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'Shipping' and Handling: Picking the Right People to Head Overseas Is Paramount

Companies are increasing the number of corporate globe-trotters to emerging markets such as Brazil and China, but there is a potential price to pay beyond moving furniture.

March 1, 2013
Related Topics: Top Stories - Frontpage, Talent Management(2), Global Business Issues, Labor Trends, Strategic Planning, Talent Management
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'Shipping' and Handling

Forget London calling.

Now it's more likely to be Brazil or China, as organizations send employees on long-term assignments to emerging markets, prompting new challenges for both employers and those headed abroad.

"There's a lot riding on the success of these assignments; otherwise companies would be hiring locally. It's critical that a company find the right people," says Scott Sullivan, executive vice president of Brookfield Global Relocation Services of Woodridge, Illinois.

But in these countries, everything from security to health care to infrastructure to housing to children's education can be causes for concern, Sullivan says.

And there are other concerns for employers looking to send workers abroad. Chief among them are the costs of failed assignments—employees who move overseas but then bail out before their scheduled time is up.

"It's a huge loss. Companies spent millions moving them around the world," says Kevin Cornelius, human capital partner at Ernst & Young Switzerland. That's prompted some organizations to take more proactive measures to find the right individuals before sending them abroad.

A survey, Successful International Assignments Into Developing Locations, by Brookfield of 123 human resources managers and corporate mobility program managers from around the globe found that China was ranked the most challenging destination by 14 percent of program managers, followed by Brazil at 10 percent, India at 9 percent and Russia at 8 percent.

And this is a time when assignments to emerging markets are on the rise. Driving Business Success: Global Mobility Effectiveness Survey 2012 by Ernst & Young found both long- and short-term international assignments are climbing after tailing off from 2008 to 2010.

More than 500 international companies participated in the survey. Nearly half had increased the number of employees in growth markets in 2011, and 60 percent planned to increase the number of employees heading to these markets in the next two to three years.

The number of workers heading to emerging markets is still small, with 329 employees on short-term assignments to these locations in 2012, and the number was predicted to climb to almost 400 by 2014. Meanwhile, the number of employees on long-term assignments is projected to jump from 1,350 in 2012 to nearly 1,500 in 2014. Organizations are focusing on these locales as they "look for new opportunities and new profit margins," Cornelius says.

A similar Ernst & Young survey in 2011 found that as of that March, China was the growth market with the highest number of international assignees. In China, they averaged 27 per company, followed by Africa with 18 and India with 13. In 2014, Africa is expected to lead, with 28 assignees per company, followed by China with 27 and India with 18.

A big problem is that, in many cases, those involved in global mobility functions aren't involved in the selection of those assigned abroad. And nearly half the companies surveyed by Ernst & Young don't have a global talent management agenda. "They're not necessarily looking for the best talent to move," Cornelius says. "They don't necessarily get the best return on investment, either."

Experienced employees heading to growth markets may be sent to establish a new operation, fill a critical-skills gap or work on a specific project, such as setting up an IT system. Promising young employees are sent to hone their skills.

Paula Larson, chief human resources officer at the global payments company Western Union Holdings Inc, says employees should eventually be able to phase themselves out of those positions. "Part of their success is the ability to backfill with a local national."

Problems arise when employees cut short their assignments. In its 2012 survey, Ernst & Young found that 8 percent of the companies that responded had at least 11 percent of assignees return early from international assignments, and in some cases, more than 20 percent returned home early. On top of that, 11 percent of those sent abroad left their organizations within two years of returning home.

One of the main reasons assignments fail is because families can't adjust to the new culture, Larson says. Challenges can involve everything from shopping to schools. "Some families embrace the learning experience for the family," she says. Others are unable to make the adjustment.

Western Union has about 100 expatriate employees overseas, and about 10 percent are in emerging markets. If someone is a candidate for an assignment, a vendor provides language and cultural training to the person's family before they agree to the assignment. "The cost of cultural training is so small compared to failed expatriate moves," Larson says.

At Ernst & Young, about 2,600 of its 167,000 employees are on international assignments at any time, says Troy Dickerson, director of mobility strategy and operational effectiveness. That includes about 270 Americans in 30 countries. Of those, about 45 are in Ernst & Young's key markets of Brazil, China, India, Russia and South Africa.

Ernst & Young sends experienced employees to such markets to fill "business critical assignments" where a particular skill is needed, or to meet the needs of a particular business unit or service line. Their aim is to "strategically align the right resources and expertise with our clients' needs," Dickerson says.

It also has developmental programs in place to foster the careers of top achievers and fill the pipeline with future leaders, she says.

Employees can be challenged by local cultural norms and business practices, she says.

The firm addresses that in a number of ways, including the use of GlobeSmart, which provides online hands-on learning modules on how to conduct business effectively in more than 60 countries.

In addition, a vendor provides cultural training before employees leave, as well as when they arrive at their destination, and some employees receive language training. Spouses and partners on long-term assignments also receive orientation training.

The company has created international directories to provide contact information for those Ernst & Young employees currently on assignment or who have recently returned home, so someone being sent abroad can tap into their experiences and get an idea of what to expect, Dickerson says.

And it has "Mobility Champions" available, that is, partners who have been expats. They help draw up assignment plans so those going abroad get the experiences they need to advance their skills.

Senior executives receive special coaching to help them deal with individual and family challenges for these types of assignments, she says.

"We want to ensure a strong return on investment for both the individual and Ernst & Young," Dickerson adds.

Susan Ladika is a writer based in Tampa, Florida. Comment below or email editors@workforce.com.

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