Tag Archives: flexible assignments

Hey HR! Here’s What Employees and Families Really Need When Relocating Internationally

Posted on December 13, 2011 by | 4 comments

Guest Author:
Rachel Yates – Definingmoves.com

[Editor’s Note:  We are very excited to share with you the assignee’s spouse perspective on international relocation, from someone who has lived through five such moves.  Rachel Yates edits a website, Defining Moves, devoted to assisting relocating families around the world. ]

I read the post from May, 2011 by Warren Heaps about global mobility policies for the 21st century on this site, and found it to be fascinating, mainly because I am part of the changing demographics Warren described. On paper, we are the traditional relocating family; husband as assignee, spouse as the accompanying partner, and two dependent children. We have relocated through three continents over the last 10 years, and we have struggled. And we are most definitely not alone.

So what do relocating individuals and families really need from HR?

Continue reading →

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Posted in Expatriates, Global HR Expertise, Global Mobility Services, Policy Development, Relocation, Repatriation, Talent Management

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Global Mobility Policies for the 21st Century

Posted on May 26, 2011 by | 8 comments

Author:
Warren Heaps – Birches Group LLC

It’s now almost the middle of 2011, so the 21st century is well underway.  The new realities of global business are upon us:

  • Companies are expanding from developed countries into new, high-growth markets in the developing world in record numbers.
  • Global talent is being snatched up across borders on a regular basis.
  • Companies are sending expats to new locations, and breaking new ground with each assignment.
  • Companies headquartered in developing markets like India, China, Brazil and South Africa, to name a few, are expanding along with multi-nationals from more established markets.
  • Demographic shifts will result in an increasing number of workers being sought from developing countries to replace the ageing workforce in North America and Europe.  In fact, McKinsey predicts that by the year 2040, the largest working-age population in the world will reside in Africa.

So what does this have to do with global mobility?  A lot!

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Posted in Compensation, Expatriate Recruitment, Expatriate Selection, Expatriates, General, Global HR Expertise, Global Mobility Services, International Assignee Recruitment, International Assignee Selection, International Expertise, Repatriation, Talent Management

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How to Develop Effective International Assignment Policies

Posted on January 17, 2010 by | 8 comments

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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Posted in Expatriate Payroll, Expatriate Taxation, Expatriates, Global Mobility Services, Policy Development, Relocation

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Five Facts About International Schooling

Posted on January 12, 2010 by | 4 comments

 

Author:
Liz Perelstein – School Choice International

Most companies sending employees overseas offer some kind of cross-cultural training.  But we rarely think of cross- cultural training for school children, even though education can be a make or break issue for many families considering an overseas assignment.

As you can see from the facts below, even expats who send their children to international schools encounter cultural differences that may be significant, and may clash with family customs.  Schools – local and even international – are a microcosm of the culture they inhabit.  Without understanding the host country’s educational system children can be disadvantaged in the admissions arena, in academic performance and in the ease of transition.

Consider these facts:

1) Did you know that 8th graders in Belgium, Korea and Japan do not use calculators in math classes?

Curriculum differences like these make it hard for children trained on calculators to adapt to local mathematics instruction in these countries.

2) Did you know that German parents give their children a Schultuete, or a cone filled with treats on the day they start first grade?

Children unfamiliar with local customs can feel awkward or embarrassed, affecting the transition to their new school.

3) Did you know that in Brazil children either go to school in the morning OR in the afternoon?

Spouses may find it difficult to work in countries with a school schedule alien to them.

4) Did you know that Saudi Arabia is enforcing a law that requires expat children to attend a school of their own nationality?

Many families choose a curriculum other than their national curriculum, often to preserve curriculum continuity with former or future schooling.

5) Did you know that admissions for 4-to-10 year olds for New York City independent schools requires an entrance examination that is ONLY administered in New York City?

Admissions opportunities may be limited for children if parents are unaware of requirements.

To learn more about educational customs in different parts of the world, visit our School Choice International blog or our Fact of the Week Collection.

More About Liz:

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Posted in Cross Cultural Insights, Expatriates, General, Global Mobility Services, International Expertise, Relocation, Repatriation

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Avoiding Burnout in Global Field Service Travel

Posted on September 29, 2009 by | 4 comments

IMG_1602cropAuthor:
Alan Freeman – LOF International HR Solutions

The following question, recently posted to an online discussion group, caught my eye:

“Our international technical services business is booming.  Our Field Service Techs are getting burnt out spending 2-3 months away from home. How can I incentivize them to keep traveling? They already receive an attractive daily bonus for each day in travel.  Also, some of the new clients are in areas that are not very desirable.”

My dear old grandpa used to tell me, “Son, if you run your horses too hard and too long, especially over rocky ground, they’re going to fall in exhaustion or go lame.  No amount of extra oats will make any difference.”

So what’s the problem?

 

Notable drop-offs in productivity, poor morale, health problems and, ultimately, resignations (at least in normal economic times) go hand-in-glove with heavy travel-related burnout – especially international travel to “not very desirable areas”.  If high crime rates, existence of serious infectious diseases, lack of sanitation, political unrest or even outright violence are characteristic of those destinations, then the prospect of employees being harmed, kidnapped or killed becomes a significant concern as well.

An indirect, negative impact on morale and productivity also can stem from marital or family problems attributable to employees’ extended absence from their spouses, partners and families.  Heavy travel on the part of one parent puts additional stress on the stay-at-home partner to look after the children, elderly parents, pets, household maintenance, financial management, etc.  In our experience, Field Service employees often maintained their homes and vehicles themselves so the spouse had to hire outside providers to look after these issues while the employee was traveling.

Throwing money at employees won’t make them or their families less susceptible to burnout, but it could contribute to a company reputation for “slave driving” and failing to understand the human side of the travel sacrifice. This is not a desirable outcome for the company or the employee.

What might be useful?

 

A firm could consider providing extended paid leave, “R&R”, between trips. Take a lesson from oil & gas, engineering & construction and defense contracting firms and utilize the “rotational assignment” approach.  Simply put, for every x weeks or months the employee works on travel, he/she is eligible for y weeks or months off on paid leave at home or in a “nice” location at company expense.  For example, one of our clients provides services at a mining site in a developing country.  Their employees work 7 days a week for 3 months at a camp site and then are sent home for a month off with full pay.

I once worked on a project where, after the employee worked 1 month (single status) at a remote Middle Eastern camp site, the company would pay for the employee and family to rendezvous in a Western European city, all expenses paid up to a set maximum, for a week.  Expensive? Yes, certainly.  Did it “refresh the horses”, improve morale and productivity and build positive morale and attitude toward the company?  Absolutely!

Sometimes, depending upon the facts and circumstances, it’s possible to provide some form of relaxation in-country (health club memberships, a bit of time off to sight-see, company-paid recreation, etc.) during travel.  This is another way to give them a needed rest.

Another possibility would be to hire additional Field Service staff so more employees share the travel burden and thereby make it possible for each to spend a bit less time in the field.  Yes, in today’s economic environment of extreme cost control, adding to labor cost is not a popular idea in the CFO’s office.  But then, what about the cost of assignment refusal, turnover, reduced productivity, lost opportunity while employees miss work due to illness or injury, and inability to recruit high caliber talent, etc.?

We also must ask how challenging, especially dangerous, are the “not very desirable” areas?  Iraq? Afghanistan? Somalia?  A jungle infested with disease-bearing mosquitoes?  Make sure you provide appropriate pre-travel medical exams and immunizations, and adopt some of the safety and security practices companies used for longer-term international assignees in hardship and danger locations.  This includes local safety and security plans, well thought out and established emergency evacuation plans and ensuring that death and disability insurance benefits are not voided by “war risk waiver” clauses in the insurance contracts.  This latter issue can easily be addressed through contact riders but, if not addressed proactively, can lead to extensive financial pain for the employer, especially given laws pertaining to the “duty of reasonable care”.  Woe unto those companies that have not established the mechanisms to track their employees’ whereabouts and deal effectively and quickly with emergencies.  Check out Mariana’s posting for some tips on extreme hardship assignments.

Our friends at International SOS Assistance are about to publish a research paper on employers’ legal “duty of care” that our readers should find of interest.

Something the person who raised the question didn’t mention – but we will – are global requirements for work permits, visas and tax compliance.  Often, even those on relatively brief field support trips to other countries are deemed by local governments to be performing “productive work” in those countries.  This can, and often does, require a work permit.  A company is well advised to consult with appropriate immigration counsel to ensure that its employees have the proper clearance to carry out their duties in each country.  This is not about the amount of time the employee might spend working in country; it is all about what he/she will be doing while in country.

As to taxes, members of management have often heard about the so-called “183 day rule” and simplistically believe that so long as the employee works in a given country for less than 183 days, he/she will not be liable for local income or social insurance taxes in the assignment country.  This is not necessarily the case and depends upon a number of key factors.  We recommend reading our contributing editor Claudia Howe’s excellent commentary on this issue.

So, at the end of the day, how do we respond to the question of “How do we incentivize our staff to keep traveling”?  We’d say, give your horses rest, treat them with dignity, recognize that their families bear a burden too, and provide them with fresh oats.

Otherwise, my dear old grandfather just might come back to haunt you!

About Alan

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Posted in Expatriate Taxation, Expatriates, Immigration

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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.

More About Chuck:

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Posted in Expatriates, Global HR Expertise, International Expertise

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Five Easy Ways to Waste Money on Expatriate Assignments

Posted on June 21, 2009 by | 8 comments

bio_400x400Author:
Chuck Csizmar – CMC Compensation Group

Once your company decides to send an employee overseas on expatriate assignment the danger of imminent waste looms large. The problem usually begins with management not understanding or even choosing to ignore the real costs of the international assignment. The money pit is then worsened by having only a weak business reason to support the assignment. If you lack a compelling business justification for why an employee is needed overseas, it is likely that you won’t be able to measure whether their assignment will be a success or not.

Below are some of the major reasons for the cost spiral of money slipping out of your hands; however, this is by no mean an all-inclusive list. I have no doubt that you can provide your own reasons as well.

  • Do not worry about the ROI

For some companies it is easier for a manager to have an international assignment given a green light than it is to have a piece of hardware or software approved for purchase. Where is the business case? Where is the justification via projected financial return that management should be held accountable for? Is anyone being held accountable that an ROI is achieved?

You should think twice before agreeing to pay out 2-3 times annual salary to provide for an expatriate assignment. “It’s in the budget” is never a good business reason.

  • Tell the employee that they are the only one who can do the job

Once an employee realizes that they are the only, or preferred choice for the assignment, you lose all negotiating leverage. I recall one fellow who insisted that he and his family live in Inner London (meaning: uber expensive) – though the office was 35 mi. north – or else he wouldn’t take the assignment. Do not expect someone holding leverage to be reasonable and accommodating when discussing terms & conditions of what you will pay for.

Strive to develop a stable of qualified candidates. It would also help if you remember that the ability to perform the job should not be the only criteria for selection. A bad cultural “fit” would be a painful and expensive experience for everyone.

Note: an employee with an attitude of doing you a favor, versus appreciating the career opportunity being offered, is a bad bet.

  • Do not bother to create an international assignment policy

Unless you enjoy living in a “let’s make a deal” world, you would be advised to lay down an international assignment policy, and then adhere to it. You will still be challenged by the employee / spouse to make improvements in their conditions, but without the support of a policy you will be hard pressed to stand your ground.

Note: make sure all terms & conditions have been confirmed *before* the plane departs. Once you have an expat on the ground in the host country you have lost whatever leverage you might have had. From there you *will* agree to term revisions, because senior management will conclude that having already made the investment you have to keep the expat happy or risk the assignment.

  • Focus on the employee, not the family

Even an otherwise contented expatriate will be rattled if every night they come home to complaints about life in the host country. Such a situation will distract the employee from concentrating on their assignment, and eventually you will face the need to further revise terms (increase costs) and / or the employee will throw in the towel and the assignment will be deemed a failure.

Be sensitive to potential family issues and include everyone in cultural orientations. The family is the expat’s support group, and if they are unhappy . . . well, you know the rest.

  • Separate assignment costs into multiple budget categories and line items

This way no one would understand the full extent of the costs involved. During five years spent overseas on assignment, neither Corporate nor local Finance was able to explain the full cost of my assignment. They had assigned expenses into so many diverse costs centers and budget line items that the confusion never cleared. Imagine the drip – drip – drip of your money if no one is even asking!

If no one is watching the costs of the assignment, those costs cannot be controlled. It would be like handing over a blank check – with no guarantees of gaining anything in return.

Finally, watch out for the manager who tries to “save money” by circumventing HR assignment policies. These creative thinkers consider that short cuts save money, but typically those “cuts” do little more than alienate the expatriate (and / or family) by treating them as second class citizens. Bad idea.

More About Chuck:

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Posted in Expatriates, International Benefits

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Reducing the Cost of International Assignments

Posted on April 17, 2009 by | 2 comments

mariblack

Author:
Mariana Villa da Costa – Littler Mendelson 

The current worldwide economic crisis is putting businesses under increasing pressure to control costs.  In spite of the challenging economic environment, however, companies are continuing to do business globally and even more small and medium enterprises are starting up international operations.  Along with this growth of international business operations comes the globalization of employment.  In addition to traditional “expatriate” assignments, more and more organizations are looking for alternative types of assignments which better address their needs, and have the potential to reduce costs as well.

Below are some ideas on how to tailor your approach to international assignments in today’s environment.

Examine Your Population 

For companies going global, look for early-in-career professionals who are seeking international assignments for their own professional development. This group is typically younger, and often anxious for the opportunity.  A lot of expenses associated with expatriate assignments are related to family members.  Since these assignees are often single, or married but have not yet started a family, many of these costs can be avoided.  Companies can create a developmental policy specifically for this situation, with allowances that are scaled back.

 “Volunteers” are a similar group – those employees that raise their hand to go overseas for personal reasons, or those with a lot of geographic flexibility.  Older employees, without the burdens of young children, are often in this category.  An added bonus – these are often the most experienced technical talent in an organization, and can be deployed effectively for technology transfer and other training missions.

Introduce Flexibility 

Expats are always keen to get cash and manage their own expenses.  Many companies have introduced lump-sum options in lieu of traditional expatriate allowances.  This allows costs to be capped, and also offers flexibility to the employees.  It is widely known that if the company gives the employee US$ 5,000 for housing, it is likely that the entire amount will be used for monthly rent.  On the other hand, if the cap for total housing expenses is US$ 20,000, the employee will allocate his expenses more wisely.

 Keep in mind, however, that in some locations, lump sums will not be very tax-effective, and could actually result in higher costs.

Proactively Manage Your Assignments

Another issue facing companies is so-called “permanent expatriates.” These are employees occupying important positions in highly desirable locations of the foreign operation for many years, who for a variety of reasons have not been reclassified as locals. The company needs to establish, in their internal policy and in the international assignment agreement, clear guidelines that outline when such a localization would take place, and then follow the guidelines.  Our experience shows that many organizations have policies for localization, but few companies actually use them!

Use Tiered Policies 

Many companies use a tiered approach to international assignments.  Depending on the type and reason for the assignment, the terms and conditions for the expat package vary.  For example, local or “local plus” packages are used for development or volunteer assignments; expat “lite” might be used for moves in markets where talent is widely available or early localization is desirable; and full expatriate packages would be used for senior level executives and leadership positions.  Regardless of the pay approach, though, companies must always be mindful of the career planning issues of managing expatriates.

Consider International Pay Scales

For employees in managerial positions, and executives that are going to a foreign location to develop and assess business, and that likely will undertake future assignments, the use of a single global pay scale is another idea.  The design of such a scale needs to account for the rates in which the company competes for this key talent.  In addition to pay, benefits and some allowances might be included as well.  

Summary 

Managing a global workforce prudently can be an important factor in the success or failure of a company doing business internationally.  Therefore, it is wise for companies to cultivate and develop new strategies to ensure their international compensation program is strategically aligned to their business, and also designed with costs in mind.

More About Mariana

Mariana Villa da Costa

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Littler Mendelson

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