Overseas operations used to be thought of as subsidiaries to help increase sales, now they are part of a network for accessing knowledge and human capital around the world. Employees in the Hyderabad office might know something about product development that Tokyo office doesn’t and you need them for that knowledge not just for additional sales. For many organizations preparing and supporting expatriate workforce represents an important investment of company resources. In fact, the stakes are high for all involved. For employees, such an assignment is often as an opportunity. Yet they must also contend with unfamiliar surroundings and cultural adjustments that can be particularly challenging. For the employer, providing ongoing support for an expatriate worker involves many judgment calls. Thus, identifying an approach to expatriate benefits that works well both for the company and its employees is critically important. A recent report on Expatriate Management Survey, India identifies the latest international assignments policies for managing a globally mobile group of employees. The report describes expatriate compensation approaches, trends in expatriate allowances and support and the use of varying assignments (including short term, long term, and computer assignments).
A truly global organization is determined not only by the percentage of business outside its headquarters location but also the number of associates with global assignments.
Due to significant investments that are involved organizations have to consider how to select the right people for the assignment, manage performance and communication issues, and ensure that expatriates are successfully repatriated or reassigned when their assignments are done. While considering executives for international assignments, it will not make business sense to make the movement if the same skill set can be hired locally at lower costs. So companies need to look at international assignments much beyond the need of just filling in a position but from a larger angle of developing the talent pipeline within the company by planned job rotations and cross country exposure. Here numbers involved may not be very large but the long term benefits will outweigh the short term costs. Organizations also ensure that assignees commit to a minimum timeframe of international work to ensure learning and knowledge transfer.
Some of the most common challenges faced by employers of international assignees are those regarding the competitiveness of expatriate packages, issues with different tax structures and of overall cost containment. While international assignment policies typically contain localization terms and conditions companies often deal with localization on a case by case basis so as not to de-motivate employees. A leading IT company’s compensation approach is as: (1) Compensation is a healthy mix of base pay and variable component (2) Domain based differential compensation grids, language premium etc, (3) Applicable local regulations are considered for incentive and bonus payouts, (4) Support from international consulting firms for practices alignment and (5) Ensuring participants in market survey for benchmarking compensation data and benefits. Keeping in mind that compensation is a key area of concern for international assignees, as well as employers, most progressive organizations follow the trend of custom designed resettlement packages depending on the needs of the executive who is relocating.
When you hire someone you are not only hiring his/her knowledge and expertise but also his/her culture social beliefs and values. Unlike frameworks of their western counterparts, policies around softer issues such as pre assignments during assignment and end of assignment support have yet been developed well by the Indian companies. Although acknowledged universally and addressed increasingly softer issues such as spouse support measures and repatriation planning still takes second place to daily operational aspects of international assignments management.
Tata Communications considers the settling down, process a challenge and says that it impacts employee readiness on the job. In the initial phase, there are culture familiarization visits involved for the expat and his/her and family gets adapted to the new surroundings. Help is also extended by companies by offering them a consultant or coach’s assistance can help them settle down.
A dedicated team for overseas operations takes care of all such movements and ensures that it provides the necessary support to the family members for such movements. The support varies from helping to fill the visa forms to help them settle, once they are abroad. Assignees also commit for a minimum time frame of international work to ensure learning and knowledge transfer. Employee friendly policies like onsite leave, initial salary advance, extra baggage allowance, children’s education allowance, family health policies mandated insurance coverage etc. To address the spouse dissatisfaction issue, one company try and provide opportunities for the spouse as well in the same company.
Participating companies were asked to rate the region in terms of the most common international assignment destinations on a scale of 1-5 with 5 being most common and 1 being least common. A growing number of companies are expanding operations in the Middle East and Latin America and are increasing number of employees to these locations. A few Indian MNCs have also started sending employees to Western, Central and Southern Africa.
Historically, companies produced their goods and services locally and sold them globally. Truly global companies now produce, buy, and sell globally thus making it imperative for organizations to design a strategy for their globally mobile workforce.