By Stephen Cryne
There is a growing demand from CEOs today for employees with global experience and savvy. To compete at a global level, companies are recognizing the need for talent who can manage complex business issues and develop bench strength to grow new markets and improve business outcomes.
In response, employers are expanding mobility programs to manage complex talent gaps, attract and retain employees, and develop tomorrow’s leaders.
There was a marked increase in the number of international assignments from 2009 to 2015, led in part by the natural resources sector, according to research by members of the Canadian Employee Relocation Council (CERC). While it’s mainly larger companies that are establishing a stronger global presence, small and medium-size enterprises are also looking beyond North America for market growth.
Central Europe, the Middle East and North Africa, Asia Pacific and China are the most popular destinations for international postings.
But international assignments are both costly and complex so it takes careful planning and execution to keep things on track and reap the rewards, for both the company and the employee. Make no mistake, the real heroes in the story are those who pick up house and home to experience a new lifestyle while contributing to the bottom line.
Here are some important steps to follow when considering an international mobility program:
The organization should determine how mobility fits with its overall business goals. Is mobility an occasional occurrence or an area of strategic growth for the organization? If it’s the latter, successful companies have developed a culture of mobility. This includes the development of well-designed and managed international assignment policies that outline the supports provided to employees.
Employers should have a formal mobility policy in place, according to Janet Bomza, a partner at PwC in Toronto.
“We have noticed a trend in this respect and more and more employers are creating a company foreign policy that thoroughly addresses matters such as immigration, business continuity plans, geopolitical risk assessments, etc.”
Begin with the end in mind. Successful assignments align the goals and expectations of both the business and the employee. Is the employee (and family) the right fit for an international assignment? How will the assignment benefit the company and the employee? All too often, the allure of an assignment overshadows the reality, especially in the pre-assignment stage.
It’s important for a company to set realistic goals for the assignment, says Mirela Marin, director of global mobility rewards at Manulife in Toronto, “that align with the employee’s career aspirations and path. And to check in and re-evaluate/re-align their goals over time.”
Employers should be looking at the suitability of assignees sent to particular countries with particular job roles, according to William Titus, COO at Relo Japan, a destination services provider in Tokyo.
“Companies should also understand the needs of the assignees and provide as much information to them as possible.”
At an organization level, the view is often short-term, driven by an operational need, without due consideration to the longer term benefits international experience can deliver.
One area often overlooked is the repatriation of the employee. Only 57 per cent of organizations with international assignment programs said they had a formal repatriation program in place, according to a 2015 CERC survey. Repatriation continues to be an opportunity for employers to retain key employees with critical global experience.
“Pro-active repatriation planning, well in advance of their scheduled return date, is one thing employers should do to ensure a successful assignment,” says Marin.
Governments around the globe are enforcing regulations governing immigration, work permits and business visitors. It’s not OK for employees to say they are on a vacation or personal visit when crossing a border for employment. Such action exposes both the company and employee to enormous risk.
Penalties for violations in some regions range from monetary fines to lifetime bans and, in some instances, imprisonment.
Companies must maintain the necessary documentation for compliance/audits or government reviews, according to Cathryn Sawicki, team lead of global business immigration services at PwC Law in Toronto.
“Due to the increase in the global mobility of employees, more and more governments have set up compliance regimes that employers and employees must abide by.”
And it’s not just immigration compliance — governments around the globe have stepped up efforts to extract more tax revenues from foreign companies. Employers need to carefully evaluate the tax implications of an international assignment. Without the correct tax planning and assistance, employees could also be exposed to double taxation.
“Having one person or a team of people who are responsible for overseeing and coordinating international assignments will help employees and employers satisfy the immigration and tax compliance requirements,” says Sawicki.
Forty per cent of respondents to a 2012 global mobility survey by Ernst & Young said they did not have a formal risk control framework to monitor payroll tax and social security compliance, with 64 per cent reporting they incurred avoidable penalties for non-compliance in 2012.
Most households today are dual income and people of talent are attracted to other people of talent, so if one professional is being moved, it is highly likely the accompanying partner is also in a professional role. Nearly 70 per cent of the top talent (executives) at Nestlé, for example, come from dual-career families, according to the Ernst & Young survey.
Family concerns are driving employee challenges. And although demographic shifts are making the familial challenges look different today than yesterday, survey after survey confirm that family concerns are the single most noted reason for assignment refusal, failure or early return.
Challenges include a lack of adequate schools, insufficient housing or adequate work opportunities. Forward-thinking organizations are responding by having solutions in place that address these realities.
Another step employers should take is ensuring family matters have been considered and planned, says Marin, “so that children are happy and settled in the right school, and the trailing spouse has a plan of their own, which could include job-finding assistance or assistance establishing a network in the new location.”
Companies should listen and be flexible to assist in resolving obstacles to being productive at work, says Titus.
“This requires oversight and a good understanding of the cost of providing flexible resolutions based not on a certain budget set in advance, but based on the extent of such costs compared to the big picture. For example, does the cost of the extra sofa, the remodelled bathroom or the extra 1.5 days of accompanied services for the spouse at $1,000 really have such a huge impact on the overall cost of assignment?”
The diversity of assignment type and policy type is being driven by a few factors. Cost pressures are driving employers to consider less expensive options for mobilizing talent, ranging from short-term assignments and employing regional staff to virtual teams and “local plus” packages.
Technology is making these different options easier to manage and demand from employees, especially millennials, is also driving flexibility. The diversity of options is complex but can be a massive strength for employers as they find the right incentive package for their budget and the particular employee.
By adapting to the preferences and needs of different generations and groups of employees, organizations are likely to increase engagement and maximize the investment in the assignment.
“It’s important to have the right support structure in place at every step of the assignment,” says Titus. “(This means) the right support at the origin, at the destination workplace, for the accompanying family; of course, the right support for setting all the expectations along the way.
“This requires oversight to ensure that all bases are covered and the correct explanations are made and expectations are set.”
At the end of the day, international assignments are complex and take meticulous planning to ensure success. Companies that adopt a strategic approach to international mobility programs are more likely to reap the rewards, including greater engagement and retention of employees with global savvy.
Stephen Cryne is president and CEO of the Canadian Employee Relocation Council. He can be reached at (416) 593-9812 or for more information, visit www.cerc.ca.
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