The past decade has seen figures of international working assignments explode in popularity.
With the development of digital technology has come an increase in international market integration. Once an opportunity open only to large corporations operating in first-world economies, the internet of things has resulted in the globalization of both SMEs and brands in developing economies, opening the floodgates for much wider-scale international trade.
In recent years, we’ve seen data that supports the concept of rising globalization. 66% of businesses are known to operate international relocation projects, sending employees overseas on working assignments. With the relocation of talent seemingly so popular, many businesses and HR representatives will likely be questioning its value to their own company.
Reasons to Send Employees Overseas:
International assignments can be beneficial to any business that is seeking to expand its profitability, providing it has the financial capital to make it happen and is capable of tapping into a relevant foreign market. With that in mind, these are the common reasons that drive corporations to send employees abroad:
International Market Penetration
Commerce businesses and applicable service industries have much to gain from establishing international links. Plenty of corporations will find they hit upper-limits of local, regional or national sales opportunities.
Eventually, their market penetration levels reach a pinnacle, given their investment levels and current market saturation. International markets offer new potential for sales, growth and, therefore, profitability. Moving staff abroad and establishing business in new markets allows access to streams of revenue unavailable domestically.
Increased Operational Efficiency
For those hitting a peak of national sales volume, international expansion is the next logical step. But what about those who have only hit regional levels, or have not even hit those yet? Why should they consider relocating staff internationally when there are plenty of untapped sources of profit to be gained domestically?
The simple answer is that overseas development can provide better opportunities. A UK business operating out of Birmingham, for example, may seek to expand business to London. But with the potential for greater consumer reach and cheaper operating costs, establishing a new base in Beijing may prove to be a better option and more efficient in terms of business growth.
Stable And Proven Leadership
So, overseas business development provides new sales opportunities and can be more cost-effective, but why not establish a presence through domestic employees instead of relocating a member of your team?
Brands the world over opt to pay out for relocation for numerous reasons. A proven employee, with experience and a mindset in tune with corporate goals, is seen as a more valuable asset than an untested worker. Given the importance of such assignments, putting hopes of overseas success on a new recruit’s shoulders can also seem riskier than using a seasoned member of your own ranks.
However, international assignments are more expensive than domestic hires. With that in mind, many businesses opt for short-term relocation projects, whereby they send over a proven individual, with knowledge of company culture, to establish an international HQ and train up domestic workers, returning once their task is complete.
In a globalized world ruled by the internet, expanding overseas might seem like something you should simply do online. Why send somebody abroad when they can manage international tasks from their home in Shropshire?
In a digital world, there is still something to be said for face-to-face interaction and local integration. To understand international markets and succeed with them, you must get to know them like you know your domestic market. You must learn about your customer and how to reach them. Achieving these results through online tools isn’t going to work.
Imagine you sell yachts and you’re expanding your business to the UAE. Getting involved in the market, having a domestic presence, meeting potential customers and being available to them locally: these are far more effective tools for growth than a website, some lessons learned from a quick business trip and online resources about culture and trade.
Dangers of International Assignment:
As this article demonstrates, international assignments are popular because they are so rewarding, but they are not without potential problems. 40% of overseas working assignments are deemed to be failures, which means businesses need to be careful when operating overseas projects. Potential for failure can be negated, but only if you take the right steps.
Avoiding Early Repatriation
If your employee comes home before they have finished their work, your project has failed. Thus, you need to make sure they don’t come back before you are ready. The biggest factor affecting repatriation is personal issues, such as problems settling in or family matters.
The key to avoiding this is offering both pre-move and post-move support; addressing problems the employee has before they become factors in repatriation. For example, if they are looking to return home because their family is unhappy, invest time in learning what the issues are and how they can be resolved.
Potential for problems can also be reduced by finding the right employee for the role. The majority of workers are either not keen on moving abroad, or dead-set against it. Finding one of those employees that thrives off the idea of working internationally, and moving them over somebody that is more apprehensive, gives you a better chance of a stable overseas project.
Cutting Down on Failed Cultural Integration
Another major issue that affects the success of overseas projects is failed integration with local cultures, both social and in the workplace. If a candidate is unable to adapt to the language, cultures and customs of a foreign country, they cannot hope to effectively communicate with clients, customers and domestic members of staff.
A staggering 75% of businesses do not offer appropriate levels of preparation prior to sending staff overseas, leaving them totally unprepared for their new role. Investment in training and education before an international assignment can greatly reduce the effects of cultural barriers and secure a stronger foothold for your international assignee.
Plugging the Holes in Leaking Profits
Overseas assignments cost roughly £80,000 before wages are included. The costs of shipping, accommodation, continued support and other relocation fees are undeniably high. If your assignee’s presence overseas is enough to secure growth in excess of their resource expenditure, the move abroad is obviously worth the cost.
However, too many businesses fail to appreciate the full price of relocation and become complacent with said costs, resulting in an inefficient international assignment. Planning and budgeting are core to the success of an overseas assignment, and businesses operating such projects should ensure they not only outline the logistics and budget limitations of a move, but also continuously re-evaluate them based on current progress.
Author: Mark Costa-Rising, of international relocation company Gerson Relocation, is an expert in corporate relocation with over 20 years of experience in the industry.