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AUTUMN 2005 – ISSUE 27

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Expat Coaching • Dual Career Solutions • Expat AssessmentOffices throughout Europe, America, Asia

NET EXPAT: Peter, can youshare with us your

experience on what happens tointernational assignment policiesduring mergers?

Peter Hawthorne: WhenGlaxoSmithKline was formedthrough the merger of GlaxoWellcome and SmithKlineBeecham in 2000, both legacycompanies were frustrated abouttheir own expat policy. So basicallywe all sat together, aiming to get thebest of both policies, but also tolook outside and fish for good ideasfrom the best practices in the field.Our challenge was money, as themessage from the top was veryclearly towards cost savings. Asinternational mobility is expensive,the message was obviously toleverage the benefits of all this. I’mstill impressed by the substantialinvolvement from our topmanagement in the redesign of ourGlobal Mobility Program. Our task was not easy, as the visionsof the two legacy companies werequite different: for the first the questwas “best value for money”, with aslightly more US-centric approachwhile for the other, slightly moreEU-centric, the challenge was on

the selection of the right people andmeeting their needs to improveperformance. The good side of thisis that we complemented each othernicely. The result was a nice holisticapproach, with a clear focus on the

needs of the expat and his/herfamily, a reduced administrativeload, and a tweak on costs! All thisof course properly integrated into acareer plan.

NE: You have taken the time toanalyze the key success factorsof modern internationalmobility. Can you share somefindings with us? PH: We certainly have. Weused to monitor simple butcentral things like thesatisfaction level of the hostorganization and of ouremployees. Through theanalysis of the results, we beganto realize that the integration of theexpat spouse/partner played a

central role in the success ofassignments, especially when facingthe dual career issue. We backed upour analysis with academicresearches, and we decided to dosomething.

The option for GSK to employ theexpat spouse/partner was not realisticand is not an option in most of thecases. We decided to work with NETEXPAT to deliver Spousal AssistancePrograms, first at a national level insome countries, now extending theNET EXPAT offer to more and morelocations, with positive results.■ ■ ■

Corporate Vision

Mergers: getting the best of twoInternational Assignment Policies

Peter HawthorneDirector Global AssignmentsCorporate Compensation,GlaxoSmithKline,Brentford, UK.

The result is a nice holisticapproach, with a clear

focus on the needs of theexpat and his/her family… and a tweak on costs!

The art of anticipating is probablyone of the skills most in danger

of disappearing in multinationalcorporations. And yet, the sooner anissue is tackled, the greater thechances of finding a solution and theless the effort required.So why is anticipation so littleevident in a world dedicated to cost

savings and optimization? Too many HR managers call on ourExpat Coaching services only one ortwo weeks after transfer, with theintention of giving their expats timeto settle into the host country. Thismeans we already have to startcoaching by ‘adjusting’ the expats’first impressions since arrival…Even worse, some expats don’t eventake their coaching seriously untilthey’ve had to face up to some crisesof their own making.

Another example is companies thatonly offer “repatriation coaching” tothe partners of their expats. And yetthe evidence shows that a partnerwho has had the opportunity tocontinue working while abroad willcope far better with the wholeexpatriation/repatriation process,and will find a job much more easilyon his or her return!

Anticipate… and your life will be alot pleasanter! ■

Anticipation, anticipation…AlainVerstandigManaging Director,NET EXPAT

Editorial

Contentsp 1-2 Mergers: getting the best of two

International Assignment PoliciesPeter Hawthorne • Director Global Assignments Corporate

Compensation, GlaxoSmithKline, Brentford, UK.

p 1 Anticipation, anticipation…Alain Verstandig • Managing Director, NET EXPAT

p 2 From Italy to DubaïFélicie de Gonfreville • expat spouse from Saint Gobain, Dubaï, UAE

p 3 The Dark Side of Short-Term AssignmentsMichael Cadden • MD, Living Abroad, Norwalk, USA

p 3-4 Balancing motivation and costIsabel Rodriguez • Senior IHR, ITX, Geneva, Switzerland

p 4 Compensation Trends in ChinaElaine Ng, Managing Principal, HR Business Solutions,

limited, Hong Kong, PRC

NN■ ■ ■ We still face the issue ofwork permits for expatspouses/partners in somecountries and, in this respect,GSK is greatly involved in thePermits Foundation(www.PermitsFoundation.compromoting open work permitsfor partners of expatriates).

Of course, next to the support ofNET EXPAT and the efforts of thePermits Foundation, themotivation of the expatspouse/partner is fundamental.But we have the feeling today ofdoing our part of the job. For non-working spouses/partners, GSKoffers a ‘training allowance’, onwhich we are relatively flexible:this helps spouses/partners go tofurther education programs,language courses, and so on … in

short all that can help themintegrate into local communitiesand enjoy their expatriation.

NE: Did you manage to keepyour finances down with allthese goodies?PH: The answer is yes! We firstdecided to use a moreconservative living package toreduce cost-of-living allowances.We removed some unnecessarymobility premiums and revieweda bit our housing policy to stick torealities. But the key savings

come from the selection of whomwe are sending abroad and forwhich position. We went downfrom 400 to 275 expats, withsavings of around £20 million. Wefound that our population ofyoung expats was quite easy tomove, and very flexible. Theproblem was that they were moredifficult to keep. Expatriation forthem is a good way of enriching aCV and moving forward to thenext employer. The more seniorpeople, the one’s with “the skin inthe game”, are motivated to grow

but within the company and aretherefore more loyal. So,basically, we ask first for resultsbefore we send our people abroad.Expats continue to see fantasticcareer opportunities abroadwithin GSK while, as anemployer, we have reduced thecost and improved the satisfactionlevel.

The right people in the right place,with the right package and theright support. I’d call it asuccessful merger of policies. ■

We ask first for resultsbefore we send our

people abroad

NET EXPAT: How did youfeel when, on your arrival

in Dubaï, you had your firstmeeting with your NETEXPAT coach, StéphanieThomas?Félicie de Gonfreville: I wantedto find a job as quickly aspossible after the year-and-a-half break in my career. I camefrom Italy where we had livedfor three years. I had found workin Italy, but only after a long andarduous job search, and I didn’twant to go through that again. Ithad made great demands on myneed for recognition and myself-assurance.

NE: To what extent did thecoaching help you?FdG: Because it is genuinelypersonalized, it allowed me tolook at my situation afresh andto capitalize on my Italianexperience. I was able to workon and elaborate my personal

objectives, and think about thelonger-term future, without thepressure of finding a new job.After nearly ten years workinglife, including an expatriation, Ineeded to structure things, toanalyze all my strengths andweaknesses, to know whichway I wanted to go, and tomake the most of my Italianexperience. The EXPADVISERtest highlighted all my goodand bad points, and I now alsoknow that some qualities aremore ‘expatriable’ than others.Over a number of meetings I

was able to define myobjectives and reconcile themwith my family obligations. Ivery quickly opted for afreelance assignment as a

consultant to the MENA group.

NE: What, in your opinion, isthe impact of an expatriateassignment in terms of bothcareer and family?FdG: I made a real ‘balancesheet’ of my professional career,while at the same time takingthat of my husband intoaccount. I find it much easier toadapt to his career path on theprinciple that I, too, can developmy skills. Being an expatriatemeans growing in various ways,learning to show yourcompetences in areas which youhave never thought of before,and questioning your ownassumptions. These challengesalso apply to the family,which has topresent a unitedfront in standing upto them. They cannotbe ignored. The expatriatepartner canoften loses e l f -

confidence, either because he orshe is no longer activeprofessionally or because theright job just doesn’t seem to be

there. This is bad both for thefamily and for the successfuloutcome of an expatriation andrepatriation. So, just like

language training,coaching should be

systematic, bothbefore and after

the event.■

I didn’t want to gothrough a long andarduous job search

again”

Just like languagetraining, coaching

should be systematic,both before and after the

event

Testimonial

From Italy to DubaïFéliciede GonfrevilleExpat spouse fromSaint Gobain,Dubaï, UAE

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According to a recent surveyby SHRM/NFTC/GMAC,

short-term assignments (STA)have taken over as the dominantform of new internationalassignments. This appears to bea direct result of cost-savingefforts by global firms. In fact,in the same survey 44 percentsaid they used STAs to savemoney, a sevenfold increase inten years. Short-term assigneesare often sent without their

families, hencesaving on housing andschools. However, inaddition to the obviousstress on families, there isincreasing evidence that thecost of additional,unbudgeted trips home areburied in other budgets andthese frequent trips ofteninclude leaving work earlyon Friday and returninglate-Monday. For highlypaid managers, these traveldays can add up quickly tosubstantial amounts of money

through lost productivity.Also, as short-term assignmentshave a tendency to be extendedwith little forethought, considerhow the cost for relativelyexpensive hotels or temporaryhousing can rapidly inflate if asix-month assignment extendsto 12 or 18 months!

There is new, hard evidence thatadditional money is saved onshort-term assignments byreducing support services suchas cross-cultural training,language training anddestination services. It seemsintuitive that these assigneeswho are expected to “hit theground running” would begetting more adjustment–typeservices, not less. But this doesnot seem to be the case. Does, asit seems, this put further stresseson the assignees?

Nearly 60% of long-termassignees, whena s k e d ,

wouldgladly go on

another suchassignment. That number

falls to below 40% in the case of

short-termers. So why are thesesuch a disgruntled bunch? This questions the assumptionthat short-termers fit the bill for

developing global managers.The answer is not yet clear, butearly evidence is beginning topoint against it. If managed tactically andproperly by Human Resources,short-term assignments can be avaluable tool for globalcompanies. But, as discussedhere, these assignments aresubject to numerous areas ofabuse and could haveunintended consequences thatmitigate the original

assumptions ofcost savings.

C o m p a n i e s ,especially HRpeople, need toremain vigilantand to educate line

managers about thedownside of short-term

assignments – the Dark Side.

Living Abroad, LLC501 Westport Ave #255Norwalk, CT 06851 USAmain tel: +1.203.221.1997michael.cadden@livingabroad.comwww.livingabroad.com ■

Survey

… expected to “hit theground running” but

with little support!

The Dark Side of Short-TermAssignmentsMichael Cadden

Managing Director,Living Abroad, LLC,Norwalk, USA

Today, international mobilityis a rite required by many

multinational companies.

Whether this is the result of adesire to expose those withhigh potential to differentenvironments, or due to thecompany’s sector of activity,expatriation has become one ofthe keys to success for thecompanies and staff concerned.The difficult economicsituation of recent years has

caused companies torationalize the costs incurredby international mobility, whileat the same time offeringattractive compensation andbenefits to their staff.This search for a balancebetween employee motivationand the cost to the companycovers several topics ■ ■ ■

Balancing motivation and costExpert Opinion

IsabelRodriguezSenior IHRConsultant, ITX,Geneva, Switzerland

Cost savings may haveresulted, but manyother unintended

consequences havealso arisen

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NET EXPAT helps Corporations and Expat Families achieve successful expatriation through a series of Career & Life Transition programs inmore than 42 countries. Two programs have been specially developed to facilitate international mobility of your Expats while four other programshelp partners of your expats find work in their future host country • Web site: http://www.netexpat.com • e-mail: info@netexpat.com

NET EXPAT

■ ■ ■1. Attractiveness of benefits: it is not alwayspossible to keep the expatriate within his/hernational system of social security: this maybe because there is no social securityagreement with the host country, because themaximum time abroad has been reached, orbecause social security in the country oforigin does not cover expatriates.Additionally, managing a Third CountryNational (TCN) requires the implementationof tools that are independent of a nationalsystem that fails to benefit the TCN andwhich, when the time comes, will not ensurehim/her a reasonable retirement.

2. Career opportunities and development,abroad and after repatriation: it is importantthat the expatriate is convinced of the

mutual benefit of the years spent far fromhis/her usual environment and possiblyhis/her family. What a loss of human andfinancial investment for the company if theexpatriate leaves the company shortly uponrepatriation!

3. Optimization of costs (research on thebest price for insurance products, advanceanalysis of specific financial and socialaspects of life in the host country). A pooranalysis of social and fiscal legislation canlead to additional costs that make

e x p a t r i a t i o nextremely expensive.

It is also worthlooking for medical

coverage that iscomprehensive enoughto spare both the

expatriate andhis/her familyand thecompany any

unneces sa r yworries.

4. Choice of payment system: mostcompanies choose the “home-basedapproach” which has the advantage ofbeing readily understood by the staffmember and by HR, and which keeps alink with the country of origin. Howeverthis approach is poorly adapted to theneeds of TCNs. Another approach is to usethe local system, with the inconveniencethat a continuity of retirement benefits issometimes difficult to guarantee. A thirdapproach is to manage expatriates from a“hub”, creating an “international club” thatallows all to benefit from the same policy,regardless of nationality or host country.

Finding a fair balance between companycosts and benefits requires enormousamounts of data and know how...

ITX35, route des Jeunes, PO Box 15101211 Geneva 26, SwitzerlandTel: +41 22 309 32 00irodriguez@itx-ge.com ■

As more jobs are created by massive foreigndirect investments, the number of

expatriates working in China continues to grow.

Relocation TrendsIncreasingly, relocation to China is leaningtowards a permanent form. This means thatexpatriates move to China on an indefinitebasis with no repatriation guarantee (seeFigure A). The major reason for this trend isthe permanent transfer of jobs to China.Other reasons include relocation of APAC orsub-regional headquarters to China. In fact,80% of respondents in this same surveyexpected more relocation of foreign nationalsto China within the next 12 months. Unlikepast years, where senior management hasbeen the main target for relocation, relocationnowadays includes also middle managers andprofessionals.

Compensation TrendsCompensating expatriates in China is one ofthe biggest challenges facing employers.While expatriates from corporate

headquarters may still be compensated onhome-country balance sheet policy, the trendis to move away from this.

As more expatriates are needed, manycompanies find that using the home-countrybalance sheet approach creates significantequity problems, when expatriates from high-paying and low-paying countries are workingtogether in a common host location.Furthermore, as more expatriates are neededin China, companies are under tremendouspressure to cut costs to make expatriateassignments less expensive. As a result,employers have used alternative models ofcompensating expatriates working in China,especially forAsian expatriateswho form the bulkof non-locals inthe expatriatepool.

FutureDevelopmentToday, the so-called “full”e x p a t r i a t ec o m p e n s a t i o n

package is reserved mainly for those comingfrom corporate headquarters. Such apackage is a rarity for Asian expatriates;especially those from Hong Kong and Taiwanworking in China (see Figure B). As Chinacontinues to develop and catch up rapidlywith Western standards, both economicallyand socially, the “full” expatriatecompensation package will gradually beeroded. However, for now, so long as demandfor foreign nationals remains high, a local‘PRC’ package cannot do.*Source of Data HRBS Relocating Foreign Nationals toChina Survey, July 2005. HR Business Solutions (Asia)Limited Tel: (852) 2524 2008 Email: elaineng@hrbsasia.com

Website: www.hrbsasia.com ■

Compensation Trends in ChinaAsia Pacific

Elaine NgManaging Principal,HR BusinessSolutions (Asia)Limited, Hong Kong,PRC

What a loss for the company ifthe expatriate leaves shortly

upon repatriation!

(A) % of Permanent Relocation Yes No N° of Comp.Foreign Nationals from Corporate Headquarters 33% 67% 27Foreign Nationals from Hong Kong 46% 54% 28Foreign Nationals from Taiwan 44% 56% 25Foreign Nationals from Singapore 35% 65% 26Foreign Nationals from Other Countries 56% 44% 25

(B) Compensation Packages OfferedCorporate Hong Kong Taiwan Singapore PRCHQ Returnees

Full Expatriate Package 73% 24% 26% 52% 11%Quasi-Expatriate or Local-Plus Package 19% 60% 70% 48% 53%Local Employee Package 4% 16% 13% 9% 37%Multiple Packages* 12% 16% 13% 9% 21%

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