Where in the world is best for relocation?

For both companies and their relocating employees, choosing the right location and cultural fit is critical to the success of an international assignment or a new overseas operation.

The question is not only when, how and why corporate employees should be dispatched on international assignments, but also where – and it can prove disastrous for both companies and individuals when the decision is the wrong one.“It takes more than technical expertise in both your job and a foreign language to succeed at a new job abroad. Expatriates swap horror stories about talented managers being groomed for the top who fail miserably in unfamiliar settings. Yet in many of these cases, it wasn’t the executives’ fault. The company failed to determine if the managers had the right personalities for the particular assignments,” according to Tony Lee, publisher of CareerCast.com and JobsRated.com.Ron Pilenzo, a former president of the US Society for Human Resource Management and CEO of the Global HR Consultancy, in Florida, said most companies simply tried to match skills but paid little attention to the economic, political and cultural differences inherent in an overseas assignment.“Most expat failures are attributed to a mismatch of the individual’s spouse or family members, and companies believe that pre-assignment training and counselling will fix the problem,” he says. “But the most critical mismatches of an expat with wide differences in values, beliefs, managerial style and team orientation in a different cultural setting will blow up the assignment and leave a wake of destruction behind.“All the training and preparation in the world cannot fix the wrong person going into the wrong country or region, where the differences are so huge that they cannot be overcome by preparation before or during an assignment.”

The right fit

Michael Tucker, an industrial psychologist and president of global talent consultant Tucker International, in Boulder, Colorado, cites the example of a “modest, hard-working manager who made friends easily” and who was sent by his US company to a production plant in Indonesia. Unfortunately, the quality control manager’s “participatory approach and outward uncertainty” caused the Indonesians to lose confidence in him very rapidly, and he was forced to return home after only a few months.“If he had been more formal and said that he would provide the answer to each problem in a day or two, his expertise wouldn’t have been questioned,” says Mr Tucker. “This was a case of someone who was sent overseas based on the job’s requirements, not on his ability to adapt to a third-world factory environment.“Many companies mistakenly select people to go overseas using the same criteria they would use for domestic positions, instead of using a systematic approach to find out who will do well in a certain country and who won’t.”

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Mr Tucker, who has developed a list of 14 predictors of success on foreign assignment, suggests that a forceful manager who might well succeed in Germany, where business assertiveness is valued, might find great resistance among fellow managers in the likes of Mexico or China, where personal relationships must be developed before business is discussed.Individuals themselves might also harbour doubts over the wisdom of the destinations chosen for some assignments. Quite aside from concerns over career progression, the would-be expat might have concerns over anything from spousal contentment to the local climate, cultural differences to the efficacy of children’s education, language problems to the cost of living.Such concerns have been somewhat ameliorated by the increasing emergence of a new type of expatriate based on commuter and short-term assignments where spouses and children often stay at home.“The cultural impact of this trend is more significant,” according to the ExpatCareers.com website. “Traditional corporate expatriates did not integrate and commonly only associated with the elite of the country they were living in. Modern expatriates spread amongst the classes and work within all corners of the globe. Integration is incomplete, but strong cultural influences are transmitted.”

Best assignment destinations

So where is the best place for an expat assignment? A wide range of surveys is published each year, and the answers can differ greatly, mainly as a result of criteria used to compile the lists.One of the most comprehensive surveys is conducted annually by Mercer, one of the world’s largest human resources consulting firms. It is aimed at enabling multinational companies and other organisations to have an accurate guide to compensating employees fairly when placing them on international assignments.The firm’s latest Quality of Living survey, published in March, provides hardship premium recommendations for 231 cities. This year, for the first time, it includes separate city infrastructure rankings, because this “plays an important role when multinationals decide where to establish locations abroad and send expatriate workers”.“The success of foreign assignments is influenced by issues such as ease of travel and communication, sanitation standards, personal safety, and access to public services,” says Slagin Parakatil, principal at Mercer responsible for its quality-of-living research. “Multinational companies need accurate and timely information to help calculate fair and consistent expatriate compensation – a real challenge in locations with a compromised quality of living.”In the Mercer rankings, Vienna occupies first place for overall quality of living for the eighth year running, with the rest of the top ten list mostly filled by European cities: Zurich in second place, followed by Munich, Dusseldorf, Frankfurt, Geneva, Copenhagen and newcomer Basel.The only non-European cities in the top ten are Auckland, in third place, and Vancouver, in fifth. The highest-ranking cities in Asia and Latin America are Singapore (25) and Montevideo (79).In the city infrastructure rankings – which include assessments of supplies of electricity and drinking water, telephone and mail services, and public transport, including traffic congestion and availability of international flights – Singapore comes out top, followed by Frankfurt and Munich, both in second place.In 230th place is Baghdad, only beaten to bottom place by Port au Prince.“Economic instability, social unrest and growing political upheaval all add to the complex challenge multinational companies face when analysing quality of living for their expatriate workforce,” says Ilya Bonic, senior partner and president of Mercer’s career business. “For multinationals and governments, it is vital to have quality-of-living information that is accurate, detailed and reliable. It not only enables these employers to compensate employees appropriately, but also provides a planning benchmark and insights into the often-sensitive operational environment that surrounds their workforce.“In uncertain times, organisations that plan to establish themselves and send staff to a new location should ensure they get a complete picture of the city, including its viability as a business location and its attractiveness to key talent.”

The expatriate view

The most recent HSBC Expat Explorer survey garnered responses from more than 26,000 expatriates across the globe. “According to our survey, Europe is home to some of the best destinations for a successful expat career,” says Dean Blackburn, head of HSBC Expat. “Six European countries have made their way into the top ten and are recognised for their strong work culture, great work-life balance, and relatively good job security.“Working abroad is an exciting prospect which can bring plenty of opportunities, but choosing a destination that’s right for you isn’t always easy. From earnings to work-life balance, career progression to job security, there are lots of criteria you should consider when it comes to deciding on your next move.”Switzerland retained top spot in the HSBC rankings of the best places for a successful career. It was joined in the top ten by, in order, Germany, Sweden, UAE, Norway, Singapore, Austria, Hong Kong, the UK and Bahrain.“Switzerland is ranked as the best all-round destination for a career abroad, combining the highest earning prospects with a good work-life balance and an excellent work culture,” said HSBC. “The average annual expat income in Switzerland is $188,275, almost twice the global average of $97,419. More than two-thirds of expats in Switzerland see an improvement in their work-life balance, and a similar proportion say the work culture is better than at home.”There again, the 2016 InterNations’ Working Abroad Index placed Luxembourg at the top of the pile, with Taiwan in an unexpected second place and Germany in third.Meanwhile, Colliers International’s Cities of Influence report, published in February and based on very different criteria from HSBC’s, maintains that London remains, and will continue to remain, “one of the most influential cities for talent, location and costs, despite predictions that companies would lose faith in the capital due to political uncertainty and the perceived threat to business of Brexit”.
  • The global real-estate company’s report is based on an index in which 20 major cities in Europe are ranked on factors based on:
  • The size and orientation of economic output and the workforce
  • The capacity and skillset of the latent and emerging talent pool
  • The cost and affordability of the city – as a place to live and save, and in terms of the cost of labour and the total cost of office occupation
  • The country risk associated with the market
  • The inherent risk and challenges presented by labour laws
London and Paris top this list, with the smaller markets of Manchester, Stockholm and Dublin in their wake.

Impact of Brexit

Damian Harrington, director and head of EMEA research at Colliers International, says, “With the recent announcement by the UK Prime Minister that the UK will be seeking a clean exit from the EU single market, and the upcoming elections in the Netherlands, France and Germany, there is clearly a lot of country risk impacting both the UK and the European Union.“Some occupiers will be more focused or interested in one component over another, and thus the overall weightings and scores could change according to these preferences. For example, occupiers driven by cost may see the southern European and CEE [central and eastern Europe] markets as more attractive than their northern and western European counterparts.“Alternatively, occupiers focused on a digitally sophisticated workforce will be more tempted by Stockholm and Prague than Barcelona or Brussels.“London may be one of the most expensive cities from a real-estate standpoint, but, when taking all factors into consideration, and the ability of the city to reinvent and evolve, it is superior to all other major European cities in this study."

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“Recent announcements at the end of 2016 by global tech giants, including Apple, Google, Facebook and IBM, reaffirmed their commitment to the future of the London and UK economies. With Trump’s latest immigration policy, this could be even more reason for talent to move to London. The ability to hold on to its workforce and continue developing its talent base will be critical to ensure the UK’s capital remains a primary attractor of corporate activity.”And yet, when all is said and done – and all the data from all the surveys have been digested – it is, perhaps, worth reflecting on these words of travel writer Bill Bryson: “I can’t think of anything that excites a greater sense of childlike wonder than to be in a country where you are ignorant of almost everything.”Read more in the spring issue of Relocate magazine, which features more insight and analysis. Access hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online DirectoryGet access to our free Global Mobility Toolkit Global Mobility Toolkit download factsheets resource centre© 2017. This article first appeared in the Spring 2017 edition of Relocate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein. This article was revised on 6 July 2017 to provide updated links to related articles.

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