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MOBILITY
Magazine of Worldwide ERC 速
October 2010
Architecture of Strategic Talent Management
Inside This Month:
Mobility in China India's Burgeoning Workforce 5 Ways to the Top
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Calendar
MOBILITY • Vol. 31 No. 10 • October 2010
Please refer page 16 for a list of upcoming Worldwide ERC® events.
STATEMENT REQUIRED BY THE ACT OF AUGUST 12, 1970; SECTION 3685, TITLE 39, UNITED STATES CODE SHOWING OWNERSHIP, MANAGEMENT, AND CIRCULATION OF: MOBILITY magazine, publication number 0195-8194, published monthly by Worldwide ERC® (The Employee Relocation Council, ERC®), 4401 Wilson Boulevard, Suite 510, Arlington, VA 22203, filed on September 2, 2010. Number of issues published annually: 12. Annual subscription price: $48. The offices of Worldwide ERC® are located at 4401 Wilson Boulevard, Suite 510, Arlington, VA 22203. The name and address of the Vice President & Publisher and Managing Editor, respectively, are Jerry Holloman and Frank Mauck, 4401 Wilson Boulevard, Suite 510, Arlington, VA 22203. The sole owner is Worldwide ERC®, 4401 Wilson Boulevard, Suite 510, Arlington, VA 22203. The tax status of Worldwide ERC® has not changed during the preceding 12 months. Issue date for the circulation data below: August 2010. Average number of copies of each issue during preceding 12 months: A) Total number of copies: 10,994 B) Paid and/or requested circulation: 1) Paid/requested outside-county mail subscriptions state on Form 3541: 9,514 2) Paid in-county subscriptions stated on Form 3541: 0 3) Sales through dealers and carriers, street vendors, counter sales, and other non-USPS paid distribution: 0 4) Other classes mailed through USPS: 735 C) Total paid and/or requested circulation: 10,249 D) Free distribution by mail: 1) Outside-county as stated on Form 3541: 0 2) In-county as stated on Form 3541: 0 3) Other classes mailed through the USPS: 200 4) Distributed outside the mail: 50 E) Total free distribution: 250 F) Total distribution: 10,499 G) Copies not distributed: 495 H) Total: 10,994 I) Percent paid and/or requested circulation: 97.6 percent Number copies of single issue published nearest to filing date: A) Total number of copies: 10,557 B) Paid and/or requested circulation: 1) Paid/requested outside-county mail subscriptions state on Form 3541: 8,987 2) Paid in-county subscriptions stated on Form 3541: 0 3) Sales through dealers and carriers, street vendors, counter sales, and other non-USPS paid distribution: 0 4) Other classes mailed through USPS: 846 C) Total paid and/or requested circulation: 9,833 D) Free distribution by mail: 1) Outside-county as stated on Form 3541: 0 2) In-county as stated on Form 3541: 0 3) Other classes mailed through the USPS: 200 4) Distribution outside the mail: 50 E) Total free distribution: 250 F) Total distribution: 10,083 G) Copies not distributed: 474 H) Total: 10,557 I) Percent paid and/or requested circulation: 97.5 percent This statement of ownership will be printed in the October 2010 issue of this publication. I certify that the statements made by me above are correct and complete. Jerry Holloman Vice President & Publisher 2 MOBILITY/OCTOBER 2010
EXECUTIVE COMMITTEE President MICHAEL (MIKE) C. WASHBOURN, SCRP, GMS, Pfizer Inc., Peapack, NJ Vice President SUSAN SCHNEIDER, SCRP, GMS, Plus Relocation Services, Inc., Minneapolis, MN Secretary/Treasurer PAMELA (PAM) J. O’CONNOR, SCRP, Leading Real Estate Companies of the World®, Chicago, IL Chairman, Board of Directors AL BLUMENBERG, SCRP, NEI Global Relocation, Omaha, NE
BOARD OF DIRECTORS CORI L. BEAUDET, SCRP, SGMS, SC Johnson—A Family Company, Racine, WI LISA CARAVELLA, CRP, Bank of America, Plano, TX JAY K. DELICH, SCRP, SRA, IFA, Arizona Appraisal Team, LLC, Scottsdale, AZ MARIO FERRARO, International SOS Pte Ltd., SINGAPORE MARK GIORGINI, GMS, China Vanke Co. Ltd., Shenzhen, CHINA WILLIAM (BILL) GRAEBEL, SGMS, Graebel Relocation Services Worldwide, Aurora, CO JOHNNY H. HAINES, SCRP, SGMS, Deloitte, Hermitage, TN LARS LYKKE IVERSEN, Santa Fe Relocation Services, Hong Kong, CHINA CHRISTOPHER (CHRIS) JAMES, Bechtel Corporation, Phoenix, AZ JO LAY, SCRP, SGMS, Coldwell Banker Central Region Relocation, Chicago, IL EARL LEE, Prudential Real Estate and Relocation Services, Scottsdale, AZ STEPHEN C. MCGARRY, SCRP, WPP, New York, NY SANTRUPT MISRA, PH.D., Aditya Birla Management Corporation Ltd., Mumbai, INDIA JOY MORRISON, SCRP, SGMS, PepsiCo, Inc., Purchase, NY STEVEN A. NORD, Alpharetta, GA JOHN PFEIFFER, GMS, Mustang Engineering, L.P., Houston, TX PANDRA RICHIE, SCRP, GMS, Long & Foster Corporate Real Estate Services Division, Chantilly, VA C. MATTHEW (MATT) SPINOLO, SCRP, SGMS, CARTUS, Memphis, TN
EX-OFFICIO Chairman, U.S. Advisory Council AL BLUMENBERG, SCRP, NEI Global Relocation, Omaha, NE Chairman, Foundation for Workforce Mobility KEVIN E. RUSSELL, SCRP, PHH Mortgage, Mt. Laurel, NJ Chairman, Global Advisory Council SANTRUPT MISRA, PH.D., Aditya Birla Management Corporation Ltd., Mumbai, INDIA Chairman, Government Relations Council C. MATTHEW (MATT) SPINOLO, SCRP, SGMS, CARTUS, Memphis, TN
CHIEF EXECUTIVE OFFICER PEGGY SMITH, SCRP, SGMS, Worldwide ERC®, Arlington, VA
MOBILITY (ISSN 0195-8194) is published monthly by Worldwide ERC®, 4401 Wilson Boulevard, Suite 510, Arlington, VA 22203, +1 703 842 3400. MOBILITY examines key issues affecting the global mobility workforce for the benefit of employers and firms or individuals providing specific services to relocated employees and their families. The opinions expressed in MOBILITY are those of the authors and do not necessarily reflect the opinions of Worldwide ERC®. MOBILITY is printed in the United States of America. Periodical postage paid at Arlington, VA, and additional mailing offices. Worldwide ERC® members receive one annual subscription with their membership dues. Subscriptions are available to both members and non-members at $48 each per year. Copyright © by Worldwide ERC®. All rights reserved. Neither all nor part of the contents published herein may be reproduced in any form without written permission of Worldwide ERC®. POSTMASTER: send address changes to M OBILITY , Worldwide ERC ®, 4401 Wilson Boulevard, Suite 510, Arlington, VA 22203
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Perceptions
Short-term Thinking vs. Long-term Strategy: An Interview with David Baxter
D
avid Baxter is a leading international economist and executive director of The Urban Futures Institute—and also holds the title of Worldwide ERC® Global Mobility Expert. We recently checked in with him for some cool
responses to some of our burning questions.
What are the big mobility issues for the next few years? Because of the recent experiences we’ve had worldwide with an unforgiving global economy, there’s a tendency to think short-term and reactionary rather than to develop longterm strategies. One of the ways we’ll see this is that more countries are practicing “labor force protectionism.” Countries facing high unemployment attempt to preserve jobs for their own citizens, even at the expense of the ultimate vitality of their economy, so we are seeing increasing resistance to issuing work permits and visas for non-residents. Regulators and political optics will slow the growth that mobile talent brings to a region. Trade is not expanding as fast as it could, and workers, firms, and governments are becoming more insular just when it’s most important to branch out. The old adage, “once burned, twice shy,” is apparent in the changing behavior of employees. Though international assignments and job transfers have often been linked to career growth, more and more, employees don’t want to give up steadiness and familiarity for the unknown. With concerns about housing, pension plans, health care, and other issues attracting more attention, many do not see the potential rewards of a job transition, particularly if that movement might take them out of the loop in the corporate environment. What should businesses be watching? There still are a relatively finite number of skilled workers, and businesses shouldn’t let their guards down when it comes to retaining 4 MOBILITY/OCTOBER 2010
their talent. It’s critical to continue to build up and retain one’s talent base and to be mindful that other companies who are not willing to make investments in their workforce, have, in tough times, a strong incentive to take a shortcut by poaching well-developed employees. Firms also must keep their eyes on what I’ll call the “environmental matrix”—climate change, sustainability, local consumption, and organic production—and how employees and communities are changing their perception of this matrix. The next generation of employees and the communities that they work in have a different level of response to these external issues, and firms will need to vet their position from a values and hiring standpoint—and then determine how these value-based considerations affect their ability to attract and retain employees. It also is important to watch increased nationalistic involvement in economic activity, particularly in the area of commodities—food, energy, metals, and the like are more subject to outcomes based on political grounds rather than business issues. Businesses need to be more informed and aware of the political contexts in which they operate, in the home country and outside of it. Also—and this is a huge behavioral sleeper—workers’ concerns with future pension and health care funding are ramping themselves up on the political and personal agenda. Employees are growing more con-
cerned about the long-term benefits that wrap around their careers than the careers themselves, something that will deeply and dramatically affect the mobility decisions that they make today. Everyone has a take on the housing market in the U.S.— what’s yours? Mine is that we’re at least two quarters off before the beginning of recovery: by the summer of 2011, rather than getting the ambivalent news of last year, we will start to hear more consistent positives. This will come partly from economic recovery, partly from rightsizing of pricing and inventory, and a more realistic perception of lenders and borrowers re: ownership. And the good news? This whole mess of the past three years is just about over! The financial industry and housing markets probably have another six months to get through the last stages of the major clean-up; we’re not digging the hole any deeper and are starting to fill it in a bit. It’s a good time to be looking forward, making investments, and articulating strategies. Think of it this way: today we are putting out brush fires after a big forest fire—now is the time to get ready to plant new trees.
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MOBILITY Magazine of Worldwide ERC®
Features
20 30 42 48 58 64
Architecture of Strategic Talent Management By Dean Foster and Lauren Herring, CRP, SGMS
The Global Mobility and Talent Management Partnership Opportunity By Scott Sullivan
80 88
104
By Alex Chua, GMS
China Mobility: Understanding the Places, Policies, Practices, and People for Successful Relocation By Avrom Goldberg
Talent Management Strategy Discussions in Asia By Christine Wilson
It Never Rains in Seattle
and Lorraine Jennings
110
By Ronald Huiskamp, GMS, and Kari Hamilton
Lending Regulatory Changes and the Effect on Transferees and Your Mobility Policy By Karen Gerba
Effective Virtual Communication and Team Meetings with Your Chinese Customers and Co-workers By Sheida Hodge
114
Awakening Giant—India’s Burgeoning Workforce By Charlene Solomon and Sean Dubberke
It All Adds up—Expatriate Compensation Collection and Considerations for Consistent Program Compliancy By Chris Pardo, GMS
70
94
An Overview of Expatriate Housing in China
120
Africa: Land of Exhilarating Contrasts By Gene Edgerton and Nancy Ruth
Israel—Milk, Honey, and Natural Gas By Tsvi Kan-Tor, Amit Acco, and Adam Greenstein
Rethinking ROI By Ellie Sullivan, SCRP, SGMS, and Tim McCarney, GMS
The Mobile Workforce: the New Rules of Engagement By Kathy Sharo
130 140 147
Uncovering the Universal Qualities of an Effective Manager By Robert F. Burch, SCRP
Three Steps to Managing Culture Shock By Margarita Gokun Silver
Strategic Planning—Back to Basics By Michelle Sandlin, CRP
MOBILITY/OCTOBER 2010 7
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MOBILITY Magazine of Worldwide ERC®
DEPARTMENTS
MOBILITY
2 CALENDAR
STAFF
4 PERCEPTIONS
Jerry Holloman
Vice President & Publisher jholloman@WorldwideERC.org
Short-term Thinking vs. Long-term Strategy: An interview with David Baxter
10 AROUND THE WORLDWIDE ERC
®
Managing Editor Frank Mauck
fmauck@WorldwideERC.org EDITORIAL ADVISORY COMMITTEE
Chairman
12 EXECUTIVE SPOTLIGHT
Jo Lay, SCRP, SGMS, Coldwell Banker Central Region Relocation, Northbrook, IL Alex Alpert, Wheaton World Wide Moving, Tucson, AZ
15 INDUSTRY SPOTLIGHT
Tamara Bianchi, CRP, Capital Relocation Services, Denver, CO
15 WORLDWIDE ERC® TRENDSPOTTING
Christopher R. Chalk, CRP, GMS, Graebel Relocation Services Worldwide, Alpharetta, GA
18 QUICK TAKES
Brenda Darrow-Fuhs, Bank of America, Longmont, CO
154 RAC REPORT 156 YP40 157 GLOBILITY
Robert F. Burch, SCRP, Alexander’s Mobility Services, Baltimore, MD Alex Chua, Newport Real Estate Limited, Shanghai, CHINA Terry Baxter Davis, SCRP, SGMS, Ernst & Young LLP, Cleveland, OH Tim Denney, Stirling Henry Global Migration, Sydney, AUSTRALIA Marge A. Dillon, CRP, GMS, Nationstar Mortgage, Lewisville, TX Sean Dubberke, RW3 LLC, New York, NY Deborah A. Dull, CRP, GMS, Crown Relocations, Houston, TX
®
159 MARKETPLACE
Kari Hamilton, ABODA, Inc., Redmond, WA Nancy F. Harmann, CRP, GMS, Latter & Blum, Inc., Realtors, New Orleans, LA Gustavo Higuera, CRP, GMS, Prudential Real Estate and Relocation Services, Scottsdale, AZ Christine E. Holland, GMS, Massachusetts Institute of Technology, Cambridge, MA Ronald Huiskamp, GMS, Dwellworks, LLC, Kirkland, WA
159 ADVERTISERS’ RESOURCE
Rob Johnson, SCRP, SGMS, Altair Global Relocation, Plano, TX Tim McCarney, GMS, Weichert Relocation Resources Inc., Norwell, MA
160 LAST PAGE
Elizabeth Perelstein, School Choice International, White Plains, NY Patricia Pollard, CRP, GMS, Coldwell Banker United Realtors, Houston, TX Michelle Sandlin, CRP, John Daugherty Realtors, Inc., Houston, TX Stefanie R. Schreck, CRP, GMS, American International Group, New York, NY Scott T. Sullivan, Brookfield Global Relocation Services, Woodridge, IL Mara Terrace, Siemens Corporation, Global Shared Services NA, Orlando, FL Sherrie Tessier, CVS, Woonsocket, RI Allie Williamson, CRP, OneWorld Relocation Services, Naples, FL GLOBAL EDITORIAL ADVISORY COMMITTEE
Chairman Joy Morrison, CRP, SGMS, PepsiCo, Inc., Purchase, NY Michele Bar-Pereg, Bar-Pereg Group, Amsterdam, THE NETHERLANDS Lorraine Bello, GMS, Ricklin-Echikson Associates, Inc. (REA), Millburn, NJ
Design/Production: Ideas, Communicated, LLC, Vienna, VA, www.ideascommunicated.com Printing: CADMUS Specialty Publications, Richmond, VA Reprints: Katina Moaney, CADMUS Reprint Services, ercreprints@cadmus.com; +1 866 487 5625 ext. 3736 Advertising Sales: Glen Cox, National Sales Manager, The Townsend Group, Bethesda, MD +1 301 215 6710; ext. 109; gcox@townsend-group.com
Lorelei Carobolante, SCRP, SGMS, GPHR, G2nd Systems, LLC, San Ramon, CA Scott Craighead, SCRP, GMS, Blue Sky Executive Search, New York, NY Anne Dean, GMS, Living Abroad, LLC, Norwalk, CT Jeff Knapton, SIRVA Relocation, Westmont, IL Derrick Kon, Mercer (Singapore), Pte. Ltd, SINGAPORE Anne-Claude Lambelet, SGMS, ACL Consulting, Geneva, SWITZERLAND Tacita Lewars, GMS, Globaforce Incorporated, Calgery, Alberta, CANADA Cindy Madden, CRP, Cartus, Danbury, CT Andrea Massoud, GMS, Living in Brazil, International Relocation Services, Barueri-Sao Paulo,BRAZIL Nino Nelissen, SGMS, Executive Mobility Group, Schlipol Airport, THE NETHERLANDS Constance Pegushin, Berry Appleman & Leiden LLP, San Francisco, CA Maureen Bridget Rabotin, GMS, Effective Global Leadership, Paris, FRANCE René Rosemary Stegmann, GMS, Relocation Africa, Cape Town, SOUTH AFRICA Rita Wagner, GMS, Interdean International Relocation, London, UNITED KINGDOM Nick Woodhams, SGMS, Woodhams Relocation Centre, Sydney, AUSTRALIA
8 MOBILITY/OCTOBER 2010
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Around the Worldwide ERC®
Attention Corporate (HR) Members: Five Ways to Get to the Top
T
here is no better way to get to the top of your field than to get involved. Members of Worldwide ERC® form a powerful community of workforce mobility professionals and HR innovators who enjoy collaborating, sharing expertise, and receiving the most relevant resources to manage their companies’ mobile workforces. If you are a new corporate (HR) member, or are looking for a place to connect with your business peers, following are five things to know about Worldwide ERC®: How the networking happens: • Our meetings and conferences create dynamic settings for you to form professional and personal friendships, engage with experts in the field, and learn more in two days than many professionals learn in a year. Worldwide ERC® convenes annual world-class conferences and training programs in North American, European, and the Asia-Pacific regions, as well as interactive webinars delivered to your desktop. Our conferences include special receptions for newcomers, young professionals, and international delegates. • Our interactive forums, developed explicitly for corporate (HR) members, help you dialogue and conduct instant benchmarking with experts and your peers from more than 60 countries about workforce mobility challenges, strategies, policies, and emerging trends. • The most rewarding way is through giving back to others—volunteer for committees and participate in our charitable Foundation. With more than 20 committees with responsibilities ranging from government relations to meeting program planning, you’ll have exceptional opportunities to work with some of the best minds in the industry. If you’re interested in charitable causes, participate in our Foundation for Workforce Mobility to raise funds for our fellow world citizens in need during personal, national, or global crises. What you’ll want to read: • Thirty thousand workforce mobility professionals read MOBILITY magazine every month. In each issue,
1.
2.
10 MOBILITY/OCTOBER 2010
industry leaders and practitioners share experiences, offer new solutions, set industry trends, describe best practices, and comment on key issues affecting the industry. • Research and benchmarking reports sent to you online or in print are mustreads for anyone developing or refining their workforce mobility programs. Watch for periodic reports on transfer volume and cost and workforce mobility policy and practices in the United States, Asia-Pacific, and EMEA. Ways to work smart: • Don’t reinvent the wheel—corporate (HR) members have exclusive access to our online policy library that houses more than 150 workforce mobility policies from national and multinational corporations. In addition, if you are looking for a new service provider, use our procurement center, complete with sample RFPs. Pump up your career: • Look into Worldwide ERC® professional designations: the Certified Relocation Professional (CRP®) and Global Mobility Specialist (GMS™). Achieving these coveted credentials expands your expertise and gives your career a distinguished edge. • Check out the Career Center, an online resource for managing your own career and recruiting for your organization in the workforce mobility industry. Where to go for tax and legal tips: • Worth more than its virtual weight in gold, every organization with a mobile workforce will benefit from the online Tax and Legal MasterSource—a $795 subscription service that is provided free with your membership. It is the most comprehensive collection of U.S. workforce mobility tax and legal reviews in existence, and is a priceless resource for your company. And be sure to visit www.WorldwideERC.org for some of our newest services including the Global Tax & Immigration Library and Mobility LawBlog™.
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Executive Spotlight
C
raig Selders, SCRP, SGMS, has been promoted to executive vice president of Paragon Global Resources and president of Paragon Relocation, which includes Paragon Relocation Holdings, and will be based in Irving, TX. Living Abroad LLC, Norwalk, CT, has named Erin Fitzgerald international product manager. Leading Real Estate Companies of the World®, Chicago, IL, has named Joe Horning, president of Shorewest Realtors, Milwaukee, WI, to its board of directors. ReloTrans®, LLC, Danvers, MA, has named Megan Goff relocation coordinator. Century 21 Real Estate LLC, Parsippany, NJ, has named Greg Sexton senior vice president, brokerage services. Crown Relocations, Hong Kong, China, has appointed Srinivas Krishnan country manager for India, Mumbai, India. Dennis Muldowney was named general manager for Crown Korea, Seoul, Korea. Francis Cheung was promoted to general manager of household goods and fine arts for Crown China, Beijing, China. Richard Marriott was named immigration quality and compliance manager, Asia-Pacific, Hong Kong. Lolita Wong was named head of global mobility services in Shanghai, China. Priya Kuttaiah has been named general manager for global mobility services in Bangalore, India. Theresa Xie has been named branch manager of UniGroup Worldwide in Shanghai, China. Hilldrup Companies, Stafford, VA, has named David A. Gonzalez senior vice president for international business development. Suddath International, Jacksonville, FL, a subsidiary of The Suddath Companies, has named Sonya Reneberg as a global account sales executive in Washington, DC. Kelly Sayles has been named global account sales executive in Houston, 12 MOBILITY/OCTOBER 2010
The Worldwide ERC® Board of Directors recently elected its 2011 executive committee. Susan Schneider, SCRP, GMS, Plus Relocation Services, Inc., Minneapolis, MN, was named president. Pamela J. (Pam) O'Connor, SCRP, Leading Real Estate Companies of the World®, Schneider O’Connor Chicago, IL, was named vice president; C. Matthew (Matt) Spinolo, SCRP, SGMS, Cartus, Memphis, TN, was named secretary-treasurer. Michael C. (Mike) Washbourn, SCRP, GMS, Pfizer Inc., Peapack, NJ, will serve as chairman for the 2011 board of directors. Executive Committee members also serve Washbourn on the Board of Directors, and Spinolo strongly support the association with responsibility for establishing all current objectives, supervising the overall management of the association, appointing individuals to serve on standing committees, and considering all proposals and recommendations prior to review by the Board of Directors. The 2011 term for officers begins January 1, 2011, and concludes December 31, 2011.
TX. Jolyce Ledvina has been named global account sales executive in San Diego, CA. NRT LLC, Parsippany, NJ, has promoted Kate Rossi to regional executive vice president for the company’s Southeast region. Cathleen Smith was appointed as president for NRT’s Connecticut/Westchester County, NY, company. Kris Vogt has been named president of its Sacramento/Tahoe company Marriott ExecuStay®, Bethesda, MD, has named Lesty Jaranilla as general manager for the Minneapolis, MN, market. PODS Enterprises, Inc., Clearwater, FL, has named John Cameron as senior vice president of long distance moving and corporate operations. Coldwell Banker United, Realtors®, Columbia, SC, has added several new
agents to its offices. Lawanda Tyler has joined the Aiken office. Tim Hubbard and Ernest Bostic, II, have joined the Irmo office. Kathy Goerss has joined the Lexington office. Paige Tyler, Sandy Espinoza, and Amanda Payne have joined the Midtown office RealtySouth, Birmingham, AL, has added several new agents to its offices. Sherita Simpson and Desiree Burtis have joined the Hoover Metro office. David Steen, Chanelle Fletcher, and Patsy Hester have joined the I-459 office. Amanda Pearce, Cathy Bice, CRP, and Tiffany Roper have joined the Inverness office. Sandy Brown has joined the Mountain Brook Cahaba office. West Martin has joined the the Mountain Brook Euclid office. James Colvin has joined the Northern office.
last_member profile07 9/14/10 11:50 AM Page 3
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Industry Spotlight
Research Reveals Future of International Work According to a new research study, the nature of global business will necessitate a sizable increase in the movement of employees between countries leading to an uptick of short-term and commuter international assignments. Further, the number of employees working outside their home country grew 25 percent during the last 10 years and will increase by 50 percent during the next decade. The report, “Talent mobility 2020: The next generation of international assignments,” by PricewaterhouseCoopers LLP (PwC), London, United Kingdom, is based on international assignment data from 900 companies, population data, and opinions of CEOs and workers worldwide. It found that global organizations placed employees in an average of 13 locations in 1998, 22 in 2009, and could reach 33 by 2020. Surveyed CEOs said having the right talent in the right place is a critical factor for business growth, with 55 percent of CEOs intending to reconsider their approach to global mobility as a result of the downturn. “While we’re not consigning existing international work models to the history books, governments and companies will have to work together to manage some of the barriers to international mobility that will otherwise impede global competition and operations,” said Billy Owens, international mobility leader for PwC (U.S.). “As countries venture into underdeveloped locations, organizations and governments would benefit from sustainable co-investment in the infrastructure needed for individuals to live and do work comfortably—this might extend to schooling and training, medical facilities, or entertainment. “Ideally, the movement of employees and executives between countries will be fluid and characterized by col-
laboration, not by onerous and costly administration.” According to PwC, members of the “millennials” view working overseas as an important part of personal development, with 80 percent of 4,200 graduates surveyed wanting to work abroad, 70 percent expect to use a non-native language at work, and 94 percent expect to work across geographic borders. “Younger employees’ appetite for working overseas could eventually remove the need for financial enticement, but current immigration and tax systems, combined with the need for certain skills or experience levels, can make deploying staff around the world
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complex and costly,” said Owens. “Articulating shared values will be increasingly important as loyalty is even harder to foster across borders. “On the positive side, technology is evolving to ease compliance and tracking burdens. The eventual harmonization of living standards and remuneration across some skill sets and industries will also make things easier.” According to the release, emerging markets are growing in importance and will alter mobility patterns as talent from these regions operate domestically and across borders. New “capital” cities will serve as business hubs according to local population sizes and new revenue streams.
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MOBILITY/OCTOBER 2010 15
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Industry Spotlight
FYI Bristol Global Mobility, Phoenix, AZ, announced the acquisition of Corporate Relocation Services (CRS), Green Bay, WI. Carolina Relocation Group, Inc., Rocky Mount,, NC, has changed its name to Continental Relocation Group, Inc. (CRG) and moved its office to 58 Azimuth Court, Rocky Mount, NC 27804. Bekins Van Lines, Hillside, IL, announced its newest agent, ALL-PRO Moving & Storage, Sterling, VA. The Navy Exchange Service Command (NEXCOM), Army Air Force Exchange System (AAFES), and Marine Corps Community Services (MCCS) have a multi-year contract with PODS Enterprises, Inc., Clearwater, FL, to bring the company’s portable storage containers to continental United States (CONUS) military installations. Michael Saunders & Company, Sarasota, FL, has announced the premier of its new website, www.michaelsaunders.com. Cartus Corporation, Danbury, CT, has announced the integration of an online cultural resource tool, Country Navigator™, into its training programs. Mobility Services International (MSI), Newburyport, MA, has announced the launch of two new technology resources, the MSI CostEstimator and a second-generation ad hoc report-writing tool. TRC Global Solutions (TRC), Milwaukee, WI, has earned Accredited Business status from the Better Business Bureau of Wisconsin. IOR Global Services, Northbrook, IL, has announced the sale of the company to Rob Burns, lead investor and entrepreneur. Kendra Mirasol, IOR’s senior vice president, also holds a minority interest. Oakwood Worldwide, Los Angeles, CA, has announced it is the exclusive provider of temporary housing services at the Indigo @ twelve | west in Portland, OR, the nation’s first LEED Platinum-certified apartment building.
Upcoming Worldwide ERC® Events OCTOBER 2010 Worldwide ERC® Learning Zone Speedsession Webinar Five Key Steps to Ensure Your RFP Really Works October 5 2:00 p.m. to 3:00 p.m. EST Sponsored by Capital Relocation Services Cost: Free Worldwide ERC® Learning Zone Webinar Homesale Programs: Understanding the Costs October 12 2:00 p.m. to 3:00 p.m. EST Global Mobility Specialist (GMS™) Training October 26-27 Seattle, WA Global Workforce Symposium October 27-29 Seattle, WA 16 MOBILITY/OCTOBER 2010
Worldwide ERC® Foundation “BESTIVAL!” October 28 Seattle, WA
NOVEMBER 2010 Worldwide ERC® Learning Zone Speedsession Webinar Managing Today's Global Workforce Optimizing Your Investment November 2 2:00 p.m. to 3:00 p.m. EST Sponsored by Cartus/Primacy Cost: Free
MARCH 2011 Global Mobility Specialist (GMS™) Training March 4, 5, and 7 Shanghai, China Global Wokforce Summit: Focus on Asia-Pacific March 8-9 Shanghai, China
last_member profile07 9/14/10 11:53 AM Page 3
Bridging Continents & Cultures Chicago Calgary
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Los Angeles Toronto
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San Francisco Hong Kong
quicktakes_oct_khan.qxd 9/17/10 3:43 PM Page 1
Quick Takes
Only 13 Weeks Left! Have You Completed Your CE Credits?
A
s of October 1, there are only 13 weeks left in 2010 for you to earn any continuing education (CE) credits you need toward your CRP®, GMS™, CERP, PHR, SPHR, and/or GPHR designations. Here are a few ideas on how you can fulfill your requirements and receive valuable workforce mobility information. 15-credit Opportunity: Attendees of the Worldwide ERC® Global Workforce Symposium in Seattle, WA, will learn about the next generation of solutions in workforce mobility and receive up to 15 CRP®, GMS™, CERP* and Human Resources Certification Institute* CE credit hours. This valuable option takes place October 27 through 29. For more details and to register, visit: www.WorldwideERC.org/ Symposium. Note, you can come for free if you are a corporate HR professional who has not attended the Symposium in the past. Look for details about Worldwide ERC® CEO Peggy Smith’s unprecedented offer on our website.
Seven- to 10-credit Opportunity Certified Relocation Professionals (CRP®) can earn up to 10 CE credits of global programming for taking the Global Mobility Specialist™ (GMS™ ) training modules being held on October 25 through 27, in conjunction with the Global Workforce Symposium and earn another valuable credential. Each of the three training modules discusses concepts in global workforce mobility and intercultural management. Note, each module counts for seven CRP® CE credits, however, a maximum of 10 CRP® CE credits may be earned from global courses per renewal period. For more details and to register, visit www.WorldwideERC.org/ Education/GMS One- to Two-credit Opportunities CRP® and GMS™ designees earn one to two CE credits for each online course in the Worldwide ERC® Catalogue of Online Global Mobility Courses. The catalogue of highly praised education opportunities includes 14 courses; a total of 18 possible CE credits, which discuss
topics such as “International Hybrid Assignments,” “Mobility Issues for China Today,” and “Cost-of-living Allowances and Housing,” to name a few. To begin, visit www.Worldwide ERC.org/pages/globalcourses.aspx One-credit opportunities CRP® designees earn one continuing education (CE) credit for each of the upcoming one-hour Learning Zone web sessions that discuss the latest challenges facing workforce mobility professionals. On October 5, learn “Five Key Steps to Ensure Your RFP Really Works” during a complimentary Learning Zone SpeedSession sponsored by Capital Relocation Services. On October 12, tune in for the Learning Zone webinar, “Homesale Programs: Understanding the Costs.” There are more sessions being announced all the time. For details and to register, visit www.WorldwideERC.org/Events *For exact CE credit amounts and other specifics, read online at: www.WorldwideERC.org/Symposium/ Pages/gws10-CE-Credit-Approvals.aspx
Communities
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ight now Worldwide ERC® members are exchanging questions, answers, and ideas in our online forums and blog, such as: U.S. Domestic Relocation Members Forum: “Can a transferee have two homes eligible for the homesale program for the same move? One home is primary residence and the other is a second home. Would only one be eligible for tax protected homesale benefits, or would both? The client is willing to allow both homes to participate in the homesale program but wants to know the answer to this question before making the decision.” Global Workforce Mobility Members Forum: “Is anyone managing expatriate administration through a central funding process rather than individual destination?” Mobility LawBlog™ In some of their recent blog posts, Worldwide ERC® Tax Counsel Pete Scott and General Counsel Dick Mansfield take a look at the details of the Dodd-Frank Act (formally known as the Wall Street Reform and Consumer Protection Act), which most immediately will affect the workforce mobility industry including the “plethora of regulations coming our way over the next year.” Read the answers solicited by these questions and add your comments and questions today. To get there, visit www.WorldwideERC.org/pages/web2.0.aspx or click on the white “Communities” hyperlink at the top of every page of www.WorldwideERC.org. Note that access to the forums is an exclusive benefit of Worldwide ERC® membership. 18 MOBILITY/OCTOBER 2010
last_member profile07 9/14/10 11:55 AM Page 3
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ARCHITECTURE OF STRATEGIC TALENT MANAGEMENT BY DEAN FOSTER AND LAUREN HERRING, CRP, SGMS
20 MOBILITY/OCTOBER 2010
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The management of a global organization requires a delicate balance of risk and reward, with success a by-product of incorporating a holistic, integrated talent management strategy that maximizes return on investment and underscores the importance of a mobile workforce. Foster and Herring examine the transactional elements of international assignment programs and frame them in the context of strategic talent management.
“
alent management”—today’s latest business buzzword—is more than just the “strategy du jour.” It is, in fact, a new framework for thinking about global success. If working today means working globally, then managing and developing employees so they can deliver global success becomes a critical strategic initiative. Drilling down to the tactical nuts and bolts of a global talent management strategy will reveal all its transactional parts, which include mobility, assessment, training, performance management, and a variety of other functions. These remain transactional elements, however, and the time has arrived to organize them into a cohesive strategy that develops global employees—the single most valuable asset of a global organization. Success is achieved by balancing risk and reward, and managing these transactional components without a talent management strategy raises risk and reduces reward; managing with a strategic vision, however, will aid in creating a prosperous future for global organizations.
T
Mobility: ‘That’s So 20th Century’ During the past century, the need for global success was addressed traditionally through mobility, and usually proceeded through several stages. In stage one, assuming a Chicago, IL,-headquarters conducting business in Singapore, talent is needed in the destination—Singapore in this case. In stage two, because business is conducted differently in Singapore from the way it is conducted in Chicago and presents unanticipated challenges, talent must become engaged with the destination and achieve an understanding of the local business environment. During stage three, the circumstances of stages one and
two also are occurring between headquarters and other destinations where the organization is doing business, which creates the need to develop synergies and a more global way of working between all parties. Addressing the first two stages of “mobility” is intuitive, but it becomes increasingly difficult to create synergies—economies of scale, if you will—for talent and a globally effective organization with just a set of transactional mobility processes, especially when the issues raised by stage three need to be addressed. It is no mystery why the process operated in such a transactional manner last century; looking even farther back, this transactional perspective was borne out of a time when, for example, “HR” was “personnel” and managing talent was simply the transactional moving of parts from here to there. To view “mobility” as the solution for global success in the past was logical, albeit limited.
So What Is ‘Strategic Talent Management?’ While exact definitions vary, generally the concept of strategic talent management begins with corporate vision and strategy. Through the right combination of recruiting, selecting, managing, developing, and succession planning, a globally inspired workforce can be developed to provide the organization with higher productivity, retention, and ultimately, superior results. According to Jennifer Nguyen, Ph.D., an organizational psychologist with Colarelli, Meyer & Associates, St. Louis, MO, with expertise in international talent management, “a company’s vision and strategy define the competencies needed to achieve the company’s plans. The competencies required then define how and where we recruit, how we select, how we manage performance, on what basis we develop and promote, and MOBILITY/OCTOBER 2010 21
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“A COMPANY’S VISION AND STRATEGY DEFINE THE COMPETENCIES NEEDED TO ACHIEVE THE COMPANY’S PLANS. THE COMPETENCIES REQUIRED THEN DEFINE HOW AND WHERE WE RECRUIT, HOW WE SELECT, HOW WE MANAGE PERFORMANCE, ON WHAT BASIS WE DEVELOP AND PROMOTE, AND HOW WE RETAIN TALENT.” how we retain talent. International talent management is more challenging than domestic talent management because there is the culture of the host country, in addition to the expectations of the role and culture of the company, which must be considered. All three of those factors define what it takes to be successful in the role.” In today’s global marketplace, one important traditional means of developing talent, spreading culture globally, and filling required gaps is through the transactional function of international assignment programs (as well as international local hires). It is only recently, however, that employers are asking themselves the tough questions about how to best use international assignment and local hires to truly optimize the management of talent. There are costs associated with such tactical interventions, and there is always the question of return on investment (ROI). According to Jose Segade, cofounder of the RES Forum, an independent community of thought leaders in global mobility, some of these questions include: 22 MOBILITY/OCTOBER 2010
• What is the true driver behind the assignment? Is there really a distinct business need that cannot be resourced from within the home country in a cost-effective manner? • If the assignment is developmental, does it provide significant international exposure/change of environment to an individual that would further develop existing skills and potential? Are they exceptional candidates and right for such an assignment? • Will the assignment provide substantial/beneficial knowledge transfer between locations and businesses? Will it help us grow as an international organization in the direction we want to go? • What is the actual cost associated with the assignment and what is the value that the assignee brings to the host location and to the development of a truly global organization; do the sums add up? • How do we want assignments to be perceived within the organization? On the one hand, are they a reward for our top talent who are eager to undertake them, or are they seen as “doing the business a favor?” on the other hand?
Because most international assignments fall into the areas of developmental, market-building, technical/skills transfer, and executive leadership, the implications for managing talent can become complex, especially when we examine costs and ROI. In addition, an increasing number of companies are offering different policy types based on the type of move. Although different packages can be effective, care must be taken to ensure that a cheaper, “expat-lite” package for a developmental assignment does not eliminate the elements proven to support successful assignments such as intercultural training, transition support, and repatriation support on return. To invest in a developmental or executive assignment without a broader talent management strategy, including the proper support on assignment, could be financially or strategically disastrous should failure or retention issues come into play. The costs associated with an international move, viewed transactionally, often are enough to raise eyebrows at the highest levels, and most of these costs are associated with the transactional pieces of mobility (box
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moving, housing and taxes, salary differentials, cost-of-living adjustments, immigration and transportation issues, school and education expenses, and the like). It is because of the expense of international assignments that, historically, one of the primary goals of mobility groups has been to manage and cut costs. However, when viewed strategically, these “costs” become investments in talent development and business objectives. Therefore, maximizing the investment rather than simply keeping costs down should truly be the focus. It still is important to spend wisely, but selecting the right people, setting them up for success, and bringing them “home” (or onto the next opportunity) successfully is equally, if not more important, in the long run. Most studies show that more than 50 percent of assignees leave the company within three years of returning home—a huge cost transactionally, and an even greater cost when viewed strategically. Retaining these individuals based on the application of a talent management strategy suddenly reduces the real cost associated with managing that talent. In addition, a successful talent management strategy will ensure that the returning international assignee will share his or her global knowledge and skills throughout the entire organization. This is the real measure of the investment that the company made when it moved its talent abroad, and represents a much more valuable return on that investment. This is made possible by moving beyond a transactional “mobility” perspective to a strategic talent management vision.
KEY TRUTHS IN STRATEGIC TALENT MANAGEMENT
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very employer is unique, which means that, depending on the business, the inputs will be diverse and different levers will need to be pulled in response to all manner of concerns, such as market conditions, stakeholder expectations, and business requirements. A handful of key “truths” about strategic talent management do cut across industries and geographies. According to Jennifer Nguyen, Ph.D., an organizational psychologist with Colarelli, Meyer & Associates, St. Louis, MO, these are: • The difference between success and failure gets finer and finer as one moves from middle management to senior executive positions. • The use of multiple assessment methodologies creates a stronger selection process. Each methodology brings different strengths to the prediction process. • Filling international positions from in-country candidate pools is more challenging and risky than filling domestic positions from local candidates. Filling expatriate positions is most challenging and risky. • The primary determinants of expatriate success include familial factors, support systems, stress tolerance, self insight, adaptability, and relational skills, and all are affected by cultural differences. • The transactional cost of a failed expatriate assignment can reach (and sometimes exceed) USD$1 million. The strategic cost is significantly greater.
Even the Transactional Bits Benefit When Viewed Strategically While most industry professionals agree that improved tracking of assignment failures (and creating better definitions of what constitutes a “failure”), retention on return, and the cascading of global skills and knowledge throughout the organization all are desirable outcomes of a strategic perspective, a proper talent management strategy also can benefit the “nuts and bolts” services—and the “soft services” in particular—that are offered to support the assignment. For example, much of what currently is offered for support on assignment is done immediately surrounding the actual relocation, which is why the process becomes more transactional than strategic. With a more holistic approach to the
services that support the actual talent development on assignment, however, the mobility process truly can become part of the talent management process. Ideally, for corporations intent on taking a more holistic approach to global mobility, it begins before anyone even raises their hand for an international assignment opportunity. Organizations need to establish a global mindset internally and support the development of global leaders through intercultural training and awareness programs specifically designed to develop the global competency skills that all employees in the organization—not just the international assignees—need to have. Dr. Mansour Javidan, Ph.D., dean of research at Thunderbird School of Global Management, Glendale, AZ, and creator of the Global Mindset MOBILITY/OCTOBER 2010 23
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ON THE WEB
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or more information on talent management, visit www.WorldwideERC.org:
• “Balancing Talent Management and Costs in a New Economy—New Concepts in U.S. Domestic Relocation” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/ 0909-abbey.aspx • “Selection and Global Talent Management” www.WorldwideERC.org/Resources/MOBILITYarticles/ Pages/0509-kozloff.aspx • The Necessary Collaboration Between Global Mobility and Talent Management for Developing Global Leaders www.WorldwideERC.org/Resources/MOBILITYarticles/ Pages/1109-caligiuri.aspx
Inventory, defines the global mindset as, “the set of individual characteristics and qualities that help you do a better job of influencing people who are different from you.” Global leadership, therefore, is “a process of influencing individuals, groups, and organizations that are different from you.” Success in global roles and international assignments in particular demands proficiency in this area. If the organization emphasizes expatriation as important for growth, then building a pool of potential candidates whose mindset and the potential for challenges can be assessed in advance becomes a long-term approach to sending the best candidates on assignment. This practice can be a part of a strong internal career development initiative, where people plan and recognize how mobility—particularly global mobility—can play a part in career development/career manage24 MOBILITY/OCTOBER 2010
ment. Equally important in the career development process is the planning of the employee’s career at the end of an assignment. With such a low retention rate post-assignment, implementing an ongoing career management initiative will help both the employee and company to think about the future.
Leveraging the Investment in Global Skills to Create a Global Mindset Assessment and decision-making assistance can benefit the employee, as well as the employer, by developing for both parties a better understanding of the potential challenges that can surface while on assignment. Companies might use a formal assessment for candidate selection, and individuals might use it to better understand their strengths and weaknesses or the potential challenges presented by living and working in a foreign culture, such as spouse/ partner career concerns.
Understanding these issues can aid employees addressing them proactively or deciding that the risk of frustration, or even failure, are too great, in which case they could end up declining the assignment. Either way, the employer benefits by having a better prepared assignee or, even more important, averting a failed transfer. While classic international assignment failures are easily identifiable by early returns, failed performance, collapsing families, and the like, more subtle measures of failed assignments, commonly known as “brownouts” (characterized by underperformance, unhappy personal relationships, and missed business opportunities because of the inability to manage cultural differences), are more difficult to identify and can be more costly in the long run. Once the decision to accept the assignment is finalized, there are several additional programs that can help ensure the success of the assignment. For instance, mobility transition assistance for both the employee and family is one intervention that can help create a smooth transition and faster acclimation to the new location. Mobility transition assistance helps career-oriented spouses and partners competing for employment in an international marketplace and supports the employee and family with settling into the new location on a long-term basis. This type of assistance addresses two of the top three issues relating to assignment failure. According to the Brookfield Global Relocation Services’, Woodridge, IL, 2010 “Global Relocation Trends Survey,” respondents cited spouse/partner dissatisfaction (65 percent) and family concerns (40
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percent), in addition to the inability to adapt (47 percent), as the main causes of assignment failure. These reasons also are top challenges experienced in any assignment, according to the same survey. In addition to job search assistance, which can be a critical success factor for dual-career families, these types of services address the practical and emotional needs of relocating families. This is accomplished by providing customized research about reestablishing life in the new location, as well as providing emotional support for spouses/partners trying to figure out, “how can I make this experience about me, too?” The Interchange Institute’s, Brookline, MA, study, “Many Women Many Voices,” indicates that the number one issue confronting accompanying spouses/partners on assignment is a loss of identity. Mobility transition assistance directly addresses this by providing proactive life and career coaching. The study recommends support for the family not only for the benefit of the spouse/partner, but also for the benefit of the company. By reducing the stress of the family associated with relocating internationally, the employee is better able to focus on the new job and achieve higher levels of productivity sooner. Research indicates that an hour a day can be spent on family issues for the six months following a move, so productivity savings easily can reach USD$10,000 by proactively supporting family issues through mobility transition assistance. Intercultural training is an important intervention that should be initiated prior to departure and, ideally, throughout the assignment, which can have a major effect on the
success of the expatriate. By offering this either immediately prior to or immediately following arrival in the host country, individuals and their families have a better framework to not only understand the new culture, but also how their own, and their own personal ways of adapting and working, compares to it. Participating in intercultural training sessions can address the employee’s inability to adapt to the destination. Intercultural training is a process, not a one-time event, and at each stage in the international assignment there needs to be an effective intercultural support intervention that addresses both the family and assignee work needs at that moment. Typically, pre-departure training resets the barometer of expectations;
post-arrival training and throughout the assignment typically address immediate needs and issues as they arise; and trainings prior to return or onward to a “next move” typically leverage the intercultural learning already experienced to the challenges of either a third country or the unique issues associated with returning “home.” In all cases, intercultural interventions can take a variety of forms like traditional training, supportive coaching, webinars for ongoing learning, and online cultural adaptability assessments. Because “assignment failure” can be difficult to classify, perhaps the more critical benefit to offering intercultural training is the faster return on the investment that results. By providing insight into the inner
MOBILITY/OCTOBER 2010 25
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MANAGING A GLOBAL ORGANIZATION TO SUCCESS IN THE 21ST CENTURY IS A JUGGLING ACT OF HUMBLING PROPORTIONS, WHERE GREAT RESOURCES AND REWARDS ARE AT GREATER RISK THAN EVER BEFORE. workings of the host country, an assignee can better identify and address issues as they come up. This can save valuable time and resources and add to the effectiveness and productivity early on, particularly in sales or leadership functions. The opportunity cost to the bottom line of not providing such services is truly unquantifiable. The initial introduction to intercultural issues from an overall perspective, as well as dealing within the host country, is important to provid-
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ing a conceptual framework for living and working in a new culture. At the same time, research indicates that the best way to retain and apply learning is through on-the-job development. Therefore, cultural coaching is a successful intervention for key positions and for developmental purposes, especially when initiated as a followon to successful intercultural training. Coaching provides a framework for setting and achieving specific goals within the cultural context of the international assignment. It
addresses both dealing with specific, identifiable issues while taking into consideration the cultural implications. Most important, this support occurs as issues arise and can be implemented on a project basis or in response to immediate needs.
And, of Course, Returning ‘Home’ It should be noted that this model is based on the more traditional long-term assignment versus the “global citizen” that takes ongoing back-to-back-to-back assignments.
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SUCCESS IS ACHIEVED BY BALANCING RISK AND REWARD, AND MANAGING THESE TRANSACTIONAL COMPONENTS WITHOUT A TALENT MANAGEMENT STRATEGY RAISES RISK AND REDUCES REWARD; MANAGING WITH A STRATEGIC VISION, HOWEVER, WILL AID IN CREATING A PROSPEROUS FUTURE FOR GLOBAL ORGANIZATIONS. However, we know that returning “home,” even when viewed only transactionally, can be the most risky and costly aspect of the international assignment. Viewed strategically, the costs and benefits associated with a successful repatriation increase exponentially. The “Global Relocation Trends Survey” states that 38 percent of assignees leave the company within one year of return, and 23 percent leave during the second year post-assignment. While the above survey states that 92 percent of companies have informal repatriation discussions, clearly the process generally is not having the desired effect given the traditionally high attrition rates following an assignment. Truly effective repatriation planning includes career management discussions that take place prior to departure; supports ongoing networking with key managers and leaders in the organization, as well as formal or informal mentoring; provides formal support in not only just getting home and finding an appropriate job, but long-term career possibilities with the company; and 28 MOBILITY/OCTOBER 2010
invites the family to participate in personal and cultural preparations. Repatriation support plays a significant role in readying the employee and family for their return home. Many who have gone through the process indicate that repatriation is more challenging than expatriation. To ensure a smooth transition with minimal disruptions that can affect productivity, offering preparation in the form of a workshop or one-onone sessions can help individuals plan for the challenges that lay ahead. Ongoing support in the form of relocation transition assistance for the employee, spouse, and family also can help make a smooth transition home and complete the cycle to getting resettled and feeling a part of the community once again. This can be of particular interest to spouses/ partners who are career-oriented, but were not working (and in many cases, legally prevented from doing so) during the assignment. Dualcareer support in this case can be critical to positioning a “gap” in a résumé. Ultimately, by addressing these personal issues proactively, the
company is retaining a more productive employee returning home.
From Transaction to Strategy Managing a global organization to success in the 21st century is a juggling act of humbling proportions, where great resources and rewards are at greater risk than ever before. Successfully managing the risks, benefits, and assets associated with creating a globally effective organization can be achieved only through an integrated, holistic strategy that maximizes the return on the investments being made, and that clearly and effectively addresses the issues of managing the talents of all those involved in the endeavor. To do anything less puts this endeavor at risk; the rewards will go to those who understand that the global future is not a transactional event, but the result of a strategic management of critical talent. Dean Foster is founder and president of DFA Intercultural Global Solutions, New York, NY. He can be reached at +1 718 287 9890 or e-mail dean@deanfosterassociates.com. Lauren Herring, CRP, SGMS, is president of IMPACT Group, St. Louis, MO. She can be reached at +1 314 392 0658 or e-mail laurenherring@impactgrouphr.com.
last_member profile07 9/14/10 12:17 PM Page 3
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The Global Mobility and Talent Management Partnership Opportunity BY SCOTT SULLIVAN
30 MOBILITY/OCTOBER 2010
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As global employee mobility and talent management undergo considerable change in the current worldwide economy, these two corporate functions appear to have a unique opportunity to develop a partnership that aids the organization’s ability to achieve its business goals through the strategic management of its human capital. Sullivan writes that there are both small and large steps to take to make your global mobility program a more effective talent management partner.
T
o appreciate the heightened interest in current initiatives regarding the integration of global mobility and talent management within many organizations, it is helpful to understand from where it originates. Talent management acknowledges that people—not just processes and products—are a critical component of an organization’s business success. It is defined sometimes strategically: the return on investment of human resources; and sometimes by the sum of its parts: the recruitment, selection, identification, retention, management, and development of personnel considered to have the potential for high performance.
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Global mobility also has two definitions. Like talent management, it is most often defined by what it does: helping employees move around the world. More recently, global mobility leaders have sought to define global mobility by what it seeks to achieve: to support the human capital needs of the business that requires employees to move around the world. A few extra words can mean a big difference in strategy and direction. Clearly the two have a lot in common from the start: to ensure that the investment the company makes in its employees is maximized. This is, however, not a new objective, so why has it become a top-tier focus for so many companies in recent times? In the past 10 years or so, there has been a major shift in how global companies staff their global operations and positions. As we have seen for a number of years now, companies recognize that they need their leaders to have international experience: to have lived and worked outside their own country to gain both practical skills and a global perspective. This shift has necessitated a repositioning of talent management from a headquarters
to a global approach. Rather than almost exclusively looking to headquarters or major established locations to staff managerial and leadership positions, companies are now finding some of their key talent in their emerging markets. Global mobility has been undergoing a similar transformation. The days of long-term assignment expatriates and inpatriates is changing or dwindling for many global companies. Global mobility leaders recognize that their mobility program must align with the objectives of the businesses they serve. In large and diverse organizations, this may dictate many different approaches to serving the globally mobile population, and the emergence of commuter assignments, project assignments, developmental assignments, and many others is an embodiment of this transforming approach. In many of these global organizations, even the baseline reason for assignments is changing. As one global mobility leader at a Fortune 200 consumer electronics products company recently said, “now, 70 percent of assignments are
job-based and 30 percent are careerbased. The company is looking to flip those concentrations.” Given this breadth of change, both underway and anticipated, it becomes clear that these two corporate functions—global mobility and talent management—have a unique opportunity to develop a partnership with an integrated, globally effective approach that helps the organization realize its global business objectives through the management and advancement of their major assets: their people. The common components of talent management and global mobility are well-aligned in many ways. For example, the talent management function of recruitment has two global mobility counterparts— candidate pool development and external new hire support. The chart below illustrates how the components of both functions potentially can align. Despite this rather straightforward alignment, only 4 percent of corporate mobility programs are integrated directly with talent management functions, according to Brookfield
INTEGRATION OF TALENT MANAGEMENT AND GLOBAL MOBILITY
Talent Management Recruitment Selection Identification Retention
Global Mobility Candidate pool development External new hire Assessment/selection Pre-departure preparation
Management
Arrival on-boarding/assimilation
Development
Ongoing assignment performance management. Preparation for repatriation Repatriation
Source: Brookfield Global Relocation Services, Inc.
32 MOBILITY/OCTOBER 2010
Retention
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Global Relocation Services’, Woodridge, IL, “2010 Global Relocation Trends Survey Report.” Therefore, a key initiative for many global mobility leaders is to identify where and how global mobility services can be used to support their company’s talent management objectives. Global mobility programs are providing career management-related services that align with their organization’s talent management initiatives by ensuring clarity in assignment objectives pre-departure, providing repatriation support during and post-assignment, supporting career planning for assignees, and creating formal links between mobility and talent management. When assignees are surveyed by their organizations, it is not uncom-
mon to find that the reality of the job expectations now that they are on assignment is not consistent with the assignee’s pre-departure expectations. This disconnect can negatively affect the assignee’s on-the-job satisfaction and the performance management experience while on assignment in the destination location.
Repatriation Support During and Post-assignment Repatriation often is one of the least-developed aspects of a global mobility program and, at the same time, the inability to provide a formal repatriation process that is linked to career planning can have a strong negative effect on the employee’s
Corporate Example A: Clarity in Assignment Objectives Pre-departure
O
ne cutting-edge organization has ensured role clarity for assignees and their managers: a global manufacturing company has implemented an assignment authorization form that includes a field for the assignee’s job description and assignment objectives. With this change to the authorization form, the assignee, the home and host manager, and the HR representative are all required to sign the form agreeing to the job description and objectives prior to the start of the assignment.
MOBILITY/OCTOBER 2010 33
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Corporate Example B: Repatriation Support for Receiving Managers
T
here are examples of global mobility programs that have implemented a more concrete infrastructure to better support the repatriation and career-planning processes. The following is an example of one approach that a global mobility team can take to close the existing gap in this area. Companies have found that the repatriation process requires action steps, not only on the part of the assignee, but also the key stakeholders for repatriation: HR, the mobility team, and the receiving manager. Many receiving managers have never been on an international assignment and need guidance to understand their role and responsibilities in on-boarding the repatriated assignee onto the team, understanding typical repatriation challenges, and valuing the return on investment that the organization gains by retaining employees with international experience—in terms of the cost of the assignment and the experience that the employee has gained. Mobility program managers have implemented guidelines and/or training workshops for receiving managers of repatriating assignees in order to reinforce and support their role in the repatriation process. Clear guidelines and/or training can be a quick win to enhance the mobility program and the company’s assignment related return on investment.
satisfaction and retention at the end of an assignment. This negative outcome to an assignment also can negatively affect an organization’s potential candidate pool for filling future assignment needs because potential candidates see or hear about repatriated assignees who are unhappy with their post-assignment role. One of the central reasons for the gap in linking repatriation to career development, and a global mobility team’s inability to support this highly strategic aspect of the assignment process, is that once the assignee returns from the assignment, the individual is no longer officially part of the global mobility program. In the “2010 Global Relocation Trends Survey Report,” corporate mobility professionals were asked to rank their critical challenges for assignments. The results of this survey indicated three of the top six challenges were related to repatriation and career planning: career management (ranked 4th), retention of expatriates (ranked 5th), and inability to use experience after repatriation (ranked 6th). 34 MOBILITY/OCTOBER 2010
Career Planning for Assignees In addition to having formal repatriation processes in place to support the post-assignment role, mobility programs can take the strategic lead on the gap that exists in many organizations in terms of linking an international assignment to an employee’s larger, more long-term career path. One approach some companies have taken is to use any template that
already exists for the general employee population regarding discussions on career planning and adjust that template to include assignmentrelated fields or topics. If the organization does not have a corporatewide career-planning process in place, creating a discussion guide for assignees and their receiving managers regarding career topics may be the solution.
Creating Formal Links Between Mobility and Talent Management Today, global mobility as a talent management partner can manifest itself in many different ways. For some organizations, it means creating formal links, such as meeting regularly with the talent management area of the organization. While a few organizations have successfully moved their global mobility program under the talent management umbrella, many more companies are working to create formal links, and some already have them. Given that many corporate talent management programs are in the
Corporate Example C: Clarity in Assignment Objectives Pre-departure
A
s a means to strategically provide a tool for assignees and their receiving managers to use for career path planning that would include assignmentrelated experiences and development, a technology industry organization has created a discussion guide that provides the assignee and his/her manager with questions and topics to cover for significant milestones in the assignment cycle: pre-decision, pre-departure, annually during the assignment, pre-repatriation, and post-repatriation. The guide enables the assignees and managers across the organization to have a consistent and meaningful discussion regarding the direction of the assignee’s career as a result of the international assignment experience. This tool also ensures that the experiences on the assignment are considered by the assignee and receiving manager in terms of post-repatriation roles and long-term career decisions. Without the tool, the discussion may be less structured or simply ignored.
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Corporate Example D: Formal Links Between Global Mobility and Talent Management
O
ne company said, “we have meetings with the vice president in charge of talent management and are beginning to incorporate and integrate strategies. Going forward, global mobility will be included in ongoing organizational development and talent management team meetings.” A second company said, “we made a significant proposal for a new framework for global mobility and got the green light to implement a program that changes how we do things—it will be less about policy and more focus on eligibility, ROI requirements, flexibility in spending, etc.; we sit with talent management already.”
early development stages and that most global mobility programs have a longer history and experience on which to rely, it seems prudent to point out that there is a responsibility for global mobility leaders to be proactive in the quest to partner the two functions. There are many perspectives that global mobility can bring to the table to demonstrate
36 MOBILITY/OCTOBER 2010
the value of integration, such as: • Recognition that the cost/ benefit of an assignment may not be measurable solely during the course of the assignment, making postrepatriation value a critical element of the assignment experience. • As companies recognize that they have cut as much “extraneous” cost from their assignment packages
as possible, attention is turning to why they send their people on assignments. • More companies have fewer assignments to/from headquarters but more assignments into/out of locations elsewhere. Employees who take these assignments do not necessarily receive the natural visibility that the headquarters employees have. • The increasing availability of regional talent—again, these employees may not be part of the mainstream and their international experience may not be maximized by the company. • The development of global leaders has become a priority and companies need to plan and nurture the global education of their high potential employees.
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On the Web Visit www.WorldwideERC.org for further talent management information: • “Global Talent Management and Global Mobility” http://www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0209hogan.aspx • “Industry Spotlight: Talent Management in the Age of International Assignments” http://www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0909-industry-spotlight.aspx
As talent management establishes a stronger foothold in organizations, as international assignment objectives become more strategic, and as international assignment management becomes more HR- and less compensation-focused, expect to see more organizations making more of the connections between talent management and global mobility to ensure that the benefits of these significant investments is realized. Consider this experience of the mobility team at a global pharmaceutical company: “two years ago we moved from the compensation and benefits (C&B) group to the talent management group. As much as it was natural to be part of the money trail in C&B, being part of the talent
groups helps us feel more connected to why people are selected and we better understand the talent agenda, not just the numbers.” Creating a more integrated global mobility program can seem an overwhelming task. As it often is difficult to implement many organizational changes, for global mobility the shift often relies on influencing other parts of the organization to buy into a change that potentially increases global mobility’s visibility and role. Being more strategic also requires a global mobility team to be made up of more strategically minded team members. Some companies are more prepared for this shift than others. In an ideal scenario, positioning global mobility as part of the talent
management team may be the best way to shift the mindset and behaviors around international assignments to a more strategic place. However, this is not the norm for most companies and, therefore, should not be seen as the only way to partner. Wherever an organization’s global mobility program sits, and whatever the stage that a particular organization is at in terms of readiness for change, there are small and large steps that can be taken to make the global mobility program a more effective talent management partner. Scott Sullivan is executive vice president, global sales and marketing, for Brookfield Global Relocation Services, Inc., Woodridge, IL, and a member of the MOBILITY Editorial Advisory Committee. He can be reached at +1 630 427 2062 or e-mail scott.sullivan@brookfieldgrs.com.
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BY CHRISTINE WILSON The task of developing a talent management system that addresses assignment return on investment (ROI) for expatriate assignments, the war for talent, leadership development, employee retention, and legal compliance is complicated by rapidly changing economic and geopolitical factors. Delegates at the Worldwide ERC速 2010 Global Workforce Summit: Focus on Asia-Pacific in Hong Kong, China, tackled many of these issues.
42 MOBILITY/OCTOBER 2010
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BY CHRISTINE WILSON Developing a talent management system that addresses assignment return on investment (ROI), the war for talent, leadership development, employee retention, and legal compliance is complicated by rapidly changing economic and geopolitical factors. Delegates at the 2010 Global Workforce Summit: Focus on Asia-Pacific in Hong Kong, China, tackled many of these issues.
T
alent management is frequently discussed by business leaders in today’s global environment. Some organizations have well-developed talent management systems, and many more are attempting to build such a framework. In March, at the Worldwide ERC® 2010 Global Workforce Summit: Focus on Asia-Pacific, this topic was central to many of the sessions that took place. Several themes ran through these presentations that give us a glimpse of how the concept of talent management is evolving; how the talent strategy is closely intertwined with mobility practices; and how it is being viewed in the Asia-Pacific context. Some of these themes included finding ways to measure ROI for an expatriate assignment; means of attracting talent with a shortage of skilled labor; development of global leaders; and compliance with employment, immigration, and tax regulations. Ideally, a talent management system should address all of these concerns.
Mobility ROI—Can It Be Measured? According to Cathy Loose, Asia-Pacific global mobility leader for Mercer, Tokyo, Japan, there are some things employers can do to measure the ROI of assignments. In a Summit presentation on the topic, she noted that the place to start is by measuring costs. She said that Mercer’s research shows that only 31 percent of companies keep information on international assignment costs in a centralized database and that only 5 percent have any kind of process for tracking ROI of such assignments. The cost of an average expatriate assignment is oneand-a-half to four times the cost of a local employee.
MOBILITY/OCTOBER 2010 43
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ON THE WEB • To set up an e-mail alert for 2011 Global Workforce Summit: Focus on Asia Pacific registration, please visit www.WorldwideERC.org/Events/Pages/apac11.aspx • Did you attend the 2010 Summit? Visit www.WorldwideERC.org/Events/Pages/apac10.aspx to view a slideshow of the meeting.
Loose outlined a holistic approach to ROI measurement that requires identifying assignment objectives aligned with the overall business strategy for each assignment and ensuring that the objectives consider emerging trends, the profile of the available workforce, and a variety of factors from the employer, employee, external, and cost perspectives. She outlined variables to examine and described an analysis system for “mapping the flows that determine what your workforce looks like.” She noted that expatriate assignments are but one of several practices influencing employees and the business. Management Consultant and Leadership Coach Chin Teik Cheah took a look at what goes on in companies in a practical hands-on workshop titled, “Managing Talent in the New Economy.” He noted that an analysis of ROI does not generally justify the kinds of packages that are provided to most expatriates. He also noted that times are changing and that the packages are becoming less lavish. He estimated that a careful analysis of the expatriate package could easily yield a 30 percent savings for most companies. This savings against a backdrop of effective communication of objectives, frequent feedback designed to help employees succeed, and measures of success will yield improved ROI. He noted that it is important to understand the talent market. If you are hiring in a market characterized by a talent shortage, you may have to 44 MOBILITY/OCTOBER 2010
compromise, but you need to understand the compromises. He also urged managers to view retention as a process that starts when the employee does. Pay for performance and provide feedback to help employees succeed, he advised.
• Hire for today and tomorrow. Most companies hire with their immediate objectives in mind and then allow employees to progress until they fulfill or exceed their objectives and then become stuck, he said. Assess candidates for their ability to progress and grow into future leadership roles. • Hire people with skill sets and values you need. Service is hard to train and values cannot be changed— they are ingrained.
Development of Global Leaders
Compliance as a Talent Management Objective
One of the often-cited reasons for expatriate assignments is to develop global leaders. A full 70 percent of respondents to a Worldwide ERC® survey conducted at the 2010 Summit indicated that the importance of global leadership development in their companies is increasing. Research conducted by Worldwide ERC® and researchers from Thunderbird University, Glendale, AZ, found that there were three major components to successful leadership in a global setting: intellectual capital, psychological capital, and social capital. Development, then, of global leaders requires identifying employees with these assets and helping them develop through experience and training. Intellectual capital includes knowledge, skills, understanding, and cognitive complexity. Psychological capital refers to cultural sensitivity and psychological fortitude. Social capital refers to the expatriate’s ability to build trusting relationships with local stakeholders, whether they are his or her employees, supply chain partners, or customers. When discussing his own approach to hiring potential leaders, Cheah suggested two basic principles:
Legal compliance, whether it is with tax, employment, or immigration laws, is critical for businesses and is complicated considerably when employees are conducting business across borders, whatever the objective of the assignment. Although the frequently used term “stealth expatriate” seems to imply deliberate intent to avoid the rules and costs of legal compliance, in fact, most often stealth expatriates are the result of failure to understand the legal issues that govern the particular employee’s activities and failure to track and thereby identify employees who may be subject to regulatory requirements. This may be very understandable with the number of jurisdictions, varying complexity of regulations, and frequency with which they change, but that is small consolation when a company must deal with a legal issue that may have begun quite innocently but has significant monetary penalties. The survey conducted at the Summit indicated that immigration compliance topped the list of legal concerns. Attorneys Brendan Ryan from Fragomen Global, and Jennifer Van Dale with Baker & McKenzie,
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teamed up at the Summit to provide some guidance. Ryan noted that the global recession has resulted in unprecedented tightening of immigration requirements in many jurisdictions and that this tightening is driven largely by domestic political issues. As a result, work permits are harder than ever to get in many locations in Asia and around the globe. Penalties for noncompliance have become increasingly arduous and costly both in terms of fines and negative publicity, he observed. Ryan recommended that companies adopt an immigration compliance policy; appoint a corporate compliance officer; implement a global immigration program; educate key corporate players including HR,
46 MOBILITY/OCTOBER 2010
legal, business leaders, and project supervisors; and plan strategically for each destination. Van Dale provided specific insights into legal issues in Australia, China, Hong Kong, Japan, Singapore, and Taiwan. The variety of issues in these few locations underscored the importance of building a system for ensuring that the specifics of each expatriate assignment are examined through the lens of all applicable laws and regulations of both the host and home locations. Developing a talent management system that addresses assignment ROI; the war for talent; leadership development; employee retention; and legal compliance is no small task. In today’s global environment, it is complicated by rapidly changing eco-
nomic and geopolitical factors. Yet, for global organizations seeking to grow and fulfill their strategic objectives, it is mandatory. Sessions like those at the 2010 Summit provided a foundation for those in attendance. The body of knowledge about all of these important issues is growing and thought leaders are continuing to share their expertise at Worldwide ERCÂŽ events. Join us at the 2011 Global Workforce Summit: Focus on AsiaPacific in Shanghai, China, March 8 and 9, where the latest on these and other important issues will be discussed. Christine Wilson is vice president of marketing and web strategy for Worldwide ERCÂŽ, Arlington, VA. She can be reached at +1 703 842 3449 or e-mail CWilson@WorldwideERC.org.
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huiskamp_MOBILITY 9/15/10 4:03 PM Page 2
It Never Rains in Seattle BY RONALD HUISKAMP, GMS, AND KARI HAMILTON
48 MOBILITY/OCTOBER 2010
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Huiskamp and Hamilton provide an introduction to Seattle’s history, economy, housing market, and culture, all in the context of the area as a relocation and recruiting destination. Should you be in town for, say, a mobility conference, they say be sure to check out the box on page 50 with suggestions for things to do.
A
bout that rain… it is unlikely that this article, or its title, will change Seattle’s reputation of being akin to a wet sponge. Sure, there is a reason they call it the “Emerald City” in the Evergreen State. It takes some rainfall to grow all of that greenery around here! Yet, the problem is not really the amount of rainfall. New York, Houston, Atlanta, and even sunny Miami all get more annual precipitation than Seattle. This city’s bad rap is that it takes so much longer for rain to fall! Seattle weather reports can be quite bewildering and somewhat amusing. Imagine commuting to work in the midst of a downpour with the weather guy on the radio predicting “a chance of rain today.” Right. Equally useless is the “rain changing to showers” forecast. Yep, that is still damp stuff falling from the skies. And do
MOBILITY/OCTOBER 2010 49
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Recommended not be fooled by “partially sunny,” which is really code for “mostly cloudy.” On the upside, those clouds and associated drizzle only last for nine months out of the whole year! The locals will tell you that there is no better place to be for the other three months of sunny bliss. That is when the mountain peaks of the Cascades, Olympics, and Mount Rainier define the skyline and everyone remembers why they love this place. The mountains, the water (bodies of water, not rain…) and the greenery of the region are breathtakingly beautiful. But enough about the weather.
Early Relocation It all started in 1851, when a group of lumberjacks who were supposed to be on a short-term assignment ended up staying and founded Seattle. It was named after the leader of the indigenous Duwamish tribe, Chief Sealth. The area had first been “discovered” in the late 1700s—rediscovered, to be more accurate, since the Chief and his people had been around for a while— by the British explorer Captain George Vancouver. The latter does deserve credit for making extremely accurate records of the area’s coastal waters while sailing his HMS Discovery up and down present day Puget Sound. Not being accompanied by his wife and children, he decided to sail a bit further and, in the process, named many of the Pacific Northwest’s waterways, mountains, and towns after his officers, crew, and friends. Captain Van himself had two cities and an island named after him. Not bad for a commuter assignment.
Pioneers and Entrepreneurs After initially flourishing as a timber town, the next 150 years of 50 MOBILITY/OCTOBER 2010
for Your Weekend in the Emerald City Food Fun Fine dining – Canlis, Seattle Space Needle, El Gaucho, Palisade Waterfront Restaurant Tom Douglas – Dahlia Lounge, Lola, Etta’s, Palace Kitchen Seafood – Blueacre, Steelhead Diner, Elliott’s Oyster House, Flying Fish, Waterfront Seafood Grill Asian fusion – Wild Ginger, Dragonfish, Wasabi Bistro Sushi – Shiro’s, Umi Sushi Miscellaneous – Ipanema (Brazillian Grill), Marrakesh Moroccan Restaurant, Purple Café (Wine and Cheese Flights), Sazerac Tasty Tours – www.savorseattletours.com
By Air, Land, and Sea Argosy Cruises www.argosycruises.com Seattle Seaplanes and Helicopter Tours www.seattleseaplanes.com Seattle Aquarium www.seattleaquarium.com Ride the Ducks www.ridetheducksofseattle.com Alki Beach (best views of the Seattle skyline from the other side of the sound!) Seattle Ferries (take a ride to Bainbridge Island!) www.wsdot.wa.gov/ferries
Only in Seattle Pike Place Market (do not miss the gum wall!) Olympic Sculpture Park Fremont Troll Space Needle Pacific Science Center Gas Works Park Underground Tour Seattle Boeing’s Famous Museum of Flight Experience Music Project Teattro Zinzanni! Seattle Art Museum
business history produced a cross section of industries. The Klondike Gold Rush turned the city into a transportation and supply hub, creating companies such as UPS, Nordstrom, and Eddie Bauer. This period was followed by a shipbuilding boom in the early 20th century, which, sadly, turned into a bust during the Great Depression. The transportation theme continued to evolve after World War II, when the aviation industry was created with
Boeing taking off. For the next few decades, the local economy largely depended on the well-being of the airplane maker. Though no longer headquartered in Seattle, Boeing remains the largest private employer in the area. Today, however, the region’s economy is increasingly diverse, with a healthy mix of both traditional and new economy businesses. Beyond Boeing, large employers in the former category include: the Port of
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Seattle, PACCAR (major truck manufacturer), Expeditors International (global logistics), and Weyerhaeuser (forest products). Newer industry sectors such as software, communications, bio-tech, gaming, Internet, and clean-tech have produced market leaders such as Microsoft, McCaw Cellular (now AT&T Wireless), Immunex (acquired by Amgen), ZymoGenetics, Expedia, and Amazon. Oh, and perhaps one more: the provider of your morning cocktail of non-fat, double-tall, caramel, nowhip, vanilla latte (there is coffee in there somewhere…), which started as a little bean roaster in Pike Place Market called Starbucks. As observed by Peggy Smith, SCRP, SGMS, Worldwide ERC®
CEO, “Seattle keeps gaining significance as the gateway to the Pacific Rim, and the area prides itself on being home to some noteworthy companies. It is an established commerce hub, increasing in wealth and consequence.”
Recruiting Talent Collectively, these companies developed an impressive local talent pool while churning out a few millionaires along the way. The latter, building on the area’s pioneering spirit, have started many new companies and non-profit organizations. All this entrepreneurial activity created a vibrant local economy that both required and attracted additional talent from around the world to move to the Seattle area.
According to the State of Washington Office of Financial Management, the area has experienced significant population growth during the past 20 years, with inbound migration outweighing departures in all but two years during this period. Although competition for top talent can be fierce, the appeal of the area certainly helps with recruiting efforts. As shared by Beth Sharpes, GMS, senior program specialist, Expedia, “when candidates come to town for job interviews, most end up accepting the relocation. It is an area that really sells itself. From its natural beauty and active lifestyle, to good schools and a robust job market, it is a great place to call home. Seattle always seems full of potential, positivity, and opportunity.”
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“I really believe that Seattle is a magical region. Yes, we have grey skies and lots of drizzly weather, but that’s Seattle’s ‘entry fee’ to such lush greenery and dazzling summers. It truly is one of the most beautiful spots in the world.”
Being Green The Emerald City owes its name for being green to more than just forestry. The National Resources Defense Council ranks Seattle number one on its “Smarter Cities” list. The list includes cities that strive “to be ‘smarter’—more efficient, sustainable, equitable, and livable.” Its ranking is based on, among others, a city’s score for air quality, green spaces, energy conservation, and recycling program. As noted in the July issue of MOBILITY, “It’s good to be green.” It turns out that having a reputation for being an eco-friendly city and employer is good for recruiting efforts, too. Johnson Controls recently completed a research study, conducted by its Global WorkPlace Solutions division, called “OXYGENZ, Generation Y and the Workplace.” The study noted that younger generations want to see evidence of their employers’ support for “recycling, green transportation, walking, and biking.” Welcome to Seattle! Biking and walking to work is a common practice. Many employers also encourage workers to commute by mass transportation, by either offering company-operated shuttle services or bus-pass programs. Washington State also is emerging as one the nation’s clean technology centers and recently ranked fourth in the country for venture capital investments devoted to clean-tech. Likewise, many local developers, both commercial and residential, are com52 MOBILITY/OCTOBER 2010
mitted to sustainable development by creating green buildings. One such example is Vulcan Real Estate (owned by Paul Allen, formerly of Microsoft), who is in the midst of a complete redevelopment of the South Lake Union area—the new home of Amazon’s corporate campus. Aside from receiving national recognition and awards for some of its office and apartment buildings, Vulcan also worked closely with the city to build the South Lake Union Streetcar.
Housing Market With much uncertainty remaining in the U.S. housing market, it is anybody’s guess what the future trends in real estate will be. What can be reported specific to Seattle is that the market fared relatively well during the past few years compared to the rest of the country. Although the area certainly experienced a correction in housing prices, the decline from its peak occurred much later and was not as severe as it was elsewhere. This can be attributed to the area’s sound economic fundamentals. The rise in home values before the market collapse was not driven by speculation, but by a strong economy, one of the nation’s highest percapita income levels, and demand that outpaced supply. As noted by Stephanie Quam, CRP, GMS, director of relocation, REO and client services with Prudential Northwest Realty, “Seattle has a great economic out-
look and has been mentioned by several national sources as one of the first areas expected to recover.” In fact, in a June report by CNN Money, Seattle was included on a list of seven cities predicted to post gains during the next 12 months—an estimated increase of 3.8 percent on a median home price of $371,000. Reliable predictions about rental markets are arguably even harder to come by. However, a recent report by the Special Assets and Loan Sales division of Marcus & Millichap forecasted a decline of apartment rents in the Seattle area of 2.1 percent for 2010. Even so, a tightening of available apartments and homes for rent has been reported, especially for rentals that are suitable for corporate transferees. Monthly rents for a typical twobedroom apartment in downtown Seattle range between $1,250 to $2,000. A four-bedroom house in the suburbs can be rented for $2,000 to $3,500. The Seattle area offers a diversity of lifestyles and residential neighborhoods that are truly unique. From high-rise apartments in Belltown, Victorians on Queen Anne, houseboats on Lake Union, to funky bungalows in Fremont and mansions in Madison Park, newcomers to the area will be pleasantly surprised by the options available. Although not every budget may afford a waterfront property or view of the mountains, the layout and varying elevations of the area almost guarantee views of
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the spectacular scenery from every neighborhood.
Schooling In general, the Seattle area offers very high quality public and private schooling options. That said, not unlike other large U.S. cities, the Seattle Public District is facing a number of challenges, including financial and leadership issues. Although this may affect the options for transferees wanting to live in the city, great public schools are available in neighborhoods such as Queen Anne, Magnolia, Green Lake, Laurelhurst and West Seattle. In addition, the city offers a wide selection of religious and secular private schools. Families often opt to live in the suburbs, where the Bellevue, Mercer
54 MOBILITY/OCTOBER 2010
Island, and Lake Washington school districts are located—all of which are excellent and enjoy high rankings nationwide. For the second year in a row, five Bellevue public high schools ranked on the 2010 top 100 list of an annual survey conducted by Newsweek magazine. The area also is home to a number of international curriculum schools, as well as a few schools with International Baccalaureate programs.
Culture Education matters in Seattle. It enjoys the reputation of being both America’s most highly educated and literate city (the latter being one of the primary reasons Amazon set up its “online book company” in this town). Braininess aside, Seattleites
are casual, down-to-earth, and love the outdoors. This laid-back attitude does not mean people do not work hard. Says Sharpes, “the atmosphere in the Seattle area translates into our office being more casual and collaborative, but the actual work that goes on is very intense. Our employees are extremely driven and sharp, which I find to be true throughout Seattle.” One reason the locals have an edge and intensity while at work may have something to do with the local coffee culture. Of course this being the hometown of Starbucks, there is no shortage of the black elixir. Locals are very discerning about their “java,” however, and the coffee scene includes many independent coffee shops and roasters. During the past decade or so, Seattle has developed a thriving food and restaurant scene that has been recognized and awarded by the leading food critics and magazines around the country. Certainly, the Northwest’s reputation for fresh seafood is well known. Many chefs in the area use local and organic ingredients for their menus, taking inspiration from Seattle’s homegrown restaurant pioneer, Tom Douglas. Today, practically every neighborhood offers a farmer’s market, some, like the one in Ballard, operating year-round. Good food is best accompanied by fine wine, of which there is also plenty available in Washington. With the state ranked as the second-largest producer of wine in the country, the area is home to some of the best vineyards. Conveniently, many have set up wine tasting locales that are within 30 minutes driving from downtown Seattle. The music scene is a vibrant one here and the Experience Music Project pays homage to many local
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musicians that include Jimi Hendrix, Dave Matthews, Pearl Jam, and Kurt Cobain. One finds a variety of local “underground” and jazz talent around every corner with venues like Triple Door, The Showbox, Jazz Alley, and even Pike Place Market. Equally synonymous with Seattle is the outdoors, and specifically outdoor activities. Regardless of the weather, locals enjoy skiing, kayaking, biking, hiking, boating, and anything else you can do while wearing fleece. On that last note, it is probably safe to say that Seattle will not win any fashion awards anytime soon. And they are proud of that, too. Smith summed up the cultural experience perfectly: “a lot of people aren’t aware of Seattle as a cultural
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arts center. It’s been dubbed ‘the new birthplace of Broadway hits’ for its ability to open shows like ‘Young Frankenstein,’ ‘Hairspray,’ and ‘Next to Normal’ that went on to rave reviews and long runs on Broadway. There is a thriving music, art, and dance community and a wealth of rich heritage that is woven into the fabric of the city… it has brilliant cultural vitality.”
As pointed out earlier, the locals pretty much enjoy the outdoors year-round, regardless of the weather. In the unlikely event that it does rain on your next visit, just act like the locals do and pretend that it does not. For the record, should you be carrying an umbrella with you, everybody here will know you are from out of town.
Climate
Ronald Huiskamp, GMS, is vice president of marketing and product development for Dwellworks, LLC, Cleveland, OH, and a member of the MOBILITY Editorial Advisory Committee. He resides in the Seattle, WA, area and can be reached at +1 425 896 0361 or e-mail ronaldhuiskamp@dwellworks.com.
Perhaps a few more words about the weather. Given the way Seattle is situated between two mountain ranges, it actually enjoys a very moderate and pleasant maritime climate. That means there are no real extremes: no hurricanes, tornadoes, heat waves, or freezing cold winters.
Kari Hamilton is national account executive for ABODA, Inc., Redmond, WA, and a member of the MOBILITY Editorial Advisory Committee. She can be reached at +1 425 864 1376 or e-mail kari.hamilton@aboda.com.
last_member profile07 9/14/10 11:59 AM Page 3
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g n i d n e y L r o t a l u d g e n a R s e g n a n o h t C c e f f E s e e e th nsfer r a r u T o Y d n a y t i l i b o M licy Po
gage t r o m f the o o the n d o , i o t o lu so, t ons. s i e evo t e h a t u r n s A conti y alte yee r y o r t t s a egul indu mplo r e d e n h that tt sa a e m r h r t u o s s f re st en write u a m osure b l y r c r s t i Ge s indu und d e o y r t i a l i g mob its ar terin m n i e l c e ms ang h c refor e e ately i r and f p o appr ed. s s e r add
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BY KAREN GERBA
T
he mortgage industry has changed dramatically during the past 20 years. With change, new monitoring vehicles became necessary to accommodate evolving best practices for mortgage customers. It became imperative that the industry as a whole develop consistent measures not only in providing the necessary disclosures, but also in using clearer, more concise loan terms throughout the mortgage process. The goals of reform are disclosure and fee change limits, mandating very specific regulations for lenders. Clearly stating fees and loan terms, as well as allowing additional time before closing if changes are made, are just some examples of how the industry is working to enhance the customer home financing process. The most recent regulations aim to bring transparency and consistency to the overall industry as well as equip customers with a greater knowledge of their mortgage, creating more informed consumers and successful homeowners. In fact, the U.S. Department of Housing and Urban Development (HUD) last year adopted the biggest reform in more than 30 years to the Real Estate Settlement Procedures Act (RESPA), which serves to help consumers proactively shop for credit services and eliminate kickbacks and referral fees that increase transaction costs. Effective as of January 1, 2010, all residential mortgage lenders and mortgage brokers were required to provide customers with a new, standardized Good Faith Estimate (GFE) meant to ensure consistency with an enhanced, easy-to-read document that clearly discloses loan terms and conditions. Primarily, the new GFE accomplishes the following: • answers common questions customers have about their loan (i.e. term, interest rate, pre-payment penalties, balloon payments, and closing costs); • consolidates closing costs into major categories and displays total estimated settlement charges prominently on the first page; and • limits the amount a fee can change if the consumer chooses the lenders service provider, and requires lenders and settlement service providers to correct errors and violations and repay customers any overcharges within 30 days of closing. HUD estimates that these improvements will lead to average savings of up to $700 in total closing costs per transaction.
MOBILITY/OCTOBER 2010 59
To access further information on the mortgage industry, visit www.WorldwideERC.org • “Mortgage and Loss-on-sale Strategies to Survive the Credit Crisis” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0309 connell.aspx • “Procuring Mortgage Services: Understanding RESPA and Other Compliance Elements” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/ 1207davis.aspx
$! '( #( &# ( $# ! ' $$! # & ' & # &-"$)#( $$! & ' + ! $" ' ! & # $ * &' )!()& ' & ! $)' ! ' # !( ' ( & ($ ( ) ( $# ! # ' $ ,% (& ( # !$ ! " ! ' &$" &$)# ( +$&! ) (# ! & # &$" ($ + ( # " & # )&& )!)" $)# $# ( (& ( $#' $ ( ! $)' $ ( & &( $ &- + & % &( $ ( # (+$& $ ' $$!' +$&! + +++ " &-"$)#( & -$) & & !$ ( # ($ & ' %! ' $#( ( &-"$)#( $$! $& )&( & # $&" ( $# $& ($ ' )! "%)' * ' (
60 MOBILITY/OCTOBER 2010
• Around the Worldwide ERC®: Worldwide ERC® and RESPRO® www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/ 0210-around-erc.aspx
In addition, for comparison and cross-checking purposes, the HUD-1 Settlement Statement (HUD-1) has been modified to incorporate a lineby-line reference to corresponding amounts on the GFE. Tolerances on changes to settlement charges between the GFE and HUD-1 are defined in three categories: Charges that cannot increase, which include the lender’s origination charge, point(s) for the specific interest rate chosen (after the rate has been locked), the adjusted origination charges, and transfer taxes. Charges that can increase in aggregate up to 10 percent if the customer selects the lender’s service provider, which include the lender’s required services, title services and lender’s title insurance, owner’s title insurance, and government recording charges. Charges that can change without limitations at settlement, which include the lender’s required services if the customer does not select the lender’s service
1.
2.
3.
provider, the initial deposit for the escrow account, daily interest charges and homeowner’s insurance. It is considered a tolerance violation when the customer chooses the lender’s service provider and the total of charges in category two increases by more than 10 percent. In these cases, the lender must cure the violation at closing or within 30 days after settlement. If the lender does not cure the violation at closing, then the lender (or third-party authorized by the lender) will reimburse the customer. “The recent requirement’s HUD has instructed lenders to make now clarifies the mortgage disclosure process and helped reduce overall closing costs charged was needed,” said Larry Gersch, SCRP, manager, residential real estate, Kraft Foods Global, Inc., Northfield, IL. “Additionally, relocating employees must be counseled up-front that there have been many new changes in the world of obtaining a mortgage. An explanation of what is required, versus what was necessary before, during the last
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relocation will help to inform them. The lender is not picking on them but the fact that requirements have changed drastically over the past few years is driving this perception, and they need to be aware. Transferees will have to comply more closely with lender requests for verification in order to streamline the loan process.”
Goals of Reform The goals of RESPA reform are similar to those of Regulation Z— Truth in Lending (TIL), which serves to protect mortgage customers from undesirable credit practices and to assist them in making informed decisions regarding the cost of consumer credit. There were three revisions to this legislation, which were implemented on July 30, 2009:
1.
Initial disclosures must be provided within three days of application. Previously, this requirement was limited to owner-occupied purchase transactions but has been expanded to include refinance transactions and non-owner-occupied properties. A seven-business day waiting period is now required between the delivery of the initial TIL disclosures and the signing of closing documents. If loan terms change, causing the annual percentage rate (APR) to increase by more than 0.125 percent, the TIL must be redisclosed to the customer. The customer must be in possession of the re-disclosed TIL for three days before closing may occur.
2. 3.
All of these rules were designed to help the customer be a better shopper, allow for adequate time to review information, compare the costs of loan products offered by various lenders, and protect the customer from any unexpected additions at closing. The first two revisions do not cause any imminent problems for mobility customers. Lenders easily can provide initial disclosures within three days of closing and it is highly uncommon for customers to apply for a loan only seven days prior to closing. The third revision, however, may cause closing delays. While the goals of reform are disclosure and fee change limits, the delays that result from these changes may lead to additional costs
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for those involved in the transaction.
Origination and Discount Points
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62 MOBILITY/OCTOBER 2010
As an administrator of a corporate program, the most important effect of the reform is the impact on origination and discount points. The mortgage industry now considers the origination fee to be a revenue source for the lender rather than an actual cost to reduce the interest rate. Going forward, only discount points are tied directly to the cost of reducing the interest rate. Lenders can continue to use the origination fee to reduce the interest rate by using the revenue to offset the cost of the rate reduction, but because it is not directly tied to the interest rate, there may be potential impacts to the tax treatment of the origination fee should IRS amend their guidance to align 1098 Mortgage Interest Statement reporting with RESPA reform. Following is a good recommendation for a change in your policy wording around the home purchase assistance policy regarding origination fee as a coverage point for your employees: “Change the origination fee as a reimbursable item in your policy to a discount point to ensure alignment with RESPA and provide clarity by tying the cost of the rate reduction to a discount point, rather than calling it an origination fee.” For employers that previously have eliminated the coverage of an origination point, you already are ahead. With the consolidation of fees, the origination fee is now aggregated into a broader category called “Our Origination Charge,” defined as the total charge for getting the loan and includes any lender fees.
Linde North America, Inc., Murray Hill, NJ, eliminated the distinction of origination versus mortgage “points” in 2005 and went to a sliding scale reimbursement that will reimburse any points (origination or discount) only when the FNMA 60day yield rate is more than 8 percent. “From a policy perspective, we are ahead of this,” said Carol A. Filippi, SCRP, manager, mobility services, Linde North America, Inc. “I am concerned that it could become confusing to the transferee when filing their taxes if IRS aligns the tax treatment with the RESPA reform and treats the point deductibility differently if deemed ‘origination’ versus ‘discount.’ We may need to provide additional counseling at tax time. For now, Linde will continue to assume the total deductibility of points unless the IRS indicates otherwise.”
Embracing Change The only thing constant is change. As a result of the regulatory reform, most employers are embracing the change by using the direct billing programs and partnering with national providers to administer this benefit. You also may find it beneficial to stay up to date on the happenings of IRS and any changes to the deductibility of origination fees. Finally, remember to work closely with your mortgage lender to ensure smooth transitions. With the help of your dedicated team of mortgage experts, the new regulatory changes should be fairly easy to understand and implement, as well as empower your transferring employees to be more successful homebuyers. Karen Gerba is senior vice president, regional sales manager, Bank of America Home Loans, Blue Bell, PA. She can be reached at +1 267 419 8593 or e-mail Karen.gerba@bankofamerica.com.
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It All Adds Up— Expatriate Compensation Collection and Considerations for Consistent Program Compliancy BY CHRIS PARDO, GMS
an your organization pinpoint how much actually is being spent on expatriate assignments? The 2009 Ernst & Young, Zurich, Switzerland, “Global Mobility Effectiveness Survey” revealed that “only 20 percent of companies know their true expatriate costs, with 58 percent having only an approximate cost.” Even more than the issue of not knowing “your full spend,” many organizations lack the ability to identify, quantify, clarify, capture, and report mobility spend effectively—leaving them at risk of being non-compliant with global taxing authorities. While there are many words that begin with C-O-MP, none are sweeter than “C-O-M-Pliant” to the ears of any global mobility program manager—especially those on the finance compensation side. A standard cost projection for a family going on a long-term expatriate
C
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assignment signifies an abundantly apparent corporate investment. In addition, when summing up the grand total of all expatriate assignments within the average corporate global mobility program, one begins to C-O-MPute the risk of not being able to C-O-M-Pile all those expatriate costs, many of which translate into expatriate C-O-M-Pensation. Multinational companies are aware that there are many assignment-related expenses that require gathering and reporting through their local payroll departments as taxable compensation. So why are 80 percent unable to track those costs? Lee Schilling, tax manager at Global Tax Network (GTN), Palo Alto, CA, says that, “the ability to collect, analyze, and report the detail on a timely basis to be in compliance is a challenge. The knowledge base within organizations in regard to expatriates is greater today than it was 10 to
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Based on recent studies of employers, few organizations truly understand the costs of their expatriate programs. Pardo looks at a few key areas that affect a compensation collection program and provides “best practice� considerations for structuring a consistently compliant expatriate expense accumulation program, one that leverages expertise and that executes properly.
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DEFINING A PROJECT MANAGER 15 years ago, so there is an awareness that something needs to be done, but it is still a matter of technical knowledge and execution.”
The Recent Economy and Its Effect on Expatriate Compensation Programs The global recession forced many companies to seek alternatives to long-term expatriate assignments. Most every recent survey will show that during the past 18 months, the mobility industry has seen increased extended business travelers, shortterm assignments, “permanent” transfers, “hybrid assignments,” and localizations, with significant decreases in traditional long-term expatriate assignments. This inevitably has lowered overall program costs. However, many corporate global mobility teams are facing new challenges with the changing authorization dynamics. For example, one challenge many organizations face is monitoring extended business travelers. Each passing day of an unknown extension could move the company and stealth
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Mobility Team and Relocation Management Company
Client Payroll Teams
Tax Partner
Global Compensation Collection Project Manager Client Home/Host Country Finance Contacts
Direct Bill Vendor Partners
Global Assignees
Source: Plus Relocation Services, Inc.
employee into risky tax and immigration compliance situations. In a January 2010 Worldwide ERC® “Global Benchmarking
Survey,” only 16 percent said they were not concerned about stealth expatriates, 77 percent only discovering these stealth expatriates by
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chance, while 95 percent stated that tax compliancy costs were their greatest potential for negative cost impacts. The increased need for cost reduction has led many companies to reevaluate their entire expatriate programs. Looking again at the 2009 “Global Mobility Effectiveness Survey,” we see that 81 percent of companies are looking to take measures to reduce costs. Many companies have worked through partial or full expatriate policy reviews looking for cost reductions in their global mobility programs. During the policy review, benefits that normally would be collected and reported as compensation are drastically reduced and, in some cases, eliminated. Examples of assignment benefits most commonly targeted for reducing program expenditures include housing allowances, mobility/miscellaneous allowances, transportation allowances, cost-of-living allowances, and most forms of “mobility incentive” allowances. In a February 4, 2010, article by Josephine Woolley, “Reviewing Mobility Policy,” on ECA International’s website, their research noted, “in response to costcontainment directives, the current trend is toward reducing allowances and the value of assignment benefits provided. We have seen that a higher proportion of companies are now applying negative cost-of-living indices and cost-effective indices.” Stricter guidelines and new expectations on employee contribution are part of the “new norm.” The overall effect of reducing these types of taxable benefits is an increased savings on tax costs, which, ultimately, further lowers expatriate compensation and global mobility program costs.
Best Practice Considerations ne of the greatest challenges corporations face is creating an efficient and effective program for capturing, auditing, and reporting expatriate compensation to the proper entities in a timely and consistent fashion. “I think that there are some common reasons why companies cannot put their finger on their total spend,” said Debbie Haynes, SGMS, manager of global mobility at JDSU, Milpitas, CA, “in my experience, the three biggest roadblocks that prevent consistent expatriate compensation accumulation are: a decentralized mobility program; a variance between regional finance expense reporting systems and technologies; and a lack of understanding regarding compensation reporting processes and requirements by regional financial managers” The following seven key steps will help your organization develop processes to get you on your way to a compliant, clearly accountable program.
O
Identify resources and stakeholders. Identify global resources and key stakeholders including global mobility leaders, internal finance controllers, payroll departments, global tax providers, and relocation management companies (RMCs) and incorporate their feedback and expertise into the program.
1. 2.
Define a project manager. Define an individual who owns the program and process—assuring all stakeholders understand their role and responsibili-
ties. Centralize payments. Centralizing payment of assignment costs—the more decentralized an organization is and the more stakeholders involved, the higher the risk of compliance, cost, and control issues.
3.
Evaluate and document. Review where and how assignment costs currently are being managed—evaluate responsibilities and processes to improve auditing and facilitate collection.
4.
Create quality tools and resources. Create program guidelines, process maps, responsibility checklists, expatriate census and reporting tools— assure that all the stakeholders have reviewed, approved, and understand these processes.
5.
Audit carefully. Build in ample time for policy audits, clarification, and thorough review of all data collected by the tax provider—this will assure compliance and save you from adding excess cost to your program.
6.
Collect quarterly. Request costs from stakeholders on a quarterly basis— doing this quarterly allows participants more frequent opportunities to go through the process and reinforces consistency.
7.
The Devil Is in the Details Although we have seen both a reduction in the number of longterm expatriate assignments and in the assignee benefit packages, companies still incur significant costs related to assignment benefits. Given
the wide variety of home-host country combinations, and the need to structure compensation delivery in the most tax advantageous manner, expatriate assignment benefits most likely will be paid from multiple sources. Collecting all the compensaMOBILITY/OCTOBER 2010 67
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ON THE WEB To learn more about compensation, please visit www.WorldwideERC.org: • “Global Compensation Plans—Where to Begin” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0206smith.aspx •“In Search of Compensation: Conducting a Salary Survey for Employee Mobility Professionals” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0709-barwick.aspx • “Currency Crisis: Protecting Expatriate Compensation Against Exchange Rate Fluctuations” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0608crosby.aspx
welcome home and let one-group be your qualified partner for allinclusive relocation services. To make your employees feel at home from the first day.
www.one-group.org Your relocation partner in Switzerland:
Phone: +41 56 417 95 70 Web: www.one-keller.com
68 MOBILITY/OCTOBER 2010
tion items paid out to or on behalf of the expatriates can become a “lesson in herding cats.” After internally identifying and approving the elements to be included in the pay and benefits package, there is usually a reprieve as activity switches to a focus on the “getting there” stage. The “getting there” stage typically includes support services that help the expatriate and family “detach” from the home location and “attach” in the host location. Homefinding trips, orientations, and settling-in services are coordinated and expensed. Some expenses may be reimbursed by the home country accounts payable (AP) or paid directly by the relocation management company (RMC). Travel costs may be billed directly to the corporate travel department. These expenses are followed by “on assignment”-related benefits, including host-country rent payments, cost-of-living allowances, school tuition payments, and hostcountry tax payments that may be paid in multiple currencies by the host country finance team and RMC—all of which are occurring while home-country payroll possibly is providing the ongoing salary, bonus payments, and home housing norm deductions in the home country currency.
With multiple currency payments and deductions being made from multiple locations, it is critical to keep track of the details of your global expatriate expense program. One might suggest “the devil is in the details” as an appropriate motto for an efficient and effective global expense accumulation program. We would agree that “compliance” certainly is in the details.
Compliance A quality expatriate program will have a compensation collection program that is built on a platform of key program stakeholders, and focuses on the collection, analysis, and consolidated reporting of worldwide expatriate compensation to support global compliancy. As taxing authorities around the world tighten their monitoring of global mobility programs, it is imperative for organizations to develop processes that allow them to produce consistently compliant expatriate compensation reporting. Identifying key steps to the successful development of a compliant program will make your task less overwhelming and realistically attainable. Chris Pardo, GMS, is vice president, global services for Plus Relocation Services, Inc., Minneapolis, MN. He can be reached at +1 952 512 5542 or e-mail cpardo@plusrelocation.com.
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Israel Milk, Honey, and
Natural Gas TSVI KAN-TOR, AMIT ACCO, AND ADAM GREENSTEIN
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As the process of extracting resources moves farther out to sea and deeper into the Earth’s crust, the challenge of managing and moving the human talent necessary to keep these operations running increases in difficulty. Kan-Tor, Acco, and Greenstein draw a road map for the HR and mobility manager new to the complexities of offshore natural gas operations.
T
echnological innovations have enabled the natural gas industry to keep pace with the world’s skyrocketing demand, extracting resources embedded farther out at sea and deeper into the earth’s crust. Recent advances in exploration technology have led to a host of discoveries across the globe, and the industry currently is booming.
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Following the recent discovery of a prodigious natural gas reserve in the Mediterranean Sea, Israel has found itself for the first time at the forefront of the natural gas industry and its related services, including offshore drilling and employee mobility.
The production of gas and oil, however, requires significant numbers of skilled employees, each holding unique knowledge and expertise. As a result, offshore employees generally are recruited from overseas in multinational groups organized by specialized recruitment compa-
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relocated to the opposite page.
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nies, or by the gas companies themselves. In recruiting foreign talent, offshore rigging companies must overcome complex mobility and immigration issues that transcend the traditional mobility challenges of onshore projects. While these issues fall into the same traditional categories as onshore operations, the offshore nature of the industry creates unique challenges that require innovative solutions. As the offshore rigging industry is relatively new to Israel, Israeli HR managers and mobility specialists are necessitated to confront these issues without any local experience or traditions to rely on. To further complicate matters, Israeli gas and mobility service companies must overcome major security and defense concerns given their current geopolitical situation. So what are these challenges? What can be done? What should be done? And what is the best and right way to go about it?
Gas Findings in Israel In January 2010, Noble Energy, partnering with Israeli companies Isramco Negev and Delek Group, discovered a massive natural gas reserve located 130 kilometers off the coast of Haifa, Israel. The reserve, aptly named Leviathan, may hold 16 trillion cubic feet of natural gas. The Leviathan site currently is estimated to be twice the size of the Tamar Prospect, the largest gas discovery worldwide in 2009, uncovered by the same U.S.-Israel consortium. With prospects of further discoveries to come, The Levant Basin, containing the Leviathan and Tamar prospects, may hold in excess of 227 trillion cubic feet of gas, compared to
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Europe’s 208 trillion cubic feet of gas. With billions of dollars of expected revenue, the ground-breaking discoveries have helped to establish the offshore gas and oil industry in Israel. While the Israeli government struggles to regulate this emerging industry, the industry itself faces enormous growing pains.
tax jurisdictions on the same income). However, when expatriates are working (and living) in non-territorial waters, taxation identifiers such as “days of presence” within a country’s borders become ambiguous and difficult to determine (An exclusive economic zone [EEZ] is a seazone over
which a state has special rights concerning the exploration and use of marine resources. It stretches from the seaward edge of the state’s territorial sea out 200 nautical miles from its coast. Territorial waters, or a territorial sea, as defined by the 1982 United Nations Convention on the
Onshore Versus Offshore Projects During the past two decades, as regional economies and businesses increasingly have become integrated through communication and trade, employee mobility services have matured and flourished. Overcoming the traditional challenges of countryto-country mobility, the mobility industry has developed unique knowledge and expertise in facilitating the movement of key employees to target countries and project locations. As recent innovations have sent the gas and oil industry to the deep sea, these traditional mobility challenges have taken a new form. While these unique challenges fall into the same traditional categories of onshore mobility, today’s mobility expert must find innovative solutions to the distinct challenges of offshore relocation. For the purpose of this article, we have identified the traditional mobility challenges while highlighting the unique difficulties of offshore operations.
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Taxation Expatriate assignments create taxation challenges because of the lack of a unified taxation system across national borders. To simplify the matter, it is a common practice for countries to have a bilateral double taxation agreement, designed to avoid the possibility of double taxation (the imposition of two or more MOBILITY/OCTOBER 2010 73
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Law of the Sea, is a belt of coastal waters extending at most 12 nautical miles from the baseline [usually the mean low-water mark] of a coastal state.). Is an employee working 90 kilometers off the coast of Israel considered to be within the borders of the State of Israel? Is the employee obligated to pay Israeli taxes or not? Further complications arise when a gas company managing an offshore operation is not domiciled for tax in the nearest sovereign state. Given the lack of an established protocol in Israel, both taxation authorities and energy companies have demonstrated flexibility in creating innovative solutions on a caseby-case basis. As such, it is recommended that HR managers plan ahead a taxation scheme together with the tax authority by way of a pre-ruling. Such proactive collaboration increases the certainty of the taxation scheme while helping to avoid unnecessary surprises along the road.
Transportation Mobility of human resources naturally requires means of personal transportation between the employee’s country of origin and the foreign assignment. Traditionally, a multinational employer will purchase two round-trip flights for every expatriate assignment: one for the start and end of assignment, and another for a home leave visit. Rig work, however, operates on a rotating schedule in which the employees work a specific number of consecutive days, followed by an equal or greater number of days off (typically two weeks on, two weeks off). As a result, offshore rig assignments involve frequent commuting between home and the offshore platform. This alone creates a dramatic 74 MOBILITY/OCTOBER 2010
increase in the level of travel procurement and administration, as offshore rigging companies need to provide up to 20 flights in one year for each employee assignment! Furthermore, when projects are located miles off the coast, employers must coordinate helicopter or marine transportation between the offshore platform and the nearest accessible port. While expatriate transportation is a cost that every multinational company has to account for, the unique work schedule and remote drilling sites of the rigging industry create transportation costs that far exceed those of the traditional multinational company. In response, rigging companies around the world are attempting to “localize” staff, building training and education centers in strategic locations to develop access to local skills and expertise. In Israel, companies have started to plan training and recruitment programs for local Israeli personnel. These training programs are supported by the Israeli government and, in some cases, work visas are contingent on such training.
Accommodations As in many other countries, multinational employers operating in
Israel must provide adequate housing options for expatriate employees and their dependents. Housing location often is a key factor in an employee’s decision to move abroad, as most expatriates will not make the move without easy access to their assignment, local shops, and decent schools for their children. A comprehensive mobility industry has been created around these efforts, including homesearch services, temporary furniture supply, door-to-door movers, and cultural training programs. In contrast, most offshore oil rig workers are employed on a projectby-project basis, and as a result, rarely travel with their families or establish permanent residency. Nevertheless, accommodating offshore employees with a livable environment while working (and living) at sea proves to be one of the most complicated and expensive aspects of offshore operations. Given the isolation of the offshore rig, rigging companies must construct the equivalent of a four-star hotel in the middle of the sea, including decent living quarters, cafeterias serving three to four meals a day, laundry facilities, recreational facilities, and a fully-equipped medical center. Of course, these
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onsite facilities require additional staffing, including caterers, cleaners, and trained medics.
Recruitment and Compensation In recruiting employees for expatriate assignments, multinational employers traditionally offer a mobility package designed to compensate the assignee for the challenges of moving abroad. Mobility packages generally include an increase in salary to compensate for the stresses of adapting to a foreign environment. Offshore rigging companies, however, must compensate employees for a number of additional challenges that are unique to living and working at sea. For example, mobility packages must take into account the
extreme weather and hazardous work conditions of working outdoors in open waters, including hurricanes, violent waves, and freezing temperatures. Offshore mobility packages also must compensate employees for the physical isolation of working at sea. In light of these challenges, basic mobility packages typically fail to attract or compensate employees for offshore assignments. Despite significant increases in salary, Forbes magazine listed offshore oil rig work as one of the top 10 worst jobs for 2010. In Israel, offshore employers have been forced to pay opening expatriate positions approximately three times that of the average Israeli salary. This re-emphasizes the need to localize
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talent, with Israeli employees likely to accept a lower salary than those currently offered to expatriates.
Health Services and Coverage In today’s environment, providing health coverage for employees across national borders is challenging but feasible, as there are a number of established international health insurance companies providing worldwide hospital insurance, in-patient treatment coverage, and emergency medical evacuation in the case that proper medical facilities are not locally available. While offshore rigs possess the capacity for indescribable environmental consequences, they also must account for the drastic and often deadly effect they have on those who work on them. Providing offshore workers with adequate health coverage, however, is an exceedingly expensive endeavor. Located miles out to sea, offshore rigging companies must provide on-site medical facilities fully staffed with trained medics. Serious injuries often result from cable breaks, slippery surfaces, falling objects, and equipment operating negligence, and thus professional medical staff must be readily available to provide trauma care. In the case of a medical emergency, rigging companies also must provide helicopter medivac transportation to the nearest hospital. While multinational rigging companies may attempt to reduce these costs, they run the risk of employee rights violations and international criticism.
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work visa questions: type of assignment, assignment duration, nationality of the employee, employee education and experience, and the like. Onshore operation. In most countries, including Israel, a valid work visa is required if the employee is engaged in an onshore rig operation. Territorial zone—offshore operation. Projects conducted offshore, however, involve a much more complicated set of issues and concerns. First, offshore rigging companies must identify the offshore location/ zone in which they are working. As a general rule, when a rig is operating in a territorial zone, most countries, including Israel, require that the employees obtain a work visa. Economical zone—offshore operation. On the other hand, a much more complicated scenario arises when a rig is located in the EEZ. As the state’s jurisdiction over this area most often is not clearly determined, it seems that every country has elected to deal with the situation differently. Most countries require that the employee obtain a work visa in this territory, as well as respecting the state’s general law in these territories (labor, tax, safety and health, environmental regulations, and the like). In Israel, for example, the “Sub-Sea Territories Law (1953)” states that all the natural resources embedded beneath the seafloor in economic waters belong 78 MOBILITY/OCTOBER 2010
to the state. At this stage, the law leaves a gap; it is not clear whether the sovereignty of the states that requires drilling permissions, tax payments, and so forth also requires the need to obtain work visas for the foreign nationals working on offshore platforms in the EEZ. In response, officials at the Ministry of Justice are arguing that the above law simply is outdated. When the law was created, nobody imagined that technology would allow for drilling in this part of the sea. Based on this argument, the officials are currently trying to adapt the law to the effect that the state holds jurisdiction over rigs located in the EEZ. On successful redrafting, it is expected that offshore operations in the economical zone of Israel will require work visas. It seems that at current, a prudent and responsible corporate decision will be to obtain work permits for EEZ workers. This will allow the company to deduct expenses from taxation as well as avoid the risk of being accused of an illegal employment. As it is said, “better to be safe than sorry.”
ity experts and regulating authorities must work together to overcome these obstacles as they arise. Several new mobility service companies have emerged in Israel, some even claiming to specialize in the offshore gas and oil industry. To facilitate the current boom, Israeli mobility experts must learn from larger mobility corporations and adapt to the established international standards of this demanding industry. Immigration and work visa regulations are changing rapidly to accommodate the emerging offshore industry. In Israel, as in many other countries, visa and immigration services are defined as legal services, and as such, must ultimately be performed by law firms as opposed to mobility service companies. At press time, new regulations regarding the need to obtain work visas in the EEZ were expected to be published by the Israeli government. These developments may impart key insights into the regulation of emerging industries across the globe.
Growing Pains
Amit Acco is advocate/partner at Kan-Tor & Acco,Ramat Gan (Tel Aviv district), Israel. He can be reached at +972 03 613 8202 or e-mail amit@ktalegal.com.
The emerging gas and oil industry in Israel faces various regulation and mobility challenges, referred to above as industry “growing pains.” Lacking established protocols, mobil-
Tsvi Kan-Tor is advocate/partner at Kan-Tor & Acco, Ramat Gan (Tel Aviv district), Israel. He can be reached at +972 03 613 8202 or e-mail tsvi@ktalegal.com.
Adam Greenstein is legal research associate at Kan-Tor & Acco, Ramat Gan (Tel Aviv district), Israel. He can be reached at +972 03 613 8202 or e-mail adam@ktalegal.com.
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Rethinking
ROI BY ELLIE SULLIVAN, SCRP, SGMS, AND TIM MCCARNEY, GMS
A
ccording to the results of the 2010 Canadian Employee Relocation Council (CERC) “Mobility Trends Survey,” less than 8 percent of companies claim to track their relocation ROI. Similarly, Mercer’s 2008 “International Assignments Survey” indicated that only 3 percent of multinational companies have a process in place to track the return on their global moves. Of course, the true value of mobility, unlike many other corporate functions, always has been difficult to quantify. While it might be easy to track the costs involved in, for example, sending an employee on assignment in France to establish an operations center, it is not as easy to assign a dollar figure to the experience and skill sets the employee acquires while on assignment. Defining “success” requires companies to dig a bit deeper than numbers.
A Strategic Outlook Indeed, the past several years have seen a shift in the way companies view mobility and its value to the organization. The results of Weichert Relocation Resources’, Morris Plains, NJ, 2010 “Mobility and the Current Real Estate Market” survey indicate that, in light of current economic and market conditions, companies are becom80 MOBILITY/OCTOBER 2010
ing more selective about who they move and how much they are willing to spend to move them. They also are aligning their mobility efforts with talent management goals, using mobility and international assignments to develop the critical talent they need to grow and sustain their business in the future. While there may not exist a single “magic formula” to translate mobility ROI into dollars, the fact is a number of leading companies do maintain their own unique methodologies for tracking the metrics that matter most to them. And in the process, they are ushering corporate mobility from an administrative, logistical function into a strategic component of talent management.
Tracking Domestic ROI At YUM! Brands in Louisville, KY, Relocation Manager Sue Newton has long held that determining the ROI of her company’s domestic mobility program is not as simple as pointing to numbers on an Excel spreadsheet. “Of course, we look at overall cost just like any other company, but I don’t think that necessarily tells you if your program is working or not,” she said. “I think it just tells you that you’re competitive. Employee satisfaction is another metric that people use, but in today’s real estate market, I’m not sure you can make
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The investment required to maintain a mobile workforce continues to grow, spurred on by tight real estate markets, increased globalization, higher costs of doing business, and other factors. However, according to Sullivan and McCarney, for all the focus on the costs of relocation, recent studies indicate that few companies actually are measuring their return on this investment.
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everybody happy and still be fiscally responsible. “At YUM!, we’re more focused on candidate selection and look to relocate those employees who have the bench to move up in the organization. With each relocation you have to ask yourself, ‘did we choose the right person to put through this very expensive program?’ and you only know that if that person stays with the company, performs at a high level, and goes on to the next assignment. Of course, there is also a burden on the company to ensure that we onboard the employee effectively to help create that success.” One of the ways that Newton has been able to boost the chances of successful transfers is through predecision, through which employers and employees review all of the factors involved in a move before the move is made to ensure that the likelihood of success exists. “I like to think of our pre-decision program as insurance for our ROI,” said Newton. “Because in today’s economy, the cost of a failed move has never been higher.” According to Newton, pre-decision is just a part of the more strategic approach to mobility that she is spearheading at YUM!, which includes tightening the reins on employee homeselling and marketing, a philosophical shift that she claims is necessary to continue to boost ROI during challenging economic times. “Relocation used to be 90 percent us and 10 percent employee, with the company expected to carry most of the burden,” said Newton. “But now it’s more like 50-50. The old thinking that we’re going to relocate you with little or no employee involvement has almost become passé. Our challenge is to put programs in place to enable 82 MOBILITY/OCTOBER 2010
you to be successful because we want you to be productive quickly, but we can’t tell you that it doesn’t require money or effort on your behalf, because it might. “In today’s market, we have to strike a balance between fiscal responsibility on behalf of the company and providing the appropriate tools and counsel so that an employee or candidate can make an educated decision about relocating.””
Tracking Global ROI At Boston Scientific, headquartered in Natick, MA, Global Mobility Director Judy Trubey, GMS, tracks attrition of her international assignees, following their progress through the company for years after their repatriation. “That’s the primary metric we use to gauge the success of our program,” she said. “But in the medical devices industry, it’s one of the most critical, because the competition for talent is so intense. When we invest the money and effort to send someone overseas, we want to make sure that the international business skills and breadth of knowledge they acquire while on assignment benefits our company, not a competitor. Nor do we want to start dealing with replacement costs on top of the original investment.”
This heightened competition and the relatively small pool of specialized talent has forced Trubey and her team at Boston Scientific to become more strategic when it comes to selecting candidates and developing global benefit packages. “On the domestic side, we feel the same pains that other companies do, because of the markets and the potential for employees to be underwater on their homes. And in the medical supplies industry, employees know they can hold out for the best opportunity if they can afford to,” said Trubey. “But on the global side, we don’t have to dangle as many carrots. In the past, we sent people on international assignments because it was a critical need; we had positions overseas that needed to be filled. Today, we’re doing it to develop our talent, and employees welcome the opportunity for an international assignment because they know it will be beneficial to their careers.” And it looks to be even more important going forward. Trubey noted that Boston Scientific soon will be rolling out a campaign to identify emerging talents at every level of the organization and grooming them for potential senior leadership roles with a rigorous training and development program. International assignments will play a prominent role in this talent management strategy. “You can’t be a global company without global talent, and that’s where our perspective on ROI remains focused,” said Trubey. “Every move is an investment in our future and if we’re going to get the best return, we have to have a plan for keeping that talent within our company and having a clear career path mapped out for our assignees.”
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Group Move ROI Sometimes ROI is measured on a project basis. A continued upswing in corporate acquisitions, business closings, and office consolidations has led to an increase in group moves, and each of these moves typically comes with its own unique set of goals and metrics for measuring success. When Chesapeake Energy was looking to move employees from a regional office in West Virginia to its corporate headquarters in Oklahoma City, OK, the company set a simple parameter for measuring ROI: a high acceptance rate among those employees being offered moves. “In the oil and gas industry, the expertise and experience is so specific, that if you have people who are good at what they do and have the talents that you need, you really want to do everything you can to keep those people on board and focused on the job at hand,” explained Lisa Phelps, vice president of human resources at Chesapeake. “So in planning this group move, when it came to ROI, we didn’t necessarily look at
a dollar value. Instead, we focused on how many people we could get to take the move.” Phelps and her team did their homework, researching how other companies approached group moves and making sure that the packages they offered would sufficiently incent employees to want to come to Oklahoma City, instead of making the severance option seem more attractive—something Phelps saw an alarmingly high number of other companies doing. “We needed to make sure that our benefits package was rich enough to make people want to move and we did everything we could to sell employees on the new location, including a loss-on-sale benefit,” said Phelps. “We also chartered an airplane and had a pre-decision trip to Oklahoma City for each employee and a guest, and we showed them around the city, let them get a feel for what it had to offer them and their families, and connected them with brokers who discussed their unique needs. Our CEO also
addressed all of the employees, reminding them how valued they were and how much we wanted them to stay with us. “Our service provider, Weichert Relocation Resources, recommended a framework and best practices for benefits, and we took it to the next level. We were very generous with this group move, but we needed to because we wanted to make it very hard for them to say no.” You might expect as much from an organization that was named to Fortune magazine’s list of the 100 Best Companies to Work For. But Phelps admits that even with generous benefit packages, her team was guardedly optimistic going into the move, aiming for at least 50 percent of employees to take the move. In the end, however, Chesapeake achieved a 70 percent acceptance rate. And one year later, they are still happy with the results. “One of the success factors we measured was how many people were still with us,” said Phelps. “And our attrition over the past year has been
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On the Web To learn more about the return on investment of expatriate assignments, please visit www.WorldwideERC.org: • “Gen Y: Recruit, Retain, Relocate‌ ROI?â€? www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0509-demego.aspx • “Beyond Cost — Solving the Enigma of Assignment ROIâ€? www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0308Lowe.aspx • “Repatriation—How Companies Can Protect Their ROIâ€? www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/1006tinder.aspx
very small, so we’re very happy with it.� The company also employs some of the strategies used during the group move across its entire mobility program, such as loss-on-sale. “In this market, employees are hesitant to make any kind of move if they don’t think that their company is willing to commit to getting them there,� Phelps said. “In the past, where companies may have said, ‘okay, we’re going to relocate you and here’s the number for your coordinator and here’s where you call with any questions,’ today, we can’t afford to do that. Our talent is so specific and so valuable to our success, we have to make sure that they feel good about their move and that the entire experience is a good one.�
Like many specialized industries, the oil and gas field is competitive and the war for available talent is ongoing. A company that does not take care of its employees risks losing them to a competitor. If that happens, all the work and effort, all the bonuses and the cost of the transfer, is lost. The way a company treats its mobile employees, therefore, significantly affects the loyalty factor. “Employees remember things, and we want them to remember that we didn’t sweat the small stuff,� said Phelps. “We just wanted them comfortable with their decisions and happy to be here.�
Defining Success In the absence of one overriding metric that allows companies to
gauge ROI for mobility assignments, there are a number of different metrics and criteria that corporate mobility professionals and HR leaders are using to measure the success of their programs. As mobility becomes increasingly viewed as a more strategic function— a critical component of an effective talent management program—companies will likely continue to define success in their own way, and on their own terms. Ellie Sullivan SCRP, SGMS, is director of consulting for Weichert Relocation Resources Inc., Norwell, MA. She can be reached at +781 982 5017 or e-mail esullivan@wrri.com. Tim McCarney, GMS, is manager of marketing communications for Weichert Relocation Resources Inc. Norwell MA, and a member of the MOBILITY Editorial Advisory Committee. He can be reached at +781 982 5026 or e-mail tmccarney@wrri.com.
Global Mobility Solutions From Pre-Decision to Settling-In, our name says it all. SIMPLE. WORLDWIDE. RELOCATION.
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Demystifying Global Short-Term Business Travel
m c a P a c b t s d f y t
L
For decades, companies have relied on short-term business travel for success in the global marketplace. Such reliance has heightened in today’s economic environment, as the nature of international assignments has changed from the more traditional expatriate assignment to short-term business travel. What has not changed is the fact that business travel presents one of the most signiďŹ cant areas of immigration compliance vulnerability for companies. All too often, employers or their international traveler employees mistakenly assume that a work permit is not required because of the brevity of their stay, and in many instances business travel does not fall under the management of companies’ global mobility programs. At the same time, the rigor with which immigration laws are enforced by government authorities worldwide, coupled with the increased sophistication of border control tracking systems, has intensiďŹ ed. As governments move to further deďŹ ne, or in some instances redeďŹ ne, what constitutes legitimate business visitor activities versus “work,â€? both international travelers and their employers are at considerable, and growing, risk.
Understanding the Risks of Non Compliance The employee who is unable to demonstrate to the satisfaction of immigration authorities at a country’s point of entry that he will engage only in permissible business visitor activities is at risk of being denied entry. Worse yet, if he is found to have a history of staying in-country for longer than what legitimate business activities would otherwise typically involve, he may be permanently banned from reentry. The situation becomes more grim when employees are found to be “working� in-country without proper authorization. Depending on S P E C I A L
the jurisdiction, these individuals may be subject a number of penalties, including monetary ďŹ nes, imprisonment, and deportation. Offending employers run an equal risk of severe penalties, including substantial ďŹ nes or imprisonment, both generally levied against the employer for each foreign national working without authorization. Employers also leave themselves open to possible media scrutiny within the community at large.
No Universal Standard To avoid these potential problems and their associated penalties, companies are challenged to calculate multiple variables such as what types of activities require a work permit, which are permissible with a business visitor visa, and which destination countries require neither a work permit nor visa for nationals of certain countries. This is no simple task and can often be so complex that even the most compliance conscious of companies can fall peril to inadvertent violations. Many countries allow business visitors to attend meetings, make sales calls, negotiate contracts, and engage in similar activities; however, there is no universal standard. For example, Egypt technically requires business visitors conducting any activity other than attending a simple business meeting to obtain work authorization (although it may be possible to obtain a work permit exemption for stays of up to 30 days), while Peru allows business visitors to supervise projects or staff, but only when overseeing an investment or business arrangement, and provided the activity does not involve hands-on management. By contrast, China generally allows business visitors to engage in any activity, provided it is for less than 90 days. There is not even common ground regarding the deďŹ nition of “business
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meeting,â€? with wide variances in permissible activities from country to country. In Singapore, a foreign national may advise clients in meetings as a business visitor, without obtaining work authorization, but in Peru, he may not. In the Philippines, a business visitor may help plan a function or project during a meeting, but only if there are no local client deliverables, no local documents signed, and there is no direct beneďŹ t generated to the local entity. Few other activities are permitted in the Philippines without work authorization, even in a meeting setting. By contrast, in the Czech Republic, a business visitor may conduct a wide variety of activities in a business meeting setting, but only for up to seven consecutive days and 30 cumulative days per calendar year, and provided he does not receive any form of compensation from the Czech Republic.
Leveraging Outside Resources To succeed in such a complex environment, companies are relying more and more on outside resources such as immigration legal counsel, to help maintain compliance. Fragomen, Del Rey, Bernsen & Loewy, a global immigration law ďŹ rm, is dedicated to providing immigration solutions to companies to ensure they remain compliant in every jurisdiction in which they do business. With 35 ofďŹ ces around the world, and an extensive co-counsel network, Fragomen assists companies formulate and maintain compliant immigration programs throughout more than 140 jurisdictions. The ďŹ rm employs more than 1,000 professionals around the world, who are dedicated to staying abreast of even the smallest changes in global immigration law. The breadth and depth of the ďŹ rm enables it not only to represent companies in managing their day-to-day immigration programs, but also to design and develop solutions to assist organizations meet the ever-evolving challenges in the global immigration arena. The ďŹ rm’s objective is to provide its clients with the tools needed to design a compliant global immigration program and facilitate their daily operations in a multitude of jurisdictions. For example, to meet the speciďŹ c challenge of demystifying short-term business travel, Fragomen leveraged its global knowledge and experience with local laws and regulations to develop a web-based compliance technology—the Business Visa Matrix.
The Business Visa Matrix Fragomen’s Business Visa Matrix is a proprietary, web-based solution which provides cost-effective, rapid guidance to help companies ensure that business travelers and short-term assignees comply with local immigration laws in the world’s most common business destinations. For many organizations, it is not practical to seek speciďŹ c legal advice each time a business traveler engages in short-term travel. The Business Visa Matrix is designed with that in mind, and provides speciďŹ c and tailored guidance regarding whether a business visa, a work permit, or neither is required for a particular visit or short-term assignment, in real-time. The Business Visa Matrix is customized to each client, taking into account their speciďŹ c destination countries, the nationalities of their international business travelers, salary source, trip length, and most
relevant tasks to be performed while in-country. The tool covers more than 60 nationalities, and allows companies to choose from over 60 destination countries. Once the criteria for a speciďŹ c trip have been input into the system, a real-time assessment is provided, including a determination of requirements speciďŹ c to the employee and trip, and general information and compliance considerations for the destination country. Dependent upon how companies most effectively manage their international business travelers, they are able to provide access to the Business Visa Matrix to all of their employees, or to one or more functional groups within the organization. Companies can also include information regarding corporate policies or procedures most relevant to the population being provided access to the tool. The Business Visa Matrix is designed to enable companies to manage their business traveler program as efďŹ ciently and effectively as possible. To that end, once an assessment is made, the Business Visa Matrix can route the user to the company’s international travel or immigration department, or to an external immigration provider of the company’s choice for processing assistance.
A Lasting Solution As laws regulating international business travel continue to change, and the global landscape for immigration compliance enforcement continues to tighten, companies are ďŹ nding it more difďŹ cult to manage their international business traveler programs while remaining in compliance. Fragomen strives to develop tools to assist its clients manage these, and other, challenges while maintaining compliance in every jurisdiction in which they have a presence. The Business Visa Matrix is designed with that goal in mind, and provides companies with the support needed to succeed in the global marketplace, while vigilantly managing their short-term international travelers. For more information about Fragomen’s Business Visa Matrix or to schedule a demo, please contact globalknowledge@fragomen.com. Or visit our booth at ERC’s Global Workforce Summit in Seattle, Washington this October 27-29, 2010.
Your World. Our Experience.
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THE
MOBILE
WORKFORCE:
THE NEW RULES OF ENGAGEMENT BY KATHY SHARO In today’s global marketplace, the quest to balance the benefits and risks of maintaining a mobile workforce has become a central issue for multinational employers. HR professionals are the connection between employee talent and assignment effectiveness, and are in a position to affect change within an organization. Sharo writes that HR professionals who take the time to understand the challenges presented by a mobile workforce and build centralized, tightly measured strategies will be wellpositioned for future success.
Y
ou would be hard-pressed today to find a company that is not dealing with issues related to mobile employees. Whether employees work remotely or need to be in the field and have access to data via mobile devices, the virtual workforce has clearly become the rule and not the exception. As a key aspect of corporate life today, workforce mobility has risen to the top of the list for HR professionals. Mobile workforce programs offer a mix of value and challenge: agility that improves service and employee satisfaction combined with complications that include cost, policy, and effectiveness. For many corporations today, the question has become how to best balance the benefits and risks of the mobile workforce. The benefits include a nimble workforce that places the right employees in the right place at the right time without the incremental costs of transferring employees to temporary locations. HR leaders also gain the opportunity to increase their talent pool, retain key employees, and more quickly respond to changing needs. This value is accompanied by unforeseen cost and risks, which are especially important considering how fast the
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Issues Facing Workforce Mobility
R
unzheimer International, Milwaukee, WI, recently conducted interviews with executives from 90 small, mid-sized, and large organizations across the United States and discovered the common issues they face pertaining to workforce mobility: • Fifty-one percent of the workforce is mobile on any given day, whether traveling, working from a virtual office, or driving for business. This number has increased by 31 percent since 2006. • Total investment in workforce mobility per-employee per-year has increased significantly in the past four years, and currently stands at an average of $7,426. This number increased by 3 percent year over year, and is significant when compared to budget cuts companies have enforced in areas such as IT security, HR training, marketing, and legal counsel this year. • Businesses lack insight into management of employee mobility programs. In the case of virtual office programs, 73 percent of respondents have no policies in place and 57 percent were unable to provide support cost information. Sixty-four percent of organizations reported that corporate travel costs were loosely managed. • In many cases, companies are not aware if the money they are spending on employee mobility is benefiting the organization. In the case of virtual office programs, 56 percent are unaware if the programs they have instituted are productive. Given this data and the pressure today to lower costs and drive return on investment, developing a strategy specific to the growing mobile workforce and associated programs is essential to meeting business objectives.
mobile workforce is growing. To truly optimize cost and effectiveness, highly structured management and measurement are essential or organizations will face threats to both their short- and long-term effectiveness. An important connection point between talent and effectiveness, HR professionals are in a unique position to affect key challenges. The starting point is measuring the state of existing programs against third-party benchmark research that compares corporate employee mobility programs. By using these benchmarks, a company can identify where policies and costs are out of alignment. Results could include higher than normal business driving costs, overor under-estimated cost-of-living for transfers, or a virtual office policy that lacks the proper control or oversight. Once a company identifies problem areas, a structured improvement plan and metrics can be creat90 MOBILITY/OCTOBER 2010
ed, which may involve best practices, policy changes, use of technology, or other appropriate measures.
Winning the Challenges of Employee Mobility One organization that benefited from a more structured approach to their mobile workforce program is United Services Automobile Association (USAA), San Antonio, TX, a company of 22,000 employees that provides financial products and services primarily to the armed forces and their families. USAA’s mobile employees rely on diverse transportation options, including commercial air transportation, private aircraft, and/ or business vehicles, depending on business requirements. As a services organization, USAA’s ability to meet client needs through the efficient movement and deployment of its talent is essential. Placing the right person with the right skills in the right place at the right time to
support the client are talent management critical success factors for USAA. Since 2004, business vehicle, business travel, and corporate aircraft programs are managed by a single shared services unit called employee support services. In 2008, USAA’s logistics operation also was added to promote an even more holistic approach. As a result of these changes, USAA has been able to reduce overall headcount by 10 fulltime employees, eliminating redundant processes and enabling USAA to more efficiently use its staff. The organizational structure also has allowed USAA to provide a single way of servicing mobile employees, regardless of transportation options (land, sea, or air). It also has enabled USAA to develop integrated policies and procedures. For example, when an employee is booking a seat on USAA’s corporate jet, they are immediately linked to lodging options that are in compliance with the company’s travel policy. The employee also is directed to use USAA’s U-Drive It program, an alternative to renting a vehicle where they can reserve a car from a pool of vehicles that are located in six regional office locations. Use of the U-Drive It program has increased by 18 percent offering substantial cost savings. As additional examples, all USAA mobility policies and forms are placed in one central location on the company’s intranet. Furthermore, all USAA employee support services representatives are trained to assist employees with the full gamut of mobility-related questions, with subject matter experts available in the different areas of mobility. When booking commercial air travel, USAA employees use the corporate on-line
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ON THE WEB To learn more about workforce mobility, please visit www.WorldwideERC.org: • “There’s More than ‘One Way’ to Support Permanent Transfers: Breaking Ground on a Permanent Workforce Mobility Policy” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0110-stewart.aspx • “Perceptions: Why Should Our Workforce Be Mobile?” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/1208perceptions.aspx • “TrendSpotting: Biggest Challenges HR/Mobility Professionals Are Facing in Managing International Assignments” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/1009-trendspotting.aspx
booking tool, which automatically presents the employee with an option to contact USAA’s in-house corporate travel department if they need assistance with their booking and to consider using USAA’s corporate aircraft services. The latter are available to all USAA employees provided that the return on investment of corporate aircraft services is greater than using commercial air transportation. USAA’s corporate aircraft site automatically loads employee average salary and benefits data by pay category and corporate jet schedulers check the price of commercial air travel. If commercial air travel would result in an overnight trip, whereas use of the company’s corporate jet would provide a one-day travel option, then the cost of lodging and transportation also are added to the
calculation. The resulting ROI analysis helps the employee decide whether traveling by commercial aircraft offers the most cost-effective and productive option for them. By taking a proactive and holistic approach to managing its mobile employee programs, including vehicle and corporate aircraft, the company has enhanced employee safety and security, generated cost savings of close to USD$4 million, and created a more satisfied and productive workforce.
Taking the First Step It is clear that the growing mobile workforce is transforming the business world, and the feverish pace at which our contemporary work styles continue to change as more of us become mobile does not show any
signs of slowing. A recent report from industry research firm IDC, “Worldwide Mobile Worker Population 2009-2013 Forecast,” predicts the world’s mobile worker population will pass the one billion mark in 2010 and grow to nearly 1.2 billion people, more than a third of the world’s workforce, by 2013. While opportunities abound, this continued growth also will bring with it new navigation challenges for HR executives and their business counterparts. Organizations that take the time to understand these challenges and address them early by building a centralized, tightly measured strategy will be positioned well for reaping the benefits today and in the future. Kathy Sharo is director of marketing, Runzheimer International, Waterford, WI. She can be reached at +1 262-971-2651 or e-mail kps@runzheimer.com.
R E L O C A T I O N
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When did a school make you feel this good? Families just know when a relocation works. Whether you are a mom or dad, toddler or teenager, HR or relocation professional, from Texas or Tokyo, when all the pieces come together, it can deliver one of life’s most rewarding experiences. ACS understands the complex needs of globally mobile families. We have partnered the relocation industry since 1967 to meet the many challenges that face international families moving to London. Our campus-specific Admissions, Housing and Transport experts work closely with parent-assisted Welcome Teams, International Groups, Parent/Teacher Organisations and Buddy programmes to create a smooth, seamless and happy transition. That is why each year literally hundreds of families from more than 50 countries make ACS ‘the’ London solution to their educational and lifestyle needs.
To find out how we can help meet your relocation requirements, please visit www.acs-england.co.uk Alternatively, call either ACS Cobham +44 (0)1932 869744, ACS Egham +44 (0)1784 430611 or ACS Hillingdon +44 (0)1895 818402 ACS Schools are non-sectarian and co-educational (day and boarding) for students 2 to 18 years of age.
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An Overview of Expatriate Housing in China BY ALEX CHUA, GMS China has a long history of welcoming and accommodating foreign residents. Traditionally, Chinese real estate has created unique housing opportunities for the foreign community to construct similar environments offered in their home countries while at the same time creating foreign enclaves within the local cities for easier government regulation. Today, as the Chinese housing market is experiencing unprecedented growth and creativity in design, foreign residents in China are offered a staggering array of choices in location, architecture, and budget. Chua examines the history of modern housing in China and how government reforms have played a crucial role in shaping the choices available to foreigners relocating today.
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M
arket-oriented reforms that “opened-up” China to foreign investment beginning in 1978 continued to propel the country to unprecedented economic growth and transformation during the past three decades. China’s unique market size, abundant skilled labor force, political stability, tax incentive system, and rapidly developing transport infrastructure attracted foreign direct investment (FDI) to flow into the country at exponentially increasing rates, with a record of USD $92 billion in 2009, according to Ministry of Commerce of the People’s Republic of China. This staggering influx of FDI has created a booming market for businesses from all sectors, from manufacturing behemoths to luxury hotels to software start-ups. This rapid growth has produced a high demand for experienced professionals. Multinational corporations (MNCs) increas-
ingly are recruiting foreign experts to supplement the local talent. This has opened the door for growing numbers of expatriate workers who possess strong managerial and leadership backgrounds and previous international exposure. According to Foreign Enterprise Service Company Limited (FESCO), Shanghai, China, the number of foreign nationals relocating to major cities in China, such as Shanghai and Beijing, has grown from 5,000 in 2000 to 160,000 in 2009. Relocating to China always has been an adventure and navigating the mind-boggling array of housing choices is fundamental in assuring that the foreign employees feel comfortable and “at home” in their new workplace. Expatriates a decade ago often were assigned to one apartment building that housed every foreign resident in town, but today foreigners are welcome to live anywhere,
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from Soviet-era concrete apartments to shared-stairway lane houses to suburban-style villas.
Evolution of the Housing Market in China There are two distinct phases of real estate development in China: prehousing reforms and post-housing reforms. Prior to the housing reforms in 1998, the housing market in China mirrored Soviet-era public housing, and no private property market in China existed. Only the specially approved organizations and stateowned enterprises (SOEs) were allowed to purchase property under the “welfare housing” system, where most local housing was assigned to employees at very low or zero cost. Foreign nationals were prohibited to
live outside the specifically designated foreign housing, known as expatriate housing. These properties were sold or leased at comparable international Tier-1 city rates, but only possessed the local housing quality levels. In March 1998, Premier Zhu Rongji announced an end to China’s half-century old welfare housing system and encouraged the commercialization of real estate development and purchasing. The real estate industry then evolved into a core pillar of the new economy, and has created a significant multiplier effect on China’s expanding economy.
Policies to Promote Demand To speed up the commercialization of the housing market, the government created policies to boost the
The Multiplier Effect of Commercialization of Real Estate Industry at Post-housing Reforms to the Broad Economy
Source: Alex Chua, Asian Tigers Mobility (China) Limited
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demand of commercialized housing. Cities such as Shanghai, for example, introduced a series of policies to promote homebuyer demand. The most significant of these incentives included zero capital gains, tax rebates on mortgage payments, simplified mortgage application processes, flat rental taxes at 5 percent, and offering the coveted “Shanghai Residency Card” for out-of-town homebuyers. In addition, foreign nationals were invited to purchase local housing for a lease of 70 years, and were now free to move out of the designated “foreign housing compounds” and live anywhere in the city. The opening up of the housing sector was welcomed by the eager homebuyers and investors. Real estate in China became a “hot” commodity thanks to its exceptional rental yield, capital appreciation, potential RMB appreciation, and increasing transparency. By the end of 2004, housing prices had nearly doubled across all the Tier-1 cities in China. The rampant interest in the housing market has led to a flurry of asset price appreciation that is currently a topic of great concern to both the Chinese government and homebuyers. The anxiety stems mainly from concern that prices are skyrocketing above the affordable price for an average whitecollar professional, the threat of a potential mortgage crisis, and speculation over RMB currency appreciation. Since 2004, the Chinese government has been forced to initiate a series of policies to slow down the pace of soaring real estate prices (see chart at right). The government designed a variety of policies to address issues across different sectors of the housing industry, applied at different periods according to the global and domestic economic situation.
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Roller-coaster Ride A series of austerity measures in 2004 to 2008 designed to control the overheated market nearly crip-
pled the housing sector. During the 2008-2009 global financial crisis, the government implemented a USD $586 billion China economy stimu-
PRE-HOUSING REFORMS
Commodity housing US$96 per sq ft (2000) US$178 per sq ft (2004) US$384 per sq ft (2010) ▲300% in 10 years
Expatriate housing US$110 per sq ft (2000) US$192 per sq ft (2004) US$439 per sq ft (2010) ▲299% in 10 years
POST-HOUSING REFORMS
Commodity housing US$96 per sq ft (2000) US$206 per sq ft (2004) US$411 per sq ft (2010) ▲328% in 10 years
Expatriate housing US$233 per sq ft (2008) US$439 per sq ft (2004) US$1,001 per sq ft (2010) ▲330% in 8 years
lus plan, rescinded the austerity measures, and adopted a more supportive stance of commercial developers. This lead to a huge boom in the market and prices soared again in 2009. By 2010, property prices in major cities such as Beijing and Shanghai quadrupled their 1998 market prices. Prevailing market wisdom suggests that without careful government manipulation of policies, the China real estate market is at risk of a price bubble nationwide. One key concern that has gone by the wayside with the focus on inflationary policies is improving the quality of construction.
Source: Alex Chua, Asian Tigers Mobility (China) Limited
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From Bubble Trouble to Rubble Trouble During a recent international forum on green and energy-efficient building, China Daily reported that Qiu Baoxing, vice minister of housing and urban-rural development, revealed that the average lifespan of a building in China is 25 to 30 years, compared to 132 years in Britain and 74 years in the United States. One of the most common complaints among foreign homebuyers is that buildings in China appear to have been built with the cheapest construction materials available, which tend to degrade quickly. Clients often are shocked to learn that a building they believe to be 10 or 15 years old was only built five years earlier. The situation is further exacerbated in Tier- 2 and Tier-3 cities in China. The quality of the developments might not merely be a factor of subpar construction materials, but rather more importantly be influenced by the level of attention and standards enforced by construction supervisors. According to authors Ping Yung and Brenda Yip in their article, “Construction Quality in China During Transition” in the January 2010 issue of International Journal of Project Management, management issues, including the attitudes or commitments of management, the cooperation of parties, and the abilities and experience levels of project managers are the most important factors affecting construction quality. Prior to 2004, the real estate industry had low-entry barriers; consequently, the backgrounds of the developers were diverse—from consumer electronics organizations and banks to agriculture firms and pharmaceutical companies. Despite lack of experience and inferior quality, the 98 MOBILITY/OCTOBER 2010
FAST FACT: In June 2009, a 13-floor building in the Lotus Riverside residential complex in Shanghai toppled, killing one worker. An investigation revealed the building’s foundations had been undermined by soil piled 10 meters high on one side of the structure and the digging of a 4.6meter underground car garage on the other. buildings quickly sold in the booming bull market. Real estate developers have been heavily reliant on strong cash inflows from pre-sales to support and recoup the initial heavily invested capital. This pre-sale “cash-in-hand” has led to even further disregard for quality.
The rising property prices of this new generation of “expatriate housing” is driven by the strong demand and lack of supply of suitable expatriate-friendly housings choices in China. Foreigner relocation companies report that their foreign clients rank location, amenities, and construction quality standards among their top concerns when searching for a new home in China. Predictably, these specialty-housing options have been offered with a huge premium. The property and rental price differences between a typical local housing option and a new generation expatriate housing in the same neighborhood can be as much as 150 percent.
Landlords of Expatriate Housing Implications of Housing Reforms, and Construction Quality Issues on Expatriate Housing A number of the real estate developers, especially those from Hong Kong with international housing development exposure, foresaw the needs of MNC’s relocating expatriates as an opportunity to introduce westernized, urban upscale apartments and grand villa suburban gated compounds. In addition to offering higher quality housing choices, many of these housing developments are equipped with English-speaking property management offices and expatriate amenities such as international schools, sports and recreation centers, restaurants, supermarkets, beauty parlors, and country clubs. The popularity of these upscale developments, such as Seasons Villa and Green Villa in the Shanghai Biyun Green City International Community, has risen so much that there now is a tenant waiting list.
There are no specific Chinese regulations dealing with landlord and tenant relations. This type of legislation is administered by local government bodies, and circumstances can vary widely across different cities. Generally, the system works in favor of the landlords, as there are no restrictions regarding discrimination of tenants, rental price control, or significant penalties for delay in repair and maintenance. Finding the right landlord is crucial for guaranteeing a hassle-free living situation for the tenants. In general, there are two types of landlords in China who own expatriate housing: corporate landlords who can be the developer or hospitality management company engaged by the developer, or individual landlords who purchased the properties from the real estate developer. The business nature of corporate landlords is to acquire or build, lease, and collect rental fees. Service quality is key for corporate landlords because
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they are incentivized to keep the tenant long-term and generate positive buzz for their development. While the leased properties offered by corporate landlords are generally more expensive, tenants report that the response or turnaround time for maintenance issues is satisfactorily quick. As there are a limited number of developer-managed properties available in China, modern stylish housings owned by individual landlords provide expatriates another choice of living with more variety, e.g., historical she he yuan (courtyard with houses on all sides) colonial-style apartments in Shanghai. While these properties are deemed to have “more character,” leasing properties from individual landlords always has been a controversial topic. If the tenants are lucky, an individual landlord will allow more room for rental negotiations and a great opportunity for cultural exchange, as we have witnessed a case where a landlord is hosting monthly Chinese seasonal cuisine dinners with tenants at the landlord’s own home. How-
Green City in Shanghai Surrounding amenities ‒Three international schools ‒English-speaking management office ‒Shopping complexes ‒Sports and recreation facilities ‒Medical facilities ‒Church ‒Food and beverage services
ever, a number of individual landlords are investors or speculators who seek to realize their investment gain via capital appreciation instead of cash flow from rental income. The past appreciation of property prices implies a low rental yield (1 to 2 percent rental yield versus a mortgage rate of 5.94 percent), which has further de-incentivized catering to the tenant’s housing needs. In this case, tenants also are harassed by different housing inspectors and dropby visits from potential buyers. One
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Central Park in Beijing Surrounding amenities ‒English-speaking management office ‒Heart of commercial zone ‒Surrounded by shopping complexes ‒Sports and recreation ‒Medical facilities ‒Food and beverage services
King’s Garden in Beijing Surrounding amenities ‒English-speaking management office ‒Walking distance to Lady’s Street ‒Surrounded by shops and restaurants ‒Sports and recreation ‒Medical facilities ‒Food and beverage services
final problem is that many of these landlords are not based in the same city as their investment properties, and they rely on their “friends” or hired help to manage properties, which leads to slow turnaround times in responding to tenants maintenance needs.
Post-reform Era Housing Housing in China still is largely influenced today as in the past by government regulation. In the posthousing reform era, there is no doubt
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that expatriate housing in China has gone through a dramatic change. Expatriates now enjoy a large variety of choice concerning neighborhoods, style, and design of homes. However, some critical pitfalls, such as building and construction quality, interior design styles, and relationships with landlords remain unresolved. It is important for MNCs and expatriates to allow adequate time and concentration when choosing a new home during their relocation period. MNCs are advised to investigate both quantitative and qualitative research on the local housing market during the assignment planning stage. The expatriate on relocation assignment should take care to personally visit the properties and carry out a detailed due diligence to avoid
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Experiences of Expatriates with Private Landlords ...restricted in interior design choices... poor quality in interior construction... too few awesome choices... furniture issues... home comes furnished with no option to remove or replace furniture... negotiations with landlords are tedious and can turn to shouting match... landlords withhold the security deposit for no reason… harassed by landlord to open home to visiting potential buyers… landlord difficult to track down… landlord unwilling to make home improvements… communication barrier… cultural differences… $250 TV in a $2.5 million apartment….
rental regret later. There are wonderful gems out there and many foreigners choose to stay in the same home throughout the duration of their assignment in China, but the opposite also is true as many expatriates find themselves packing up and mov-
ing multiple times before they find a suitable home. Alex Chua, GMS, is vice president of Asian Tigers Mobility (China) Limited, Shanghai, China, and a member of the MOBILITY Editorial Advisory Committee. He can be reached at +86 10 6415 1188 or e-mail achua@at-mobility.com.
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China Mobility
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Understanding the Places, Policies, Practices, and People for Successful Relocation BY AVROM GOLDBERG AND LORRAINE JENNINGS The People’s Republic of China, with its complex and rapidly evolving economy and business environment, presents an exciting challenge for mobility professionals. Goldberg and Jennings write that organizations seeking to expand their global presence by moving human capital to China should strive to understand the destination locations, assignment policies and practices, and the needs of their potential assignees.
s one of the most rapidly changing economies in the world, China’s complex and growing business market has put a strain on the human capital throughout the country. As a result, this emerging market has an incredible need for talent and skilled workers. Although there is great opportunity for business growth in China, without proper planning and research, relocating employees to China is a journey that is fraught with complexity and challenges. Companies must consider all the factors—and the type of relocation—before asking valued employees to make the move. SIRVA recently updated its “China Mobility Report” (http://chinaindex.sirva.com/), which provides insight into China’s evolving relocation market. Benchmarking the mobility policies and practices of companies in Tier-1 and non-Tier-1 locations in China, the report is designed to help businesses with the creation of their China mobility strategies. Companies in the report shared their relocation challenges in China, which include how to aid in the cultural transition of assignees, control costs for the relocation assignments, ensure consistent benefits and compensation administration, and strategically relocate employees. So, how do companies looking to successfully place employees in China overcome these challenges? The answer is strategic planning and
A
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extensive research into the China environment. This research and analysis can be structured into four areas: Place: researching the infrastructure, culture, and practices of the potential city of relocation. Policies: understanding what policies are appropriate for the location and the assignee—and learning how these policies can vary from city to city in China. Practices: ensuring the established policies are effective in practice for the assignee and the company. People: taking the time to understand the assignee’s professional and personal goals, as well as investing in planned preparation, orientation, and transition programs.
Place: Understanding the Location The first step in ensuring a successful relocation to China is to explore and understand the local landscape. Socioeconomic changes are affecting how and where companies are doing business and, consequently, where they are asking employees to relocate. More companies now have operations in cities outside the considered Tier-1 cities, which include Guangzhou, Shenzhen, and Tianjin. In fact, in the 2008 “China Mobility
Report,” companies reported that they had assignees working in 44 Tier-2 cities. By the 2009 report, this number had increased to 65 Tier-2 cities. Regardless of relocating to a Tier1 or non-Tier-1 city, assignees and their families will have a period of transition. However, mobility professionals must conduct thorough research on the specific location as each city comes with its own unique culture and practices. By conducting the in-depth research, mobility professionals can better identify the appropriate assignees for each location and communicate how things operate in a particular environment. The result is a more prepared and satisfied assignee. Through research, mobility professionals will learn essential factors and differentiators about each city which can lead to important preparation or even policy changes. For example, there may be certain facilities available in the larger, more commercialized Tier-1 cities. Tier-1 cities likely will have the best, world-standard infrastructure, as well as the strongest, most enduring links with the outside world. Non-Tier-1 locations likely will have limited standard infrastructure for assignees, including
On the Web For further information on China, visit www.WorldwideERC.org:
973-543-6001 email: askpmi@pmipmi.com www.pmipmi.com
• “Worldwide ERC® Trendspotting: Organizations Perceive the Talent Shortage Situation in China As... ” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0610TrendSpotting.aspx • “The Rising Bar for China Expatriates” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0310-Weiner.aspx • “Help Wanted: China and India’s Search for Experienced Managers” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0309draeger.aspx
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international-standard housing, schooling, and health care facilities. In fact, some locations may be considered “hardship” locations because of the lack of basic amenities for the family; accordingly, a company may decide to allow the family to reside in a Tier-1 city and provide flexible fly-in/fly-out arrangement for the assignee to visit his or her family.
Policies: Ensuring the Right Compensation and Benefits As companies expand their footprint in China, one of the struggles for any mobility decision-maker is to ensure the right policies are in place for the location and the specific industry. In addition, the right kind of policy for a short-term relocation can vary significantly from a longterm or a permanent, one-way assignment. Understanding how other companies in China manage policy elements—like education assistance, housing norm deductions, and incidental allowances—can have a significant effect on the bottom line. One such policy element is hardship allowance. Let us use this as an example and explore the effects that location, industry, and assignment type can have. Location. In general, policy elements are similar across both Tier-1 and non-Tier-1 cities in China with variances in the levels of benefits because of the hardship and difficult conditions between the cities. For example, in a non-Tier-1 city, the assignee may receive additional benefits—including a longer preassignment visit, an increased hardship allowance, frequent rest and recreation trips, and more frequent review of goods and services and exchange rate fluctuation.
Industry. Another factor that mobility professionals must consider when establishing the policy is the industry in which they operate. In the “China Mobility Report,” companies in the automotive industry indicate they do not provide a hardship allowance, while companies within the IT/telecommunication industry provide a higher hardship percentage for some locations. Recognizing that assignees may talk with their peers about relocation benefits and industry norms, it is important to view the assignee’s total package and not just one policy element. Assignment type. Finally, the type of assignment also can dictate the type of policy appropriate for the assignee. The “China Mobility Report” found that 21 percent of companies pay a hardship allowance in Tier-1 cities for short-term assignments; this number increases to 40 percent for long-term assignments in Tier-1 cities. For permanent one-way assignments, 90 percent of companies in the report include a hardship factor.
Practices: Putting Policies in Motion While mobility managers may conduct thorough research to understand current China relocation policies, companies also need to evaluate current trends and ensure appropriate policies are put into practice. For example, the 2009 global financial crisis significantly changed how some companies applied their relocation policies in China. From the 2008 to 2009 “China Mobility Report,” many of the companies— likely driven by the need for cost containment—had frozen their costof-living differentials, reduced hardship allowances, and eliminated or MOBILITY/OCTOBER 2010 107
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...the 2009 global financial crisis significantly changed how some companies applied their relocation policies in China.
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scaled back the rest-and-recreation trips from hardship locations. Further, a number of participants indicated that many long-term assignees were transitioned to permanent one-way contracts with a higher success rate in Hong Kong, Shanghai, and Beijing. The report indicated that companies find the emerging permanent, one-way, and domestic assignments are new to China, and these assignments are predicted to increase as a result of the changing business need and the continued requirement to control cost.
People: Investing in Their Success Two of the most vital elements in ensuring mobility success in China are how well the assignee and family are prepared, and how the return on investment is measured. Particularly for strategic positions, HR and mobility managers must work to guarantee that the assignee has a clearly defined career path, goals, and objectives while ensuring an appropriate position has been lined up for him or her on repatriation. In addition, the assignee and his or her family must be provided with transition assistance to enable their successful integration professionally, socially, and psychologically into the new location—with consideration on how to best help the family manage change and culture shock. Lack of communication, verbally and nonverbally, can affect every
aspect of a person’s career and personal life. If someone cannot communicate, imagine the difficulty of going to the bank, dealing with customers, and even going grocery shopping. In addition to the new surrounding environment, if the assignee and family cannot adjust or are not happy with the new living arrangements, it could result in separation anxiety.
China: Respecting the Unique Mobility Environment China is a complex and rapidly evolving economy and country. As a result, mobility professionals need to adequately prepare to achieve successful relocations in this exciting environment. Companies looking to relocate employees to China should thoroughly evaluate the locations to which they are looking to relocate, the appropriate policies and practices, and what are the needs and desires of the potential assignees. As companies look to expand their global presence, mobility managers can play a vital role by helping to find and place the right people for long-term success. Avrom Goldberg is managing director, Asia- Pacific and Middle East, for SIRVA Relocation, Hong Kong, China. He can be reached at avrom.goldberg@sirva.com.hk. Lorraine Jennings is manager of consulting services, Asia-Pacific and Middle East, for SIRVA Relocation, Melbourne Australia. She can be reached at lorraine.jennings@sirva.com.au.
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Effective Virtual Communication and Team Meetings with Your
Chinese Customers and Co-workers
Understanding differences in basic business values is a powerful tool in bridging the gap and designing successful communication strategies. Hodge outlines four principles that illustrate business interactions with Chinese nationals, as well as offers strategies for successfully addressing these situations in a virtual environment. 110 MOBILITY/OCTOBER 2010
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ulticultural and multi-geographical teams are becoming the backbone and building blocks of global companies. Most organizations do not have viable alternatives to virtual communication when managing their far-flung operations. Success will depend to a great extent on the global workforce’s ability to work and execute across differences in business practices and work environments. With advances in communication technologies, distance has become irrelevant to business interactions. But ease of communication does not guarantee effective communication, and sometimes the ease and frequency of communication across borders creates misunderstandings and sabotages results. In many cases, these difficulties swirl under the surface and do not rear their heads until companies fail to launch a new product or implement global initiatives. Companies in the United States and China must gear up for increased business interactions in the new decade. Although the Chinese prefer face-to-face meetings, prohibitive costs and the need for quick actions are making virtual communication a rule and face-to-face meetings an exception. Success or failure of global organizations in China depends directly on an innovative approach to virtual communication. Before you and your company can identify the most effective tools for virtual communication, you must clarify the expected results: • Sharing information: the aim is to create acceptance and understanding. • Discussions and collaboration: the aim is to create a shared vision and ensure that everyone contributes their agreements as well as disagreements. • Decisions: the aim is to get everyone’s commitment to follow through and work to execute the decision.
Understanding Basic Cultural Differences To get results from virtual team communication, you must consider the underlying principles that impel the thoughts and actions of your Chinese counterparts. Although we cannot lump Chinese culture into a monolithic whole and work with them based on stereotypical descriptions, we must realize that there are fundamental and deeply-rooted values that are shared among people with similar upbringings and life experiences. Understanding differences in basic business values is a powerful tool in designing successful communication strategies. Following are examples of four unspoken principles that will govern your business interactions with the
BY SHEIDA HODGE Chinese. These are real-life examples and are followed by winning strategies for success.
Accountability Vs. Bureaucracy An American company ran into difficulty in implementing the terms of its contract with a Chinese supplier. Executives at the top of the American company had decided to enact a seldom-used stipulation that was clearly spelled out in their contract with the Chinese supplier. The engineer in charge of the project was directed to contact his Chinese counterparts to implement this project. He made little headway in his communication with his Chinese counterparts; there were many questions and objections. Because he was put in “charge of getting things done,” he could not go back to his boss and say, “they don’t listen to me, please help me to do my job.” Because he was told that the Chinese prefer face-to-face communication, he got permission to visit China. After getting the same run-around after face-to-face meetings, he became increasingly frustrated. His efforts to push harder and demand action resulted in alienating his Chinese counterparts who escalated their complaints to increasingly higher levels until they finally reached the president of the American company. The problem was resolved with renewed negotiations at the highest levels between the American and the Chinese companies. The end result was that the American company organized a cross-cultural training program for its entire engineering department. At the end of the day, one of the engineers raised her hand and commented that “this was very helpful, now you should go and do this training for our top executives!” Winning strategy: If this situation had been addressed from the beginning by the top-level American executives, the American engineer would have had access to decision-makers, and with the support of his management, he would have achieved positive results. As this case indicates, virtual meetings with decisionmakers lead to far superior results than meeting face-to-face with people who do not have decision-making authority. Team leaders or individual team members in the United States usually are empowered with decision-making responsibility within the scope of the project and are accountable for results. Unless you are dealing with the very top of the organization, your Chinese counterparts might not have the same decision-making authority. Generally, people who lack authority and real power make it up. This made-up power is bureaucracy. Your Chinese counterparts who do not have the power to say “yes,” feel powerful and in control by saying “no.” MOBILITY/OCTOBER 2010 111
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On the other hand, in China, when people in authority decide that it is to their benefit to proceed, they can persuade others to get behind them and things will happen very quickly. This is not necessarily true in the United States, where power is more horizontal and the top person must get buy-in from other stakeholders in the organization before proceeding.
Equality Vs. Hierarchy An American organization was exploring a business project in a Tier2 city in China and a young employee, who spoke a little Chinese from his student days in Taiwan, was put in charge of the project. It was identified that a director of a government organization in the Chinese city had the authority to initiate and facilitate the project between the American and Chinese groups. After exchanging e-mails during the span of several months, the American employee was feeling very positive about his communication with his Chinese counterpart and decided to follow up his e-mail with a telephone call. The American employee decided to greet and carry on discussions in Chinese to please his Chinese counterpart. But the Chinese director became very abrupt and ended the conversation in a brusque manner. Although confused, the American employee decided to follow up with a cheerful e-mail. After several days of silence, he received an e-mail from his Chinese counterpart saying that he was greatly insulted by the familiar way that the American employee addressed him on the telephone. He pointed out that any future communication should come from the director of the American organization. Winning strategy: To get results, observe and match hierarchal levels in virtual communication. While it is 112 MOBILITY/OCTOBER 2010
not always possible to perfectly match levels, some organizations might inflate the position of their employees (although this subterfuge could backfire). If this inflation is warranted, the title of employees must be updated to reflect their responsibility. To pave the way for effective virtual communication with Chinese counterparts, executives at the highest level possible must initiate the process and introduce the designated employee as the person who has the knowledge to carry on the project. Young people, and especially younger women’s positions, must be bolstered with a good introduction from the highest level possible to establish their credibility.
Surface Agreement Vs. Implementation A U.S. multinational company was sued by its software vendor for improper use of its products and had to pay a huge penalty. To prevent future fines, the IT director at the headquarters in the United States was assigned the job of changing and overhauling related manuals and procedures at several of the company’s Chinese subsidiaries. The IT director immediately formed a team of IT employees who worked in different locations in China. E-mails were followed by regular conference calls and everyone was very agreeable. But after eight months of communication, nothing of substance had happened. The American IT director was losing hope of accomplishing her objectives. Winning strategy: When you are assigned to any task, regardless of domestic or international location, you must line up the resources that you need to do the work. The IT director assumed that her Chinese team members had the time and the motivation to allocate the extra time needed to work on the IT project. Because they were busy (and sometimes the subsidiaries are bom-
barded with requests from headquarters to participate in implementing tasks that are not of the highest priority to them), the Chinese subsidiary assigned several of their leasteffective employees to the team as placeholders. To avoid frustration, get the preliminaries in order: • Ensure your project has buy-in at the highest level and that Chinese team members allocate the resources needed to complete the project. • Keep the top people in authority involved in your project by inviting them to be guest speakers during your conference calls and by sending them progress reports. • Follow up closely with your team and keep the lines of communication open by providing relevant information and keeping the status of your project current.
Task Vs Relationship The engineering department of an American high-tech company was working very closely with its Chinese counterparts at its subsidiaries in Beijing, Shanghai, and Chengdu. American engineers were the drivers of projects and several of them led virtual teams of American and Chinese. The Americans started their conference calls with a bit of humor to create a friendly environment and put everyone at ease. But they were not sure if that tactic was working because the level of engagement was in doubt and the Chinese did not readily participate in discussions. Although they tried to work with the Chinese the same way they communicated with their dispersed American colleagues, the results were not the same. On the surface all was well, but the American engineers felt unsure about how best to communicate work issues such as quality and timeliness of reports, performance and quality of work, and engagement and participa-
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tion during conference calls. Discussions about the quality of work ended up with a comment or a behavior they could not understand. American engineers grumbled about the Chinese by the water cooler or at meetings: “It is so hard to understand them and I don’t know if they understand me?” “They stay quiet at conference calls and act surprised if we ask for their opinions,” or, “Sometimes, they sound abrupt and pushy and we are taken aback about some of their comments.” “Do I tell them directly or I tell their boss about the screw ups?” Winning strategies: A relationship of trust and confidence is the main ingredient of effective and productive communication. We interpret e-mails and telephone conversations based on trust and the relationship that we have with the other person. Misunderstandings are the main cause of conflict and breakdown in communication, and strategies for addressing them involve both communication and relationship-building: • Communicating across language and accent barriers is the most difficult aspect of virtual communication across borders. The bad news is that you cannot do anything immediately to improve accents and language capabilities. The good news is that you can apply virtual communication tools that will increase understanding and remove language barriers to a great extent. • Start your virtual communication process by accepting and expecting that it will take more time. • Slow down and explain concepts more thoroughly and allow non-native English speakers more time to understand the concepts. Impatience kills virtual communication; your Chinese counterparts can turn you off mentally and disengage from the conversation. • Remember that non-native
English speakers, especially those who recently have been immersed in speaking English, have just a basic, unvarnished grasp of the language. Because non-native English speakers are unfamiliar with the nuances of the words, their communication could be very raw and they might use words that could have negative connotations. Also, their communication by e-mail or telephone might lack the softening language that makes conversation more palatable. Thus, your Chinese counterpart might sometimes sound too direct and rude. For example, writing “you are confused,” instead of “there is a misunderstanding.” • Work to establish a relationship at the very beginning of your interactions. It is hard to change first impressions after they are formed. • American culture is very taskoriented and forms relationships around task accomplishments. The Chinese respond better to working relationships when both sides have established a personal rapport. • Show your sincerity by demonstrating that you have their best interest at heart and you are not just looking out for yourself in pushing to get the work done. Show that you are working to create value for both sides, and paying attention to the human side of the equation will demonstrate this point. • Allocate some time to get to know your counterpart as a person. First, share some information about your background by e-mail and then follow up with a light one-on-one telephone call. At the initial stages of working together in the virtual workspace, share the project’s background information with your Chinese counterparts, specifically as it relates to them and their boss. Let them know the reasons for starting this project and its importance to the organization.
Most important, let them know the executives at the highest level who are supporting the project. But be aware of giving too much information and pay attention to material that must be kept confidential. • Take conflict offline. If there is an issue, set up a time to speak to the person one-on-one. • Do not correct people on the conference calls as they could lose face and resent your action.
Effective Virtual Communication In virtual communication, lacking the benefit of an emotional context, we must pay more attention to values and business styles to develop trust. There is the belief that to build trust with your Chinese counterparts, you have to spend face time to entertain them or give them expensive gifts. Of course, in any culture, face-to-face communication is preferable to email, telephone calls, and even video conferencing. However, meeting in person in itself is not sufficient; sometimes the more we meet with a person the less we like and trust them. The Chinese, the same as their American counterparts, are very busy and to build trust with you, they want to know: • Your company’s established brand (They want to do business with reputable companies and people.). • Your level of authority and expertise and your ability to implement and execute the required tasks. • Your connections at the highest levels, and the background of your dealings with other associates and customers in the past. • Your commitment to them and to know that you have their best interests at heart as well as your own. Sheida Hodge is director of cross cultural services for Hodge International Advisors, Mercer Island, WA. She can be reached at +1 206 420 7980 or e-mail sheida@hodge-ia.com MOBILITY/OCTOBER 2010 113
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Awakening Giant India’s Burgeoning Workforce 114 MOBILITY/OCTOBER 2010
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BY CHARLENE SOLOMON AND SEAN DUBBERKE As multinational organizations increasingly make strategic use of educated Indian talent, at the same time they are aiding in the development of many of India’s industries. Dubberke and Solomon write that to truly appreciate the country’s global importance, and to understand the scope of India’s activities in the marketplace, one first must be able to successfully and engage and collaborate across cultures.
I
t was bound to happen. In the summer of 2010, India had a technology breakthrough—a $35 laptop—which promises to increase the largest democracy’s influence and power in the world. More than 100 million schoolchildren will be the first to receive the touchscreen computers, which resemble Apple’s iPad. Growing access to the Internet and mobile technology through innovative devices such as this one has established a greater connection in India to global news and information. Such momentous breakthroughs significantly influence literacy and education, which means the number of people brought into the global workforce increases, thus affecting the types of interaction we have at work. Learning about the people and culture of India on a deeper level will help you develop better workplace relationships that can lead to greater efficiency, satisfaction, and success in the country. Indeed, the numbers are astonishing. While the Republic of India, also known as Hindustan (“Land of Hindus” in Hindi) boasts a population of one billion people, approximately 232 million read, write, and speak English, which places India second in line after the United States for countries with the most English speakers, according to TESOL-India. According to the World Bank’s “Country Summary of Higher Education,” India has the third largest higher education system after the United States and China. However, at the same time, 34 percent of adults and 18 percent of youths were illiterate in 2007, according to UNICEF (China’s illiteracy rates are 7 percent and 1 percent, respectively). MOBILITY/OCTOBER 2010 115
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Strategies for Success in India • Clarify tasks with a written checklist and open-ended questions. • Strive to not make assumptions. • Directly ask for your Indian colleagues’ input—many may be reluctant to provide unsolicited feedback. • Intensive management (also known as micromanagement) may be viewed as good management by Indian employees. • When asking questions, a “yes” response often does not mean “yes, I understand”—use an open-ended approach to solicit more qualitative answers. • Ask questions in several ways to ensure phrasing did not affect the response. • Clarify terminology when possible. • Ask for regular feedback and follow-up on tasks to maintain schedules and to meet deadlines. Source: RW3 CultureWizard’s Working with India e-Learning module
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The contradictory nature of this emerging giant is something we are bound to encounter more frequently in the workplace as the decade continues. How can we make sense of the two following headlines, which both appeared in the Times of India on the same day? The first reads: “India Space Research Organization launches PSLV-C-15 with 5 satellites;” and the second: “8 Indian states have more poor than 26 poorest African nations.” While 421 million acutely impoverished Indians surpass the population of the poorest countries in Africa, Indian scientists succeeded in reaching Earth’s orbit with five satellites in the same day. It is within this paradoxical framework that we see the India of the present, and it is within this framework from which we must become aware of its vastly rich culture and history, certain to touch us all in some way. What cultural values and behaviors can you anticipate from people who come from a country of such dichotomy? How do Indian history, industry, and education play into their workplace expectations and behaviors? It is no secret that organizations around the world recognize India’s enormous, educated workforce as an inexpensive labor pool. In recent years, as companies make use of educated Indian talent, they also help to develop many of India’s industries, most prominently the technology sector. This also has spurred immense growth of a middle class in cities such as Bangalore (Bengaluru), an increase in university attendance, and myriad other technological advances. To appreciate the country’s global importance, it helps to understand the scope of India’s activity in the marketplace. As international businesspeople
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interact with Indians on a daily basis, how can you successfully engage and collaborate within this culture?
Cultural Collaboration Two of the key cultural values that characterize Indian society are a strong respect for hierarchy, (which is reflected in roles within a company as well as within one’s family), and the importance of building relationships. These values are somewhat different from values in North America and Europe, where individualism, freedom of expression, and a transactional approach to the market is more prevalent. The following provides some insight into these values and some successful modes of interacting with Indians. Obviously, teaching culture requires a certain amount of generalized information. Just like a bell curve, where the majority of the data falls in the middle and the minority exists on either side of the curve, cultural attributes are distributed in such a way across communities. These areas in the middle are referred to generally as “national culture.” It also is important to recognize “personal culture,” which refers to an individual’s unique experience linked
to their core values and beliefs. While the visible signs of culture, such as the way people dress, the food they eat, and outward behaviors, are easy to recognize, it is the invisible signs of culture that are demonstrated with more subtlety, and thus are the most difficult to comprehend. By no means is the list in the sidebar below complete, but it lists many of the common workplace issues. You may face people with perspectives you have never experienced before, and to understand them requires adopting an intercultural lens through which you can decipher the attitudes and behaviors you encounter. Sudhesh Bhaskaran, an intercultural consultant of Indian origin in Dubai, United Arab Emirates, offers some tips for effective collaboration. When first meeting with colleagues and co-workers in India, Bhaskaran recommends using a top-down approach, depending on the level of seniority or position, where you establish your credibility at the beginning of a relationship by some display of accomplishment and stature. You can do this by giving your colleagues background on your education, or simply what you were responsible for in previous positions. You may feel
Key Values in Indian Business and Society • Respect for elders and authority. • Building trust through interpersonal relationships. • Working and learning collaboratively. • Obligation to the family before anything else, including work. • Preference to avoid giving or receiving bad news, in order to maintain harmony. • Hesitance to take undirected initiative. • Eschewing use of the word “no,” which can cause loss of face. • Importance of building relationships and focusing on people over meeting schedules and deadlines (However, in cities like Mumbai, Chennai, and Bangalore, this aspect is less apparent.). MOBILITY/OCTOBER 2010 117
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On the Web For more information on India, visit www.WorldwideERC.org: • “The Trailing Spouse In India” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/1109-manian.aspx • “Untangling India” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/1208caballero.aspx • “A Closer Look at India Today: Emerging Mobility Trends and Practices” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0809-karetnick.aspx this is boasting, but an Indian colleague will listen carefully to these qualifying details to place you somewhere in a hierarchy. Defining one’s role and demonstrating one’s knowledge through action is important in highly stratified societies. As a manager, it is crucial to gaining respect. Once you establish credibility, “you can start ‘melting the ice’ and building your own network of more personal relationships within the office,” says Bhaskaran. This method can be applied on a virtual level, too. “Building strong relationships in India requires the use of various soft skills, of which many Westerners do not regularly use in the business context, given the transactional approach many professionals take in the West,” says Bhaskaran. Some simple ways to do this are to begin meetings by discussing the weather, what you did over the weekend, and inquiring about the well-being of your colleagues and their families. Take interest in the personal side of your co-workers’ lives, and allow questions to be asked of you in return. What you may consider private information is probably a topic of conversation at the office in India, e.g., ages of spouses/ partners and children, or even salary. Bhaskaran notes an important trend that has grown during the past 10 years, during which many call centers have been established throughout India. As a result, younger generations have worked with people from around the world and have been exposed to a large 118 MOBILITY/OCTOBER 2010
body of popular Western culture, most of which comes from the United Kingdom and the United States. This forms their knowledge and perspective of the West, and in a way has affected their perception of themselves, as Bhaskaran highlights a subculture in India that is “inbetween” the older generations and a highly Westernized global media culture, which in India is derived from mainstream movies, television, music, consumer products, and more. This youth is mostly urban, and has had the chance to develop a new, more American accent when speaking English. Indian English generally always has sounded closer to British English. Urbanization also has enabled young Indians to move into their own apartments, something typical of Western youth, but unheard of in a society where children do not move out of their parents’ home until married (some never move out, even after marrying). The opportunity to study abroad, especially in the UK and U.S., also has added to this nameless, “in-between” culture.
Group-oriented Cultures Brainstorming and creative thinking is another area requiring a unique approach. Group-oriented cultures need the support of a team of equals to feel comfortable speaking openly about an issue. If you are managing a team of Indians and wish to devise a new method or product, it is best to give instructions to a group of people rather than rely on individuals to
deliver work on their own. Learning also is a collective experience and Indian teams succeed at higher rates through group work in which members can interact and discuss what they have learned. Handing out printed materials and assigning reading or individualized homework will not be as effective. Reinforcing lessons through informal conversation at the workplace and through time spent outside of work is a better way to transfer knowledge. According to Goldman Sachs’ “Asia Economics Analyst,” 140 million people in India will move to cities by 2020, and by 2050, 750 million will live in large urban centers. The more people that make the rural-urban migration to global cities such as Mumbai and growing locations like Ahmadhabad and Baroda, the more connected India will be to the international marketplace. Thus, intercultural awareness is a core competency in the numerous industries seeking opportunities in India and around the world. In addition, the most success in global business has proven to come from culturally diverse, global teams. Are you equipped with the knowledge and experience to drive valuable collaboration across cultures? Charlene Solomon is executive vice president of RW3 CultureWizard, New York, NY. She can be reached at +1 212 691 8900 or e-mail charlene.solomon@rw-3.com. Sean Dubberke is marketing and program coordinator for RW3 CultureWizard, New York, NY, and a member of the Mobility Editorial Advisory Committee. He can be reached at +1 212 691 8900 or e-mail sean.dubberke@rw-3.com.
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africa: The world’s second-largest and second-most populated continent, Africa is home to a variety of cultures and geographies that makes understanding this destination essential for the managers of an organization’s mobile talent. Edgerton and Ruth provide an overview of the diversity within the continent, and offer tips for organizations seeking to expand operations into the region.
BY GENE EDGERTON AND NANCY RUTH hen one thinks of Africa, a vast scenic landscape most often comes to mind—wildlife roaming the open plains and woodlands, a splendidly flamboyant skyline above myriad ethnic groups imbued with traditional customs. It is only on closer inspection, however, that one will find that Africa is a land of contrasts—not only in its physical composition but also in the way its peoples live, think, and behave.
W
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Land of Exhilarating
contrasts
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Africa is an enormously complex and assorted continent, comprised of more than 50 countries with an estimated population of nearly 1 billion. Its land size is greater than Europe, China, and the United States combined. In addition, the plethora of languages and religions often separate one tribe or family from another. Urban areas exhibit many of the modern characteristics commonly found in any other developed city: an excess of mobile phones, Internet cafés, and traffic jams. In contrast, just outside these metropolitan areas lie rural communities that are vastly underprivileged and steeped in tribal traditions and beliefs. Yet, even in these extremely impoverished areas, you will find people with mobile phones, which helps drive commerce, trade, and interactions with other communities. History. Commonly believed to be the continent in which human life began, the history of Africa dates back for centuries. It is marked by the rise and fall of empires, kingdoms, colonialism, and slavery. To best navigate its current social, economic, and political environment, one must look back to understand how history has shaped the African culture today. As an illustration, Equatorial Guinea has a long history of foreign occupations (including the Portuguese, Spanish, Dutch, and French) and, more recently, coups. It is thus understandable why Equatoguineans are considerably risk-averse. This often manifests itself in taking more time to establish trust and to agree on a contract. More specifically, they may be apprehensive about sharing their viewpoints or committing to deadlines, simply because taking chances like these may be perceived as detrimental to their livelihood or career if proved wrong. Expecting an African 122 MOBILITY/OCTOBER 2010
“Sticks in a
ers, to put the needs of to participate in what bundle are the group first, and to may be considered unbreakable.” voice the group’s opinrisky behavior may be —BANTU PROVERB ion before expressing his unrealistic. To be or her own. Most imporeffective, one must tant, to excel there must be a collecbreak the task down to manageable tive responsibility from a unified milestones that can be closely moniteam. This requires a well-established tored by all. The effect of colonial structure of relationships. rule and the recent intervention from the United States also has led to cerRelationship Group Dynamic tain cultural paradigm shifts. At times, Equatoguineans feel conflictWhen working in Africa, it may ed: they want to maintain their traditake time to adapt to the relationship tions, yet recognize the need for group dynamic. However, eventually Western knowledge and technologies. it can be leveraged to benefit the Geography. In addition to history needs and goals of your social situaas a defining force shaping modern tion or work environment. For examculture, geography also plays an ple, if your Nigerian team faces an important role. For example, important closing date on a project, it Equatorial Guinea is divided into might be disadvantageous to stress three main regions, the mainland, Rio the importance of meeting this deadMuni, and two islands: Palé and line or to state the importance of Bioko. When oil was discovered in doing a good job. This puts responsi1996, the capital was moved from the bility and accountability on the indimainland to the city of Malabo on vidual, not the team. A more useful the island of Bioko. This created a approach may include saying, “I need natural opposition between the ruling your help. Our team is facing a diffitribe on the mainland (the Fang) and cult deadline and we need your assisthe home territory tribe on the island tance. Is it possible for you to come (the Bubi). When working in teams, in this Saturday morning to assist our it is important for managers to be team in completing this project? You aware of these subtle conflicts within will help everyone so much and our the hierarchical system and assign entire team will celebrate success.” responsibilities accordingly. This approach is more effective because it emphasizes the importance of relationship, not task, and because Understanding Key Values Shaping it focuses on the needs of the group, African Culture There are a variety of attributes not the individual responsible for getdefining African culture. The two ting the task done. By communicatmost influential are the concepts of ing in this manner, the employee will group identity and relationship. In be more likely to comply. contrast to cultures where the indiIt also may be unfavorable to vidual is the basic unit of society and express to the individual that he or nurtured to become self-reliant to she is of great value to the team. This produce a thriving community, tactic, although flattering, separates Africans emphasize the family (and the person from the group and could other small groups) as the basic unit. potentially cause loss of face. In Mozambique, a child is taught While it might take time for from an early age to bond with othWesterners to achieve 100 percent
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“No one tests from more direct cultures trust from their the depth of vary, but they emphasize African counterparts, a river with the same point: “it’s as if developing relationboth feet.� they are talking in circles. ships is the founda—BANTU PROVERB He told me ‘yes,’ but I tion for any longthink he really meant ‘no’term success. Take why would he do that?� the time to get to know your colleagues (in work or social settings). “There is no phrase Send an e-mail to them just for the without a double sake of getting to know them better. meaning.� Become inquisitive about how they —AFRICAN PROVERB celebrate their birthdays, holidays, and specific family events. ExRespect and saving “face.� Rechanging this knowledge may offer spect for others and protecting his or your colleagues the security needed her reputation is an intrinsic part of a to move ahead in accomplishing the collective society. This recognizes that tasks at hand as trust is slowly built. Communication. Because Africans a person’s status within the group and use a more indirect style of communi- hence the organization is important. cation, it may be frustrating to under- The perceived loss of status or “face� may be insurmountable from an stand what they are trying to say. African’s perspective. Direct commuComments from individuals coming
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nication—particularly disagreeing with a directive from a valued peer or superior—is in direct conflict with this value. Rather than offend a colleague, an African may choose to respectfully avoid the issue, particularly in a group setting. Maintaining harmonious relationships is highly valued and an important factor in why Africans communicate this way. Understanding the cultural framework and adjusting your style to respond in a manner that is more aligned with these cultural values are essential for achieving your shortand long-term goals.
Thrive on Assignment Many international corporations in Africa have altered their business conduct, either instinctively or by necessity, and have fostered a more communal and relationship-reliable approach to accomplishing objectives. Often, the “survival of the fittest� mentality changes to a more African “survival by unity� way of thinking. Set realistic expectations. Where time is money from a Western point of view, investment in relationships is money from an African’s perspective. As a result, one of the most important factors to ensuring a successful expatriate assignment is to set realistic expectations for yourself and your colleagues. Be cognizant of attempting to accomplish too much. Understand that language, culture, and perhaps newly-defined corporate culture barriers may create unexpected obstacles. Spend time visiting with others and become flexible with the African way of doing things.
“Knowledge is better than riches.� —AFRICAN PROVERB
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On the Web For further information on Africa, visit www.WorldwideERC.org: • “Incentives and Compensation for Going into Africa” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0607stegmann.aspx • “The Expatriate Experience in South Africa ” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0610-ColonraTurner.aspx • “‘A Heartier Employee’: Selecting and Training Expats for African Assignments” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0608dunaway.aspx
Take language lessons. Many corporations offer language courses. Taking advantage of this benefit and learning a few greetings not only will be greatly appreciated by local colleagues, but may also form the first link in building productive relationships. Conduct on-site visits. Orientation or “look see” visits are important for the proposed transferee to get a glimpse of their potential living situation and help set realistic expectations. After this, it is important to meet with the transferee to debrief and look for any red flags that might need to be addressed. Leverage past experiences. It is important to remember that former expatriates are excellent resources for their first-hand experience and their wealth of practical information. Establish a plan to capture the knowl-
edge gained during an assignment and maintain a database of expatriates and their contact information. This enables the new or prospective assignee to easily connect with former expatriates who have lived in the same areas and makes the knowledge transfer more efficient. Because rotational expatriates are on a continual come-and-go basis, they may not develop the trust needed to establish effective relationships with their African counterparts. More effort will be needed to establish these connections and, hence, more time may be needed to achieve agreement with ideas or policies and to meet project deadlines. Consider health and safety concerns. In many parts of Africa, it is not rare for expatriates to ask questions such as, “what would happen if there were a coup?” or, “what will I
Safety Tips for Expatriates • Schedule airport pick-up with a known individual or corporate contact. • Register with your local embassy as soon as possible. • Stay current with travel advice and local news throughout your stay. • If you are traveling to other cities or countries, be sure to carry your passport and visa. Give copies of your important documents to someone back home who has easy access to faxing or e-mailing them to you or someone else. Scan your important documents and e-mail them to yourself. • Familiarize yourself with local hospitals and clinics to identify those most appropriate for your needs. • Purchase proper health insurance that includes evacuation to more modern medical facilities as needed. • Stay alert when traveling after dark. • In certain countries, special permits are required for almost all types of photography, especially presidential palaces, military installations, airports, harbors, and government buildings. • Do not take or ship camouflage-patterned clothing, large knives, binoculars, and firearms. Those items may be confiscated and the carrier might be detained. 126 MOBILITY/OCTOBER 2010
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“Once you have the dust of Africa on your feet, you cannot shake it loose.”
the duration of their stay. —FROM THE BOOK, DUST OF AFRICA, BY SHEL ARENSEN Use mobility consultants and training. do if I become terribly ill?” Health Destination services, orientation and safety issues need to be supported home searches, and settling-in serby a joint community. Because of vices are available in most locations. this, many companies will provide an The support and guidance of a local in-depth security orientation for their mobility consultant will alleviate expatriates on arrival. Others may much of the stress, so that the share services that they have already assignee (and family members) will established. For example, in Equafeel more at ease about this large torial Guinea, different oil companies endeavor. It also provides the opporpool resources to help each other. tunity to showcase the positive One might offer its exceptional medi- aspects of the new location. cal services in exchange for an evacuaCross-cultural training sessions can tion plan where helicopters can lift be extremely beneficial to the expaexpatriates out in case of an emergen- triate and family. Whether it be predeparture or post-arrival, these culcy. It also is important for assignees tural insights are useful in helping a to find ways to stay physically and person adapt to the new living and mentally healthy, as well as to mainworking environments. tain good connections back home for
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The vast lands of Africa possess seemingly magical qualities. However, many of Africa’s cultural values and behaviors often conflict with those coming from outside the continent. Therefore, prior knowledge of the African culture is essential to one’s journey abroad. This knowledge provides a platform from which the expatriate may not only successfully meet business objectives but also may thrive—reveling in the beauty and diversity of this great continent. Gene Edgerton is senior research and development specialist for Cultural Awareness International, Dallas, TX. He can be reached at +1 214 691 4113, via www.culturalawareness.com, or e-mail gedgerton@culturalawareness.com. Nancy Ruth is program manager and senior Africa facilitator for Cultural Awareness International, Dallas, TX. She can be reached at +1 214 691 4113, via www.culturalawareness.com, or e-mail nruth@culturawareness.com.
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Uncovering the Universal Qualities of an Effective Manager 130 MOBILITY/OCTOBER 2010
Conducting due diligence prior to sending an employee on assignment is key to a successful outcome. The same holds true of accepting a management role. Burch identifies the common traits of effective managers, evaluates how good decisions get made, and offers decisionmaking dos and don’ts.
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BY ROBERT F. BURCH, SCRP
Y
ou may have read Dale Carnegie’s classic, “How to Win Friends and Influence People,” taken some Dale Carnegie training, or participated in management training of some kind. Whatever the case may be, you realize what you have read and learned seems much like common sense. So if managing people effectively requires simple common sense, why is there so much training material, so many books, and so many seminars? As you probably realize, part of the answer to the question has a lot to do with what we are wired to do. Good sales professionals do not necessarily make good managers, and vice versa. Regardless, the right amount and type of training (and practice, of course) can help many people realize their potential, whether you are talking about management or the rank and file.
Common Attributes of Effective Managers Many articles and books already have been written offering answers as to why certain managers are successful and why others seem to fail. While it may be somewhat difficult to find a truly good manager, it is far easier to identify the attributes that separate good managers from average or bad ones. In spite of what many people believe, a significant problem in any business is a lack of qualified management personnel. People are the key factor in the success of any business, and success starts with an effective and competent management team. According to Chuck Franklin, a Baltimore, MD, business consultant at the professional employer organization (PEO) Administaff, there seems to be such a shortage of good managers that organizations tend to accept mediocre performance rather than deal with the unpleasant task of terminating the bad managers. On one hand, good managers can direct “human capital” to help separate their organizations from the competition. On the other, bad managers can drag down an organization. Ask management gurus about talent development, and they will tell you managers frequently are not good mentors and coaches. Administaff, which provides training and employee development as part of its human capital management services platform, says organizations spend insufficient time and resources trying to turn bad managers into effective managers. In many cases, no matter how
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much organizations attempt to “mold” their managers, dominant personality traits will not allow enough long-lasting change to take place. Once again, you are most likely to succeed in a role you are “wired” to perform.
the chance that a decision will be wrong or even harmful to your subordinates, to your organization, or to both. As you might expect, tried and true practices exist that may help you when it comes to making gamewinning decisions.
A word of caution: a red flag should go up if you have to frequently backtrack after you make decisions. Decision-making Every day managers make decisions that affect their people. The path to decision-making obviously can be complicated. Even if your intentions are pure, there is always
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First, to make a sound decision you will need to gather information from all those involved, and take into consideration whom your decision will affect. Do not make the mistake of not gathering enough information
before making your decision. Most members of your team want to be involved in decisions that affect their working environment. Even if you think you can make the decision by yourself, you will get more buy-in as a result of involving as many members of your team as possible in the decision-making process. Second, when you hit bumps in the road or you are feeling indecisive, use your network of trusted advisors to help arrive at the right decision, as well as draw on past experience for insight on the best way to navigate your way past the bumps. That is, identify similar situations you have handled in the past, and what you did to fix them. What kinds of options were available, and would they work in the current situation?
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Third, never make assumptions about a situation. After all, you are familiar with what “assume” means, right (“to make a ‘beast of burden’ out of you and me”)? Make sure that you have a clear understanding of the situation at hand so you can gather all the correct and appropriate information to make an air-tight decision. Fourth, learn to draw on the expertise in your organization. If you have a mentor, seek him or her out. Ask questions of your team members from your own department, and of coworkers outside of your department. Involve those below you in the decision-making process by asking for their input. Even if the ultimate decision is in the hands of management, it only makes sense that involving other members of the team will help build a stronger company.
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Besides, you just never know when a staff member might come up with a great idea that everyone else has overlooked. A word of caution: a red flag should go up if you have to frequently backtrack after you make decisions. Are you gathering information too quickly? Should you have waited until you have more of the facts? If you are making decisions too quickly, you have wasted a lot of your time and effort. If you are feeling pressure to make a hasty decision, ask for more time. Manage expectations: provide the person putting pressure on you with a reasonable time and date by which can make your decision. Finally, perhaps the best management tip of all is one that extends well beyond the boundaries of being
a manager: do not make decisions driven by emotion. As you have heard hundreds of times, it is never a wise choice to make a decision when you are angry or upset. The timing to make a decision is not right until you have presence of mind and feel some serenity in your emotional state… something you really understand if you are a parent! Having a level-head is the way you can determine if the decision you made is the best one or simply the one that felt right at the moment. If you have a child in the age range of 8 to 12 years, you might know a cartoon called “The Last Airbender,” which became a movie in the summer of 2010. Even if you are not familiar with the story, you still can heed the wise words of one of the main characters. The character, a
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Hallmarks of a Good Manager
W
hen it is time to identify a candidate for a management role, look for certain attributes that good managers tend to exhibit. Online Business Advisor (http://onlinebusadv.com) offers the following list of common attributes among good managers, culled from the self-study training manual, “Managing People for High Performance.” They do caution that their list is not a complete one, but “seems to form a good foundation in terms of identifying what attributes are common among good managers.” “They care. They have a good sense of humor. They have strong people skills. They possess strong communication skills—both verbal and written. They have a sense of fairness in dealing with people and issues. They exhibit consistency in behavior. They are able to control emotions and keep them out of decision-making and interactions with others. They believe that employees are more important to his or her and the company’s success than he or she is. They are honest. They are willing to seek input from employees and build consensus. They are open-minded. They are flexible. They have well controlled egos. They are self-confident and secure. They are good listeners. They possess the ability to be direct when needed without being abusive or offensive. They have a sincere interest in people and their well being. They have good perceptive/intuitive abilities. They possess a good understanding of what makes people tick. They are mature. They allow others to get credit for positive outcomes and they want their people to succeed. They understand that hiring good people is critical to their success and they do not micromanage. They are willing to admit to their own shortcomings and mistakes and do not feel a persistent need to be right.”
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kind man known simply as “Uncle,” lovingly coaches his young and impetuous nephew to exercise patience and self-control. Who could not benefit from having some of those virtues to spare? When managers do not make timely decisions, they miss deadlines, waste their organization’s money, and irritate co-workers who are counting on them. Collaborative decision-making often will produce the best results. In the words of the late Milton M. Hill, president of Alexander’s Mobility Services until his untimely passing in 1996, “if you have made a poor decision, put the decision behind you, and get on down the road.” Do not let a bad decision today affect any future efforts to make sound decisions and implement the best solutions.
Decision-making Dos and Don’ts Decision-making in the workplace is clearly a necessary skill for managers, yet, according to professional trainer Jerry Gildea of Baltimore, it often is neglected as part of a manager’s professional development. Organizations often may train managers on how to review and assess employee performance regularly, but ignore or neglect decision-making skills altogether. Do: 1. Ensure that decisions are not made in a vacuum. Although you, the manager, are ultimately responsible for the outcome of a decision, other people are affected by it. If there is someone with a vested interest in your decision, make sure you have a dialogue with that person. This will help him or her prepare for the effects of it, so he or she is not taken off-guard.
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2. Take all factors into account. This is similar to the prior suggestion, but it is less about consulting people and more about considering all factors that are relevant to the situation. If it will affect workloads or office morale in any way, you need to think about that. 3. Be willing to admit you were wrong. If the decision you made was not the right one, do what Dale Carnegie advocates: “if you are wrong, admit it quickly and emphatically.” This demonstrates strength of character, and helps your team relate to you better. Don’t: 1. Don’t waffle in your decision if you truly believe in it. You may be able to change it if it seems most appropriate, but stand by your deci-
138 MOBILITY/OCTOBER 2010
sion if you feel it is the right choice. By waffling, you may be sending the signals that others may be able to manipulate you into doing things their way. 2. Don’t make hasty decisions. If an employee makes an egregious error on a project, do not automatically discipline or fire the employee without considering the factors involved in the error. Should someone else also have noticed the problem? Often mistakes are made by one person with the knowledge of others. 3. Don’t make any decisions outside of your organization’s stated mission. This means that you should not take any new projects on that are outside the scope of the organization. As exciting as they may
be, they need approval first. If you think it is something the company should consider, consult the top management first. Ultimately, the main qualities of effective managers are those who are willing to make tough decisions and stand by them. However, effective managers must demonstrate a willingness to admit mistakes, and to show their human side if becomes apparent that the decision was not the most appropriate. Whenever in doubt, seek the guidance of a trusted advisor. That advice may make your decision easier. Robert F. Burch, SCRP, is regional vice president of sales—Eastern, for Alexander’s Mobility Services, Baltimore, MD, and a member of the MOBILITY Editorial Advisory Committee. He can be reached at +1 410 406 9200 or e-mail rburch@alexanders.net.
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BY MARGARITA GOKUN SILVER Culture shock can affect even the most veteran of expatriates, and potentially can derail what otherwise would be a successful assignment. Gokun Silver writes that there are
THREE
STEPS TO MANAGING CULTURE
SHOCK
three main steps to mastering culture shock, and outlines each step.
A
t one time or another, a good number of us probably have experienced the phenomenon that is widely referred to as culture shock. People describe culture shock in different ways but most often it is defined as a rollercoaster of emotions we go through when we move and have to adjust to a culture or an environment that is different from our own. The three steps mentioned in the headline were borne out of a presentation I was asked to make on addressing culture shock for an expatriate group in St. Petersburg, Russia. “What can I say about dealing with culture shock that hasn’t already been said over and over?” I thought. “How can I present it in a different manner—so that not only these ideas stay with people but that they also are original?
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The First Step—Perspective Power Let us begin by examining the stages described in the sidebar below. Definitions may call them stages yet they are nothing but perspectives—points of view—that
we hold about something, in this instance a culture that is foreign to us. And, if that is the case, can we change these perspectives at will rather than wait around for the worst times to end?
THE FIVE STAGES OF CULTURE SHOCK STAGE I—also known as the “honeymoon stage.” During this stage, everything in the new place seems fascinating, interesting, and exciting. STAGE II—during this stage, we begin to encounter daily struggles of living in the new environment and realize the great differences between the life we have known and the life we live now. This is the stage where most negative feelings surface because it is a time when we begin to set up our household, start grocery shopping for the first time, have a plumbing problem, and the like. Daily struggles, difficulty communicating and, in general, differences between our home life and our new life is often what produces deep dissatisfaction, hostility, anger, sadness, and feelings of incompetence. STAGE III—during this stage, we begin to feel better because things are looking up. We are learning ways to live our new life, we start gaining some understanding of this new place, we know how to ask for what we need, and problems no longer seem grandiose. STAGE IV—during this stage, the new place starts feeling a little like home, we succeed in making local friends, we no longer fret a lot about bad things, and we enjoy the good things. STAGE V—also known as the “re-entry stage,” the stage when we have to return back to our home country. Many things we encounter on our return might be new to us because we have been absent for a number of years. Our friends have moved on and we still miss the “old” friends and connections we have made in the country we left. This stage is typical for “perpetual” expatriates in particular.
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Let us give it a try. First let us take these five stages and give them names—names that signify the “feeling” of each stage. This way we can see that they are merely examples of how we look at our relationship with another culture. We can say that our relationship with the new place is: • fascinating (Stage I); • frustrating/painful (Stage II); • doable (Stage III); • enjoyable (Stage IV); or • a longing (Stage V). These definitions are by no means perfect, but they illustrate at least five different points of view we can take on our relationship with another culture. We begin to see that “stages”— or perspectives—are really the expressions of a “being” condition, a state we are in. And, as we already know, while we cannot often change things around us, we can change the way we feel about those things. Changing our own emotional response to something is within our control. Perspectives we hold color the lens through which we look at the world. And, as such, they either empower or disempower. If you find yourself locked within a disempowering perspective, why not recognize that and move yourself out of it into another perspective—the one that will give you more power? Disempowering perspectives do not serve us at all—in fact, they make victims out of us. If we open our vision and discover that there are other states of “being”—other perspectives or ways to look at our relationship with another culture—we will have a power of choice. We can now choose which perspective suits us best at the moment, which will make us happier and more fulfilled. Because remember, living in another culture will remain essentially the same no matter
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how we look at it, but our looking at the situation will have an enormous effect on us, our emotions, and our opportunities. So the first step to managing culture shock—and your relationship with another culture—is to notice what state of being you are in. What perspective do you hold now? What other perspectives are out there that also ring true for you? Step out of your present perspective and step into another one—the one that is more inspiring and holds more creative power.
positive interactions for every negative one during any given period of time (weekly works best). For instance, what makes your day in your new place of residence? Is it going to a museum, chatting with a friend, having a coffee, taking photos, going to a theater, or shopping for souvenirs to send home? Make sure you schedule five of those activities each week. You will be surprised how quickly the feelings of culture shock subside when you follow this exercise.
The Third Step—Negativity Be Gone The Second Step—Feeling Good Matters The second step comes from the research on marriages conducted by Dr. John Gottman, author of “The Seven Principles of Making a Marriage Work.” What, you may ask, does research on marriages have to do with culture shock? Quite a bit apparently. As I read Dr. Gottman’s book in my relationship coaching study, I realized that some of what he proposes could be integrated successfully into culture shock management strategies by viewing a relationship with another culture just as you would at any relationship with another human being. Think about it. Whether you are in a relationship with your spouse, your child, your friends, or your colleagues, you always have the good times and the bad times. And, of course, you try your best to avoid the bad times. It is the same in your relationship with another culture. Increase positivity in the relationship by increasing the number of positive interactions with the new culture and decreasing the number of negative ones. To start with, aim for the ratio of about 5-to-1; that is, try to find five 144 MOBILITY/SEPTEMBER 2010
This third step also comes from the research conducted by Gottman. When he watched couples argue, he discovered that those relationships that consistently exhibited the “Four Horsemen of Apocalypse” in their fights were the least likely to last. How does that apply to culture shock? If you spend the next few fights not only battling but also closely observing yourself and your partner, you will discover that fights escalate out of control and offer the least possibility of ending peacefully if any of these elements are present: criticism, contempt, defensiveness, and stonewalling. These are the Four Horsemen of Apocalypse and all four create a high degree of negativity in any given relationship. And that often proves to be lethal to the relationship in question. Imagine yourself unhappy in the country you are in or imagine yourself having a bad day. As with any relationship, your first inclination might be to resort to these four horsemen. You may engage in: • criticism (“These people are just so rude!”);
• become defensive (“It’s not my fault they don’t understand me.”); • act in contempt (think of all the eye-rolling, sneering, mockery, or hostile humor); or even • stonewall (“Well, if that’s how they are going to be, I won’t deal with them at all.”). This kind of response does not only do anything to improve your day, it actually does a great deal in damaging your relationship to the culture. Bitterness and disrespect grow like weeds and soon you find yourself resenting the very name of the country in which you live in and of the people that populate it. This, of course, creates more unhappiness that, in turn, brings more of the same. Bad days pile one on top of another and soon you find yourself desperately waiting for that flight that will take you out of there. Is that the way to spend two to three years of your life? Step three is based on taming the horsemen and, thereby, decreasing negativity in conflict. Instead of judging, blaming, criticizing, and stonewalling, next time try to use humor, a sense of affection, or a sense of acceptance regarding whatever it is that is bothering you. Blaming, criticizing, and judging only will escalate your conflict with another culture—the development you do not want. If, on the other hand, you use humor, you will avoid spiraling out of control in your frustrations and anger. These three steps work very well together and they also work well on their own. Try them next time you experience culture shock. Margarita Gokun Silver is the founder of the Global Coach Center, Miami, FL. She can be reached at e-mail mgokun@gmail.com or via www.GlobalCoachCenter.com.
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BY MICHELLE SANDLIN, CRP
As organizations continue to modify budgets in response to the economic downturn, greater attention has been placed on “getting back to basics.” Sandlin explains how focusing on customer service and reinvigorating relationships both are part of taking time to refocus attention on the fundamental business elements and habits that may have been neglected during recent times of business hardship.
I
t seems like no matter where I go or with whom I have spoken, during the past 18 to 24 months everyone seems to be saying the same thing: “it’s time to get back to basics.” In fact, this has been a recurring theme that has resonated at mobility conferences and events throughout the country, as well as being written about in various newspapers, magazines, and blog posts. Almost by default, as companies were forced to slash budgets and jobs to combat the challenges imposed by the economic downturn,
greater importance has been given to the idea of getting back to basics. What does “back to basics” mean? Have we not been focusing on the fundamental elements of our business? Did we lose sight of our core values? How did this happen? What important lessons have we learned? And, more important, can we rest assured that we have regained our focus? In the broadest sense, “back to basics” means taking the time to refocus our attention on the more fundamental business elements and habits that may have been neglected
during recent times. When times are good, it often is easy to say that we are too busy to focus on rudimentary details but, when times are tough, it is essential to evaluate those things that made us successful and begin implementing those strategies once again. As such, the idea of getting back to basics even may need to be incorporated into our goal-setting and/or strategic planning activities. In strategic planning, a company or organization looks at where it is now, where it has been, where it wants to go, and determines the strategies necessary for getting there. MOBILITY/OCTOBER 2010 147
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Simply put, it develops the road map of necessary strategies or actions for achieving a pre-determined goal. Is this not what we are doing now as an industry?
Reinforcing Relationships The most obvious example of this concept can be seen within our very own Worldwide ERC® organization. I was intrigued this past May when I first heard Peggy Smith, SCRP, SGMS, CEO of Worldwide ERC®, speak at the Relocation Directors Council (RDC) Spring Event and at the Worldwide ERC® National Relocation Conference about how she was embarking on a “listening tour.” Smith’s plan was to spend the first 120 days in her new role as CEO lis-
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tening to what Worldwide ERC® members had to say. She said that she wanted to stay connected and to keep her finger on the pulse of what is important to the members, and stressed that she really wanted to hear from us and listen to our ideas. She is looking to take it back to the basics, if you will, by talking with members to better understand the issues that are important to them, and what value membership in Worldwide ERC® brings to them professionally. I was fortunate to take part in Smith’s listening tour, first by telephone and then in person. During our initial hour-long telephone conversation, Smith explained the idea behind her tour. She said that Worldwide ERC® is ready to embrace
challenges and examine new approaches. She said that she thinks the listening tour is important as an input valve to help determine what the strategic plan for the next three to five years might look like. She also said that based on the member input she gathers, she should begin to see key themes develop that she can return to the Worldwide ERC® board of directors during the upcoming Global Workforce Symposium in Seattle, WA. Everything she said during the course of our conversation really resonated with me, both as a member of Worldwide ERC® and as the person responsible for the global relocation services of my company. Her listening tour exemplifies how organizations
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find their way back to center by first focusing on fundamentals. I have seen this same basic principle put into practice by mobility service providers, both within the relocation management companies (RMCs) and within the real estate companies that partner with them. For mobility service providers, getting back to basics means a realignment of their organization’s goals to more closely reflect those of their customers and clients. This, too, is much like a listening tour. It is about listening to clients’ needs, and rising to the occasion to solidify business relationships in the best way possible. It is about evaluating the ways in which companies can best partner with their clients to achieve that allimportant level of synergy.
There seems to be a shared sentiment among mobility service providers that they must put even more time and energy into their existing relationships. This has to happen on the client level as well as on the partner level. Thus, it is more important than ever before that our clients and our service partners know what sets us apart.
The Value-added Proposition The idea of a value-added proposition has increased importance in the relationship between mobility service providers and their clients. For example, in my role as director of global relocation services for John Daugherty, Realtors, Houston, TX, I partner with RMCs on a regular basis to provide homefinding and home mar-
keting services. Okay, that is great, but what is the value-added proposition that I am able to provide to the RMCs that my competitors cannot? Without giving away any trade secrets, this has to do largely with the fact that I am constantly asking questions, intently listening to the responses, then jumping into action. We live in a very competitive environment where consistent follow-up, follow-through, and communication can be key differentiators. According to Jo Ann Royer, CRP, GMS, director of relocation and business development at Williams Trew Real Estate Services, Fort Worth, TX, “the idea of going back to basics reflects what many of the relocation management companies are doing and are asking us to do by
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The Basics 1. Evaluate how we treat and value our clients and customers. 2. Focus on customer service. 3. Incorporate training and continuing education opportunities. 4. Provide more personalized service and attention. 5. Do not forget to listen to our clients, customers, and service partners. 6. Determine your value added proposition and capitalize on it. 7. Do not let technology stand in the way of building personal relationships.
providing continuing education opportunities and relocation training for their teams.” She says that, “everyone is trying to utilize some of the quieter moments or slower times to try and regroup a little bit and take stock in what is important to our clients, and what is necessary for
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us to remain successful as relocation service providers.” Royer is right on point. I also have seen a growing trend among RMCs for seeking additional continuing education and training opportunities for their team. They also are coming to expect that of their service part-
ners. As it continues to be more expensive to send employees to mobility conferences and travel budgets grow tighter, it becomes increasingly important to be able to bring education and training opportunities into their offices. And for those team members who have their CRP® designation, training classes that have been approved for CRP® recertification hours are king. Ryan Agee, CRP, director of supplier partnerships at Altair Global Relocation in Plano, TX, says that, “Altair encourages our service partners to bring educational opportunities to the table. At Altair, continuing education for the front line personnel is paramount. We strive to expand the industry knowledge base of all client-facing employees. For
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On the Web To learn more about mobility and the real estate industry, please visit www.WorldwideERC.org: • “Focusing in on Relocation Training—a Clear Picture for Future Success” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0909-sandlin.aspx • “Regional Real Estate: Planning for the Year Ahead” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0510-Puckett.aspx • “After the ‘Golden Age’: Avoiding Inventory in the Current Real Estate Market” www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/0308montchal.aspx
instance, while we certainly don’t expect our relocation consultants to double as loan consultants, they should be and are kept abreast of fluid changes within the mortgage industry. They know and understand the impact of changes such as HVCC legislation and RESPA guideline modification on the relocation industry… on our clients… on our transferees. The same can be said of the evolution of other service sectors.”
The Art of Customer Service Perhaps the most basic of all backto-basic principles surrounds the sometimes lost art of customer service. This is no time to turn our back on customer service. Instead, it is time to focus on custom service. Agee added, “our clients are asking us to focus on customer service. Costsaving policy changes, for some clients, have resulted in narrower scopes of benefits for relocating employees. If Altair can enhance the overall relocation experience by delivering outstanding customer service, it is our responsibility and pleasure to do so.” Agee says that Altair’s CEO and cofounder, Gail Plummer, SCRP, coaches their relocation consultants, stating that, “when you hear a phone ringing, lend a hand, pick it up. It’s customer 152 MOBILITY/OCTOBER 2010
service 101. It doesn’t necessarily have to be your phone or your transferee for you to answer a burning question, to ease a concern, or to make a positive difference in the course of a relocation, especially in this challenging economic climate. Altair expects the same of our service partners.” The business climate we live in is far too competitive to have the words “customer service” be viewed as an oxymoron. Our clients expect much more from us than ever before and, if we are not willing or able to deliver exceptional customer service every time, then we are putting our client relationships at risk. More personalized attention is necessary, so do not make the mistake of hiding behind your computer and shooting off an email when a phone call or personal note might be more appropriate and have the potential to deepen the relationship. Ginny Logan, CRP, GMS, senior vice president of Briggs Freeman Corporate, Dallas, TX, agrees that back to basics seems to be the trend. She says that, “from 2005 to the first quarter of 2008, the market was so hot and everyone was so busy that there wasn’t time to focus on the basics. Due to the downturn, it is time to refocus on what we are doing and how to do it better.”
And I think that is exactly what we are all trying to do within the mobility industry and beyond. Our clients and customers always appreciate that we are not taking their business for granted and that we are always seeking ways in which to improve our service delivery, but it has to start with the basics. We have to make sound improvements at the ground level to build a strong foundation in which business relationships can flourish. We must always remember the little things, the basic things from which everything else will follow. Borrowing from the theme of the Spring RDC Conference of, “Rebound, Rebuild, Reposition,” the economic recession certainly brought with it an opportunity for all of us to rethink, reflect, and get back to basics as a necessary step toward recovery. We were forced to look at what we were doing, review how it was that we got there, and put important measures in place to hopefully prevent us from repeating the mistakes of the past. As mobility professionals, during a time when international and domestic mobility numbers were down, we were faced with the challenge of remaining valuable to our clients, and many of us had to do so with smaller budgets and reduced personnel. We had to use our time and resources in new, creative, and productive ways. So what did we do with the extra time? For many mobility service providers, the slower times allowed us to evaluate, reevaluate, and yes… get back to basics. Michelle Sandlin, CRP, is director of global relocation services for John Daugherty, Realtors, Houston, TX, and a member of the MOBILITY Editorial Advisory Committee. She can be reached at +1 713 561 7500 or e-mail michelles@johndaugherty.com.
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RAC Report
Regional Market Summary: Louisville, KY, Metro Area
S
ituated on the banks of the Ohio River, Louisville is the largest city in Kentucky with a population of 721,594 and is the 17th largest city in the United States. The MSA ranks 42nd nationally with a population of 1,258,577 and includes eight counties in Kentucky and four in southern Indiana. Louisville never has experienced the extreme highs and lows that some of the larger cities and areas on the coasts have undergone. Its growth has been slow and steady. Through 2006 and 2007, sellers could expect to make a profit on resale of their homes. The 2005 market was perhaps the peak for the Louisville area. The slowdown began in earnest in 2008 and slowed with the economic downfall. The number of listings continued to rise, foreclosures were high, demand was mediocre and was only going to get worse. Sellers were selling “knowing they were lucky to recoup their investment.” And buyers were not buying unless there was a “deal” to be had. Builders went into the remodeling business since bank loans were non-existent. Developers were not developing and many vacant sites were available with price drops from 25 percent to 50 percent. The city was optimistic that the worst had passed and prices would stabilize. The stimulus incentive of $8,000 for first-time homebuyers and $6,500 for repeat buyers meeting qualifications created strong demand, especially in the under $200,000 price range. However, the seller did not appear to “move up” to the next housing bracket. The $1,000,000 and up market did not move at all, generally having a threeyear supply of inventory. The current median home price in Louisville is $136,400 versus a U.S. median of $176,867. Prices actually are up from a year ago but growth is slowing. Most buyers in the market have 154 MOBILITY/OCTOBER 2010
STATISTICAL SNAPSHOT
Unemployment Months of Supply Annualized Sales Volume Annualized Avg. Sales Price Average DOM
TODAY
ONE YEAR AGO
CHANGE
9.8 17.71 8,283 $136,000 85
10.5 11.07 8,033 $129,000 91
- 6.7% + 60.0% + 3.0% + 5.4% - 6.6%
access to government-backed financing. The conforming loan limit for Louisville is $417,000 compared to the U.S at $729,250. The FHA loan limit is $302,500 compared to the U.S. at $417,000. The economy of Kentucky and the Louisville area appears to be bucking the national trend and even expanding in some areas. There are strong “pockets” of growth, especially in areas with an older housing stock located closer to the city center. The current level of construction shows building permits from January 2010 through June 2010, was 2,295—53.1 percent below the longterm average but better than most markets. Construction was strongest in the 2005 market, then slowed and reached its lowest point in June 2009. It has shown some increase, suggesting that inventories have stabilized. The median price and the one year price growth shows a 4.4 percent improvement through 2010. This can be credited mostly to the stimulus. The local employment growth is respectable compared to other markets. The growth rate is 0.1 percent compared to the U.S. at -3 percent. Long-term rates were on the rise early in 2010 based on negative economic news. Summer 2010 has seen rates fall below 4 percent, rates unheard of for decades. Foreclosure rates versus the U.S. rate also saw a lower number of prime, subprime, and Alt-4 foreclosures. This rate is low relative to the national average.
MARKET AT A GLANCE
Economic Climate
Stabilizing
New Construction
Low
REO Activity Supply Demand Market Direction Market Mood
Stabilizing High Down Down Hopeful
Reduced construction has limited the new supply of homes, possibly allowing demand to catch up with current supply. Louisville unemployment rate lags the national average but has improved relative to the same period last year. Last year was 10.5 percent versus 9.8 percent this year. Mortgage rates are expected to rise in the fall, which may put more pressure on the market. A year ago, there was an 11-month inventory of homes; that has now expanded to 17.71 month’s supply. This will not change until the job market improves. “Possibility City” remains optimistic that the metropolitan area will continue to expand the business base, which only can improve on the current market. The remainder of 2010 will be an extension of the fall and winter of 2009—which is always a slower market like a majority of the U.S. marketplaces. Linda S. English, SRA, is with English Appraisal Services, Inc., Louisville, KY. She can be reached at +1 502 339 1353 or e-mail lindaenglish@rac.net.
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YP40
Young Professionals in Global Mobility
W
orldwide ERC® brought together a group of young professionals ages 40 and younger in Orlando, FL, at the National Relocation Conference. The purpose? To form a community of “younger” workforce mobility professionals, learn from them, and encourage them to become the leaders of the industry’s future. The result? YP40—a growing community of young professionals interested in sharing their expertise, receiving mentoring, and developing a network of collaboration at all levels of the industry. The YP40 column will be one of the many venues our future leaders will use to reach out to the industry and educate us on issues affecting them and bridge generational divides. Whether you are a YP40 or a veteran working with YP40 professionals, this column will be a valuable regular stop for you in navigating our rapidly changing multi-generational working environment. That first YP40 gathering in Orlando was an exciting evening, which included first-time conferences attendees, industry mentors, and everyone in between. It highlighted the rich community that exists among the long-time members of Worldwide ERC® and at the same time provided an entrée into that community for the younger attendees. “For many new Worldwide ERC® members, it’s difficult to break into the organization,” said Catherine Getty Rich, a corporate housing specialist with Furnished Quarters LLC, New York, NY. “People have created their own networking alliances over the years. When I attended the YP40 event, it opened doors for me, and turned on a few light bulbs, too, especially regarding the importance of social media. YP40 is great not only for new business, but also friendships with people who are going through similar situations.” In addition to helping YP40s make connections at Worldwide ERC® meeting events, the YP40 community is a source for learning about the industry and ways of managing and growing a career. For example, a veteran professional in the industry noticed I was blocking people from viewing my connections on LinkedIn. He sent me an e-mail. “Blocking connections does not protect you; it limits you,” he wrote. As I sat staring at the screen of my computer, I realized he was right! How could I have been so foolish? And, I’m supposed to be a member of the young, tech-savvy generation of mobility professionals. Yet there I was, getting schooled by a guy whose first cell phone was the size of a loaf of bread and came with a tote bag. We all need to recognize that openness is the cornerstone of Web 2.0. In a world where the lines between public and private have been blurred, you cannot worry about who is going to see your connections. The paradigm has shifted—information is readily accessible and 156 MOBILITY/OCTOBER 2010
trying to hide or cover it up is futile. Those of us who embrace this principle will succeed and others surely will fade away. We must share our successes while being humble and endear people through our failures. Information is the fuel for generation millennia and the ability to use social media as its engine is invaluable. Our network connects us to the world and gives the employee mobility industry the ability to move anyone anywhere around the globe. Relationships have and always will be king. Today, the real question is not just whom you know, but whom you can ask to get the information you seek. We all solve problems in our day-to-day lives, and social media provides a powerful medium to share our lessons learned and learn from others’ experiences (regardless of their longevity in the industry). So, for me, one of the many advantages to joining the YP40 group within Worldwide ERC® is the platform it provides to help me evolve as the industry and businessplace evolve—whether it’s by learning how to use social media to my advantage by connecting you (in-person and online) with others that understand the medium or by tapping into a broad global network of professionals with other expertise to share. The YP40 task force leaders also recognize that the more experienced members of Worldwide ERC® have set the bar extremely high and young professionals have a lot to learn from them. For that reason, a mentoring system allows YP40 member to connect with others who can nurture and advise them as they grow their mobility careers. The next YP40 gathering will take place at the Worldwide ERC® Global Workforce Symposium. Young professionals ages 40 and younger— Join us in Seattle, WA! What? YP40 Rainmakers Reception Where? Global Workforce Symposium When? Wednesday, October 27, 2010, 6:00 to 7:00 p.m. (prior to the opening reception) Why? Because you are a future leader of the workforce mobility industry. Alex Alpert is director of sales for Wheaton World Wide Moving, Anaheim, CA, and a member of the MOBILITY Editorial Advisory Committee and YP40 Group. He can be reached at +1 800 999 1055 or e-mail alexalpert@wheatonlhr.com.
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Cameroon Govt., Expatriates Meet to Improve Business Climate Dow Jones Newswires (08/14/10) A recent conference involving the Cameroon government and the country’s citizens living abroad began discussing strategies of improving the country’s business climate in order to boost investment. Cameroon is ranked among the world’s most difficult countries because of an unhealthy business environment, and many expatriates have become reluctant to invest back home. “We want the government to set up a strategic framework to engage the diaspora to get involved in Cameroon,” said information technology expert Jacques Bonjawo, an attendee of the forum. Cameroon Trade Minister Luc Magloire Mbarga Atangana assured potential investors that the government was taking steps to improve the country’s business atmosphere. “We’re working with the World Bank to see how we can improve on business climate in our country. We’re already making efforts to reform the judiciary, revise taxes. We now have a new investment code, which investors should find more attractive,” Atangana said. (http://online.wsj.com/ article/BT-CO-20100814-700787.html) Companies Try Efforts to Protect Workers in World’s Danger Zones USA Today (08/24/10) Yu, Roger Today’s global economy often requires people to enter at-risk areas where they can be exposed to natural calamities, war, terrorism, kidnapping, disease, and other dangers. Approximately 10 percent of employees who are transferred from the United States are assigned to countries that are considered “dangerous or have harsh conditions of living,” according to Mariana Costa, an international employment lawyer. As a result, more and more U.S. companies are relying on detailed security briefings and employee training to prepare workers for assignments abroad. CARE, an international development organization, required employees bound for Haiti this year to take part in a 45-minute “stress consultation” that previewed issues they would encounter, such as widespread devastation and challenging living conditions. The sessions
reminded workers about reactions to working in a continually high-pressure environment and asked them to think about their coping mechanisms for stress. “What are some things that can reconnect you to what brings you hope and joy? Hopelessness is a byproduct of vicarious stress,” says Lynne Cripe, CARE’s director of employee engagement, support, and communications. Corporate travel managers are implementing “travel risk management” by adding restrictions to travel policies, gathering country intelligence reports, purchasing more insurance policies, monitoring employees’ movements, and hiring medical evacuators and security companies. The U.S. Commerce Department’s International Trade Administration estimates that from 2000 through 2009, the number of U.S. citizens traveling to Asia, South and Central America, the Middle East, and Africa increased by 47 percent to 12 million a year. (http://www.usatoday.com/ travel/news/201008-24-dangertravel24_CV_N.htm) Skilled Migrants Will Flock to Europe If Spouses Can Work, Says Expert EurActiv (Belgium) (08/20/10) Europe has a shortage of high-skilled workers and needs to attract more from other countries, but the EU’s policy of not allowing the spouses of foreign workers to seek employment is hindering progress on that front, according to Kathleen van der Wilk-Carlton of the Permits Foundation. Countries like the USA, Canada, Australia, New Zealand, and Switzerland, which allow spouses to work, are attracting more skilled workers than the EU and, worse, many EU workers are migrating to these countries as well. Just 5 percent of skilled workers migrate to the EU, and a Permits Foundation survey found that 25 percent of those turned down work in the EU because their spouses could not work. Being joined by a partner is “a crucial factor” in a transferee’s decision to accept a job, and their “health, well-being, and integration are all facilitated by their family accompanying them,” van der Wilk-Carlton says. (http://www.euractiv.com/en/socialeurope/skille d- migrants-will-flock-europe-if-spouses-canwork-says-expert-news-497002)
September 9, 2010 This issue is sponsored by:
Read the full issue and subscribe for free at: www.WorldwideERC.org/Newsroom/ GLOBILITY Visit our online Career Center jobs.worldwideerc.org
GLOBILITY® is an exclusive news service of the Worldwide ERC® offered free of charge for the asking and comes to you twice a month. To subscribe, visit: www.WorldwideERC.org/ Newsroom/GLOBILITY. GLOBILITY® sweeps nearly 7,000 sources including major newspapers, business magazines, web sites, wire services and industry publications to find the most noteworthy news focusing on global workforce mobility issues. The editorial staff reviews over 15,000 stories per day and prepares an executive summary of the most significant articles to be delivered to your e-mail inbox.
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M A R K E T P L A C E
Advertisers’ Resource THE SUITES
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T O W E R S
Company
R E T H I N K T H E R E N TA L For business travel, temporary assignments and relocations in the newest residential building in Midtown Manhattan. With more than 100 furnished units – studio, 1 & 2 bedrooms – and spa-like amenities including a 75-foot pool and state-ofthe-art gym, these are rentals reconceived for the 21 st Century.
ON-SITE MARKETING OFFICE: 606 WEST 42 ND STREET NEW YORK NY 10036 T 212.695.3400
MNUNZIATO@SILVERTOWERS.COM
SILVERTOWERS.COM
ALWAYS First Class You’re not average, so don’t settle for average. There IS a big difference in corporate housing companies. In 2010, Francine Manilow has been named: Business Woman of the Year: National Association of Women Business Owners Entrepreneurial Woman of the Year: Women’s Business Development Center Member of the Year: Women Impacting Public Policy Inductee into the University of Illinois at Chicago’s Entrepreneurship Hall of Fame
· · ··
Like you, we NEVER settle for less than first class!
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Short Term Corporate Housing Since 1980 Certified Woman Owned Business
1-877-MANILOW www.manilowsuites.com
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ACS International Schools.................................................................................93 Air Animal Pet Movers......................................................................................33 AIReS.................................................................................................................14 AIRINC..............................................................................................................69 Altair Global Relocation.........................inside back cover, conference bellyband Appraisal Institute.............................................................................................27 Asia Pacific Properties......................................................................................99 BAL Global......................................................................................................45 Bank of America Home Loans...........................................................................37 Bennett Schoolplacement Worldwide, LLP........................................................26 Berlitz................................................................................................................77 Bristol Global Services, LLC...............................................................................66 Brookfield Global Relocation Services...............................................................57 Capital Relocation Services...............................................................................35 CItiMortgage.....................................................................................................47 CORT.................................................................................................................53 Cosmopolitan Canine Carriers, Inc..................................................................143 Crown Relocations...........................................................................................29 Culanco GmbH.................................................................................................38 Delsuites Executive Class Accommodations......................................................25 EMDOC serviços Especializados LTDA..............................................................83 Fidelity Residential Solutions...............................................................................1 FIDI..................................................................................................................146 FosterQuan, LLP.............................................................................................127 Fragomen, Del Rey, Bernsen & Loewy, LLP.............................................6, 86-87 Frasers Hospitality Pte Ltd...............................................................................103 Global LT, LTD..................................................................................................75 Global Mobility Solutions.................................................................................85 Global Relocation Consultants, Middle East.....................................................36 Graebel........................................................................................................40-41 HCR Group.......................................................................................................84 Hilldrup Companies........................................................................................119 HRS Relocation International LLC.....................................................................46 Interconex, Inc................................................................................................107 Intermark Relocation........................................................................................91 JPMorgan Chase Bank, N.A., Home Mortgage.................................................79 Keller Swiss Group...........................................................................................68 Living Abroad...................................................................................................54 Manilow Suites...............................................................................................159 Marymount International School......................................................................60 Mayflower Van Lines......................................................................................123 Movers Specialty Service..................................................................................51 North American Van Lines..................................................................................3 Ocean Global Relocation Solutions..................................................................76 Paxton Companies...........................................................................................39 PC Housing...............................................................................inside front cover Plus Relocation Services, Inc..........................................................................101 PMI Expatriate Mail Services..........................................................................106 Primacy Relocation, LLC...................................................................................11 Pro-Link GLOBAL Visa & Immigration Services.................................................19 Prudential Fox & Roach Realtors......................................................................63 Prudential Real Estate and Relocation Services..........................................9, 133 Quest Serviced Apartments...........................................................................135 Reindeer Auto Relocation...........................................................................72, 73 Relocation Directors Council............................................................................56 Robinsons........................................................................................................108 Sally White & Associates................................................................................124 Santa Fe Relocation Services..........................................................................109 SIRVA Relocation.................................................................................back cover Stewart Relocation Services..................................................................bellyband Suites at Silver Towers...................................................................................159 The Halstead Properties...................................................................................92 TheMIGroup......................................................................................................17 TIRA—The International Relocation Associates.............................................129 Toll Transitions...............................................................................................100 Transcontainer Group....................................................................................145 TRC Global Solutions, Inc...............................................................................125 UniGroup Worldwide.........................................................................................61 United Van Lines............................................................................................137 Weichert Relocation Resources Inc.....................................................................5 Wells Fargo Home Mortgage..........................................................................139 WHR Group......................................................................................................13 WorldCare Pet Transport.................................................................................55 Ziegler Relocation.............................................................................................62
MOBILITY/OCTOBER 2010 159
last_member profile07 9/16/10 5:41 PM Page 2
Last Page
Four Tips for Life in the Immigration Fast Lane
M
oving employees around the world presents many challenges, from coordinating household goods to structuring payroll, even managing pet travel. One of the more meticulous and often exhaustive areas of global mobility is immigration services and the myriad changing regulations. For workforce mobility professionals, it is important to understand immigration changes and ensure employees are globally compliant at all times. Where do changes come from? Government agencies and committees frequently are changing their immigration policies to keep up with the local economic climate, country needs and demands, and global trends. Many government agencies publish new laws or regulations, possible changes, and clarifications on their websites. Sometimes, however, new policies are rolled out and never officially announced. Immigration providers will scan government websites, speak to consulate personnel, and work within their own network of other immigration attorneys or local providers to get the most up-to-date and precise information. How can you stay in front of changes? The best way for mobility professionals to stay informed is to sign up for regular immigration alerts, whether they are from a government, an immigration provider, or partner who monitors immigration trends. Alerts typically are available by country, globally, or regionally, allowing for sign up in a particular area of interest. If dealing with a smaller volume of international assignees, less frequent newsletters that recap alerts also are available. Also, RSS feeds are available through the Worldwide ERC® Global Immigration News Library (www.worldwideerc.org/gov-relations/global-taxlegal/Pages/global-immigration-news.aspx). What are trends, and how can you recognize one? It is important to recognize trends, especially as in recent years there has been an increase in global immigration changes and stricter policies, with more rigorous scrutiny of applications, more aggressive enforcement of the rules, and more delays. This basic trend is cause by the global economy being in shambles (government protectionism) and global security (governments taking precautions). We saw this in 2008 with the United Kingdom’s point-based system and in 2009 in India with tighter regulations and restrictions around business visitors. Before these changes were finalized, many announcements came out from 160 MOBILITY/OCTOBER 2010
authorities foreshadowing these upcoming amendments. When this happens, it typically indicates a trend within a country, leaning toward policy modifications. For example, when India began implementing changes, there were restrictions put in place surrounding restricted nationalities. Shortly after, additional restrictions were implemented also limiting unrestricted visa and immigration holders. In addition, significant immigration trends within one country sometimes lead to a domino effect where one country reacts to another country’s change. What do you do once you have the information? Do not panic. It is important to gather all of the facts and make sure the information has been verified. Often, when changes are rolled out and put in place, confusion occurs within the internal government entity, the local and district offices, as well as overseas embassies and consulates. This can lead to inconsistency with advice. Ensuring that the information has been verified is critical so that planning can be handled accordingly and accurately. The best approach for verifying information is to consult an expert. If available, contact a partner that assists your company with immigration matters, and ask that they advise of changes, clarifications, and the most efficient ways to deal with the change. If no partner is available, consult an expert in immigration to assist and analyze how the change could affect your organization. Involve human resources, hiring managers, and in-house counsel to format the appropriate strategy to deal with the changes before they take effect. Validate, strategize, and roll out. Anticipating immigration changes, gathering and verifying the information, and reacting appropriately is critical to the success of any organization’s mobility and immigration program. Proactive action in the face of immigration changes can better aid in understanding the policies that may affect assignees and global programs, as well as allow for strategizing in advance for possible changes. This will enable immigration programs to succeed, ultimately affecting the success of any employee mobility program. Mickey Matteson, CRP, is the director of business development for Emigra Ogletree Worldwide, Raleigh, NC. She can be reached at +1 602 463 0123 or e-mail mmatteson@emigrogletree.com. Rachel Ryder is the director of compliance and consulting services for Emigra Ogletree Worldwide, Houston, TX. She can be reached at +1 713 874 8539 or e-mail raryder@emigra.com.
last_member profile07 9/17/10 4:04 PM Page 3
Think Outside The Box Developing the right international policy requires creativity and expertise. The relocation experts at Altair are here to help with best practice policy consulting. Altair’s Global Consulting Services team provides support to clients with consulting services such as global policy review, policy development, and cost control analyses. We understand the complexities of global mobility, and we can think outside the box to develop an international policy that works for you and your assignees. Call today or visit us on the web.
+1 972 +1468 9723000 468 3000 www.altairglobal.com www.altairglobal.com
Aim High
Play It Straight
Make It Fun
last_member profile07 9/14/10 12:59 PM Page 3
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