The changing world of relocation
In a changing world wrought with security concerns, labour shortages, tighter governance regulations and emerging technologies, relocation practices need to evolve to keep pace. Canadian HR Reporter asked three relocation experts about the trends they see in relocation.
Tim Verbic
National director of business development and marketing
Royal LePage Relocation Services
Toronto
The Canadian relocations industry has experienced another strong year, with exceptional activity in Western Canada, namely Alberta. With record prices for crude oil, the increase in activity in Alberta’s oil and tar sand fields has created a demand for both white- and blue-collar workers in the oil industry.
Workers from Eastern Canada, as well as from other countries, have been arriving in Alberta, looking for both the well-paying jobs and the high standard of living Alberta offers.
But the boom has created an immediate challenge for employers: how to acquire, and retain, talent at an economically viable cost. Employers have turned to relocation companies to provide the necessary services to manage both domestic and foreign employees as they relocate to Alberta and return from foreign assignments.
Cost containment
HR departments are constantly balancing services with cost containment, and this has translated into a review of relocation policies. A recent trend is to shift from paying for individual expenses to giving employees one lump sum for all relocation costs in an effort to reduce the cost required in managing employees’ expenses. Some relocation companies offer a pre-paid purchase card that employers can give to relocating employees.
Short-term relocations
Another developing trend is the increase in short-term relocations. High-value employees are looking for a variety of challenges while trying to maintain a healthy work-life balance.
Also, as more organizations are looking to new markets for opportunities, such as China, India and Singapore, the short-term assignment can be a cost-effective means of helping the company achieve its objectives in these markets. These international assignments pose a unique set of challenges to both the employer and the relocation provider, requiring visa and immigration, offshore housing and other support services.
Regulatory effects
The repercussions of the 2002 Sarbanes-Oxley Act (SOX) in the United States continue to affect the relocation market in Canada and around the world.
Section 402 of the act, according to one of several legal interpretations, prohibits bridge loans, advances and other routine financial practices in relocation for “executive officers.” These may include presidents or vice-presidents in charge of a principle business unit, division or function.
Sashya D’Souza
Vice-president of global services
Shepell-fgi
Toronto
Increasingly, companies’ customers, suppliers and competitors are located outside of their national borders. As a result, strategic employee recruitment and retention strategies require a focus on global competency skills and development.
Global competencies can vary, and include a genuine curiosity and interest in learning, flexibility and adaptability in thinking and the ability to respond appropriately to different people in different situations.
A sense of adventure, strong leadership skills, cultural knowledge and personal resiliency are also important characteristics in a global employee.
The alternative assignments
Traditionally, international assignments have lasted three to five years and represented a significant expense to the company. Key objectives for sending employees abroad were to export expertise for a specific time, as well as to develop the global skill set of the assignee, increasing her value to the organization back in the home location.
While these objectives continue to be relevant, companies are seeking more cost-effective ways of achieving them. A variety of alternative forms of international assignments have emerged.
One is shorter assignments, where the transfer of responsibility to local managers happens more quickly and project time frames are being shortened whenever possible.
Another is “localized employee transfer,” where an employee is transferred permanently to the host location after a certain period of time on assignment, and ceases to be compensated and supported as an expatriate.
Short-term business travel and commuting are also becoming popular alternatives to the traditional international assignment. Furthermore, companies are looking to emerging countries for potential international assignees.
Repatriation
When it comes to international assignments, it’s important for a company to think beyond the actual assignment phase. The successful repatriation of an employee and family is a critical step in the process, but unfortunately one that is often overlooked. The impact of bad experiences with repatriation and post-assignment career dissatisfaction can have serious repercussions on a company’s global mobility program, specifically with respect to recruiting for future international assignments.
It’s important to develop a qualified candidate pool, and to retain former expatriates with valuable international experience, by supporting them through the repatriation and integration process at home. That includes recognizing the newly developed global skills of returning employees and providing them with opportunities to apply and continue to strengthen those skills.
Leonore Clauss
Relocation consultant and cross-cultural business coach
Toronto
Destinations previously considered safe have become less so in recent years. Apart from war-like operations and terrorist activities, there seems to be a higher number of crimes that can affect relocating employees.
Extortion and blackmail is a commonly known risk for expatriates and businesses in South America. But recent reports from Japan, China and other Southeast Asian countries show criminal activity is increasing there as well.
Perceived to have been extremely safe on all accounts, Japan now registers a disturbing trend in crimes involving students of various ages. Societal expectations of superior academic performance are contributing to an array of violent behaviour. Suicide remains a problem among students, as does bullying, assault, extortion and even a few sensational murder cases involving rather young girls and boys. The economic roller coaster of the past 15 years has spurned more property crimes, theft, robbery and white-collar crime.
China’s fast growing economy produces its own brand of crime connected with foreign business activities. Expatriate management could be exposed to copyright infringements, blackmail, intellectual theft, racketeering or simply a profound lack of transparency in dealing with certain opportunistic elements.
Purse snatching in tourist areas is one thing, kidnapping children and demanding huge sums money from foreign parents or organizations — as is happening in Beijing, Shanghai and Guangzhou — is quite another. While car theft and web-related crime is up, rape, murder and assault are down. Nonetheless, the biggest danger for the occasional and permanent visitor to China remains road traffic, which claims 100,000 lives each year.
Is relocation really necessary?
When it comes to a foreign assignment and considerations of relocation, the growing consensus is that it’s not really necessary.
Factors such as special schooling, spousal career, security concerns, fast moving business objectives and virtual global teams have given rise to alternatives to physical relocation.
After the Sept. 11 terrorist attacks, companies have had to look seriously at the whole issue of travel and mobility. New technology in telecommunications and personalized computing have made connecting so much more attractive and affordable.
Global work units, ongoing education and international training, internships, job shadowing and long-distance collaboration can successfully reduce the physical necessity for relocation of head office personnel.
Tim Verbic
National director of business development and marketing
Royal LePage Relocation Services
Toronto
The Canadian relocations industry has experienced another strong year, with exceptional activity in Western Canada, namely Alberta. With record prices for crude oil, the increase in activity in Alberta’s oil and tar sand fields has created a demand for both white- and blue-collar workers in the oil industry.
Workers from Eastern Canada, as well as from other countries, have been arriving in Alberta, looking for both the well-paying jobs and the high standard of living Alberta offers.
But the boom has created an immediate challenge for employers: how to acquire, and retain, talent at an economically viable cost. Employers have turned to relocation companies to provide the necessary services to manage both domestic and foreign employees as they relocate to Alberta and return from foreign assignments.
Cost containment
HR departments are constantly balancing services with cost containment, and this has translated into a review of relocation policies. A recent trend is to shift from paying for individual expenses to giving employees one lump sum for all relocation costs in an effort to reduce the cost required in managing employees’ expenses. Some relocation companies offer a pre-paid purchase card that employers can give to relocating employees.
Short-term relocations
Another developing trend is the increase in short-term relocations. High-value employees are looking for a variety of challenges while trying to maintain a healthy work-life balance.
Also, as more organizations are looking to new markets for opportunities, such as China, India and Singapore, the short-term assignment can be a cost-effective means of helping the company achieve its objectives in these markets. These international assignments pose a unique set of challenges to both the employer and the relocation provider, requiring visa and immigration, offshore housing and other support services.
Regulatory effects
The repercussions of the 2002 Sarbanes-Oxley Act (SOX) in the United States continue to affect the relocation market in Canada and around the world.
Section 402 of the act, according to one of several legal interpretations, prohibits bridge loans, advances and other routine financial practices in relocation for “executive officers.” These may include presidents or vice-presidents in charge of a principle business unit, division or function.
Sashya D’Souza
Vice-president of global services
Shepell-fgi
Toronto
Increasingly, companies’ customers, suppliers and competitors are located outside of their national borders. As a result, strategic employee recruitment and retention strategies require a focus on global competency skills and development.
Global competencies can vary, and include a genuine curiosity and interest in learning, flexibility and adaptability in thinking and the ability to respond appropriately to different people in different situations.
A sense of adventure, strong leadership skills, cultural knowledge and personal resiliency are also important characteristics in a global employee.
The alternative assignments
Traditionally, international assignments have lasted three to five years and represented a significant expense to the company. Key objectives for sending employees abroad were to export expertise for a specific time, as well as to develop the global skill set of the assignee, increasing her value to the organization back in the home location.
While these objectives continue to be relevant, companies are seeking more cost-effective ways of achieving them. A variety of alternative forms of international assignments have emerged.
One is shorter assignments, where the transfer of responsibility to local managers happens more quickly and project time frames are being shortened whenever possible.
Another is “localized employee transfer,” where an employee is transferred permanently to the host location after a certain period of time on assignment, and ceases to be compensated and supported as an expatriate.
Short-term business travel and commuting are also becoming popular alternatives to the traditional international assignment. Furthermore, companies are looking to emerging countries for potential international assignees.
Repatriation
When it comes to international assignments, it’s important for a company to think beyond the actual assignment phase. The successful repatriation of an employee and family is a critical step in the process, but unfortunately one that is often overlooked. The impact of bad experiences with repatriation and post-assignment career dissatisfaction can have serious repercussions on a company’s global mobility program, specifically with respect to recruiting for future international assignments.
It’s important to develop a qualified candidate pool, and to retain former expatriates with valuable international experience, by supporting them through the repatriation and integration process at home. That includes recognizing the newly developed global skills of returning employees and providing them with opportunities to apply and continue to strengthen those skills.
Leonore Clauss
Relocation consultant and cross-cultural business coach
Toronto
Destinations previously considered safe have become less so in recent years. Apart from war-like operations and terrorist activities, there seems to be a higher number of crimes that can affect relocating employees.
Extortion and blackmail is a commonly known risk for expatriates and businesses in South America. But recent reports from Japan, China and other Southeast Asian countries show criminal activity is increasing there as well.
Perceived to have been extremely safe on all accounts, Japan now registers a disturbing trend in crimes involving students of various ages. Societal expectations of superior academic performance are contributing to an array of violent behaviour. Suicide remains a problem among students, as does bullying, assault, extortion and even a few sensational murder cases involving rather young girls and boys. The economic roller coaster of the past 15 years has spurned more property crimes, theft, robbery and white-collar crime.
China’s fast growing economy produces its own brand of crime connected with foreign business activities. Expatriate management could be exposed to copyright infringements, blackmail, intellectual theft, racketeering or simply a profound lack of transparency in dealing with certain opportunistic elements.
Purse snatching in tourist areas is one thing, kidnapping children and demanding huge sums money from foreign parents or organizations — as is happening in Beijing, Shanghai and Guangzhou — is quite another. While car theft and web-related crime is up, rape, murder and assault are down. Nonetheless, the biggest danger for the occasional and permanent visitor to China remains road traffic, which claims 100,000 lives each year.
Is relocation really necessary?
When it comes to a foreign assignment and considerations of relocation, the growing consensus is that it’s not really necessary.
Factors such as special schooling, spousal career, security concerns, fast moving business objectives and virtual global teams have given rise to alternatives to physical relocation.
After the Sept. 11 terrorist attacks, companies have had to look seriously at the whole issue of travel and mobility. New technology in telecommunications and personalized computing have made connecting so much more attractive and affordable.
Global work units, ongoing education and international training, internships, job shadowing and long-distance collaboration can successfully reduce the physical necessity for relocation of head office personnel.
