Over the 16-year course of their expatriate assignments, the Viadas conducted a normal, albeit exotic, life. They were able to acclimate to each new location, whether it was a four-bedroom home with servants or a dilapidated house in a questionable neighborhood. And Citibank management was delighted every time the family reestablished its routine of schooling, swimming lessons and social engagements. The Viadas' knack for resuming normal life benefited the company's bottom line: Luis was able to focus on his work.
But it wasn't mere luck. Citibank knew what it was doing. The company recruited Luis from a master's degree program at Georgetown University's School of Foreign Service. He spoke four languages, had lived overseas when he was growing up and had an avid interest in international affairs. "They wanted to build up an international staff," recalls Luis. "They told me, 'We're looking for internationalists. Don't worry, we'll make you a banker.' " They not only taught him the necessary skills, they also provided human resources support in each country.
The Viada's Citibank experience stands in stark contrast to most corporations. Its success with the Viadas reveals a major contradiction in the way companies approach the global workplace. Ninety percent of the time, businesses select employees for overseas assignments not for their cross-cultural fluency, but for their technical expertise, according to a 1992 survey of 50 Fortune 500 companies by International Orientation Resources (IOR). Companies use previous overseas experience and interest only 20% to 30% of the time, and cultural sensitivity, interpersonal skills, adaptability and flexibility—all traits proven successful in foreign assignments—only 10% of the time. Usually HR isn't even involved. And, even after the assignments are made, only 58% of companies surveyed by Windham International and the National Foreign Trade Council provide any cross-cultural preparation.
Does this process work? Not really. Most experts agree that 20% to 25% of all assignments fail. Experts define failed assignments as either employees who return to the United States prematurely or expatriates who are unable to achieve business objectives.
Contrary to expectations, however, the majority of these failures have nothing to do with job skills. The IOR survey discovered that about 60% of them fail because of family difficulties. It's little wonder: Family members often are treated as after-thoughts. The Windham survey revealed that spouses are included in preselection interviews only 21% of the time, and only half of them receive cross-cultural training, even when it's offered to their partners.
Most current strategies are insufficient.
As we enter the 21st century, HR must question these short-term, provincial tactics. Why aren't international HR specialists involved in the selection process? Why isn't HR a partner in the global business strategy of the company? Where are the American-based language and cross-cultural resources that will allow individuals to conduct business internationally; and where is the critical HR support in the host country? Gary M. Wederspahn of Prudential Relocation Intercultural Services in Boulder, Colorado, suggests that international HR professionals aren't partners in global planning and implementation because they don't "speak the language of business—dollars gained, saved or lost." They use anecdotal data and don't quantify crucial information.
There's a lot at stake. The dollars-and-cents of an overseas tour rings in at about three times annual base salary. In some countries, the cost is substantially greater. Failed assignments easily add about $100,000 in moving and travel expenses, not counting wasted time and money in pre-assignment site visits, training and replacement. But, it's more than money. One major faux pas can ruin customer goodwill; ignorant remarks can devastate a firm's reputation; an international fiasco can wreak havoc on the career of a rising star. These costs are incalculable and jeopardize long-term business opportunities.
Even assignments that succeed are at risk with these primitive methods. Just ask John L. Graham. "HR strategies are about five to 10 years behind business strategies," says the author of three books on international business negotiations and the associate dean of the Graduate School of Management at the University of California at Irvine.
"In the U.S., when you hire somebody, you tend to hire someone just like yourself. If you were a Wharton grad, you hire a Wharton grad," Graham says. Of course, that doesn't work in the dynamic international arena where diversity reigns. It leads to a lot of failures abroad.
Furthermore, Graham says, because the human resources function is very conservative, it is difficult to change these fundamental procedures. He warns, however, that if we don't fix HR policies, "... we're going to come up with brilliant corporate strategies that we can't implement. Not only will people be unhappy if they're given [overseas] jobs they can't perform, but we'll waste a lot of money."
"The selection process is fundamentally flawed," concurs Michael S. Schell, president of Windham International, a New York-based global relocation-management company. "Expatriate assignments rarely fail because the person cannot accommodate to the technical demands of the job. The expatriate selections are made by line managers based on technical competence. They fail because of family and personal issues and lack of cultural skills that haven't been part of the process."
Underestimating the importance of cultural differences is dangerous. Compare these proverbs, for example: "The squeaky wheel gets the grease" vs. "The pheasant would not be shot but for its crying." They are two completely opposite approaches to the same situation. Such cultural differences as making eye contact, knowing when to smile and using formal or informal names dramatically affect business negotiations and interpersonal relationships abroad. When expatriates don't understand cross-cultural issues and can't speak the language of the country in which they're doing business, creative solutions to business problems aren't put on the table; business dealings quickly turn adversarial.
Look at Japan, for example. According to Graham, more than 20,000 Japanese who work in the U.S. speak fluent English. Only 200 Americans working in Japan can claim to speak Japanese fluently when they go over. It's no wonder that the U.S. has the largest trade deficit with its second largest trading partner. "If we had better language skills, we could do a better job overseas," he says.
Steve Henry is reminded often of the enormous cultural differences in conducting business abroad. The vice president for sales and support with Milwaukee-based Allen-Bradley Company has lived in Tokyo for almost three years. Every time a colleague from the U.S. visits Japan, he sees the importance of cross-cultural literacy. "After 30 minutes of going around the table and people discussing things 10 times, the Americans are going crazy," he says. "I tell them it drives me crazy, too, but you have to sit back and listen and listen and listen, even though you know the outcome will be the same. You have to do it so business can proceed. Otherwise, [the Japanese] will become quiet and intimidated because they think you're moving too fast."
Graham points out just one of the many paradoxes U.S. businesspeople face. The Japanese seldom like to say, "no." They may ask a counter question, simply look away or even leave the room. People from the U.S. want to know where they stand in straightforward talk. In order to effectively deal abroad, expatriates have to understand business and cultural practices.
Human resources can't ignore family issues.
In addition to learning new business or job skills, expatriates must deal with profound personal issues. They must close up living quarters in the United States and find new ones overseas, open bank accounts and get driver's licenses. If they have children, they must find good international schools and enroll their kids in extracurricular activities. Most expatriates spend their first month abroad in hotel rooms without their household belongings. HR can't leave employees to struggle alone with these issues.
The demographics explain why. Currently, 90% of expatriates are male, and 78% are married, according to Windham International. Forty-six percent of accompanying spouses leave a career in the U.S. A recent survey of 120 international companies by Windham and the National Foreign Trade Council shows that 88% of companies believe that dual-career issues will become a more acute problem in international assignments. Although the questions remain largely unanswered, HR executives must recognize that there are new questions being asked: How does the company compensate for the lost income of the partner? Can employers intervene with the host country to obtain a work permit for the accompanying spouse? Are educational opportunities and travel benefits for the spouse going to be important in the employee's benefits package?
Furthermore, the increasing number of women going abroad as expat employees will exacerbate the situation. What will an unemployed male spouse mean for international assignments? How will HR address gender-role conflicts? What about the sexism that employees face when they're overseas? HR must create educational tools and in-country supports to help employees handle these difficulties.
Even if the spouse wasn't employed before the assignment, he or she leaves a support network of friends, family and community activities. Children are another complicating factor. They may have special needs or may not adjust easily to a new school and neighborhood. These aren't insignificant issues. They put a strain on the marriage, which ultimately can generalize to the work arena.
Because of these issues and others, Schell believes that all family members need training and support. Contrary to current practice, he emphasizes the importance of preparing the partner. "The organization needs to acknowledge the spouse and family and help them with cultural preparation," he says. If the spouse needs to be supportive in order for the employee to be productive and the assignment to succeed, it only stands to reason that the spouse's needs must be addressed.
"The problems for men and women shouldn't be much different," suggests Graham. "Both need cross-cultural training and support. But, there should be special support for the spouse getting settled." This is where outside agencies are helpful.
Kathyrn Devos agrees. She's the manager of employee services at Schering-Plough Corporation in Kenilworth, New Jersey. Because the pharmaceutical company has 21,000 employees worldwide (7,000 overseas), Devos has her hands full relocating medical directors, project engineers, and finance and marketing people from the United States to other countries as well as from one overseas location to another. Unlike the majority of companies who ignore preselection criteria, Schering-Plough's international human resources department administers tests and in-depth interviews to determine a candidate's potential for success. They relocate about 70 people internationally each year.
Devos says the employee's family is always a consideration. Often, an assignment depends on the country that potential expats will be going to and the lifestyle acceptable there. "There are some countries—such as Kuwait—to which we wouldn't want to send a family with small children or a couple with a pregnant wife because medical facilities aren't up to our standards," says Devos. One employee was a rising star and was identified for an overseas assignment. The company presented the possibility to the individual. After discussion, everyone agreed that he should turn down the offer because his wife had muscular dystrophy and medical facilities in the potential location were remote. Another family had difficulty because they had a child with learning disabilities.
"Because so many assignments fail due to the family complications, you have to pay more attention to them. This is where predeparture and cross-cultural training comes in," she says. For example, how will cultural mores affect teenagers? What are the dress codes, and how will children respond? In some countries, even older children can't wander freely. People must be forewarned about taboos, dangerous places and customs they must respect.
Henry knows this firsthand. His wife and three daughters accompanied him to Tokyo, and he believes that predeparture programs made a difference in their adjustment to their first assignment abroad. As part of Allen-Bradley's predeparture program, the Henrys spent a week meeting with expats who had lived in Japan, learning the history and culture of Japan from experts, visiting with Japanese who explained how locals might view them and starting to learn the language.
"We talked about what some of the ups and downs might be when we first arrived. They tried to put us at ease and let us know some things might be shocking. It was very helpful, especially for the girls," says Henry. Nevertheless, they weren't prepared for the shock of the jammed Tokyo subways, the lack of personal space or the neighbor in the apartment upstairs who sings with his karaoke machine past midnight.
Companies such as Windham International, International Organization Resources, Prudential Relocation Intercultural Services, KPMG Peat Marwick and others help to anticipate some of the families' needs and integrate those with support in the host country. They can serve as cultural translators when people face confusing situations. They may also help the spouses define and plan some important activities to pursue when first arriving in-country; they give specific information about extracurricular activities for children. One woman traveled with her husband from Canada to Hong Kong. She had been the manager of a museum in Toronto. With the help of counselors, she decided to work closely with schools and museums in Hong Kong and become an expert in Asian art. In this way she could maintain her career path while her family was overseas, even though she wasn't making an income.
It's wise for the non-career spouse to develop a plan, also. He or she has to identify the challenges and evaluate options in the local community to avoid becoming isolated at home while the rest of the family moves into a routine. Some couples decide that this is a perfect time to start a family. Others choose this as a period to provide full-time parenting and self-enrichment. Ask successful expat spouses and they'll tell you that identifying choices is extremely valuable.
Ongoing support is as important as preparation.
Even that isn't enough, however. "It's very important to provide an integrated predeparture and destination program," says Schell. "Even if companies offer excellent preparation programs, they need to follow up with practical host-country support activities." It's certainly not acceptable to stop educating the expatriate family about cross-cultural issues. It's equally dangerous to ignore continuing ties with headquarters.
No one knows this better than Devos, who maintains regular phone contact with expatriates. Her troubleshooting has paid off. She recalls a young couple living in Europe. The wife was pregnant and extremely afraid to have the baby overseas. During a conversation with the employee, Devos remembers: "... something just didn't feel right." She had the host-country supervisor check into the matter and became more convinced that the woman was in danger of becoming housebound because of her fear. "We offered the couple an extra trip home," she says. "It was just a thank-you, not their annual return. But it allowed them to have the baby here and return to their assignment."
It's this kind of sensitivity to individuals that makes international HR successful. More often than not, these painful situations won't even come to light because the employee is reluctant to reveal that he or she is having problems. And assignments are rife with problems. In fact, culture shock is predictable in most normal cycles of adjustment (see "Employees Pass Through a Predictable Pattern of Adjustment").
Ongoing support also must continue from one assignment to another. This is true for everyone, even employees like Steve Henry, who do well in overseas assignments. He's now extended his time abroad and will move to Hong Kong. Such a change will require additional cross-cultural training because the culture in Hong Kong is very different from that in Japan. But Henry is supported by a company that strongly believes that people must learn the local culture. For example, Allen-Bradley encourages language lessons for family members before the assignment and after arrival. The company also has an integrated global program that incorporates family members, Milwaukee-based mentors and an annual HR review focusing on expatriates. In Henry's case, training, personality and attitude combine for a successful package.
International Orientation Resources
If U.S. business is to triumph in this global competition, there must be many more Steve Henrys. Human resources professionals must educate themselves about available resources and what expatriates actually face when they're overseas. Practitioners must learn about cultural differences and what it actually means to do business abroad. If HR expects to be business partners, they need to learn global dollars-and-cents.
Personnel Journal, April 1994, Vol.73, No. 4, pp. 56-60.