In the wee hours of one night nine months ago, Joydeep Bose, the president and global head of Olam International’s human resources, was half asleep in Singapore when he picked up his ringing mobile phone. When he answered, the caller spoke without pausing. “This is Pratyush and I’ve just [come] to know my factory is being robbed. People have come in trucks and they are taking our coffee away. What do I do?”

It was a long-distance call from the manager It was a long distance call from the manager of the coffee plant in Honduras. Most would freeze when they hear the next part of the conversation, even though the robbery was happening miles from a warm comfortable bed: “There was
some shooting and they have shot at some security guards.”

Bose calmly replied: “First, have you informed the police?”

“Yes, I’ve informed the police. The security is having a gunfight over there,” Pratyush said.

“Don’t do anything rash,” Bose warned. “Don’t even go near that place. Let the security handle it. Just monitor from where you are, at home or the office. Don’t bother about what has been stolen until the entire thing has died down.”

After informing his CEO and other senior managers about the robbery in progress, Bose kept in touch with Pratyush every hour for updates, making sure the expatriate leader placed his employees’ and his own safety first. “We have to calm him down, make sure he can think straight, ensure that he doesn’t come into any harm and he takes the right decision and he is not worried about the company’s property being damaged,” Bose asserted.

The robbers eventually fled, leaving behind the intended loot after they failed to overcome the arrival of local police. Fortunately for Olam, there were no casualties or losses that night, although one security guard did hurt his leg in the gunfight.

Expatriation hardships ‘greatly exaggerated’

This incident is a rare occurrence for nearly 180 expatriates whom Olam sends on global assignments in remote places and emerging economies across 25 countries. Its expatriates can be found in African nations such as Nigeria and Ivory Coast, to southern and Central American cities Peru and Mexico, or emerging Asian economies Indonesia and Vietnam. Some would label these cities as difficult locations to send expatriates to. But Bose begs to differ. “The perception the average person has of hardship is far more exaggerated than what actually existed on the ground,” he says. “Most people draw their inferences of [living] hardship from what they read in the media and on the internet.”

That perception usually ends up at least five times more exaggerated than the city’s actual state, Bose reckons. You hear from various media about the high kidnapping rates in Colombia.
But when people go to its capital city, Bogota, it’s just like any other bustling city, says Bose. The risks, if any, are present only when you go outside the city.

For its international assignees, Olam paints a realistic picture of the living conditions in these cities. “You don’t tell a person that there is no problem and everything is hunky dory there,” Bose says. HR needs to manage their expectations, and those of their spouses and children, especially when they are moving from Singapore where it is considered very safe compared with countries with high personal security issues.

Potential assignees would take a trip with their families to the proposed location before they take up the assignment. It gives them the opportunity to see if the city’s lifestyle would suit them. And Olam takes it a step further. HR would arrange for potential assignees’ spouses to meet other expatriate spouses already living in that country. “So they speak to each other and they draw their own information from what they see,” Bose says.

Of course, it gets a bit tricky when relocating global assignees to cities Olam has yet set up operations in, especially if it’s an emerging economy. Take Mexico, for example. The expatriate manager from Peru was allowed to operate out of his home base with frequent to-and-fro travelling to Mexico in the first few months. This period of transition was complete once he had established an infrastructure – new office, local hires, accommodation, schooling for his children, car rental – and was familiar with the operations. Yes, armed with a budget, time and empowerment, the expatriate manager had to get everything done by himself. Only then was he ready to take the leap and officially relocate with his family.

“In some countries, you have people [consultants] to help you transition into these countries, but not for emerging economies,” Bose says. “You have to do it gradually. You have to hire your local team to help you.”

Safety first

High crime rate, socio-political tension, rough climates and poor infrastructure – these are some of the hallmarks of cities with a low quality of living. Sujith Olachery, HR manager for Saipem Singapore, a well-travelled expatriate who has worked in Africa, Europe and Asia, doesn’t deny the challenges. Olachery acknowledges that organised crime and high security risks are very much rife in African countries. Remote areas in Southeast Asia are perhaps not as threatening because the population is “more civilised”, but it pays to be careful. “There are always associated risks when there is poverty – there would be attempts to make money off you in different ways,” he says.

The recent earthquakes in Santiago, Chile and Haiti are clear examples of how companies need to better keep track of their assignees to mitigate the impact of any emergency. HR needs to make sure they keep an updated list of where their expatriates live, contact details and next of kin information, says Lee Quane, ECA International’s regional director for Asia.

In places with a high crime rate such as South Africa or Nigeria, Olam has a set of basic rules, which are documented and explained to its new expatriates moving to those cities. Given that Olam has such a large number of expatriates, these basic norms become very important in countries where their safety could be compromised. This ensures that expatriate leaders are constantly aware about their safety and how they should conduct themselves in a foreign city.

The rules are simple: one is never drive a car alone after a certain hour in the evening. “If the person is not aware and he goes into parts which are not safe in the night, it’s asking for trouble because as an expat you draw attention to yourself,” says Bose.

There are occasions when Olam would hire police escorts for employees who have to travel in the middle of the night or at odd hours in Lagos, Nigeria. This can cost up to a few thousand US dollars. But travelling to the operations located in Akure, a five-hour drive away from Lagos, doesn’t happen very often. If there is an urgent need to travel there after sunset, the employee would usually spend the night in Akure before returning to Lagos in the day.

Cost of security would definitely vary from location to location, explains Quane. Locations such as Kabul and Baghdad are “practically war zones” so what a company pays on security would be higher. “On one hand, you provide a financial incentive to get the employee to go,

but you still need to safeguard your investment and that person while they are on assignment,” says Quane.

Poor or lack of medical facilities in these countries is another big concern for Olam. It currently has tie-ups with International SOS and insurer Aviva so employees or their families can be flown by air ambulances to the nearest medical centre in case of any medical emergencies. For instance, if someone had an accident in Africa, the air ambulance could send the patient to either London or Johannesburg.

The ongoing political unrest in Thailand raises another concern for Bose as Olam has operations in the country. HR has advised the 22 employees there, including two expatriates, to monitor the situation. Travelling to the country has been cut back. If it gets out of hand, managers are authorised to do whatever is necessary to keep their employees, families and themselves safe. But Bose understands from his managers’ reports that the coup-prone country is safe for now. “The protests that happened are an inconvenience. You get stuck on the road, you can’t travel, but it’s not a security threat.”

But the company is well prepared. After all, it had evacuated employees in Guinea Bissau, Africa few years ago when there was a coup. If a political coup does occur, Olam will send international security forces in to help fly its employees and their families out. It is costly but Bose doesn’t see it as expensive when it comes to safety. The same goes for cities with unpredictable natural disasters. When a volcano erupted in Papua New Guinea and the physical atmosphere became extremely polluted, the entire team was evacuated to a city which was an hour’s flight away. “What we tell our expats is, the first priority is safety. There won’t be questions if they have to charter a flight,” he says. “All managers can make decisions on their own without taking permission from anyone in the organisation to ensure they and their family’s safety is not at any time compromised.”

Risky business

With such risks involved, it’s hard to imagine employees would be willing to relocate to cities fraught with unfavourable conditions, especially if they have encountered a terrorist attack once. Olachery was on his first expat assignment to Indonesia when the Australian embassy bombing took place in front of Saipem’s offices in 2004. Fortunately, the crisis and security management plans HR had in place were up to the test. Employees were evacuated immediately. But it still affected Olachery quite terribly. “It was one of the learning points for me because it was in front of our eyes,” he says.

According to the annual location ratings system by ECA International, Jakarta is ranked 38 on the Asian charts and 191 globally as the least favourable city to live in. No doubt, the high socio-political tension, vulnerability to terrorism and the recent earthquakes are not helping its cause. But it is not among the 10 worst cities for expatriates to live in. The bottom three Asian cities are Kabul, in Afghanistan, Karachi, in Pakistan and Pyongyang, in North Korea. As these cities score consistently bad or poorly across all categories, Quane says“they would require the most time and effort for an assignee to adapt their lifestyle towards”.

Other criteria the survey looks at when exacting quality of living include health-care facilities, crime rate, air pollution, quality and availability of goods and services, standard
of transportation and infrastructure, and children’s education.

“The crime rate in the host location would have a more profound impact on any person’s day-to-day living than whether or not they can buy their home newspaper,” Quane says.

Yet Olachery is relocating from Singapore to Indonesia with his family for the second time next month. He will be the new country head for Saipem Indonesia as part of its expansion plans, overseeing the company’s strategic business and HR functions. Olachery understands the risk levels involved but with all security measures firmly in place, he doesn’t foresee any problems.

Olam has about 70 expatriates living in Nigeria alone. With more than 20 years of experience in the country, it hasn’t had any untold incidents. Its expatriates live with their families in a highly secure compound on Victoria Island, the main business and financial centre of Lagos, Nigeria. A typical three-bedroom apartment will cost you about US$6,000 a month and the costs rise according to the size of the apartment. “It’s very expensive but it’s a safe place to put our managers there,” says Bose. “[Because] we have large procurement infrastructure there and we require expats to
run them.”

But no matter how prepared the company is, Olachery says, people will still panic. “You can only minimise the problem as much as possible.” Companies need to have a clear security and evacuation procedure that will not only stand up on paper but also be tested repeatedly.

In any case, expatriates still have to be aware of how they conduct themselves in a foreign land, says Bose. “Don’t do silly things like walking out alone in the evening or taking a jog in the early morning on a road where there is no one.”

Support system

One relocation challenge HR typically faces when encouraging employees to accept assignments from metropolitan cities to difficult locations is providing them with a reasonable “hardship allowances”. Location allowances are normally recommended as a percentage of the person’s basic salary and the size of the location allowance increases as the location’s quality of living conditions decline, explains Quane.

In cities such as Singapore, Tokyo and Yokohama, where the quality of living is good, companies do not need to provide a location allowance in order to attract employees to work there. The recommended allowance goes in 5% increments up to 25%, depending on how low the city is ranked on ECA’s survey. And for locations at the bottom of the list, ECA recommends 30% of the base salary as a sufficient location allowance. “But some companies may decide to pay higher than our recommended [figures] if the locations are particularly difficult,” says Quane. “It varies between companies, but it can be anywhere between 10% and 20% or 30% more.”

Olam pays its expatriates a hardship allowance, which is based on several factors. They include the quality and availability of infrastructure – shopping malls, roads, medical services, security, and schooling – and level of language difficulties. The hardship allowance can extend up to 20% to 25% of the individual’s home salary with cars, language courses for their families, housing and international schooling for children paid by the company. “This is over and beyond,” says Bose.

Olachery says one of the best ways of compensating expatriates is maintaining their net income after tax, no matter where they are sent to. Whether the assignee goes to Singapore or tax-free countries in the Middle East, the base salary should be untouched with additional perks provided by the company. “It doesn’t matter if you are expatriated to a lower-costing country,” says Olachery. “If a person goes to Singapore and you pay him $10,000, and after tax, you pay him $9,000. If he is expected to go to Indonesia, he would expect to retain the same level of $9,000. He should not get less than that.”

Expatriates should also be able to choose the currency they want their expatriate assignment package to be paid in. Saipem has a multi-currency system with around five to six major currencies for its international employees to choose from. “That’s the best retention strategy, whether moving from Changi or to across

the globe.”

However, financial incentives may not be enough to entice employees to work in difficult locations. “These are locations that are also incredibly difficult for their families to adjust,” says Quane. Most assignees would take their families on assignment with them if they go to cities such as Sydney or Hong Kong but not when they are assigned to difficult locations. “We find it much less likely that the employee would take their family with them. When companies send in staff to such locations, the employee would travel on their own.”

To reflect the relative hardship in these cities, Quane says the company should provide additional rest and recuperation leave for the employee to travel home to be with his or her family much more regularly than usual. “The company has to manage issues such as the security of the employee in the host location and the family as well. Do they encourage the family to remain at home or do they encourage employees to travel home much more regularly to see their families?”

Show expatriates that you care

“We won’t send a person to an absolutely unsafe place. We ensure that there is a mode of safety in any of these places that you go to,” says Bose. But besides taking care of their basic needs and giving expatriates carte blanche on security concerns, Bose says companies should give assignees entitlements for entertainment or create a support system for them to socialise.

The first thing that hits expatriates and their spouses when they arrive at a new host country is they have no friends. HR needs to create an expectation that these managers and their spouses should meet up at least once a month in the next few years until they develop their own social network.

Allow expatriates to join golf clubs, associations or even set up a gym or a clubhouse with drinks and food for them if possible, Bose suggests, especially in cities with lower quality of living. “Entertainment is a premium at these places so the organisation goes out of its way in these countries to ensure a lot of socialisation is happening,” he says. “Unless people are willing to socialise and be available for the other person, they won’t have any friends initially.”

Olam also ensures compliance in cultural behaviour training and security guidelines for difficult locations, says Bose. Elections during coup-prone countries are usually a volatile period and Olam’s offices are warned to close
up by 5.30pm to ensure no one works late. But there have been occasions where employees work late and that increases the risks of their personal safety.

Another example Bose gives is keeping track of discipline in areas such as travelling rules and respecting speed limits on roads. Expatriates are not supposed to be on the road for more than eight hours at once, even if they have a driver.

“I don’t know to what extent these rules are really followed. I know in the evenings we don’t drive, nor after sunsets.” But he is mostly unaware whether expatriates are dutifully keeping to the enforced time, speed and driving-hour limits. “Education, rather than forcing compliance, is important.”

Expatriates should feel comfortable working wherever they are and it’s fair for them to want a lot more support from the organisations they work for. Therefore, there is a need for HR to ensure the company really cares for its expatriates, says Bose. “They are making a sacrifice by moving out of their home country and living in a place which may not be one of the best places to live in.”