International HR Decision Support Network Bloomberg BNA s resources will change the way you do business

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1 //////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////// International HR Decision Support Network Bloomberg BNA s resources will change the way you do business

2 Repatriation Best Practices Benefit Both Employee and Employer By Elizabeth Bilek-Portalla, CRP, GMS-T, Regional Vice President, Mobility Services International As regional vice president, business development, Elizabeth Bilek-Portalla directly supports the growth of MSI s worldwide Talent Mobility Services in the Mid-Atlantic region. She has more than 25 years of relocation experience and, for the past 15 years, has served as vice president of MSI s strategic services. In this role, she works with clients throughout the engagement s lifecycle, providing policy, analytical, and general management support. Before joining MSI, she served as assistant vice president of international compensation at Merrill Lynch & Co. She also worked as a senior relocation specialist at American International Group. Liz holds the Certified Relocation Professional (CRP) and Global Mobility Specialist Talent (GMS-T) designations from Worldwide Employee Relocation Council (ERC). She is a recipient of the Merrill Lynch Presidential Award and a past member of the Relocation Council of New York, and the Wall Street Relocation Group. The long-term assignment as we know it today, conceived in the 1950s as global corporate expansion began taking hold, has never been without its challenges. 1 Although some of these challenges have diminished over the years telecommunications issues, for example -- others have not. In response, the mobility landscape has shifted, with a wide array of assignment types now being used (e.g., commuter, project-specific, business traveler, and rotator) that provide cheaper, shorter-term, and less challenging alternatives. That said, however, the long-term assignment remains very much in play (though for fewer employees), because it s sometimes the most suitable option. If, for example, a company is opening a sales office or entering a new market or an employee is serving as a financial controller of a strategically important subsidiary, a long-term assignment makes the most sense says B. Sebastian Reiche, associate professor of people management at IESE Business School in Barcelona. Also, he notes, these types of assignments are better developmental tools, as it is the long-term exposure to an international experience that is more likely to develop crosscultural competencies

3 The challenges of long-term assignments therefore remain, as does the need to address them. In doing so, many companies find it not only benefits all parties involved, but also their bottom line. Coming Back to a Different Place One of the most difficult aspects of an overseas assignment, at least according to many former assignees, is the return home, or repatriation. Although one might imagine this to be just the opposite, this phase can actually be harder for the employee and accompanying family members than the initial deployment. For instance, the newly repatriated employee may have believed the overseas assignment would ensure career advancement, when, in fact, it did not. Not only is there no promotion when he or she returns, but often the previous job is no longer available. In such scenarios, the employee may be given whatever open position exists or nothing at all. 2 For those who do remain with the same company, the challenge of workplace reintegration can be disappointing. During an overseas assignment, employees often work in fairly autonomous environments, but find upon their return that they have little autonomy and much more direction. On a personal level, adapting to former surroundings can also take its toll, especially for those who have been away for a long time or who are repatriated to a location that is different from their former home. Those who do move back to former communities and homes may find that those homes no longer feel familiar. Close friends or family members may have moved away, and those who remain may have established relationships with others in the community and be more distant. After the initial reentry, repatriated employees may also find that their friends and relatives are not particularly interested in the family s experiences abroad. As a result, the returning expatriate and family can feel isolated in what were once comfortable surroundings. Reverse culture shock often sets in, and, because it is so unexpected, the impact can actually be greater than that of adjusting to the host country culture. Unfortunately, many assignees and their families do not realize this until they are in the midst of this experience. At this point, they can quickly become frustrated and demoralized. 2 Bolino, M. Journal of International Business Studies, Expatriate Assignments and intra organizational career success: Implications for individuals and organizations. May 2007, pp

4 How Employers Can Help Beyond shifting to shorter-term assignment types, there are other steps companies can take to mitigate these difficulties. But do they? Although many provide the needed benefits and support before and during the assignment (i.e., language and cultural training and on-assignment support for spouses and dependents), the reverse is often the case with repatriation. As organizations struggle to contain costs, they re increasingly less likely to allocate the resources needed to assist employees when they may need it the most at the end of the foreign assignment. 3 According to KPMG s 2013 Global Assignment Policies and Practices survey of more than 600 organizations worldwide, less than a third of the responding organizations offered standard repatriation benefits, such as counseling, mentoring programs, and internal career planning and job placement, to their global assignees. As multiple studies have shown, skimping on these types of benefits is often a false economy. Unless a company has no interest in retaining the employee post assignment, which is admittedly sometimes the case, they risk losing valuable talent both in terms of intellectual capital and return on investment (estimated at approximately two to three times the assignee s annual salary). 4 Employees who no longer feel valued upon their return -- whether it is because their former job no longer exists and/or because they feel that no one cares about their experience -- often leave their companies within a year or two of their return. 5 Many also end up working for competitors, where they can leverage the knowledge and skills they have gained while living abroad. Companies that recognize this and employ repatriation strategies to promote retention are much more likely to avoid this scenario. Repatriation strategies fall into three broad categories: pre-assignment planning, onassignment support, and repatriation assistance. 3 E&Y Global Mobility Effectiveness Survey Towers Watson and Worldwide ERC: A Global Talent Mobility Study, Regional Differences in Policy and Practice July Ren, H., Bolino, M., Shaffer, M., and Kraimer, M. Journal of World Business, The influence of job demands and resources on repatriate career satisfaction: A relative deprivation perspective." January 2013, pp

5 Pre-assignment Planning More often than not, the pre-assignment stage is limited to determining benefits, tax responsibilities, assignment budgets, financial preparedness, letters of assignment, and visa and immigration requirements. While these are essential to the assignment s success, they do little to prepare employees for their eventual repatriation. According to the KPMG survey, only four percent of respondents actually included repatriation planning at the beginning of the assignment. 6 To ensure a successful repatriation, however, employers should, as the expression goes, begin with the end in mind and clearly articulate the assignment s purpose to the employee and the company s expectations for him or her upon return as early on as possible. Will there be a return to the same job, a lateral transfer, or a promotion? Or are there no guarantees? Even when the latter is the case, providing this information in advance can give the employee some idea of what to work toward (or not) and what skills to develop. Ideally, says Cecilia Franchi, a former expat and director of Global Consulting at Mobility Services International, the position one returns to within the same company or elsewhere would be something that utilizes the knowledge and expertise gained while on assignment. The experience needs to be recognized, she said. It s frustrating to go somewhere and learn so much you basically double your knowledge and then return and not be able to use it. That said, she added, there are ways around this. Even when no position is available that directly uses the new experience gained, there are other creative ways employers can leverage the newly repatriated employee s overseas experience. If the employee has the opportunity to conduct any type of teaching or training, that s how you incorporate it. Host country colleagues can also be included on calls, etc. When you do this, it makes a monumental difference. It benefits the organization by engendering more global collaboration, which ultimately benefits the bottom line. Reiche echoes these sentiments. For employees returning to the same organization, benefits include access to key stakeholders in the host unit/country, the transfer of contextual knowledge back to the home unit (e.g., how to deal with local clients or suppliers in the host 6 KPMG International, GAPP Survey

6 country), and obtaining a broader and cross-regional perspective of how the company works. In addition, he notes, international assignments help to develop cross-cultural competencies (e.g., cultural awareness, empathy, communication skills, etc.), leadership competencies, which are in increasing demand in today s business environment, and an international pool of talent a company can access for future global expansion. Financial Repatriation Compensation packages for long-term assignments are often greater than the usual home country compensation. These not only include what is needed to keep the employee whole, but also premiums, allowances, and standard pay increases over the course of the assignment in addition to a possible cost of living adjustment (COLA). This typically enables the expatriate and family to enjoy a more affluent lifestyle in the host country than they do at home. At least a portion of their income is free and clear and can be used for personal enjoyment and savings. Upon repatriation, however, these premiums and allowances disappear and there is often less discretionary income. This is compounded by the fact that a spouse or partner may have given up a job when the family went on assignment and cannot immediately resume working when they return. As part of pre-assignment planning, therefore, consideration should therefore be given to long- term financial and tax counseling and lower allowances for certain aspects of assignment. This allows the expatriate to absorb some of the living costs so there is less impact upon repatriation. And, as noted, spouse/partner career assistance should also be provided during the repatriation phase. On-assignment Support No matter how much employees prepare and train for assignments, it is virtually impossible to know what life will be like in the new location. They therefore need focused and continued support as they acclimate and work in new cultures with new colleagues and in new roles that may be more challenging than those they have had in the past. 7 7 Miser, A. and Miser, M., The Routledge Companion to International Business Coaching. London: Routeledge, Taylor and Francis Group, Print. 5

7 This support generally comes in the form of a mentor in the home country who looks out for the expatriate s career interests, says Reiche. This can be a direct supervisor, but it could also be a colleague who the employee knows well. And for long-term assignments, it may be useful for the expatriate employee to have multiple home mentors should one or more of them leave the organization before the employee returns home. Mentors who have also been on international assignment, particularly in the same location, can also serve as coaches and provide information, guidance, and support during the initial period of stress and uncertainty. In this role, they focus not only on the employee s specific assignment and cultural assimilation, but also on development and long-term career matters, which can significantly improve morale and engagement. Beyond this, a mentor can do much to alleviate the out of sight, out of mind mentality within the organization and help keep the employee visible to colleagues by promoting his or her accomplishments and meeting at the home office when the employee returns for home visits. Additionally, he or she can keep the employee up to date on changes and other news within the organization and provide information on potential job opportunities upon repatriation. Expatriates can also benefit from formal coaching programs, typically delivered by a professional third-party provider rather than a colleague. With this type of program, which is more like counseling, the coach enables the employee to share concerns within a safe environment and can identify areas that need additional focus and development. Coaches can also help the expatriate optimize the assignment from a personal and professional development perspective. Repatriation Assistance When it is time to come home, most companies provide logistical benefits such as household goods shipping and temporary housing. As noted earlier, however, they are far less likely to provide the other types of assistance afforded during the pre- and on-assignment phase, such as support for spouses/partners and school-age children. While an argument could be made that these aspects of repatriation should not be the company s concern, many believe they should be. 6

8 A repatriating spouse or partner, for example, often faces employment issues. He or she may have put a career on hold to support the employee and enjoy the opportunity to live in another country. Upon returning home, however, he or she must quickly reengage in the job market, either to duplicate the lifestyle while on assignment or to pay the bills. This puts additional pressure on this individual to not only settle the family in, but to quickly find appropriate employment. Re-igniting a career that had been put on hold for a number of years can be especially difficult agrees Lorraine Bello, president of REA, a firm specializing in career transition and global mobility support services. Returning to one s home country and settling back into regular life can pose challenges as daunting as those encountered with expatriation. Services such as those provided by REA address these issues by coaching the spouse or partner on reemployment options or career alternatives and re-adaption (as needed) to the work culture. School-age children also face repatriation challenges. During the assignment, expatriate children typically attend private international schools with small classes and a high level of personal attention. Once back home, many go into the public school system, which often has less of both. Socially, things are also likely to be different, as old friends may have moved away or developed other interests. Extracurricular activities might have also changed. Activities that were available in the host country may be very different from what s available at home. As a result, many children feel confused and isolated, and can benefit considerably from transition counseling. This counseling, provided by therapists like Lois Bushong, a former expat and author of the book, Belonging Everywhere and Nowhere: Insights into Counseling the Globally Mobile, can save considerable emotional upset during the post-repatriation period, especially for adolescents. If the expatriate can remember that this is all a phase in returning to their home culture, this will help them walk through this journey of readjustment, she says. In time, they will find their spot (it may be a different spot) in their home environment again. To further address these and other issues associated with reverse culture shock, companies can also provide some repatriation cultural training, which typically lasts a day or two. In addition to benefiting from the training itself, the employee and family will feel more supported by the company as it assists with their reintegration and adjustment efforts. 7

9 Companies can also help with re-assimilation by establishing networking groups that include other former expats and their families, as those who have also been there literally and figuratively can do much to alleviate reverse culture shock. In many instances, says Bushong, what helps the most is just talking with someone who understands. So often the average listener's eyes just glaze over as they do not know how to respond to the expat's story and why listening is so important. I have heard it said that we are not fully home until we have been able to tell our story and feel it has been heard. ABOUT MSI: MSI is a global business solutions company and the leading provider of global talent mobility services to corporations worldwide. Through the alignment of its global mobility solutions (including global compensation and immigration services), talent management capabilities, and global expansion services, MSI enables companies to grow, compete, and globalize by helping them strategically develop, mobilize, and retain their talent. This alignment between global mobility, talent management, and global expansion services is increasingly critical as corporations face mounting challenges with regard to employee recruitment and retention in today s competitive marketplace. MSI focuses on delivering services that yield measurable outcomes to both the employee and the business. MSI s tri-regional operations centers in the Americas, EMEA, and Asia Pacific enable it to provide a one-stop solution for talent mobility in over 190 countries and territories. MSI WEBSITES 8