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Management Expatriate postings Credit: Getty / Sean Sexton “I once went to a meeting with a fellow Westerner in Japan,” recalls Ellen Shipley, Head of Mobility and International Assignments at BT, a major telecommunications company. “He took a business card from our Japanese hosts, didn’t look at it, and flipped it on the table. You just can’t do that there. There are a lot of little rules you simply have to pick up on, wherever you go.” Getting the right person Because many workers are just unsuited to conditions abroad, careful selection of the expatriate is vital. To avoid potential conflict and the resulting failure of the placement, companies routinely test for cultural sensitivity in prospective expatriates. But all too often, company headquarters will play down the importance of the test’s findings, and go ahead in selecting candidates purely on their performance on home territory. "I have seen Language ability, or at least the desire to learn, can be a key factor in helping expatriates settle in people who were superstars in their own country," recalls Efkemann. "And based on this record, their management assumes they will perform just as well in a different country. But then they fall flat on their faces because their approach didn't fit the local market at all." Cultural training, prior to departure, can teach some of the essential dos and don’ts and help reduce the risk of major clashes. Large companies also routinely offer language training to ease the transition. Although no one will become fluent in a language after a short course, a basic grounding can demonstrate respect for the local culture, and a willingness to learn more about it. Indeed, language ability, or at least the desire to learn, doubtless correlates strongly with the cultural sensitivity that is so essential to expatriate success. After all, it must be difficult to be sensitive to a culture when you have very little idea what is being said around you. The Economist Intelligence Unit survey seems to confirm this link. Former expatriates were much more likely to crave another posting if they found dealing with a foreign language to be “highly attractive.” Despite the apparent benefits of cultural and language training, the current economic climate is prompting some companies to cut back on it. “There is a real lack of understanding within the corporate world about what it actually means to pack up and move to another country,” says Shipley. “Consequently, when times are hard, heads of departments can see the investments that have traditionally been made to help an expatriate settle as dispensable items.” 5 key measures that can help boost the success of a placement Improving the odds __ No strategy can guarantee the success of an expatriate placement. However, companies can certainly adopt measures to facilitate their employee’s transition, and thus increase the likelihood that he or she will excel in a foreign environment. 1. Choose the right individual The key issue of selection is too often downplayed, with companies often believing that domestic star performers will automatically reach a similar standard within a completely alien culture. Robust selection procedures which ensure that the individual is flexible and sensitive enough to recognize and adapt to cultural differences are essential. 2. Offer cultural and language training Provided that prospective expatriates possess this necessary openness, cultural training will educate them about the key differences in approach and behavior that they are likely to encounter in their new country. Language training can teach the basics, and thus help to show a welcome interest in the host culture. Relocations on the rise International relocations, especially among service firms, have risen steadily for three years in a row, rebuilding since a 2009 low. In 2011, 28% of firms globally expected an increase in the number of relocations abroad, according to Atlas' 2011 Corporate Relocations Survey. 3. Allow the family time to commit wholeheartedly Rushed decisions to spend several years away from family, friends and a familiar setting can quickly be regretted. Companies should insist that the whole family contemplates all the personal repercussions of the placement before consenting to it. A paid-for “look-and-see” trip will aid this decision-making process. 4. Support the entire family Family discontent frequently undermines the success of an expatriate placement. Companies can help to integrate spouses by introducing them to others in a similar situation, or by assisting them to find work that is appropriate for someone of their level. (According to the Permits Foundation, 82% of expatriate spouses or partners have a university degree.) 5. Appoint a good destination service provider Once ensconced in their new country, a destination service provider can teach the family all the necessary practicalities, such as how to pay utility bills and where to go shopping for various items. 32 T Magazine Issue 07 Ernst & Young
The importance of family integration The adjustment for the expatriate may be difficult enough, but many believe that assignments more often than not fail because the worker’s partner and children don’t acclimatize well to their new surroundings. “Family issues are the biggest obstacle to expatriate success,” says Yvonne McNulty, an academic specialising in global mobility at Monash University in Australia. “If the organization is focusing only on the expat and not on the family, problems can quickly surface.” When you look at the available evidence, it’s not hard to understand why. According to an extensive 2008 survey by the Permits Foundation, interviewing more than 3,000 expatriate spouses and partners of 122 nationalities, 89% of spouses were working prior to the assignment, but only 35% during the assignment itself. Three-quarters of those not working said they wanted to work, inevitably leading to frustration, disillusionment and boredom. Eight in 10 working spouses reported a positive adjustment to their adopted country, compared with only 32% of non-working spouses. “The location may have changed, but the expat worker’s routine of getting up and going to work hasn’t,” says Shipley. “But the partner doesn’t know a soul – he or she’s not working and, unlike the expat, has no ready-made networks to tap into. Three or four months down the line, you’re both fed up, and we’re talking about bringing you home.” Many companies, including BT, try to help partners (also known as, “the trailing spouse”), by offering them a few thousand pounds to be used for anything that might help them to integrate, be it a vocational training course, language classes or club membership. However, McNulty says that the amount of corporate attention devoted to helping the spouse and other family members is simply insufficient, given the impact of their potential unhappiness on the success of the overall assignment. “HR departments have a hugely difficult time getting sufficient funding for something that doesn’t have a clearly Insufficient corporate attention is devoted to helping the expatriate's family members measurable return on investment,” she says. “Family support has rarely been seen as an essential part of expatriate management. Maybe companies shy away from it because the issue is too challenging, or perhaps they are wary of crossing a line and interfering in their employees’ personal lives.” Further statistics from the Permits Foundation appear to verify these views. About threequarters (76%) of expat partners, for example, would have welcomed some guidance or advice on their job search, but only 11% believed they received adequate support in this regard. Taking matters into their own hands, expatriates and their partners have established informal networks throughout the world, including clubs to meet each other face-to-face and websites for sharing ideas, anxieties and local recommendations. Most partners’ websites and blogs are set up by women (according to a 2010 survey by Brookfield Global Relocation Services, 83% of expatriates are men), but there are signs that support groups for male partners are emerging, such as the Brussels-based STUDS (Spouses Trailing Under Duress Successfully). Careful consideration Thomas Efkemann of Ernst & Young recommends that expatriates should discuss the potential international assignment in depth with their partner and family prior to accepting the offer. “Company managers should allow them the time to consider all the implications,” he says. “Sometimes, after the initial wave of Companies need to intervene to ensure that executives are not placed at a financial disadvantage enthusiasm for this exciting opportunity to work abroad, problems begin to arise. Where will they live? What about schooling and health care? Is the partner able to work abroad as well? By the time worker and partner both realize they don't really want to go, they may have already made a commitment.” A “look-and-see” trip to the relevant destination, often paid for by the company, can give the family the knowledge they need to make an informed decision, prior to formal acceptance. If they then do decide to take the plunge, a good destination service provider who can assist with the practicalities of the move is also invaluable. “Having someone there to help you find the right property to live in, sort out your bank account, get you a driving license or show you the local grocery store, can greatly ease the stress involved in the transition to a new country,” says Shipley. “Cutting back on this service is a false economy for companies. They need their expatriates to hit the ground running, not spend their days worrying about how to pay an electricity bill.” For any potential expatriate family, an open and curious mind, and the motivation to make the assignment work, along with the initial assistance an employer might provide, will make for a good start to what can be a fulfilling and successful venture. But those who are inflexible by nature, or are accompanied by a family member dragged to the foreign destination against their will, are unlikely to get successfully through the long days, weeks and years that lie ahead, even with the most expert tax advice or instructive cultural training course in the world. Most common issues affecting international assignments 49% Family- or spouse-related issues 47% Compensation package 36% Repatriation 32% Location or cultural issues 14% Others 9% Position-related issues (e.g., unsatisfactory position) *multiple responses possible Source: Ernst & Young's Global Mobility Effectiveness Survey 2011 Ernst & Young Issue 07 T Magazine 33
Page 1 and 2: T Magazine 07 Magazine Tax insight
Page 3 and 4: Stephan Kuhn Your feedback We work
Page 5 and 6: Global tax news A roundup of recent
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