From cost-cutting to unhappy families, Anthony Wong talks to HR heads about the solutions to major challenges faced by employers over expat assignments.
The globalised economy has made sending talent overseas more popular than ever as companies attempt to make their brands global.
With such a huge number of talent moving in and out of countries, tax, talent retention and family unhappiness with a new environment are all problems HR needs to solve to ensure a successful expatriate assignment.
Here is what three HR heads in Asia had to say on enhancing expatriate polices and the experience of assignees.
Flexibility is the key to success
To ensure assignees are able to complete their overseas assignments, employers always try their best to cater to their needs, but in some cases, assignees can get too comfortable with their new working environment and refuse to return to their home countries.
This is often the case, especially for talent from China and India relocating to the west, according to Benjamin Wong, human resources director for APAC at Knorr-Bremse, a manufacturer of braking systems for rail and commercial vehicles.
“We send management trainees on overseas assignments to gain technical knowledge so they can bring back the knowledge to their home country to support the development of the business,” Wong says.
“To help them gain international exposure, the management trainees will get a chance to go on an overseas assignment during the course of their 18-month programme.”
Unfortunately, a number of management trainees often decide not to return to their home country after they have established their connection in the foreign country.
“The engineers from our company are highly sought-after, and some of them have left the company for a competitor and have continued to develop their career overseas. Retention has become a major challenge for us,” he says.
In fact, the situation is so bad, the company decided to stop running its management trainee programme in China to prevent losing talent to competitors.
Another challenge Wong has to face in handing out expatriate assignments is the complex tax system that comes with it.
When the assignee relocates, they still need to settle their tax payments in their home country, which is often covered by employers. This is especially costly for employers when relocating someone from a high tax location to a low tax location.
Wong wants more flexibility in dealing with tax for expatriate employees to reduce the cost of relocation.
“One way to reduce tax is to provide the assignee with a local contract so he or she only has to pay the local tax and make his or her contract back home dormant,” he says.
“In this way, the expenses on tax can be reduced and the assignees have no worries about resuming their career back in their home country when they decide they want to go back.”
Ensuring a cultural fit
With expansion plans all over APAC, Marriott International is no stranger to handing out overseas assignments. The hotel group has plans to open more than 30 hotels in APAC by the end of 2016 with half of them in China.
“Moving people around is a big part of our expansion plans; we need to have the right leadership and talent with a Marriott background to open the hotels,” says Regan Taikitsadaporn, chief human resources officer at the hotel group.
The top reason why expat assignments fail is unhappy families – a challenge for expat assignments across industries. To reduce the chance of a failed assignment, it is common for employers to arrange for assignees and their families to visit the destination before deciding to make the move.
Marriott decided to take another step to ensure assignees and their families would be able to fit in with a new environment by introducing an online education tool.
“The tool known as the culture wizard helps people learn about different cultures when they are going on a business trip or going to work in a different environment. It has country profiles giving a snapshot of the country’s culture with information on the dos and don’ts in the business and social environment of those countries,” Taikitsadaporn says.
“The tool is like a cultural ruler comparing the culture of your home country and the country that you are going to. It helps people understand and work better in other cultures.”
Part of the tool is a self-assessment for assignees and their families to evaluate whether they are suitable for an international assignment.
The user of the tool will be given scenarios they may face during international assignments – and how they handle those situations will help determine if the assignment is right for them.
He adds that another advantage the hotel group holds in relocating talent is that being in the hospitality sector allows the company to provide accommodation to assignees at a bargain rate.
“It is common practice for our assignees to stay in hotels, saving cost on rent,” he says.
As a global company with a presence in more than 220 countries and territories, international job assignments are part of UPS’ culture and a frequent occurrence.
Before any international assignment, the company spends considerable time speaking to the candidate and their family to ensure they are mentally prepared and equipped to handle the relocation.
With more than half of the world’s trade happening in the Asia Pacific, and countries such as China and Singapore, the region continues to be a location of choice for international relocations.
Tim Robinson, VP of human resources at UPS Asia Pacific, points out that as a diverse region with varying standards and levels of progression, Asia can be challenging for relocations when dealing with things such as work visa applications, housing, medical care, and education and schooling for employees relocating with young children.
“Asia is like a melting pot. Consider the cultural and language differences across the 40 countries and territories we operate in, and one can imagine how challenging things can be,” he says.
UPS works with external relocation partners to make sure employees and their families are safely settled into their new environment.
“This can include administrative tasks such as applying for work and family visas, to sourcing for comfortable and safe housing, securing comprehensive medical care coverage, and even short-listing schools for those with children,” he says.
UPS prioritises the safety and acclimatisation of employees. This means investing to make certain of the employee’s readiness to move.
“One of the ways we do this is to fund a visit for the employee and his or her family to the new host country. We encourage them to try the food, transportation and even explore potential neighbourhoods to live in. That way, they’re exposed to the local lifestyle and culture first-hand,” he says.
Commenting on the length of international assignments, he is seeing an increasing number of regional employees taking on shorter special assignments.
“The assignments are typically on average two to three years. However, we have seen a rise in regional employees taking on special assignments which have a shorter time frame (six to 12 months),” he says.
“These assignments provide exposure to strengthen an employee’s breadth of knowledge. Ultimately, a role is assigned based on an employee’s career advancement plans and development needs.