecedented window into the customs of a different country.  As schools are a microcosm of the cultures they inhabit, children raised in local schools abroad can be our true ambassadors in the global world of the next generation.

Providing support in the form of tutoring, on-line learning and language instruction is a key consideration companies should consider when developing policies to support your employees in remote locations.  Inviting parents to reframe their definition of education as learning rather than schooling is the key to promoting the right attitude for a successful assignment.

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Posted in Expatriates, Global HR Expertise, Global Mobility Services, International Expertise, Relocation, Repatriation

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Guidelines on Dangerous Assignments – When Your Employee is Risking His Life for the Company

Posted on September 8, 2009 by | 3 comments

mariblack3Author:
Mariana Villa da Costa – Littler  Mendelson

It is a big and dangerous world we live in today.  There are many “hotspots” around the world where the personal safety and security of staff can be in jeopardy unless the proper precautions are taken.  Expatriate employees assigned to high-risk locations are especially vulnerable.  Companies need to become familiar with the actual in-country conditions, work with security experts to do a risk assessment, and evaluate and update their assignment policies to minimize the risk to assignees and company alike.

What’s Dangerous?
Assignments may be considered dangerous in locations that have some of the following characteristics:

  • Countries where war, civil insurrection, or terrorism exists and presents physical harm or imminent danger to the health or well-being of an employee.
  • Widespread, uncontrolled violence or disease.
  • Lack of infrastructure (limited availability of basic goods and medications, for example).
  • Lack of family support services, such as schools, health care, etc.
  • Extreme physical conditions (sub-freezing temperatures, remote locations, etc.).

Companies often have a difficult time attracting and retaining people for these assignments, as the assignment is likely to be very stressful on the employee and family.  A proactive approach helps to address the problem.

Steps to Manage Extreme Hardship Assignments
There are several measures that can be taken by employers to address the unique challenges of extreme hardship assignments.  Here is a checklist to follow:

  1. Should the assignment include family members, or is an unaccompanied status required?
  2. Expatriate package should be reviewed to consider extra allowances and other benefits, as appropriate.  Some examples are:
    • Hardship Pay – Usually 10% to 25% of base salary, to compensate employees for extreme living conditions.
    • Danger Pay – Typically 15% to 25% of base salary, in addition to all other compensation.
    • Travel Benefits – Extra trips, or allowance to make trips for R&R (rest and relaxation) on a periodic basis, in a safe and secure location.
    • Assignment Letter – Update to include details on all extra benefits and explain the conditions the employee will find in the location.
  3. Safety and Personal Security precautions should be followed and training and information provided to each assignee (and family members), including:
    • Security Briefing and Training – Ensure every assignee is informed about the security risks in-country, knows how to address them, knows where to go in an emergency and whom to call (in the company, and perhaps outside security consultants as well).
    • Bodyguards (if required).
    • Secure Housing – Limitations on where assignees can live, to eliminate situations that are particularly risky.  Apartment complexes, gated communities or compounds many be appropriate.  Armed guards and security systems are typical.
    • Legal Representation Abroad
    • Kidnap/Emergency Response
    • Emergency Evacuation Procedures – Each assignee must understand the company’s procedure for evacuation, how it affects family members, etc., in the event of natural or man-made disaster, war or other catastrophe.
  4. Health issues are another important consideration.  Are there adequate medical facilities available in-country?  If not, what sort of arrangements can be made?  You also need to consider contagious diseases, insect-borne illnesses, HIV and other sexually-transmitted diseases, extreme pollution, blood supply, treatments for chronic illness, availability of prescription drugs, and applicability of health insurance.  There are health experts that specialize in assisting companies and families in health assessments, medical evacuations and similar challenges.Don’t forget the basics, such as up-to-date vaccinations!
  5. Other insurance (beyond health insurance) is often required.  Typical examples:
    • Life and Disability Insurance – Make sure coverage is valid in the assignment country.
    • Kidnap and ransom insurance
    • Burglary and other household effects insurance
    • War risk insurance – Often needed in countries designated as war zones.
  6. Cross-Cultural Training should be provided to ensure a relatively smooth transition for the employee, and a realistic preview of what daily living is like.  Companies often view such training as “too soft,” but experience shows that it is extremely helpful to prepare assignees well for many contingencies.
  7. Crisis Management Protocols should be defined in each organization.  Some suggestions:
    • Define a protocol for assigning “critical” status to disaster or crisis situations. It is important that companies have informed local sources to ensure that their assessment of the situation is valid and current.
    • Formalize and communicate country or regional contact points and phone numbers.
    • Set up a procedure for the employee in the event of an emergency.
    • Ensure that employee emergency contact numbers, as well as home and office phone numbers, are on record with the home office and the country contact person.
    • Conduct emergency evacuation briefings or updates upon assignment and at periodic points during assignments, particularly in areas of potential risk or conflict.
    • Plan for financial and travel contingencies.

Other Resources
There are many other resources to assist employers in managing extreme hardship assignments.  Start with the US Department of State Travel Warnings.  The UK Border Agency provides a listing of current conditions in many countries, as does the US Central Intelligence Agency World Factbook.  Forbes Magazine publishes a list of the World’s Most Dangerous Countries, which offers some useful information.  Check with security consultants and health care experts as well.

Summary
Managing assignments to dangerous places is a challenge for employers and stressful for employees.  Careful planning, sound policies, advance preparation and of course, a sense of adventure, are all steps to mitigating the risks and ensuring a successful assignment for your company.

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Should Global Mobility Services Be Centralized?

Posted on September 3, 2009 by | 17 comments

Author:
Warren Heaps – Birches Group LLC

As organizations continue to look for the best way to manage their globally mobile employees (expats), one of the most common issues to address is the best organizational structure to provide the necessary services and support to this group.   What is the optimal structure – centralized or decentralized – and how does an organization decide which approach is best for them?

Back to Basics
Expat management is a cross-functional discipline made up of several different areas of expertise, each highly technical in their own right, including relocation, compensation, tax, payroll and immigration.   To be effective, one must become familiar with all of these areas, and master at least a few of them.

In addition, customer service and vendor management are critical, especially given the preponderance of outsourcing to third-party providers.   Finally, all Global Mobility departments need a link back to the global talent management strategy in their company.

In my opinion, few companies, and few individuals in those companies, are really truly experts in all the aspects of Global Mobility.  Therefore, it makes a lot of sense to centralize mobility services, and invest in and develop the few staff that do have the capacity and experience to become experts.   Depending on the size of your assignee population, this could be at the corporate or HQ level, or in organizations with larger assignee groups, at the regional level.

The Regional Model
One of the most common structures used by many organizations today is the regional one, typically Americas, Europe-Middle East-Africa (EMEA), and Asia-Pacific.   Under this approach, a designated regional center coordinates all of the assignment management for the region.   The reality is that all organizations are at least partially outsourced, so much of the work is handled by third-party providers, and the role of the internal staff also includes the management of these outsourced processes.

A regional structure helps to ensure consistency across a broad range of countries, and develops deep knowledge of local practices, to provide the highest possible level of support to assignees.  In many cases, regional suppliers are engaged, based on their local market knowledge and performance in the region.

The Global Model
Some organizations choose to centralize services at headquarters.  This model ensures the highest level of consistency, since one group is responsible for all service delivery.   With smaller programs, this approach can work; as programs get larger, however, the regional model quickly emerges as a more practical solution.

Under a global model, there are often opportunities to ensure high levels of tax compliance and identify tax planning opportunities effectively.   These decisions require input from corporate tax and finance as well as human resources, and are best managed jointly at the headquarters level of the organization.

Another added advantage of the global model is the selection of outside providers, which would tend to be more global as well.   Realize, however, that few service providers can really provide services everywhere – they all rely on partner organizations to supplement their own resources.

The Decentralized Approach
There are some companies which continue to manage their mobile employees through a network of local offices, without any centralized support at the regional or global level.   This is a challenging way to operate for all but the very smallest programs, and may give rise to missed opportunities in areas such as vendor consolidation, tax planning and the general efficiency of the program.   Even under a decentralized approach, however, a standard international assignment policy should be developed and distributed, ensuring a minimum level of consistency.

Tools to Help Manage Your Program
Another factor to consider is the level of automation available to your organization.  Without a technology tool for assignment management that is accessible globally, decentralization is not realistic.  These days, there are hosted (SaaS) solutions which are affordable and very powerful, and integrate easily with your global ERP solution.   Whether you work with a specialized vendor, such as Atlas or MoveOne, or rely on your accounting or relocation firm, deploying a robust assignment management software solution goes a long way to simplifying your expat administration and helps eliminate redundant and inefficient processes.

Ask yourself a simple question – how many expats do you have in your company today?   If you cannot answer this question with confidence, you need a better tool to manage your program.

Don’t overlook short-term assignees, commuter assignments and short-term business travelers.   Each of these assignees require tax, relocation and immigration services, and if poorly managed, can result in unexpected costs. You should be able to capture all types of assignees in your assignment management system.

Moving Your Program Forward
Now that I’ve got you thinking about how your expat administration is being managed, take a careful look at your organization structure.  What kinds of changes might be beneficial?  Where are you biggest “sore spots”?

Post some comments about your specific challenges, and we can try to address them.

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Warren Heaps

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Birches Group

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Posted in Expatriate Payroll, Expatriate Taxation, Global HR Expertise, Global Mobility Services, International Expertise, Relocation, Repatriation

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The Expatriate Agreement – Yes or No?

Posted on August 31, 2009 by | 7 comments

bio_400x400Author:
Chuck Csizmar – CMC Compensation Group

Recently I was asked by a US client to explain why I recommended that they create an international assignment letter for their expatriate employees.  After all, they only had a few employees overseas and previously had resisted the call to what they described as “playing the lawyer card”.  They felt that management could effectively deal with the circumstances of each individual expatriate situation as matters came up, and were reluctant to lose what they considered their prerogative – to set terms and conditions as they thought appropriate for each employee.

This is not the first time I have been asked that question, as it is not unusual for small companies or non-profit organizations to send an employee overseas with little more than a verbal agreement and a series of vague assurances.  These organizations wish to avoid bureaucracy and move quickly.  However, in most cases these casual and hurried arrangements have proved painful and expensive experiences for all concerned, largely because:

  • The shock employees and their families faced when they came to grips with actually living in a foreign country, vs. simply visiting.  The local realities of daily life, combined with cultural differences compared against “back home” became quite a wake-up call when they were no longer insulated by the transitory nature of a business trip.
  • The constancy of unforeseen and confusing localized situations arising (medical claims, driving licenses, bank accounts, schooling, language, etc.) proved such a frustrating distraction for the employee that they often lost focus on the job – the reason they were there in the first place.
  • Relationships with headquarters suffered as the employee asked for more and more consideration (increased payments) to redress what they considered coverage gaps in their terms & conditions.  The trust element was weakened as employees felt they were being short-changed by management.

Coming from an environment where every expatriate was given a detailed assignment letter “before” getting on the plane, I was at first taken aback by the client’s question – because the absence of mutually agreed terms and conditions is almost certain to eventually prove very expensive to companies trying to take a “short cut.”

Here are some reasons why providing an assignment letter is a good idea:

  • Protection:  Like any contract, confirming the terms & conditions of the assignment protect both parties from misunderstandings, misinterpretations and assumptions – before expenses are incurred.
  • Clarity:  Accepting an overseas assignment is a major step for any employee, as well as for their affected family members.  The more you are able to clarify exactly what the terms and conditions of the assignment are, the more likely you are to ensure a smooth assignment for all parties involved.
  • Cost control:  Defines those expenses that the company will pay for and conversely what they will not pay.  An agreement here will mitigate issues rising once the expatriate is on the ground in the host country.  Concerns raised once the assignee is relocated usually result in increased company costs, as negotiating leverage is lost and the company feels compelled to avoid alienating a very expensive investment.
  • Standardization:  Your international policy, whether written or only a matter of case law precedent, should strive to treat all expatriates in the same fashion.  Unique circumstances do occur but the basic principles should be repeated for every assignee.

So how bad can it be, playing it by ear and leaving terms & conditions to be developed over the duration of an employee’s international assignment?  Flexibility and quick thinking are positive management traits, are they not?

Unfortunately, when you court the inherent risks that accompany an undocumented assignment, you should be prepared for:

  • Increased costs that you have not planned for
  • Constant negotiations that attempt to improve the lot of the expatriate
  • Disgruntled employees and / or affected family members
  • Greater risk of failed assignment

Taking that short cut usually limits the financial and emotional protection the employee and their family are going to rely on, at the same time that the company has committed a substantial amount of money to place them in an overseas location.  That is not a good management practice.

When preparing an international assignment letter, what elements should be included?

  • Title, compensation and assignment duration – critical elements of status and reward in the host country
  • Housing and cost of living allowance considerations – should include the amounts involved (as applicable) and the frequency of review
  • Benefit coverage (medical, dental, life, vacation, holidays etc.) – how will home country benefit protections be handled in the host country
  • Relocation considerations – the back and forth policy coverage for the employee’s residence, to include movement of household goods overseas
  • Property management (as applicable) – what will happen to the home country residence?
  • Tax preparation – employee obligations in both countries.   Usually a statement of company liability for “additional” taxes is included.
  • Home leave – how often, and in what circumstances?
  • Schooling, language, cultural orientation (as applicable)
  • Repatriation – a balance is usually struck here between the employee’s strong concern and the company’s natural vagueness for what the future might bring
  • Connection to international assignment policy – refer to the policy as the source of company rules and procedures
  • Unique and individual circumstances (as applicable) – if it’s different from the norm, write it down!

The items listed above represent only a portion of the questions that your expatriate candidate will have, and the list is not all-inclusive.  So should your company consider taking a casual approach to sending an employee overseas, unsupported by a signed assignment letter, be aware of the risks involved.

Is there a scenario of an employee being asked to live overseas where circumstances would not require an international assignment letter?

I don’t think so.

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Global Salary Budgeting – Smart Approach or Misguided Shortcut?

Posted on August 23, 2009 by | 4 comments

heaps_warren1Author:
Warren Heaps – Birches Group LLC

It’s getting near to the time of year when companies start to draw up budgets for next year.  One of the most important numbers in the exercise is how much to budget for growth on the salary line.  Some organizations assume that making an assumption for salary growth globally based on the figures used in the headquarters country is a good solution.  After all, it’s easy to just take one number and apply it around the world.  Such an approach, however, is flawed.

Just as Chuck Csizmar explained in his recent post about comparing salaries across different countries by converting currencies, global salary budgeting needs to be done country-by-country, and taking a shortcut like the one described above is a recipe for disaster.   Here’s why.

Market Movement Varies by Country
The primary information used by HR and finance to determine salary budgets is market movement (this is a measure of how much salaries increase from one year to the next, usually from surveys) and internal economic assumptions (basically, how much can the company afford?).

Suppose your US-headquartered company decided to apply the US salary increase percentage to all of your markets overseas for a five-year period.  The graph below compares the average increases over the five-year period ending in 2008 for selected markets.

Average Pay Increases

As you can see, the average increase amounts vary a lot by market.  The difference compared to the US ranges from 7.1% (India) to almost 20% (Nigeria).  At the same time, the average in Europe is below that of the US. And that’s just comparing the averages for one year.  If you looked at the cumulative effects with compounding over the five-year period, the differences grow dramatically.

OK, I get it.  I need data for each market.   I’ll just use inflation.
Inflation data is fairly easy to get on a global basis.   You can usually find it for free on various websites, and your local finance folks will certainly have some figures for you to use as well.   They use inflation to budget price increases for your products and to anticipate the impact of price increases in raw materials and other costs of doing business for the upcoming year.   And of course, official inflation figures are produced by the government of each country in an unbiased and apolitical fashion, right?   But what does inflation, or cost-of-living, have to do with salaries?

Cost of Labor is What Matters!
Setting salaries is affected by many factors.  The absolute level of pay is certainly influenced by cost of living – countries with higher costs tend to have correspondingly higher salary levels.  But the main factor affecting salary increases – the one that drives the market movement each year – is an old rule from Economics 101. Three words.  Supply and Demand.   If you are recruiting for positions with hot skills, for example, and there is a shortage of these skills in the market, don’t you end up paying more for these recruits?  If there is high unemployment or an excess of qualified candidates, and positions are easy to fill, isn’t there considerably less pressure to raise salary levels?

Can I just use devaluation instead?
Short answer?  Nope.  Local employees are paid salaries set in local currency, and obtain their everyday good and services in the local market, in local currency.   Devaluation (or revaluation) defines the relationships between the currencies of different countries, usually with a reference to a “strong” currency such as US Dollars, Euros, Pounds Sterling or Yen.   Exchange rate changes do affect the price of goods, for example, especially imports or imported raw materials.   But these fluctuations do not fundamentally affect the cost of labor in a country.  Remember, also, exchange rates are sometimes controlled by governments to achieve other objectives.   Hardly a reliable measure of anything, really.

The Best Approach
To estimate your salary budget properly, you need to obtain data for market movement in each country, and analyze it in the context of your own organization’s situation (market position, health of the business, funds available for increases, etc.).   There are many sources for market data – everyone has their favorites (hopefully some of you are using Birches Group data).  And then you have to apply something no statistic or consultant can provide – your own judgment – to determine the right figure to use in your company.  Interpretation and analysis of the data and applying it to your company’s situation is the art of compensation rather than the science.


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Expats: Saving Money on Global Benefits, Part 2

Posted on August 18, 2009 by | 2 comments

George Bashaw

 

Author:
George Bashaw – Atlas Global Benefits

I hear snippets everyday about the economy recovering. Try telling that to your HR friends.  They are still getting pressure to cut costs and create efficiencies.  Adopting a true expat plan for benefits can create numerous efficiencies.  This blog is Part 2 in a series to help companies save money on international benefits by creating a global health benefits package specifically for expats.

Hard Cost
I am surprised every time I run into a company that does not have a global benefits package for expats.  A typical response is, “we don’t want to spend the money.”  This is a common misconception.

Did you know:

  • Expat plans are typically less expensive and more compressive than a comparable domestic plan;
  • The plans typically they do not have copays and many of the exclusions common with domestic plans;  and
  • The hard cost does not take into consideration the cost of a critical event like a heart attack or a medical evacuation and repatriation without international coverage.

Do a comparison and see where your company falls.

Efficiencies for HR
A company has three options when insuring expats:  keep them on a domestic plan and run claims through their current carrier; put them on a local (country-specific ) plan; or a specialized expat plan.  By choosing the latter, you can greatly reduce the administrative burden.  Here’s how:

  • Compliance:  Administering employee benefit plans in multiple countries creates a significant amount of compliance with local laws.  Adopting a global benefits package for globally mobile employees shifts the burden of compliance from the HR department to the insurance carrier.
  • Claims and Service:  This becomes the responsibility of the expat carrier.  It is only a matter of time before you have an employee in an assignment country on the operating table demanding payment to begin surgery.
  • Consistency in Benefits:  It is common for companies to provide expats with a local health care solution rather than one that is fully transportable around the globe.  Since benefits vary from country to country, you could end up with a disgruntled expat when they discover that one country’s benefits are richer than the next assignment.

Benefits for the Expat

  • Freedom:  Expats are on foreign assignment and their needs are significantly different than someone who is a local employee.  By nature, the expat will travel (different countries and home) and they need coverage that will follow them.
  • Productivity:  A global benefits package keeps your expat focused on their assignment.  They no longer worry about having to travel for medical care or deal with claims and medical provider issues.

Foreign Nationals
Creating a global benefits plan for non-US citizens working abroad requires some due diligence and proper communication.  The challenge is to design a plan that is integrated with any social benefits so there is no duplication. Perception of the new plan is very important.  In order to be well received, it is necessary to properly communicate the benefits to the expatriates so they are comfortable with the new private coverage as compared to their prior social system.

Use a Broker for a Complete RFP
I know this sounds self serving, but use a broker who writes international coverage.  Out of ten companies I call on, nine have one of two expat carriers. But there are more than a half a dozen carriers who provide quality coverage and it would serve you well to get a full RFP.  Second, a broker has knowledge of the market, leverage with carriers, and can match your needs with the appropriate insurance provider.  Third, most brokers have enough business to merit carrier discounts that can help negate commissions or broker fees.  In sum, make sure you are specifically insuring your risk and use a professional to facilitate the process.

I hope this helps you navigate through the complexities of expat health care options.  Please let me know your thoughts by leaving a comment.

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Abrupt Repatriation: Tips to Pass on to Parents

Posted on August 17, 2009 by | Comments Off on Abrupt Repatriation: Tips to Pass on to Parents

Photo Liz Perelstein (2)Author:
Liz Perelstein – School Choice International

Although the merits of sending families home before scheduled repatriation dates are a topic of continuous debate, we know that some companies are resorting to this course of action.  Where children are involved, the situation is understandably more sensitive, and companies are struggling to come up with cost-effective, yet fair and reasonable solutions.

If you find you have to make or implement difficult decisions when it comes to children and their education, preparing yourselves, and helping parents prepare, is the most effective way to handle the delicate task at hand.  Three things that parents should keep in mind are:

  • The resilience of children
  • Opportunities that come from change
  • Thoughtful communication

First, anxious parents need reassurance that children are extremely resilient and don’t, as a matter of course, suffer long-term as a result of transition, although the anticipation of change and the early stages in a new school are challenging for everyone.  In typical circumstances, the children who find change most difficult are those whose parents do.  So it is important that parents make every attempt to recognize and convey the opportunities the family has had and will have, and to address any problems as a family.  Any concerns that children cannot comprehend should be saved until after bedtime.  Parents should share as much about the circumstances as children want to know and are able to absorb, using their questions as a guide.  It is essential that they are told that neither they nor their parents have done anything wrong, and that the current economic circumstances are something that the world is confronting together.  Parents can explain that many of their friends also have been making life changes as a result of the recession.  Some have moved homes, and others have switched schools.  Different families will make different kinds of choices, but sacrifices are now common among friends and family members.

These are some additional tips that can be shared with parents to provide them with peace of mind:

  • Be available to speak with children and to answer any question they may have.
  • Make thoughtful choices about the new school, reflecting on academic and social characteristics of children and how they have fared in their current school, in addition to family values and logistical circumstances.  Gather lots of information and ask many questions about matters important to children, rather than focusing on factors more important to adults.
  • Before starting the new school, engage the head and/or teacher in a conversation about the child so that good class placement decisions are made and the new teacher understands the child, his/her needs as well as current transitional circumstances.
  • Address curriculum differences through tutoring or outside enrichment, but first clarify that there are likely to be discrepancies between performance in their new and former schools; parents should explain that each school teaches different material so that the child is not at fault if s/he struggles at the outset.

Communication, both with the school and with the child, is the key to a successful transition.  When families are calm and thoughtful, a change of schools can give children an opportunity to learn essential life skills such as making new friends and dealing with uncertainty, which is an invaluable part of any education.

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Reverse Culture Shock (or Why Do I Hate Being Back Home?)

Posted on August 17, 2009 by | 13 comments

maryd-pic5Author:
Mary Dougherty – Shepell-fgi

When employees begin an international assignment, they often experience “culture shock” in the host location.  Many companies provide support services to ease the transition for these families, ensuring a quick adjustment and a productive and satisfying international assignment experience.  But what happens when the assignment is over, and the family heads home?

  • 25% of expatriates leave the company within 2 years of repatriation (National Foreign Trade Council survey)
  • 69% experience significant “reverse culture shock” (Bureau of National Affairs, Washington)

Coming Home is Not So Easy
Repatriation is not as simple as it sounds.  “Reverse Culture Shock” is often experienced by those returning from an international assignment, and this can have tremendous impact on professional and personal adjustment.  The challenges inherent to living in a different cultural context for a significant period of time do not end with adapting to the host culture; they continue through the process of returning home and re-adjusting to what was left behind.  In fact, it is often those who have adjusted most successfully abroad who have the most difficulty returning home.

It can take up to 18 months to adjust and reintegrate after an international assignment; adjustment issues effect employees and their families both personally and professionally.  Understanding the problems that they may encounter upon reintegration is the key to a successful repatriation.

What to Watch For
Here are some common symptoms or situations that repatriating families encounter:

  • irritability/ resentment
  • sense of difference and disconnect
  • disappointment
  • inability to concentrate
  • low morale
  • change in values/attitudes
  • marital conflict
  • fatigue
  • parent/child conflict
  • educational/adjustment problems for children
  • depression
  • feeling unappreciated personally/professionally
  • decreased productivity
  • loneliness

What Can Employers Do?
One way to lessen the negative impact of repatriation is to provide support to the employee and their family in the form of a “Repatriation Debriefing.” Skilled repatriation counselors can help these individuals recognize the symptoms of reverse culture shock, and provide techniques to manage through it effectively.  To support family members, providing an opportunity for the employee and family to candidly and confidentially discuss repatriation challenges with regard to both work-related and family experiences is key. This process provides an opportunity to examine and explore the potential difficulties of returning home, as well as assisting in problem solving and goal setting.

Employers should also carefully manage repatriation assignments to ensure that expatriates are retained in their organizations, and that the new skills acquired during the international assignment are recognized and leveraged.

Finally, don’t minimize the importance of taking care of the family.  When an employee relocates, so does their family, and the impact on a spouse and children can be profound.

These steps will help minimize turnover amongst repatriates, preserving your international assignment investment, and also ensure that your repatriating employees are quickly and effectively reintegrated into their home country.

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