International mobility

Expatriation: current trends and practices

KPMG Internal Executive Services

KPMG has recently released it’s survey 2011 on global assignment policies & practices. Herebelow is a summary of the findings.

1- International assignments are still on the rise

A large majority of companies are considering either to maintain or to increase their international assignments.

Future use of expatriates in next 5 years :
  • About the same: EU:46%; Asia:40%; US:41%
  • Somewhat more: EU:33%; Asia:21%; US:34%
  • Considerably more: EU:12%; Asia:17%; US:8%

2- Their motivation to do so is primarily linked to meeting Business objectives

An important proportion of them are still focused on reducing the cost of their programs. But their main objective when sending people abroad remains to support the organization’s business objectives and being adaptable to changing business requirements. (71% overall)

Interestingly, Asia Pacific companies appear to lay stronger emphasis than their European counterpart on controlling program costs and ensuring an acceptable ROI (EU : 8% ; Asia : 14% ; US : 15%) ; and on attracting and retaining assignees by maintaining competitiveness with other organizations’programs (EU : 7% ; Asia : 17% ; US : 11%) 

3- One international assignment out of two lasts 2-3 years

  • Less than 1 yr: 3%
  • 1-2 yrs: 17%
  • 2-3yrs: 52%
  • 3-4 yrs: 19%
  • 4-5yrs: 6%
  • More than 5 yrs: 3%

4- Companies do not report numerous lack of performance on international assignment, but acknowledge a number of assignees leave the company at the end of an international assignment due to lack of job avalable in the home country or because they get a better opportunity from another company.

% of dismissal because of inability to perform effectively during international assignment
  • None: EU:21%; Asia:45%; US:27%
  • Less than 5%: EU:60%; Asia:45% ; US:53%
  • Between 6 to 10%: EU:4%; Asia:0%; US:6%
  • Do not know: 12%
% of assignees leaving the organization within 12 months of returning from an international assignment
  • None: 14%
  • Less than 5%: 35%
  • Between 6 to 10% : 13%
  • Do not know: 25%
Reason for assignees leaving
  • No appropriate job available in the home country: 36%
  • Offered a better job/career in another organization: 21%
  • Do not know: 30%

5- Companies still largely rely on informal assessment by HR or management of potential assignee's suitability for international assignment. They seldom implement a specific process for establishing international assignment goals. 2/3 are hesitant on the quality of their repatriation process. 2 companies out of 5 are planning the return 6 months before repatriation; 1 out of 4 do so only 3 months before repatriation; 1 out of 10 do not make any anticipated plan. 

- Way to assess a potential assignee’s suitability for international assignment
  • Assessment by external evaluator: 8%
  • Assessment by trained evaluator from within the organization: 5%
  • Informal assessment by HR or line mgt: 56%
  • No assignee assessment: 38%
-Approach to establishing goals for international assignments
  • No different process: 64%
  • Goals established for every assignee: 22%
  • No process for establishing assignment goals: 15%
- Satisfaction on good repatriation process :
  • Strongly agree: 5%
  • Somewhat agree: 29%
  • Neutral: 33%
  • Somewhat disagree: 23%
  • Strongly disagree: 10%
- Planning the assignee’s return :
  • At the beginning of the assignment: 4%
  • One year before repatriation: 7%
  • 6 months before repatriation: 39%
  • 3 months before repatriation: 24%
  • No planning : 13%

6- Families are largely taken into account. Dual career challenges are well identified and an important number of companies are providing a form of assistance.

The concept of family evolves. In addition to legally married spouses and dependent children, companies are including
  • unmarried domestic partners/companions of opposite gender: EU:78%; Asia:76%; US:39%
  • unmarried domestic partners/companions of same gender: EU:63%; Asia:60%; US:40%
  • dependent parents/extended family: EU:8%; Asia:10%; US:13%
Issue with dual career couples 
  • Employees are less likely to put themselves forward as candidates for assignment: 58%
  • Increases the chances of assignment failure: 34%
  • Reduces the length of assignment, the employee is willing to take: 27%
  • No noticeable impact: 30%
Assistance to accompanying spouses/partners whose careers are interrupted by an assignment
  • Allowance of payments to be used for designated expenses (job search, education...): EU:31%; Asia:26%; US:27%
  • Allowance that can be used for any expense: EU:13%; Asia:19%; US:14%
  • Job search assistance at host country: EU:29%; Asia:17%; US:16%
  • Work visa assistance at host country: EU:40%; Asia:36%; US:27%
  • Reimbursement of education expenses: EU:29%; Asia:19%; US:17%
  • Partial compensation for lost salary: EU:3%; Asia:2%; US:3%
  • Full financial compensation for lost salary: EU:0%; Asia:2%; US:2%
  • None: EU:23%; Asia:26%; US:37%

7- 60% of respondents consider current expatriates compensation are not more generous than they need to be. An important majority of compensation programs are home country based.

Do you think that assignees are overcompensated?
  • Yes: 40%
  • No: 60%
Compensation:
  • Home country base: 60%
  • Host country base: 12%
  • HQ Country base: 8%
  • The higher of Home/host country compensation: 7%
  • Case to case basis: 8%

8- Most organizations are providing Preassignment visits, which according to 58% of respondents could last between 5 to 10 days. Companies are providing language and cross cultural training not only to the assignee but also to the spouse and the children.

Preassignment visit to the host country
  • Assignee only: 9% (EU:8%; Asia:20%; US:8%) 
  • Assignee & spouse: 59% (EU:48%; Asia:36%; US:67%) 
  • Assignee, spouse & children: 18% (EU:31%; Asia:20%; US:12%) 
  • No: 14% (EU:13%; Asia:24%; US:13%) 
Duration of the preassignment visit
  • Less than 5 days: 39%
  • 5 to 10 days: 58%
Language training
  • Assignee only: 7% (EU:8%; Asia:12%; US:7%) 
  • Assignee & spouse: 29% (EU:24%; Asia:29%; US:33%) 
  • Assignee, spouse & children: 42% (EU:52%; Asia:27%; US:37%) 
  • No : 22 % (EU:16%; Asia:32%; US:23%) 
Cross cultural training in standard policy
  • Assignee only: 6% (EU:8%; Asia:7%; US:5%) 
  • Assignee & spouse: 21% (EU:28%; Asia:15%; US:19%) 
  • Assignee, spouse & children: 37% (EU:33%; Asia:39%; US:40%) 
  • No: 36 % (EU:31%; Asia:39%; US:36%) 
Frequency of language training being offered:
  • Offered for every assignment: 43%
  • Only when assignment country may pose a challenge: 40%
  • When requested by the assignee: 9%
Services provided :
  • Repatriation counseling at the end of assignment: 30%
  • Internal career planning/job placement toward the end of the assignment: 31%
  • Formalized mentoring program: 10%
  • Pre-repatriation visit to the home country: 21%
  • None of the above: 40%

Read the whole KPMG Global assignment policies & practices survey 2011 on KPMG website

If the leader's future is global, mobility is the learning ground

10 years ago, Accenture conducted a survey on the characteristics of the "leader of the future". 10 years later, are those traits been integrated by today's leaders? During the last decade, the globalization of the economy has continued to expand, with the emergence of new key actors and an engine "made in Asia". The current business context requires new abilities from our leaders, stemming from a world that has become global, cross cultural and slightly virtual. But if our leaders have undeniably progressed, companies are lagging to implement the right policies for breeding their talents within this new paradigm and to take all the best advantages from international mobility.

 

The new leader's skills: the usual and more, definitely global.

Back in 1999, the Accenture survey had shown that, while some competencies would remain constant, 5 Key characteristics were to be increasingly critical:

  • Thinking globally
  • Appreciating cultural diversity
  • Demonstrating technological savvy
  • Building partnerships
  • Sharing leadership

 

 

 

► Thinking globally

Companies can no more focus on their country or region. Global leaders must have an in depth understanding of globalization and how it impacts on various aspects of the business.

Amongst leaders interviewed, "several suggested that future leaders might need to spend time in multiple countries to better understand how multi-country trade could help their organizations achieve a competitive advantage". It is not surprising that the last decade has seen the development of learning expeditions, where a group of leaders travel abroad together, visiting companies, discovering new environments and various business models (microcredit organization included), as a way to benchmark their own practices with inputs from totally different contexts, and to develop their global awareness.

► Appreciating cultural diversity

As organizations become global, leaders are increasingly involved in the management of cross cultural teams, with team members more than often split over different places of the globe.

The challenge for the new leader is to go beyond his own filters, understand different values, behaviours and ways of achieving results. Not only must he be capable of adapting to different situations and avoid misunderstanding, but his key cross cultural capacities should enable him to mine extra-ordinary resources from diversity.

► Demonstrating technological savvy

Technology currently has and will continue to have a major impact on businesses, the way we do it and how we will interact. The global leader must be capable to make the best use of new technologies and trends to optimize the performance of his organization.

Generation Y leaders were born in an entirely different technological environment from their predecessors'. They should facilitate the removal of old barriers and promote whatever benefits they can mine from technology.

► Building partnership

The business world has changed and the positions of the actors have evolved subsequently. Companies are building links together on various occasions: joint ventures, joint research, joint offers... A company can no longer consider a competitor strictly as such, as the latest may well on different occasion switch to being a partner, a supplier or a client.

The future leader must be savvy in the art of building networks and capitalizing not only on his own traditional resources but on his global human capital, which includes subcontractors, consultants, temporary workers, ... and various pool of talents (such as dualexpat).

► Sharing leadership

As organizations become more complex, geographically splitted and intertwined with other companies and stakeholders, leaders will have to share leadership and to build on vision and facilitation.

At the time of the research, the authors stressed that contemporaneous leaders were largely unaware of those emerging skills that their younger colleagues were foreseeing.

 

A decade later, is this set of strategic competencies largely agreed on by a new generation of corporate leaders?

If the answer is yes, it should provide savvy companies with ample reasons to handle the management of their expatriate with renewed attention and to recognize, beyond cost considerations and the need to breed local talents, that international assignments should remain a key way for their organization and individuals to walk the global talk.

 

What can we expect from international mobility?

In an article published at the same period "Are we taking our expatriate talents seriously?", McKinsey consultants stated that while companies largely considered that "in a world of intensifying competition for human capital, a strong global talent pool has become a strategic asset and one of the few sources of sustainable competitive advantage", they didn't always translate this belief in their talents and mobility management practices.

Expatriates may not be the ultimate solution

It is sometimes considered that expatriates are over privileged and that, in many not so uncomfortable contries, they take advantage of undue benefits, remnants of the past or typical output of an expatriate costs bubble.

Expatriation is difficult to manage. It is expensive. It implies dealing with a full range of constraints and the risks of failure remain high, with huge financial and stakeholders relations consequences.

The large use of expatriates by multinational companies can be also resented negatively by local talents in increasing regions where talents abound and have developped a competitive set of skills compared with their expatriate counterparts.

 

But international assignments of the very best talents will  remain the best way for companies to achieve sustainable high performance in their global operations.

Said the Mckinsey authors: "expatriates play the critical role in the process of transforming opportunities into thriing businesses by transferring (typically from the company's home base) the required institutional resources, technologies and know how; by building country specific knowledge and relationships; and by developing the local talent that is the key to long term success and profitability."

The new set of strategic skills for the global leader, be it the capacity to think globally, manage diversity or work in a largely virtual environment, throws an additional light on expatriation which is to enable future leaders to actually learn and implement the competencies that they need to successfully carry on the management of global corporations.

In that respect, the management of international mobility should not merely considered as a way of sufficiently encouraging mobility so that enough talented individuals would continue to apply to or accept international assignment. It should increasingly be interpreted as an imperative for breeding overseas the very best talents who will be key for the success of the company in the long run. A change of focus that is not only a switch of perspective as the challenge for the future whould be no longer "how do we manage expatriates?" but "how can we expatriate our very best talents?".

 

 

"Are we taking our expatriate talents seriously?"- Tsun-yan Hsieh, Johanne Lavoie and Robert Samek. The article can be downloaded at this adress: Aluminium jobs

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