Going global

Time to open shop overseas? Sound HR can make the difference between success and expensive failure. Put the right people in the right roles with the right support.

The world has grown smaller and many companies are testing the waters in established and emerging markets. An increasing number of organizations are finding out “going global” brings a challenging array of human resource issues. Preparing for the opening of a new office overseas goes beyond determining the location that best meets a company’s business needs and objectives. Negotiating with government authorities in a different country, where laws, culture and language differs, is vital to success.

Staffing the new entity will likely involve the assignment of one or more employees to the foreign country. This allows the application of a firm’s business standards and procedures, and ensures the organization has a measure of control over the operations of the overseas office. The expectations of assignees should include the training of local nationals who can eventually assume the management responsibility of the new venture — but that comes later. There’s a lot of work to do to prepare the initial team.

Selecting the right candidate

Selecting the right candidate to develop and manage a new international business venture can be the biggest challenge a company faces. Small and large organizations alike want to ensure that they staff the assignment with an individual who is not only technically qualified, but also someone who is able to work in a global environment. Considering the hundreds of thousands of dollars of expense involved with an international assignment, it is critical to select the right candidate. Neither the organization nor the employee want an early repatriation or failed assignment.

But where and how do you start? Initially, define the criteria that will be used in the selection process. Key candidates should possess at least the following:

•technical skills;

•communication skills;

•ability to adapt to a new culture;

•empathy;

•flexibility; and

•interpersonal skills.

And while it is important to carefully screen candidates, it’s equally important to look at their families. Not all families are equipped to deal with the stresses of living internationally. Sometimes medical or elder-care needs are priorities and the family may not feel comfortable relocating even for a short period of time.

The desired end result of the selection process is that the organization sends a qualified individual who can meet and exceed the goals of the company, while developing his international expertise.

Preparing the candidate and family

Once the candidate is selected, invest time and resources in the preparation of the employee and family. Cultural conflicts and language differences are both factors to consider when preparing the employee or family to live and work in a foreign country. If the employee cannot work comfortably in the local business language, while recognizing the cultural nuances of business practices, he will not be successful in developing business opportunities in the overseas location and the firm’s investment may be at risk.

Equally important, is the family’s understanding of the impact the relocation will have on them. All family members should be prepared for culture shock. While the assignment may seem like a vacation initially, reality soon sets in as the challenges of daily living present themselves. Cultural and language differences can make a trip to the grocery store seem so frustrating that it is not worth the effort. Security issues in some countries may present safety concerns to the family if driving alone or leaving the home unoccupied is a security threat. All these issues combined can result in high levels of stress for all concerned.

Cross-cultural training and language training are a must. Typically, cross-cultural training will include the experiences of individuals who have lived and worked overseas, specifically in the country in which you intend to open your office. Whenever possible, seek out these former expatriates so the candidate and family can learn from their experiences.

In addition, proper immigration documents, such as residency permits, should be prepared in advance. Failure to do so could see an employee denied entry into the foreign country at a critical time in the new business’ development. Delays can be very costly. Most countries do not allow a spouse to be employed solely on the basis of an employee’s work permit and children must have proper documentation in order to be enrolled in school.

With all these necessary tools provided, the employee can concentrate on the responsibility of getting the new international investment up and running as quickly as possible.

Supporting the family overseas

Finding the right home in the right community, enrolling children in school, opening a bank account or finding a doctor can all be overwhelming tasks when settling into an overseas assignment. Many organizations make use of outside service providers that can help the employee and family settle into their new environment quickly. Typically, these service providers have local representatives who are knowledgeable about rental accommodation, schooling, banking laws, community and sports centres, doctors, dentists; most aspects of daily living that are sometimes taken for granted.

Often, the spouse feels the greatest impact of these challenges as the employee goes to work and interacts with the local nationals and, perhaps, other individuals from home. As well, the spouse may have given up a career in order to accompany the family overseas. This can have a traumatic impact in conjunction with the stresses of settling the family in a foreign country.

Many organizations offer spousal assistance in the form of reimbursement for continuing education, job search assistance, resume preparation or re-certification. This assistance may be offered in the overseas location or upon repatriation to the home country.

It is crucial for the expatriate and family to have an international compensation package that allows them to live in the foreign country without financial hardship.

Determining an appropriate level of compensation impacts not only your expatriate, but also the levels of profitability of your new operation.

Typically, most expatriates eventually repatriate to their home country so it is imperative that home-base salary levels remain intact.

However, many expatriates experience additional costs for housing, goods and services, and transportation in the foreign country. Most organizations provide allowances to recognize the additional cost-of-living in the assignment location. Many provide an additional premium that recognizes that the employee and family have faced disruption, leaving behind the familiar and adapting to a new unfamiliar country.

Communication is key

Perhaps the most important detail for the employee and family overseas is news from home. This includes not just the ability to read a newspaper or magazine from home, but also communications regarding the home country office. Many expatriates experience a sense of isolation from their organization because they suddenly are no longer in the home office.

There are few opportunities to have conversations with peers or supervisors. Time zones may make it almost impossible to contact the home office during working hours. Organizations are constantly in a state of change, and expatriates posted to an overseas assignment for a period of two or three years are challenged to keep up with these home office changes.

Typically, they are focussed on the task at hand, developing and managing the international business. It is a very unpleasant surprise, indeed, when the expatriate returns home, only to find a completely different organization than the one he left behind. Expatriates who experience problems fitting back into the organization often leave the company and the firm loses a valuable resource.

Ensure that regular company communications, newspapers and magazines are sent to a family overseas. Use Internet technology and e-mail whenever possible.

Appoint a mentor (usually a senior manager or the employee’s direct supervisor) who is responsible for communicating to and supporting the expatriate while he’s on the overseas assignment.

Communication is part of the ongoing support of an expatriate overseas and should not be overlooked.

Establishing international human resource policies and practices is an integral part of a global strategy. Successfully developing overseas business opportunities requires an international HR policy that selects the right candidate and ensures support for both the employee and family.

Gail Reinhart is a consultant in the Calgary office of Runzheimer Canada. She may be contacted at (403) 243-0501 or visit www.runzheimer.com.

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