In times of financial difficulty, organizations immediately review costs. In international organizations, the size of the travel and global mobility budgets are often the first target for the cost-cutting scissors. Initially, the packages are cut – fewer benefits, less cover – and then companies start asking the big question – why send employees abroad at all?
Fewer or different international assignments?
Every recent Global Mobility survey (e.g. Santa Fe, 2017 or EY, 2015) has shown that companies expect to increase the number of international assignees; however, on closer examination, it becomes clear that the numbers include a wider range of profiles than just traditional long-term expatriates.
Mark Harrison at ECA shows how many three-year assignments are being replaced by short-term or even commuter assignments. In some cases, they are superseded by virtual management completely.
But is this a false economy? By reducing the number of managers with extended experience and, more importantly, solid business relationships in international offices, are these cost-conscious organizations suffering from a false economy?
Can a short-term assignment achieve as much as a long-term assignment?
What is the real return on investment in a long-term assignment?
Given the risk and the expense involved – why send employees abroad on an international assignment at all?
There are two perspectives to consider when assessing the value of expatriates:
- The benefit to the organization
- The benefit to the individual
Why send employees abroad – the benefits to the organization
We must be clear straight off that a long-term assignment is not always the right solution.
Before the Asian financial crisis in 1997, the immediate reaction to any minor challenge in an international office was to pack up a trusted employee from head office. The employee, who was probably due a promotion was given a generous benefits package and three years to turn things around.
Without question, this is the riskiest, most expensive approach to assignment management.
Nevertheless, despite high failure rates, the long-term assignment has a history of making a significant positive impact on the whole business, not just the host country.
International offices often suffer due to talent shortages. A Global Risk Management Survey by Aon in 2015 pinpointed a deficit of the right talent in the right place as the fifth biggest risk facing international companies. Other surveys put the risk even higher up the list.
A long-term assignee has the skills that the company needs, and hopefully the ability to pass this knowledge on to others – if given the time. This creates a scalable solution to some of the talent challenges facing your local office.
The cost is easily measured by looking at the missed opportunities or project delays caused by lack of talent versus the assignment cost. This is offset by the comparative value of internally developed talent.
Relationships – at the heart of everything
Anyone who knows anything about intercultural working knows that relationships are at the heart of getting anything done – whether internationally or at home.
An assignee sent to West Africa arrived to an almost empty home, waiting for his belongings to clear customs. After four weeks he was ready to do anything.
He had been assigned a driver by his company for security reasons, and every day they exchanged small talk. One morning the assignee asked the driver, “how do you manage to get anything done around here?” He then explained the situation with his belongings. The driver empathized, and the expat went about his daily routine.
That evening the driver dropped him off near a queue of three trucks at the compound. His cousin worked in customs and had managed to find the right piece of paper needed to get the customs declaration signed and the property delivered.
Only someone ‘in for the long haul’ can build the networks and relationships needed to be truly effective.
A remote relationship will always lose out to a personal face to face one; everyday contact will lose out to sporadic meetings.
Developing new clients, keeping existing ones, working with local governments, building trust with colleagues – all these crucial business tasks need effort and input over a prolonged period. If you won’t make the effort, your competitors will!
At a purely fiscal level, consider the time and money spent handing those relationships over to a new person every week, only to lose that huge contract. The case for why to send employees abroad is strong.
Humans dislike change. It causes frustration, confusion, and resentment. The pace of evolutionary change is plenty fast enough for us. When a series of high profile assignees dip into your office for just a couple of months then quickly morph into another group of assignees you find yourself in a state of flux.
If you have identified the need to bring in an international assignee, then you need to commit that person for long enough to make a real difference. Given the same goals, tools and workflows, different managers will approach the same tasks in very different ways. Time, resources, and goodwill are hard to get back once wasted through yet another change of focus.
Developing the skills, knowledge and experience of a new market takes time. Often it needs long intensive research on the ground so that you don’t get tripped up by tiny details that you overlooked at the beginning. Recovering from a small cultural blunder is not a situation that benefits from a quick fix.
One of the biggest assets of sending employees abroad is the global perspective informed by intimate local knowledge.
Even the best handover will not prepare a more fleeting visitor to maximize the opportunities in the market. The long-term expat is a corporate culture ambassador, who is trusted by head office and the local office to reposition corporate policy in a local context. Only someone who has extensive experience in that location, understanding the office environment as well as cultural nuances can hope to get the balance right.
Why send employees abroad – the benefit to the individual
Research on why to send employees abroad from the University of Mannheim shows that international experience has a positive impact on your career. Not only do those employees who have worked abroad have higher career satisfaction, they also manage a greater number of people, are more senior and have higher incomes than those who have not.
The Financial Times agrees. Candidates with international assignments on their CV are perceived as better workers, more engaging, better team players, higher performers, more likely to succeed. If you want to make an impression at interview, giving examples from your experience of a foreign office makes you a more credible choice.
The skills you learn on an international assignment cannot be learned anywhere else – that surely answers the question “why send employees abroad”?
Problem-solving and decision-making under pressure, when confronted with culturally confusing signals from your counterparts; establishing close business relationships with partners who have priorities you don’t initially understand; balancing the miscommunications between high and low context speakers.
These skills are invaluable – they help you to understand your customers, give you a broader perspective leading to more creative ideas and solutions, and help you to get the most out of your teams. You may even get the chance to learn a new language.
And if you move with children, the exposure to a different education system, a new culture and language is a gift that cannot be bought.
Bowing to practicalities
Cutting longer international assignments will no doubt have a short-term impact on reducing costs – there is no question that sending employees abroad is expensive. But the long-term cost of a short-term saving can often outweigh the benefits.
The decision to send employees abroad on long-term assignments is a bold move that is looking to long-term gains. It is not a question of why send employees abroad it is a question of why is your company not when your competitors are. Global Mobility professionals with a strategic view can make the business case clear to leadership that the best strategy in tough times is to take a long-term perspective.