(Back to ARTICLES) Assignment Due Diligence By Mary van der Boon (this article first appeared in Expatrium) How important is a reconnaissance trip to your prospective destination before you sign the contract? Mary van der Boon looks at the Pre-Assignment Visit An increasingly young, multicultural and diverse workforce brings an important new phase to expatriate assignments, termed the pre-decision phase. Pre-decision can be likened to an assignment due diligence procedure that includes a careful assessment of all aspects associated with the proposed posting. Taking an international assignment is like taking a huge leap into the unknown: one of the greatest sources of anxiety for all future expatriates is being unable to visualise where and how they will be living in the destination country. Housing, medical, schooling and working conditions are all of paramount importance to the well-being of an expatriate family, and their own company’s HR department may only be able to provide sketchy answers to their many questions. Once a rarity, the pre-assignment visit has gained in popularity over the past decade, as convenient air travel connections to even the world’s most remote destinations make the reconnaissance visit both practical and affordable. Long considered a perk limited to the company’s senior elite, until recently many expatriates have been making use of the opportunity to pay a visit to their potential host country before signing the contract. Three new trends are putting the pre-assignment visit in jeopardy, however: 1. The Bottom Line Placing increasing emphasis on streamlining and outsourcing (both done with a firm eye on the bottom line), some companies are moving towards a lump-sum package where the expatriate, and family, essentially arrange their own transfer. Is the cost of the pre-assignment visit so high? Most such visits last for three to seven days, with all travel and accommodation expenses absorbed by the company. According to the Employment Relocation Council in the U.S., the average cost of a pre-assignment trip is under $2000.00 within the continental U.S., and roughly twice this figure for international moves. European HR sources estimate approximately the same amounts, in Euro, for within & outside Europe. Yet when the relocation allowance is managed as a lump-sum allocation, the pre-assignment visit almost always falls by the wayside. At the recent annual European Relocation Association conference held in Amsterdam, the issue of lump sum, employee-managed relocation came under fire by HR and relocation professionals alike. Susie Inwood, Principal HR Adviser for the BG Group in the U.K. reaffirmed her company’s policy of full-support professional-assisted relocation for their employees, including pre-assignment visits. She cited ‘do-it-yourself’ horror stories of employees ending up with houses in unsuitable areas of foreign cities, repossessed vehicles, unpaid bills and numerous legal problems, all of which the company was ultimately expected to solve. Says Inwood "think Murphy’s law. If it can go wrong, it will go wrong". Runzheimer International, while acknowledging that the trend towards lump-sum relocation assistance is growing rapidly, particularly in the U.S., advises that along with positive factors such as cost-saving, particularly in administrative handling and auditing of expenses, companies considering lump-sum benefits must also take into account these negative factors: Increased Transferee Stress Lump-sum payments defer the responsibility for many details of the relocation to the employee. This increased pressure may amplify stress on the employee and his family already created by taking the new position. False Economy Few employees will be able to resist the urge to economise on non-accountable lump-sum relocation allowances. Particularly ‘optional’ costs such as cultural and language training and pre-assignment visits tend to be dropped as non-essentials in employee-arranged relocation. A Successful Relocation is not Guaranteed Since the details of the employee move are, for the most part, no longer in the hands of the company, there is always a greater risk of assignment failure. Injuries With employees handling their own packing and moving, there is an increased risk of injury. These injuries can cause significant expense in medical coverage, lost hours and delays in the actual move. 2. The Glopat In another global trend, many multinationals don’t actually have "expatriates" anymore. They have internationally mobile employees, or glopats, who can be re-assigned anywhere in the world on a sliding pay scale that is designed to make this mobility attractive. There are new expat definitions in today’s global business environment. The most common (the ‘Mobility Pyramid’): Glopats: employees with a world perspective, who can `fit in' and contribute wherever the organisation operates, frequently on the move tackling short or medium term assignments Globals: Move around the world on medium term assignments Regionals: Accept short, medium or long term assignments within a geographic region and/or at a regional headquarters Mobile Local Nationals: functional experts and regional managers prepared for cross-border task force memberships, short-term projects and training assignments abroad Rooted Local Nationals: Functional experts and general managers tied to their home base Both glopats and globals are often hired on the basis of their assumed mobility, and as such may not receive a great deal in the way of assignment assistance. Regionals, mobile & rooted local nationals generally receive no relocation assistance whatsoever, even for those on lengthy commuter assignments (where employee commutes to work in another country long-term while place of residence remains unchanged). Commuter assignments are one of the fastest-growing form of expatriate mobility within Europe according to the just-released Landwell/Pricewaterhouse Coopers survey, Managing Mobility Matters – a European Perspective. 3. Who’s Got The Time? Following Peter Drucker’s pressure-cooker maxim of ‘you’re as good as your last performance’, many executives turn down both a visit to their new assignment location and cultural or language training before departure. Most cite a lack of time and the low priority placed on this type of preparation by their company. This workaholic trend may be changing, however. Many Generation X (22-35 years old) and Generation Y (21 and under) employees will refuse an assignment outright if the opportunity to visit and evaluate living, housing, working, schooling and lifestyle options in the host location is not offered, leaving HR departments little option than to offer the possibility. The HR Benefits The pre-assignment visit should be viewed as beneficial for several reasons from a human resources perspective. Damage Control It should serve to prevent uncomfortable future discussions that begin with "I had no idea" and "why didn’t you tell me?". By providing the employee and family members with the opportunity to seek answers to their questions on their own, HR can avoid recriminations and long-lasting ill-will later in the assignment. Reluctant employees should be encouraged by HR to visit their destination country, and in particular to include other family members in the decision-making process. Investment in the Future Many companies are currently willing to spend money on making the assignment a better experience for the partner. This is in clear recognition that to neglect this area can jeopardise the success of the whole assignment. The emphasis on greater indirect spending on areas such as pre-assignment orientation visits, family support on arrival in the host location and the career or education of the partner, is clearly considered by more progressive companies (such as best practices leaders Schlumberger and Philips) to be a better investment than simply heaping more generous allowances on the expatriate. What Matters Most The 5 most important criteria for successful assignments - from expatriate partners* 1) living situation in the host country 2) pre-assignment visits 3) children’s schooling and health on assignment 4) general information about the host country 5) job/activities for partners *Source: Norsk Hydro ASA survey Maximise the benefit of your pre-assignment visit:
|
|||