Top Incentives for Global Relocation

The face of global relocation is changing. Employers are now confronted by the complexities and challenges of operating a global workforce on a tight budget, making the support of employees on international assignments paramount in reducing company costs.

When an increased salary isn’t enough to lure employees oversees and keep them there, tailored incentive packages can be used to persuade them to take an international assignment while shrinking the cost of international relocation, according to Mobilising Talent: The Global Mobility Challenge Survey, a recent study sponsored by consulting company BDO.

Among the nearly 18,500 employees surveyed, the most commonly desired incentives included international assignments in English-speaking countries, a guarantee that employees could move back to their current role after the international assignment is complete, round trip airfare to return home for family visits, a paid trip to visit the country before agreeing to move there, paid language training, and immigration assistance for spouses, according to the study.

While some of these incentives may involve a hefty upfront cost, employers that offer international assignees cultural transition support, instead of merely offering them an increased salary, are more likely to see a long-term cost reduction, according to Carol Joy, the global mobility manager at manufacturer MOOG Inc.

For an employee who is relocating with his or her family, for example, one of the biggest concerns is the family’s ability to adjust. If an employee’s spouse or children are unable to successfully transition into a new culture, the employee is more likely to call off the assignment, costing the company more money than the initial relocation.

“The family’s failure to readjust is the biggest reason [an international assignee] will leave early,” Joy said. “A lot of supervisors and managers don’t want to spend the money upfront. But if you find that that person can’t adjust, you’ll certainly have some sunk costs.”

To ease the transition period, employers can send potential international assignees on home-finding trips with their family members, or they can create cultural profiles where employees will learn about how people interact with one another in a new country with different social cues, according to Joy.

Employees who have a good grasp of a foreign culture’s characteristics before they begin an assignment tend to have a better understanding of how to communicate with their subordinates, co-workers and peer groups, Joy said.

But immersive cultural training can be costly, and some culture and language programs can cost about $3,000 to $5,000 per employee, according to industry reports.

However, despite the research on the benefits of cultural training, only 37 percent of companies reported providing formal cross-cultural preparation in all instances for employees on international assignments, according to the 2012 Brookfield Global Relocation Trends Survey.

A company that takes a relocated employee’s concerns and well-being into consideration can potentially increase his or her productivity, improving its return on investment, said Donna Chamberlain, managing principal at BDO. If all of the employee’s needs are being met abroad, that employee is less likely to be distracted by personal matters, enhancing work efficiency and focus.

“It’s obvious now that people do not want to go too far out of their comfort zone,” Chamberlain said. “There is no one-size-fits-all incentive package. And while consistency is important, there needs to be diversity and flexibility in [a business’s] policies.”

In general, companies reported better assignment preparation and mandatory cross-cultural preparation as the top initiatives used to improve an international assignee’s return on investment in 2012, according to the Brookfield survey.

While long-term international assignments are not as widely used as they once were, there is still a need for them. More than half of international companies’ revenues were generated outside the headquarters country last year, a record high, according to the Brookfield survey.

For companies with a global presence, immersive long-term international assignments give managers an opportunity to understand how to interact and communicate with clients in other countries.

“International assignments aren’t going to go away,” Joy said. “There’s still a need to transfer company culture from one location to another using senior management.”

Jessica DuBois-Maahs is an editorial intern at Talent Management magazine. She can be reached at editor@talentmgt.com.