International assignments: Managing change and complexity

Fiona Murchie shares some international assignment case studies delivered at the recent Symposium Events Expatriate Management and Global Mobility Forum in London.

Fiona Murchie shares some international assignment case studies delivered at the recent Symposium Events Expatriate Management and Global Mobility Forum in London.We all know that managing assignee populations in a new country is challenging. As well as getting the type of assignment right, there is the tension between cost control and the need to respond to global demand and business growth.Policy and practice are having to move towards a more flexible approach, in order to deploy talent overseas and respond to commercial needs. Equally, there is a shift in compensation and benefits from balance-sheet to more responsive types of compensation package.Getting it right in terms of compensation and the quality of talent is critical. But now, owing to demographics and an ageing population, there are fewer middle managers with families willing to go on assignment, mainly because of concerns about education.Far fewer children now go on assignment, and this isn&#x;t helped by the shortage of international school places in many regions, and the cost involved. Concerns about health, not lessened by the Ebola epidemic in West Africa and pollution issues in China, together with heightened anxiety regarding security and safety in particular regions, are also part of the mix.Add to this resistance from partners and spouses to go on assignment because of concerns about their own career paths and remuneration, and one can see that the role of the HR global mobility manager or overstretched HR team is not easy, particularly against a global background of increased compliance across tax, social security and immigration.GKN A challenging environment indeed, but, as attendees at the Expatriate Management Forum run by Symposium Events in July learnt, there are navigable paths to follow, as illustrated by innovative global mobility practitioners who offered a nimble approach in some tough environments.Andy Burley, global reward manager for benefits and mobility at global engineering group GKN, charted the way through assignment types, their characteristics and appropriateness. There was no doubt, he concluded, that different assignment options provided choice for businesses, but nothing could replace a deep understanding of the business environment one was working in, if the appropriate assignment framework were to be set.&#x;Be clear on assignment objectives and who will benefit &#x; the employee in development terms or the business,&#x; said Mr Burley. For GKN, as for many established multinationals, there is a spectrum, but, where the emphasis had formerly been the business need, there was now more of a trend towards developmental needs. That being said, he affirmed, &#x;Each situation needs to be examined on its own merits to determine the best policy option.&#x;With economies picking up and talent shortages in particular markets and sectors, there is a requirement, now more than ever, to ensure consistency and fairness as well as return on investment. It was important, Andy Burley felt, to look ahead to the end of an assignment and understand what a successful assignment would look like. Assignment success is all about planning, and the business needs to give clarity on objectives and outcomes.In the context of 100 long-term assignments across 35 countries, inevitably the challenge of dual careers had resulted in the need for more flexibility at GKN, but in certain countries, such as Russia and Brazil, compliance, and in particular visas, impact on the ability to move dependants.Not surprisingly the organisation had seen an increase in commuter assignments, which were regarded as less disruptive to family life. They were commonly used not only between the UK and France and the US and Mexico, but also as a work pattern for employees working for four weeks in Sweden and two weeks in California.Different options provide flexibility, but informed decisions need to be made. It was important to recognise that every assignment is different, but also to have a good framework to ensure fairness and consistency, Mr Burley said.AIRINCKay Hall, of research-based company AIRINC, flagged up some interesting trends and hot topics. She urged companies to be clear and transparent about eligibility criteria, recommending the use of a relocation programme decision tree as a good starting point.Ms Hall warned delegates of the pitfalls of the &#x;murky waters of permanent and local moves&#x;. Defining the permanent move, including taking into account protecting net income, purchasing power and ongoing benefits, as well as repatriation or the next move and alignment with the host salary scale, is all-important.AIRINC has introduced a permanent transfer calculator to assist in this tricky area. Similarly, it offers clients a hardship evaluation points system, which assesses physical threat, discomfort and inconvenience, with scores translated into allowances.In the bid for HR to be more strategic through mobility programmes, Kay Hall offered encouragement and an achievable structure. From a solid base of operational excellence, including tax, immigration and legal compliance, the structure to deliver with clear processes, roles and responsibility would follow, allowing high assignee experience with defined assignment goals and career plans.The resulting value to the organisation would be seen in terms of delivering a mobility programme that met future business goals, with mobility as the trusted adviser to talent and key business leaders.General MotorsManaging expatriate assignments in difficult locations was brought to life by Richard Pennington, General Motors&#x; head of global mobility for the EMEA region. He was able to share some of the things that went well, as well as some of those that didn&#x;t, and lessons learnt from moving employees to Uzbekistan. This came about when the company took on a new engine manufacturing operation in the capital, Tashkent, as well as an existing manufacturing plant in Andijan.The objects were the same as for most global mobility projects: to get the right people to the right place at the right time for the right cost. The general approach was Action &#x; Plan &#x; Do &#x; Check.Richard Pennington urged his audience not to be over-reliant on the internet, and, if possible, to go and see for themselves. &#x;Nothing beats going to a location &#x; particularly a harsh location &#x; yourself. Get out from behind your desk and go and assess the place for two weeks if you can.&#x;It was crucial to be able to identify and nurture reliable local sources of information, Mr Pennington said, to be able to listen to them carefully, and then to suspend judgement, to ensure you made the right decisions. He also emphasised the importance of selecting suppliers on the ground carefully, even if you already have a network of existing suppliers.Strong relationships in the host location are of paramount importance. In difficult locations, it is particularly important that the local HR, finance and legal staff work with you proactively, as making payments at the right time can be critical. Equally, cultural training and language providers are essential.Man with a planIn terms of making the plan, Richard Pennington recommended being prepared to think differently and not be drawn into familiar patterns. General Motors works with stakeholders to produce a very comprehensive plan, which includes nearly 150 items.For example, procuring property had been difficult, and things could take a long time. Tackling employees&#x; reservations and nervousness, particularly around health and security, had been overcome by formulating a worst-case-scenario plan that offered reassurance regarding medical and security evacuation. This built and sustained trust.Hard measures of success are needed. In General Motors&#x; case, the measure of success was to be 60 per cent uptake.Good communication is essential, and documenting the process flow gave people confidence in the move. It takes time in such circumstances to gain trust, but honesty is crucial, and trust was built up by encouraging questions.Mr Pennington also felt that it was very important for the local global mobility managers to be empowered and to have some flexibility to act in the region. This can be difficult to negotiate, but he saw it as being essential to doing an effective job in that location.He also advised that it was vital to be able to distinguish the &#x;noise&#x; from the genuine issues. In difficult locations, he warned, there could be a multiplier effect, so get things validated and don&#x;t just rely on what you hear from assignees.Lessons learntAnother piece of sound advice was to visit the assignees regularly yourself. Lessons learnt had included underestimating the power of local landlords, the legal environment and cultural issues, and perhaps focusing too much on the assignees and not enough on the families.Looking under the surface had resulted in some pragmatic remedies, such as problems with internet and expense being overcome by issuing flatscreen TVs and a ready supply of films, plus extra money for Skype and upgrading kitchens.The origin of the assignees can be important. General Motors was seeing increasing numbers of inexperienced assignees coming from developing regions of China and India. Family issues regarding dependants and schooling, as well as issues with landlords, were of a different nature, and culturally the assignees were reluctant to talk about problems.This required those responsible for global mobility to think in a different way. By carrying out a detailed formal review every six months, they were able to identify a range of issues, take immediate action on some, and delay action on others.Richard Pennington&#x;s overriding advice was not to make assumptions, because the devil is in the detail and more time spent on planning will pay off. He warned his audience to be prepared to expend more time on difficult and small locations, and advised them to be prepared to act decisively if required, and to enjoy the challenges.KingfisherBy contrast, Oonagh O&#x;Connell, senior global mobility manager at Kingfisher, spoke about her experience of setting up in Romania. Kingfisher acquired 15 stores in Romania, and was to have its first new opening there in seven years.Ms O&#x;Connell had found it important to gather as much country-specific information as possible to encourage mobility. Briefings had been crucial, sitting down face to face with the assignees and understanding their realities and determining what made sense for the business and the individual.ZurichA powerful survey from Zurich revealed the potential impact of an ageing employee population on the business and those employed internationally.There is strong evidence from the survey that longevity and the greying workforce are impacting employee benefits, and that companies are aware that their effect will be even stronger in the future. It seems that companies are ill prepared and not sure how to fund the additional costs that accompany an ageing workforce that is working for longer.Employees, it appears, are also aware of longevity, but don&#x;t fully understand the impact on their financial futures, the survey found.Benefits offered to expats include private healthcare, income protection, group life insurance, critical illness and disability benefits, and flexible benefits.Upon employee relocation, most companies retain retirement benefits in the home plan. However, the expatriate benefits package is different from the one offered to domestic employees in nearly 80 per cent of organisations.The biggest trend in Western Europe is towards staying in employment past traditional retirement age, most popularly from 65 to 70. However, companies are not planning to increase levels of retirement funding to take account of increasing longevity.Companies are gearing up to communicate and encourage their employees to save more themselves. They are also anticipating having to change their benefits structure for the ageing population and, more significantly, the greying workforce.Respondents to Zurich&#x;s survey anticipated making the changes to accommodate the greying workforce in the following ways:
  • Raising contributions
  • Managing the increasing healthcare risks
  • Improving awareness of longer-term financial planning
  • Partnering with employees
  • Introducing flexible benefits
The majority of companies surveyed (43 per cent) anticipated sharing the potential increase in cost with the employee, but a significant proportion (39 per cent) didn&#x;t know whether or not they would do so.DiageoDavid Wells, director of global mobility at Diageo, spoke about his experience of bringing the company&#x;s polices up to date to serve its population of 350 international assignees in 61 countries.With 36,000 employees across 80 countries and around 40 per cent of its business in emerging markets (primarily in Africa and Latin America), the company was reviewing its policies to align better with the business strategy and to accommodate changing international assignment demographics.Emerging markets are expected to contribute 50 per cent of sales by the end of 2015. With the overarching ambition to &#x;create the best-performing, most trusted and respected consumer products in the world&#x;, there was the desire to drive down cost, to invest in growth, and to guarantee growth plans with the right people with the right capability. Inevitably, this meant implementing policies which enabled global mobility.The principle of being bold in execution, which was highlighted in the company&#x;s performance ambition agenda, gave clear direction. The policy choices needed to be clear and to provide the tools to enable the right choices first time. Administration of polices needed to be simpler while enabling 100 per cent compliance.The policy review resulted in a change from eight policy types with unclear guidelines and definitions of how to apply, and inconsistent treatment of transfers, to four simple policy choices. A clear decision tree ensured that the policy choice was right first time and global mobility took ownership of international transfers with a clear IT policy.Diageo has also made the shift from all benefits being provided in kind to a flexible arrangement based on individual circumstance wherever feasible, which fits the needs of its diverse international assignment population better. By moving from a generous above-market benefits package to median benefit provision, in line with the market and competitors, the company succeeded in saving &#x;3 million in costs, which is being used to underwrite growth plans and ensure the right talent is benefiting from global mobility experience.As David Wells said, &#x;We provide global mobility polices which guarantee our plans with the right people and capabilities; mobility plays a key role in achieving what talent must do. Fulfilling the company&#x;s performance ambition to &#x;act like owners&#x;, global mobility were empowering international assignees to own their international assignment package and, at the same time, enhance the overall international experience.&#x;No doubt Diageo&#x;s shareholders will drink to that!&#x;