Who should we pick to send overseas and how can we encourage the person to accept the assignment? What should we pay the employee? What about the employee’s spouse and children? What other benefits and perks should we offer? Should we offer them a driver, company car or a housing allowance? These are just some of the big questions HR practitioners and companies often fret over when it comes to sending an overseas for an assignment.
Unfortunately in the discussion, repatriation or the process of bringing an expatriate back to the original country after an assignment is over, is neglected and something which HR practitioners and companies often drop the ball on.
“An expatriate policy from a multinational company generally runs 50, 60, 70 pages. Of that the majority is spent talking about things such as compensation, how you would be compensated, the benefits you would have, et cetera. Companies would only devote of that 5% at most to repatriation,” says Lee Quane, regional director of Asia for ECA International.
Quane says in most MNCs, repatriation is often only conducted six months prior to the end of the assignee’s term. In some instances, companies even leave it till the last month before talking about repatriation.
If repatriation is conducted poorly, employees (the ones whom the company invested time and money sending overseas) come home disillusioned and lost. Returning expats may even feel isolated and may eventually leave the company – taking along with the leadership skills and knowledge the company spent money cultivating during the assignment.
And retention rates are dismal for returning expatriates. In a 2008 survey conducted by GMAC Global Relocation Services, out of the 154 companies surveyed, the annual turnover rate for all employees stood at 13%. But for expatriate employees during assignments, the attrition rate increased to 25%, and 27% attrition for expats within one year of completing the assignment.
Furthermore, a Managing Mobility Survey 2008 conducted by ECA International shows that only one in five companies among the 202 companies surveyed actually track retention rates of return assignees. Out of those companies, they only saw a 9% attrition after the first year and 15% over the two years after repatriation.
But to even lose an employee after they have completed an assignment is a costly affair, says Colin Chong, HR director of Asia Pacific at InfoPrint Solutions, as expatriate assignments cost companies large amounts of money. In addition, Chong, who oversees 150 people in Asia Pacific, says expatriate assignments are also used as a tool to develop talent and a future generation of leaders. So having a turnover on returning employees would mean losing a potential leader.
This is why companies should look beyond the short-term goal (which is usually based on the business needs) and think about the employee’s repatriation needs even before beginning the assignment – especially if it the assignment is for developmental purposes, says Quane.
Ready for takeoff
HR practitioners have to tread delicately when presenting an employee with an opportunity to go overseas, says Mario Ferraro, group general manager of international human resources at International SOS. “If you sit as a fly on the wall in an office when an employee is being presented with an international assignment opportunity, you will hear, ‘This [assignment] is great for your career’,” Ferraro says.
But with statistics indicating a high turnover rate among returning assignees or the lack of available opportunities they are given after an assignment, it may send mixed messages to those considering an overseas assignment. “There seems to be disconnect between selling the assignment as an opportunity, and the fact that when these guys finish the assignment, there is no guarantee of an opportunity,” says Ferraro.
With this disconnect, an employee may perceive the overseas assignment as a career risk instead of an opportunity. When that happens, employee mobility (which is a critical business need) is hampered as employees become reluctant to head overseas for the fear that they may be put out of a job in the future.
This is why HR practitioners often need to walk a fine line between conveying a sense of comfort to the employee that the assignment is in fact an opportunity, and being transparent and managing the employee’s expectations of what may happen after the assignment is over.
But before an employee goes out for an assignment, should they promise a job upon their return? The answer is no, say the three people interviewed. Because of the rapid and dynamic way businesses are changing everyday, it is difficult to predict and foresee if the job will still exist in several years down the road.
Guaranteeing a job upon return may lead to future legal ramifications for the company. “How can you promise a job if your company closes down while the expat is on assignment? Or alternatively, how can you promise a job if you’re offshoring that function?” Quane says.
At bare minimum, Ferraro feels companies should live up to the obligation of repatriating the expat after assignment term is over. “And I think the company should have an ethical obligation to do its best to find the employee a job.”
High altitude thinking
In order to first understand how to help returning expatriates, HR practitioners first need to understand the psychological and social challenges that run through an employees’ mind when they first return home.
While companies often spend good money helping their expatriate move and integrate into a new place with help such as cultural classes and providing a person to mentor and guide them around a foreign city, there is often no such equivalent help for returning expatriates. One reason for this is when companies fall under the misconception that expats are already familiar with their home surroundings.
But what companies fail to understand is that expatriates can experience “reverse culture shock”, says Quane. Chong adds that for expatriates who have been away from their home for several years, one big challenge is in resettling the family and children back into the home country again. This is why, Chong says, “HR has to be sensitive to these kind of [personal] needs,” he adds.
Expats who experience a feeling of “relative isolation”, are often the ones who are returned to their previous position, says Quane. With several years in the passing, it is very likely that other people in the original department would have moved on as well. “So the person is essentially coming back into a pretty much alien workforce once again,” Quane says.
The sudden loss in prestige and sense of importance may come as a shock to other expatriates as well. “Typically when [expats] are overseas, they tend to occupy positions and roles which in the local context may be fairly prestigious,” says Ferraro. While assignees often occupy positions of technical experts, bosses or leaders which are unavailable in the host location, expats were essentially the “big fish in a small pond.” Ferraro adds, “Their ego is boosted and rightly so.” Hence, employees who come back may have to adjust with becoming a “small fish in a big pond” again.
The lack of proper employee reintegration may lead to a dip in employee morale and productivity isues. “In the first two, three or even six months, the person starting to get their footing back in the home location. If a company does not plan well, they would lose about three or four months, at least, of employee productivity,” says Quane.
Other times, repatriation might not even be on the cards as the expatriate may decide to want to stay on in the host country instead, says Chong. “If a person goes to China for three years, the person may love the culture and like the lifestyle. I can imagine for personal reasons, executives may get attached to the local team, that after three years, going back may be a struggle.”
In instances such as these, Chong says the best if HR policies are flexible and allow the assignee to settle in the host country if they want to. Otherwise, there is a chance that the employee may quit and join the competition instead.
“The key is keeping talent. For a global company, whether you lose a guy, it is better to lose a guy in Bangalore and salvage him in New York.” While it is easy to see a bigger picture now, sometimes saying is easier than getting it done,” admits Chong.
Ready for landing
So what are some of the things companies should do in order to help ensure that the organisation does not lose a returning expat?
Chong says when he used to mentor “nextgen” future leaders at his old company IBM, he often adviced expatriates to keep in close touch on what is happening back in their home country.
“At the same time, keep your network strong.”
Chong says assignees should find themselves either a mentor or a sponsor (preferably both) before heading out to the host country. While an executive sponsor would be the person who supports and initiates reasons as to why the assignment would be good for the employee, Chong says a mentor’s role would help the assignee navigate through the organisation or whom the assignee can discuss issues and problems with.
While some companies allow expats to utilise their homeleave tickets to travel to other locations or even by cashing it in, smart companies require expats to use their homeleave to go back to their home country as it helps to keep employees in touch with what is happening in the organisation.
Allowing expats to use their homeleave tickets for vacations or even cash diminishes the long-term goal of ensuring an employee is kept in touch with the home country “because you are perpetuating the fact that your staff will therefore in three years time not be so familiar with the home environment when they come back,” says Quane.
For International SOS, not only do expats have to utilise their home-leave tickets to travel back to the home country, the organisation requires these employees spend a couple of days back back working in the home office as well.
Another challenge HR practitioners face is in obtaining a full and comprehensive overview of the expat’s entire work history, which includes the expat’s salary, performance reviews, expecations and skills. That is because companies often operate based on where the employee is located during this work. “So if you have a British employee who is going to Hong Kong, he disappears from the radar screen in UK, and appears on the radar screen in Hong Kong. Then he goes to the United States, he disappears from the radar screen in Hong Kong and appears on the radar screen in the United States. So each HR team has a fragmented view of the employee’s history.”
In order to combat this problem, International SOS also has a dedicated and centralised HR team based in Singapore which looks after the organisation’s 700 expatriates. “The biggest benefit of having this centralised team is that irrespective of where the employees are, where they are going next or where they have been before, it is the same team that has the same visibility of the company,” Ferraro says.
International SOS has also appointed role of group general manager of professional development. “His job is to keep an overview on where all our medical staff is.” The group general manager of professional development then anticipates the needs of expats whose assignments are coming to an end, look at what opportunities there may be towards that time period and fosters a dialogue with the expat on what opportunities there may be within the organisation after the assignment is over.
And International SOS has seen many cases where expatriates did not return home, but simply tack on another assignment after their current one has ended. “When companies start to think globally and have good visibility of what are their global leaders, then you can provide many more options. Then it becomes a little bit easier to guarantee something at the assignment.”
International SOS also has a dedicated role of employees relations manager, whose job is to stay in touch with employees. “Regardless of where they are, they could be on an oil rig, in the middle of a jungle, the person’s job is to remind them that they are our employees and that we have not forgotten about them.”
Last few words
Similar with the expatriation process, HR’s overall role is to play the role of facilitator between the line managers and assignee in both home and host location. Chong adds that HR practitioners must not be too presumptuous in assuming that the repatriation process will “take care of itself”, and should make sure that all the tiny details (such as getting feedback from stakeholders) is processed.
And with everything HR-related, eventually, it all boils down in managing employee expectations, so that employees feel that they are engaged and in control of their careers throughout each and every step of the way.
One way to manage expectations is by good and constant dialogue, while conveying to employees their genuine commitment in looking after employees’ careers. As Ferraro puts it, “Having that degree of dialogue with the employees as to engage them on how the organisation is doing, so if eventually if there is no opportunity or if the employee needs to compromise upon repatriation, the employee understands and does not feel short-changed.”