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Relocation: A Balancing Act

A Balancing Act | Human Resource Executive Online In 2009, companies will be forced to juggle expatriates and their families worldwide, while balancing the decisions involved in finding and retaining globally competent employees.

Wednesday, November 19, 2008
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When taking the pulse of the global relocation field, it is apparent that there is a lot to think about. Will companies around the world be able to find the ideal globally competent employee? Once found, what will it take to retain this employee? And finally, how have expatriate-family dynamics and needs changed from the classic model?

Balancing these three key issues is on the minds of HR executives worldwide today and will continue for a long time to come. The trends of a global talent shortage, the need to retain talent and the demand for work/life balance are the main factors that have a direct bearing on this "balancing act."

While the phrase the "War for Talent" continues to be overused, it is clear that this trend shows no sign of abating. Evidence of this is the beginning exodus of the baby-boomer generation from the workforce, mostly through retirement. The result is a growing need to improve employee satisfaction and thus, ensure retention. This is particularly important for expatriates repatriating back "home" after an international assignment.

Currently, the global demand for skilled labor has exceeded the supply, resulting in shortages in many pockets of the world, according to news articles. For the past 20 years, the U.S. workforce has grown by 50 percent; however it is predicted to grow by only 3 percent over the next 20 years, according to the U.S. Department of Labor Statistics. Demand in the United States continues to be high for skilled non-U.S. citizens (especially from India and China).

This year alone, the U.S. Citizenship and Immigration Services received more than 163,000 applications for just 65,000 H-1B visas, which were distributed within the first 24 hours. Debate over increasing the cap is ongoing. Since L-1 visas are not subject to a cap, non-U.S. employees are now entering with an "Intra-Company Transferee Visa," whenever eligible. An additional advantage of this visa is that the accompanying spouse is allowed to work in the United States.

Across the Atlantic, the European Union will need 20 million skilled workers over the next two decades. They have a plan to make it easier for skilled foreign workers to get jobs in the E.U.'s 27 member states. The Blue Card is a combined residence permit and work visa that would allow holders and their families to live, work and travel anywhere within the European Union. If agreed upon by member governments, the proposal, introduced by the European Commission in 2007, will pass in 2009.

Currently, 55 percent of skilled non-U.S. citizens head for the United States and only 5 percent to the European Union. With the Blue Card, the European Union hopes to reduce this imbalance, which will be to the detriment of American employers.

According to GMAC Global Relocation Service's 2008 Global Relocation Trends Survey, the three emerging destinations for many expatriates are China, India and Russia -- countries with rapidly growing economies. These countries also happen to be the three most challenging locations for expatriates and their families to successfully complete assignments and for international-assignment-program managers to set up, according to the survey.

With 25 percent of international assignments now in emerging markets, this is no small challenge. With security issues, rising housing costs, insurance prices, natural disasters, education for kids, work permits and visa issues, the list of worries for expatriates goes on and on. Additionally, potential employees and their families are often reluctant to head to a part of the world they may have heard little about until recently.

How do HR executives balance the needs of the company with those of the potential expatriate employees and their families?

Often the secret ingredient, forgotten in most recipes, is the expatriate spouse. While discussions between the employee and company may happen months ahead of an upcoming international assignment, the spouse is often left out of the equation until the last minute or, more often than not, altogether. The employee and spouse may have spoken countless times about the possible assignment, yet the company may offer little to no support regarding the spouse's career or other needs.

For most companies, it is becoming increasingly hard to fill certain positions without providing comprehensive and lucrative compensation packages. Including career-support services and any other additional support for the spouse may make a difference in whether an employee accepts or declines an international assignment.

Retaining Talent

There is no arguing that the most valuable and sought after commodity in any company is talent. In order to attract and keep this talent, all aspects of a relocation package need to be appealing. The challenge then becomes, how do companies keep these packages frequently updated in order to offset the declining purchasing power of the dollar, while at the same time addressing the needs of the employees and their families?

According to Martin Foxwell, West Coast director of the New York-based consulting firm ORC Worldwide, "The implications for global and expatriate pay packages include a classic conflict: Expatriate pay packages are renowned for their high cost to the company -- often three or four times an employee's base salary.

On one hand, companies are continually challenged to reduce costs wherever they can, and expatriate packages are an obvious place to start. On the other hand, the fierce competition for the best talent is putting upward pressure on the cash, perquisites and benefits needed to incentivize potential expatriates [and their families] to undertake international assignments. This dilemma is a delicate balance and an extremely important strategic issue."

This statement should be given considerable thought in light of the fact that, in 2008, 58 percent of companies surveyed by GRTS said they were reducing expenses for international assignments in response to economic conditions.

Once companies have found talented employees, the main goal is to retain them. One way of doing this is by making sure that there is a job offer of equal or greater interest for them once they repatriate "home" or head off on another international assignment. Companies are often still losing their best talent by not taking advantage of the cultural understanding and global competence the employees acquired while on assignment.

Natalie Richter, principal of Natalie Richter and Associates states, "An organization's greatest resource is its globally competent employees. They enable companies to be nimble and respond quickly to changes in the international environment, which in turn makes them more globally competitive."

HR executives are crucial in providing an employee with a seamless international-assignment transition and ensuring that there is communication between home and host country.

As the war for talent continues, it is apparent that practices such as flexible hours, remote work, intercultural training, executive coaching and spousal-career services, are now essential. Even areas such as more effective use of virtual teams and greater utilization of communication alternatives such as instant messaging, voice over IP and Web conferences -- once regarded as optional -- are now crucial.

Companies that are spending more time and effort focusing on work/life balance as a strategy for talent management will be the winners of this war!

Work/Life Balance

How are HR executives going to address work/life balance issues, which are particularly challenging for expatriates on international assignments? In some cases, the "norm" is often for the employee to arrive months ahead of the rest of the family and then travel extensively throughout the assignment. It is no wonder that finding balance is imperative. This is particularly true when many expatriate families juggle the demands of needing to be in two or more places at the same time, while preparing for the final move to a new country.

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One of the areas that creates great challenges for HR executives and companies, not to mention the expatriate families in question, is when the accompanying spouse or partner must give up his or her career. The dual-career issue continues to be one of the main reasons employees turn down international assignments. When families are accustomed to two working parents' salaries, it becomes very hard to scale down to one income, even if the expatriate-compensation package comes with additional perks and added benefits.

According to the GRTS, 54 percent of accompanying spouses were employed before their relocation. During the assignment, however, only 20 percent found employment. This dramatic drop may be due to a variety of factors. It is clear that these spouses have to be very creative in finding work that matches their skill set, as each country offers new challenges and opportunities.

This is particularly true for "serial expatriates," who move every few years. For some spouses, having a portable career -- a profession that they can "carry in a suitcase" and keep with them from one host country to the next -- is the ideal situation. A few lucky and strategic individuals are able to continue working with their same employers, either remotely or at an office in the host country.

For most spouses, however, the visa restrictions, time constraints and difficulties of finding a job make seeking meaningful, financially stable employment close to impossible. This may suit the needs of some families, when the spouse is eager to be a full-time parent, but for younger couples just starting their careers, this may cause unexpected stress. Finally, the needs of the single expatriate employee (and parent!) relocating alone must not be forgotten, as this population is slowly growing and the dynamics of the expatriate family are changing.

When looking at the demographics of the current expatriate population -- 50 percent are between the ages of 20 and 39, according to the GRTS -- the needs of Generations X and Y are becoming more apparent. These populations have an increasing interest in greater flexibility at work, more meaningful jobs, further professional freedom and ultimately more work/life balance. Their outlook on life has been shaped by, among other things, the Internet, information overload and overzealous parents. Many of their overworked parents spent most of their lives working for the same company and not as much time as they would have liked with their families. These new generations are ready to change that.

The classic model of an expatriate employee willing to work 75 or more hours per week with a demanding travel schedule is slowly shifting, as there is ample evidence of the stress caused by the work/life time crunch of international assignments. Companies are becoming more and more aware that family adjustment, partner resistance and children's education are the three most critical challenges faced by expatriates.

Since the inception of the GRTS 15 years ago, these same challenges have continued to be critical, so it should come as no surprise that family concerns, including dual-career issues, are the most common reasons potential expatriate employees and their families turn down international assignments.

Finding a balance for these work/life matters will be a challenge for HR executives as the changing generations will continue to affect the global workforce.

In order for companies to remain globally competitive and win the war for talent, they must be able to juggle expatriate family needs as well as company demands and economic hurdles in order to find and retain the ideal globally competent employee and be successful in this global market.

Saskia Meckman is founder of Soleil Intercultural and offers intercultural training and consulting to organizations with employees on global assignments. She has been working in the global relocation field since 1998, based out of New York, Boston, and currently Boca Raton, Fla. U.S.-born, with Ecuadorian and Dutch-Austrian-Danish parents, she grew up in France, Germany, Luxembourg and The Netherlands, and has traveled extensively around the world.

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