We’ve all heard the horrifying urban legend that the supermarket shelf-life of a Twinkie is probably longer than that of the shelf itself. But have you heard about how long expats should be sent off on international assignments?
If you want them (and your company) to be successful, the answer is not that long because, according to the Harvard Business Review, the costs of expatriate assignments can be almost three times higher than employing a local national employee! On top of that, if the assignment isn’t managed carefully, along with ensuring the success of the employee’s family on location, the failure rate could cause severe economic consequences on you, the employer, as well as potentially reduce the retention rate of the employees themselves.
However, the news on this front isn’t all scary. There are numerous legitimate business reasons why an employer might need to assign an expatriate to an overseas office and plenty of tips and strategies to ensure the assignment goes swimmingly, resulting in a successful business venture as well as a happy employee whose horizons and career prospects have been broadened by working for you.
Why consider expatriates for international assignments?
If you are considering a new branch or office in a new country, chances are you haven’t yet had a chance to recruit locally available talent. Given that you need ‘boots on the ground’ in order to launch operations, secure logistics, and even get the hiring process started, assigning an employee from headquarters or even another country office would allow you to have trusted personnel in place to help the company start off on the right foot.
Starting a new office may not be the only reason to have international assignments – launching a new product or technology or opening up a new sales market which requires expertise in order to transfer the knowledge to local staff are also common circumstances requiring expats to be relocated. If you have already existing experts in a different location, why reinvent the wheel when they can head overseas for a period of time to ensure solid training and adoption by the local national staff.
Choosing the right person
While it’s fairly obvious that technical knowledge and expertise would be imperative in determining the right fit, it is also important to consider whether the employee’s family is ‘on board’ with the duration and location of the assignment. The longer the deployment, the higher the risk of family dissatisfaction, whether they are relocating with the employee or not. And with higher family dissatisfaction comes a higher risk of assignment failure and employee turnover.
But once the basic considerations have been met, it is also important to consider other factors such as:
- Familiarity with the assignment location’s culture, language and geography which would enhance the expat’s success in navigating the local bureaucracy in order to get your business needs met.
- Open mindedness, flexibility, and a commitment to learning a new culture and way of working. Someone resistant to change is probably not the ideal fit for an international assignment where their usual habits and ways of conducting business would probably need some serious tweaking in order to adapt to the new environment. Assigning someone with prior overseas experience would help mitigate this risk.
- An oft ignored success factor is choosing someone who is not afraid to hire their replacement. As mentioned earlier, expats can cost three times as much as a local national and if the goal of the assignment is truly to seed the office for sustainability, then the expat should be looking to plan for their succession soon after they get operations up and running.
Ensuring the success of the assignment
Once you have selected the person you think will be the best fit to help you achieve your overseas business goals, it is imperative you set them up for success. Poorly managed international assignments have a high rate of both business failure as well as employee turnover, which in turn can be costly to the company. Here are some ways to ensure success:
- Have clearly defined business goals and objectives outlined for the international assignee
- Define the initial length of the assignment so they can manage both business and family expectations; extensions can be determined later, once the assignee is on location and has obtained a better ‘lay of the land’
- If their family is accompanying them on the trip, be very clear on what benefits and services the employer will be providing to them as a way of helping them settle in and adjust (schooling, job search assistance, language or culture training, etc.)
- Employee compensation and benefits, especially currency fluctuations, cost-of-living or hardship allowances, as well as medical and security coverage are going to be top of mind for any expat so as an employer, pre-empt any fears and anxieties by addressing them right off the bat
- Host vs. Home country taxation complications can stress out the most talented accountant so imagine being the employee having to navigate these issues for the first time! Be very clear on whether the expat can expect any employer sponsored benefits such as equalization or protection or even accountant services to help them manage and file their taxes properly
- In a similar vein, ensure the assignee is supported in complying with all host country labor laws. The easiest way to mess up your company’s business objectives as well as your brand in country is by intentionally (or unintentionally) ignoring or skirting rules and regulations if they’re deemed to be inconvenient, expensive or liable to slow things down.
- Be clear about making sure the expat is ‘making themselves redundant’ by hiring local talent to take over for when they leave. The goal is to seed the office for sustainability.
- Stay in frequent touch with the employee, provide lots of support and when it is time to wrap up the assignment, start the conversation on reintegrating back to their home country well in advance!
- Finally, make sure there is a documented International Assignment Policy that highlights all the requirements, resources and objectives associated with being an expatriate employee at your company. If you would like help with drafting one, please check out Global People Strategist, or inquire about Blue Marble’s HR Consulting Services.