“Considering the significant financial investment made in deploying an employee overseas, assignment failures are to be avoided at all costs.”
Over last few decades, globalization has pushed many organizations to turn their focus towards emerging markets in search of new clients and competitive advantage. But the draw of the growing middle-class consumer base is often matched by the struggle to find talent with the rights skills and competencies. The solution is generally to import foreign employees to work alongside local hires, to provide the skills and experience necessary to run the business in the short-term and help build local capabilities for the long-term.
But asking an employee to uproot her life and move isn’t an easy sell, especially for assignments of long duration. Add a challenging economic, social or geopolitical environment, and you leave employees with a difficult choice. To bring the whole family with them has clear advantages, but would also mean exposing their spouse and children to the same level of hardship. The alternative—leaving the family behind—brings all the emotional challenges associated with long-term separation. Some organizations offer the intermediate option of stationing the family in a nearby alternative location, reducing the distance between the employee and family members and allowing for more frequent family visits. For example, it’s not uncommon for employees on assignment in some middle eastern locations to relocate family members to Dubai.
Irrespective of the situation, differences in living standards deserve serious consideration for a number ofreasons. Firstly, they can create anxiety for the employee and his family, which may lead to reluctance to undertake the assignment. Secondly, living condition may erode the employees’ morale and affect his performance over time. This could ultimately lead to “assignment failure”: the employee falling short of achieving the objectives of the assignment and/or a request to be repatriated prematurely.
Considering the significant financial investment made in deploying an employee overseas, assignment failures are to be avoided at all costs. More importantly, poor planning and preparation for differences in living standards can expose employees deployed abroad to a number of risks with potentially harmful or even lethal consequences. Employers have a “duty of care” obligation towards their employees that extends to overseas assignments.
There are several factors that can contribute to differences in living conditions when moving between locations. The annual mercer quality of living survey evaluates local living conditions in more than 450 cities surveyed worldwide. Mercer’s proprietary quality of living methodology compares living standards in terms of 39 factors grouped into 10 categories:
- 1. Political and Social Environment
In some countries, the political environment may expose the employee to prosecution for saying or writing the wrong thing. In others, the social environment may be characterized by high rates of violent crime or exposure to terrorist attacks or social unrest.
- 2. Economic Environment
Employees and their families may not be prepared for life in a country going through significant economic stress, or with a less developed economy.
- 3. Socio-cultural Environment
Social and cultural differences can make going about one’s daily routine or making new connections difficult for foreign employees and their families.
- 4. Medical and Health Considerations
Some countries may not have the medical infrastructure in place to meet the needs of employees with health conditions, or to provide reasonable standards of care in case of accidents or emergencies.
- 5. Schools and Educational Standards
Employees with children may be forced to pay for private schooling or overseas boarding schools in locations where international schools are lacking.
- 6. Public Services and Transportation Infrastructure
Others may not be able to drive due to legal or safety concerns, forcing them to rely on poor or still-unsafe public transportation.
- 7. Recreation
Some locations may have very limited recreational facilities, depriving employees of much-needed diversion outside of work.
- 8. Availability of Consumer Goods
Employees deployed to remote locations are likely to find a very limited range of everyday goods, and a shortage of many of their favorite items and brands.
- 9. Housing Standards
Housing standards can vary widely between locations. In many areas it is important to pay particular attention to the security of the premises, as foreigners can be tempting targets for criminals.
- 10. Natural Environment
Certain locations are notorious for natural hazards such as floods, monsoons, earthquakes and volcanic eruptions—unfamiliar occurrences for many employees.
It’s easy to see why it’s important to plan, prepare and support the employee to manage differences from the home location to the assignment location. Even the less urgent factors cited above have great impact on employees’ quality of life. We recommend organizations respond on two fronts:
- In terms of planning, the company needs to carefully evaluate the risks, brief the employee and provide as much “on the ground” support and advice as possible. The company may need to develop crisis management processes and procedures. Proper planning also includes ensuring that adequate insurance coverage is provided for medical emergencies, accidents and fatalities. Extra care is required when deploying employees to conflict zones or locations prone to natural disasters, as many insurance policies exclude “acts of war” or “acts of god,” and may therefore require additional policy riders.
- From a pay standpoint, the company needs to adequately incentivize and compensate employees for undertaking assignments in difficult locations. Failure to incentivize these moves can ultimately result in high refusal rates and strong bias towards locations perceived as “easier”—leaving the company with the same talent shortage it was attempting to address.
What Emerging Markets Can Do To Attract Skilled Talent
Having run the quality of living study for 19 years, we observed that infrastructure deserved its own ranking, as there is a strong connection between quality of infrastructure and a city’s attractiveness for global talent. We focused on power and potable water supply, telecom penetration, public transportation and international air travel connectivity with this new ranking.
Singapore topped the chart, leading all other cities in the developed world. The correlation between the city state’s world-class infrastructure and the number of foreign workers who call Singapore home—including this writer—is clear.
Asia is leading the world’s economic growth today, but also its infrastructure growth. Governments in Asia and elsewhere across emerging markets recognize that investments in infrastructure go a long way in attracting multinational companies and the skilled talent that comes with them. A positive cycle of progress is created as their local economy gets a boost from the new skills and opportunities available.
In the meantime, however, organizations in both emerging and developed markets looking to expand must keep in mind the considerations enumerated above as they deploy their talent abroad. There is no such thing as too much planning when it comes to ensuring the safety, happiness and productivity of a mobile employee.