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Why do international assignments fail and how to avoid it?
A guide to ensuring international assignment success
A corporate executive is offered an opportunity to head up a regional office in an exotic country on the other side of the world. Jumping at the chance, his wife quits her job; they take the children out of school, put their house on the rental market, and book one-way tickets to their new home.
It takes less than three months to realise their mistake. Stuck in a house they don’t like, their wider family thousands of miles away, struggling to make friends, dealing with a seemingly insurmountable language barrier, and navigating enormous cultural differences. A week later they’re on a flight home, getting ready to pick up the pieces of the life they thought they were leaving behind.
Most corporate HR consultants have a version of the same story, and would agree that relocating employees internationally is a major challenge for both the companies and staff involved.
Management recruiting firm Chalre Associates, detail the five top reasons for expatriate assignment failure as:
- Family stress
- Cultural inflexibility
- Emotional immaturity
- Responsibility overload
- Physical breakdown
International migration is on the rise. A report by Finaccord, predicts 56.6 million expatriates for 2017, a figure that’s expected to grow by 3% a year. Of those, almost three quarters have moved for work reasons, either job seeking or taking up foreign assignments at the request of their employers. And almost half of the rest are the families of those people moving for work.
Benefits and costs
Living the dream…
For many people, living and working abroad is a life-long dream. It’s a chance to embrace the culture of a new country where the climate or the lifestyle can be radically different to home. Coupled with the familiarity of a corporate environment and relocation support from an employer, foreign assignments can be hugely successful, life-changing experiences.
Company needs
For a company, especially multi-national corporations, foreign assignments are an important way of injecting their values and corporate culture into regional offices. Moving executive staff to subsidiary companies in other countries helps transfer operational knowledge and management skills, building trust between the two locations, especially in newly acquired businesses.
The cost of globally mobile staff
While there are clear benefits to relocating staff, there are also risks involved on both sides: not least, the cost. For an employer, foreign assignments are among the most expensive of HR projects, averaging two to three times the basic annual salary of the employee, and often running into hundreds of thousands of dollars. Factored into those costs are multiple flights, temporary accommodation, moving costs, health care, and potential school fees if families are involved. There are financial implications on the employee side too – in the planning and preparation of their trip, but also emotional costs in leaving family and friends for the possibilities of an unfamiliar country.
Because foreign assignments are so expensive, companies involved in moving staff around the world are continually looking to find ways of ensuring sure they don’t fail. Unfortunately, 20-45% of them do.
Relocation risks
Why do assignments fail?
They fail for many reasons, most often when an employee’s expectations of their new life doesn’t quite match up to the reality. It can be something as straight forward as the change of climate. For someone sitting in a rainy office in Manchester, the chance to relocate to Dubai might seem very appealing. But the reality of baking in a 40-degree heat wave in August can prove an unpleasant shock. Sometimes relocations don’t work out because people struggle to adapt to cultural differences in their new home. Something particularly evident when employees move from Western cultures to the Far East or vice versa, or to areas with different religious backgrounds such as a transfer from the U.S. to the United Arab Emirates. And sometimes the professional arrangement just doesn’t work out — either because the role isn’t right, the employee or employer has under-estimated the demands of the new job, or there’s a cultural clash of management styles.
Family problems
But the most common reason for foreign assignments failing is when an employee tries to relocate with their whole family. For individuals, moving internationally can be relatively straightforward. Factor in spouses leaving their homes, children moving school, family and friends left behind, language barriers to overcome and an enormous culture shock on arrival, and it’s easy to see why relocating doesn’t always work out for everyone in the family.
Partner problems
Often, the success of assignments hinge on whether the spouse can settle successfully. In their home country, both partners might be employed and enjoy the financial security of two incomes. But relocation can mean one person has to give up their job to move. If they’re then unable (or not allowed) to work in the new country, it can increase their sense of isolation and put a strain on finances. Which can quickly lead to resentment, low self-esteem, depression and a plane ticket home again.
Best practice for success
Companies that enjoy low rates of failure in relocating staff put in place comprehensive support, before, during, and after their employee’s assignments. Given the costs involved, it’s in their interests. Typically, they’ll offer relocation expenses, regular flights to and from their home country, language classes, community programs to build relationships with local staff and other expatriate workers and their families, help finding the right schools for their children, and access to comprehensive private health care insurance.
Health care at hand – The role of iPMI
For families, international private medical insurance (iPMI) is a key factor in considering relocation opportunities when they arise. Because health care systems differ around the world, families want the peace of mind of knowing their children have access to the best possible care while they’re away. They also want the reassurance of knowing that in an emergency the best medical support is on hand, perhaps returning them to their home country for treatment if necessary. Employers too want to ensure their international teams and their families stay healthy, happy and productive.
From an employer’s perspective, offering iPMI to relocating staff is increasingly important, both for their employee’s benefit and because many countries around the world are beginning to make health care insurance compulsory. Rising health costs globally mean governments are less inclined to fund medical services for employees on foreign assignments. Both Saudi Arabia and the Netherlands already require iPMI in place for expatriate employees, and other countries are following their lead.
Extra support from Aetna International
Private medical insurance companies, like Aetna International, provide comprehensive support for both employers and employees involved in foreign assignments. For our members, that support begins before they leave home. Our Care and Response Excellence (CARE) team offers a 24/7 year round service providing a detailed pre-trip planning program to help them understand how the health care system works in their new country, where their nearest approved medical centres are, and what to do in the case of an emergency. They can also assess their health before departure, checking for potential problems, ship any required medication, handle medical support for chronic, long-term conditions like asthma, and provide wellbeing advice.
Once in country, support is available 24/7 through our Employee Assistance Program to talk through any problems they may be experiencing in adapting to life as an expatriate. And if a real emergency arises, Aetna Security Assistance in partnership with crisis response management experts at WorldAware, provides members with access to the security advice and assistance needed to stay safe — such as global security alerts, security briefings and more.
Knowing their family has medical support when they need it gives employees more time to focus on getting the most out of their new lives, and employers a better chance of their assignments succeeding and ensuring a good return on investment.
Read and download our free comprehensive guide: An Employer’s Guide to Successful International Assignments.
For people considering moving abroad or for organisations sending employees on an international assignment, our library has articles looking at some of the issues expatriates experience and how best to handle them. We regularly provide advice to employers around occupational health and how to ensure assignment success. Existing members can also access our health library for specific information on different medical conditions and disease information. To find out more about eligibility for Aetna International plans that include Aetna Security Assistance AdviceLine or ActionResponse support services, speak to one of our expert advisors.
March 2017 will see the launch of Aetna Security Assistance services for Aetna International members in the Americas, ensuring global AdviceLine and ActionResponse service availability through certain Aetna International private medical insurance policies.
If you’re an employer or broker looking for international Private Medical insurance for clients or staff, you can call us to discuss your needs. Get the right telephone number for your area, here.
“Companies that enjoy low rates of failure in relocating staff put in place comprehensive support, before, during, and after their employee’s assignments. Given the costs involved, it’s in their interests.”
