Relocation

Relocating Your Business? Here's How To Ensure You Succeed In Global Mobility

Relocating Your Business? Here's How To Ensure You Succeed In Global Mobility
Image credit: Shutterstock.com
Contributor
Group Sales and Marketing Director, AGM Group UK
7 min read
Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

The world of global mobility is awash with examples of failure.

40% of assignment projects fall short, and this isn’t a new trend. Failure rates have maintained similar levels since globalization really took off in the 1950s.

Despite the perils of the practice, 2018 will see 92% of businesses operating global mobility programs either maintain or increase the scale of their projects. Many smaller businesses are now taking their first steps towards global mobility, too.

And for good reason.

Corporate relocation is known to have numerous benefits, from establishing global contact networks and increasing foreign market penetration, to the development of top talent. Yet, moving employees abroad is also expensive; around GBP80,000 before salary is included.

For those SMEs investing in their first attempts at globalization, you want to reap the benefits without being part of the failing 40%. How can you take advantage of international relocation without becoming a casualty of the global mobility landscape?

A Lack of Cultural Preparation Can Collapse Assignments

Cultural barriers are, without question, a major cause of assignment failure.

87% of recruiters operating in the global mobility sector identified language and cultural skills as essential to success.

But languages and cultures are complex. Expecting an employee to learn as they go is a dangerous notion. A lack of understanding early in an assignment is only going to impact efficiency and communication, slowing down work and creating a backlog of tasks.

So what is the end result of poor cultural understanding? Employees become overwhelmed. They are unable to perform and either struggle through achieving poor results or quit and repatriate.

Both are nightmare scenarios. Both are common relocation problems. Both are completely avoidable.

To succeed in a foreign country, employees must arrive prepared, yet 75% of businesses do not provide adequate preparation prior to moves. Employees aren't trained in workplace culture, or given support of language or customs. They are not ready to perform at optimal levels, so they don’t.

Small business owners can avoid many of the problems simply by preparing their employees for life abroad. The provision of cultural and language training materials, combined with other methods of support such as sending them overseas for early stages of cultural adaptation, setting up meetings with expats and overseas work associates, and assistance in post-move integration, can drastically reduce failure rates.

Finding the Right Candidate for the Assignment is Critical

The opportunity to move overseas for work may sound like an attractive proposition, but you will also find plenty of employees are not so infatuated by the idea.

Two-thirds of brands face rejections from employees when attempting to fill overseas positions. Over 50% of your workforce will flat-out refuse to move, while many more will require convincing.

Establishing an overseas assignment with an incompatible individual is highly conducive to failure. Global mobility is rewarding yet challenging, and without the right employee on board, defeatable obstacles become immovable objects.

Effective alignment between employee and relocation requires strategy. Stage one is identifying employees willing to move. Career hungry millennials are far more likely to be convinced, with 92% actively seeking overseas roles, but who else is within your talent pipeline with the right skills and looking for the opportunity? Surveying your workers to determine interest is another way to find appropriate candidates.

You must strike a balance between skill, expertise and willingness. It is unlikely the perfect candidate exists, but that does not mean you don’t have viable options.

Once you have your candidate, take them to the negotiation table to discuss everything from policy and objectives to perks and support. The better the package offered, the more likely they are to commit.

Related: The Top Five Challenges Of Doing Business In Dubai

Creating a Budget is One Thing, Sticking to It is Another

Over half of companies currently operating international move projects admitted to a failure in financial management of their global mobility programs. They cite overspending as their biggest oversight.

Given the costs involved, going over budget presents problems for small businesses in particular. If you can no longer fund your move, it will fail. So why are so many businesses guilty of overspending?

Most companies will produce budgetary analysis of relocation as part of their initial planning phases, yet only 23% will follow that budget once in place. The issue with relocation is there are so many variables that costs fluctuate constantly. The result is that while strategy can remain largely the same, the costs can ramp up fast.

Failure to reconcile numbers means exceptions are inevitable. For cost-effective global mobility, businesses need to be constantly analyzing their budget and adjusting strategy to match. Along with a robust exceptions management process.

The core problem facing most businesses is a reliance on original plans and an ignorance of how a number of small changes can massively impact spend. SME owners who want to avoid global mobility failure need to ensure they are staying on budget, even if that means compromises, directional shifts or even delaying projects.

A Failure to Consider Personal Implications Puts You at Serious Risk

There is a great mythos around the working environment that many consider it to be more important than family or relationships. International relocation exists to disprove this theory.

70% of working assignments that crumble are linked to family issues. Repatriation occurs when those close to your assigned employee become unable to deal with the strains of life abroad.

Key to reducing the occurrence of family issues is support structures. Leaving family to their own devices fails to address problems that can derail a project. Support can include cultural learning, assistance -such as finding schools, accommodation, settling in and building community- as well as providing allowances for travel home and additional leave to enable it.

Family matters should be woven into a core relocation strategy, not tagged on if problems occur.

Post-Assignment: Understanding Employee Retention for Effective ROI

Failure of an international relocation is not simply defined by an employee repatriating early. Sometimes, a project can be completed as intended, but the failure occurs after the assignment.

What does this mean, exactly?

Staff attrition rates for repatriated employees is exceptionally high. Up to 60% of assignees will resign within a few years of returning. The result is not only the loss of valuable talent, but also the poor ROI. You have invested in developing these employees overseas, and now another company is reaping those rewards.

Why are people leaving? The reasoning behind this is simple: underutilization.

Employees given roles abroad are provided with clearly defined goals and responsibilities. Often, upon return, they aren't given the same direction. Their newly gained skills aren't put to proper use and they are placed either in inappropriate or poorly defined roles. People know their value and, if another company offers them something better or they feel underappreciated, they will leave.

Another danger very few businesses consider is a phenomenon known as reverse culture shock. Those on long-term assignments may find adjusting to life back home difficult.

The reason it is so commonly ignored, and therefore a major issue, is because businesses fail to understand that a return home can be as difficult as moving abroad.

The solution to both of these problems is the same: planning. Retention of these employees is all about support and reintroduction: a reversal of the processes you would follow when moving an employee overseas for their assignment. Create relocation strategies that adopt repatriation as part of the process. Think about how you are going to best use your employee once they return, ensuring their skills are utilized, while also making sure they are handling their reintegration and putting plans in place to support them if required.

Related: Overcoming Obstacles: Seven Tips For Startups Operating In Emerging Markets

More from Entrepreneur

Jason's expertise and experience can help you with storytelling, motivation, and pitching your business to media.
Book Your Session

In as little as seven months, the Entrepreneur Authors program will turn your ideas and expertise into a professionally presented book.
Apply Now

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.