Assessing sustainable engagement

among expatriate employees

Global organisations recognise the importance of having experienced and well-informed Global Mobility/HR teams to support their expatriate employee communities, not only before their departure and during the assignment, but also on their repatriation to the home country.

Gonzalo Shoobridge, Senior Consultant, Organisational Surveys and Insights, EMEA

Billy Turriff, Leader, Data Surveys and Technology, Middle East

Lesley Brown, Director of Organisational Surveys and Insights, Asia-Pacific

Whilst the benchmarking of expatriate employee policies against other organisations worldwide and across all industries are key for human resource international mobility decision making, this will not necessarily offer feedback on how effective or popular specific policies are and how these impact the sustainable engagement of expatriate employees.

The effectiveness of long term assignment (LTA) policies can be measured through an ‘Expatriate Engagement Survey’ that tackles two different angles: LTA Policies and the resulting expatriate employee levels of sustainable engagement. The results of such investigation will provide decision makers with useful information for them to assess their policies, take actions and support decisions as necessary for their expatriate employee communities.

The data presented is derived from an in-depth engagement survey implemented by Towers Watson together with the RES Forum (The Community for

International HR and Mobility Specialists) in which expatriate employees working in five different multinational organisations were surveyed. The purpose of the survey was to gain an understanding of the meanings and interpretations attached to the specific role of expatriate managers in their host organisations:

• What are the organisations’ expatriate employee engagement levels?

• What drives expatriate employee engagement/retention/productivity?

• Impact of demographic/organisational factors on expatriate employee engagement?

• Which areas can we address to improve expatriate employee engagement?

• What are the most popular LTA policies? How do expatriate employee feel about these policies?

Q&A

Opinion categories in the expatriate survey

Engagement

Enablement

Energy (well-being)

Retention

Productivity

Recognition

Development

Performance appraisal

Supervision

Client focus

Communication

Cooperation

Efficiency

Empowerment and innovation

Pay and benefits

Your expatriation experience

Effectiveness of LTA interventions

How do we measure engagement among expatriate employees?

Engagement measures the level of connection expatriate employees feel about

their host organisation, as demonstrated by their willingness and ability to help their host company succeed, largely by providing discretionary effort on a sustained basis. It also takes into account the rational part of the engagement equation, how employees connect with their host company’s goals and values, and their emotional connection, such as the employee’s pride in the host organisation.

So, how engaged are expatriate employees?

It is essential for expatriate employees to demonstrate an ability to establish,

promote and protect the core values of the corporations they work for in other geographies, and this can only be achieved through a well engaged expatriate employees community. There are unique elements of expatriate engagement, which stem from the nature of their jobs. Expatriate employees seem to pay more attention to all factors related to a company’s future and actions of senior leadership, as well as their engagement tends to be more driven by one’s individual outlook and future prospects compared to non-expatriate employees.

Our research shows that engagement among expatriate employees is particularly high, 92% agree with the goals and objectives of their host organisation, 84% would recommend their host organisation as a good place to work, and 97% would be willing to offer discretionary effort to help their host organisation succeed. These scores outperform those of non-expatriate employees in similar positions in their home organisations.

So, what drives engagement among expatriate employees?

The drivers of engagement among expatriate employees are:

• Recognition of personal contributions in the host organisation.

• Cooperation and teamwork within the host organisation.

• Adequate use of the expatriate employee's skills and competencies by the host organisation.

• Good communication with the host organisation line manager/leader.

Which expatriate employees are more at risk of leaving the organisation?

Most expatriate employees, especially those in their first assignment, consider

their international assignment as recognition for their good work and an important step in their career progression within the organisation. Not surprisingly, the key drivers of expatriate employee retention are:

• Levels of satisfaction with their international assignment to date.

• Good promotion/career prospects. • Good relationship with their line-manager in their host organisation.

Interestingly enough, pay and benefits is not a key driver of retention for expatriate employees per se, however, of course, it is linked to the overall satisfaction of the expatriate employees' international assignment to date, which is the most significant key driver of retention.

The expatriation process involves many technical and professional aspects, but also contains personal, social, cultural and organisational items, that are often the trigger that make expatriates choose to return to his country ahead of schedule.

Q

A

A A

A

Q

Q

Q

“…the accompanying partner is impacted enormously by the decision to accept an expat assignment. The partner is required to give up their work and occupation to move into a foreign country, learn a new language, leave their family and friends, travel for long hours and are not compensated by an exciting new professional challenge, but are pushed into a supporting role...”Survey respondent

2 Assessing sustainable engagement among expatriate employees towerswatson.com

So, what is the expatriate employee profile most at risk of leaving the

international assignment?

Based on our survey results, expatriate employees most at risk of leaving are:

• Those aged between 45 and 54. • Those single or married with their spouse in the home country.

• Those with a local/country level job role scope (rather than regional or global).

• Those in their second non-consecutive expatriation. • Those with short length assignments (less than six months).

• Those close to finishing their assignments or recently repatriated.

• Those assigned to the Middle East. • Female expatriate employees (one in four surveyed expatriate employees were female) show less positive results than their male counterparts, especially in areas linked to productivity, empowerment, innovation, pay and benefits, and the overall expatriation experience.

Major factors contributing to failure include the expatriate employee's inability to adjust to the new job, inability to adjust to the new culture, or an expatriate employee's spouse and family’s inability to adjust to the host country. The expatriate employee's family is a strategic piece in the expatriation process. In many cases, due to uncertainty, employees with families reject expatriation altogether when repatriation is not well planned in advance.

It is important to note that the knowledge of the local language has no impact on the overall expatriation experience. Also, expatriate employees whose partners are nationals of the host country express more positive opinions in their whole expatriation experience.

In general those whose expatriation was initiated by their host company (rather than by themselves or their home organisation) show the most positive survey results.

A

Q

“It is essential for expatriate employees to demonstrate an ability to establish, promote and protect the core values of the corporations they work for in other geographies, and this can only be achieved through a well engaged expatriate employee community.”

The view from abroad – expatriate employees in the Middle East

Billy Turriff, Leader of Data Surveys and Technology, at Towers Watson in the Middle East believes expatriate employees need to be well prepared before relocating. "Expatriate employees will need to be mindful of falsely based expectations," he says. "The majority of expatriate employees who move to the Middle East tend to encounter problems because they do not have sufficient practical information about their new home. There are a number of challenges faced by expatriate employees in the Middle East, particularly when they first land. Areas that expatriates find challenging are around schooling for their children and also securing housing provision that meets their expectations."

There are also challenges both in and out of the work place to consider. "In addition to the above, the administration requirements for new joiners such as, opening bank accounts, visa, connecting utilities can be frustrating especially if minimum support is provided by the company," Turriff states. "Challenges in the work place typically focus around a lack of empowerment by senior management and also the capability and skill to manage and work with a very diverse workforce."

Depending on the location of the expatriate employee in the Middle East there may also be challenges for the wider family, for example, wife obtaining suitable employment in certain countries.

Turriff also stresses the importance of planning and proper research before making any move. "The significance of the Muslim statute and acceptance of ‘western’ ways also apply differently in each country, so it’s important to do some research on the future expatriate employee destination, and to make sure expatriate employees have some base of information established before they move to their host country in the Middle East," he adds. "Let’s not forget each country claims its own unique nature/characteristics and therefore has its own relationship with foreigners."

Finally, expatriate employees can expect a gradual transition into settling into their chosen country. "Overall most expatriate employees enjoy the experience of the Middle East," Turriff summarises. "However, it is not uncommon for expatriate employees and their families to require a six month settling in period to really understand how organisations and society works."

Assessing sustainable engagement among expatriate employees 3 towerswatson.com

How sustainable are those high levels of expatriate employee engagement?

The concept of ‘Sustainable Engagement’ adds an element of ‘Enablement’ (a work

environment that supports productivity and performance in the host organisation) and ‘Energy’ (individual physical, social, and emotional well-being at work in the host country) to the expatriate employee engagement equation.

In general, expatriate employees feel enabled within their host organisations: 75% of expatriate employees feel they do not face obstacles at work, they consider they have all the necessary equipment, tools and resources to do their job well (76%), and most importantly, the people they work with cooperate to get the job done (88%).

A

Q

Engaged

Enabled

Energised

Supported by the local

work environment

Sustained by well-being at work

Bienestar físico y emocional en

el trabajo

Willing to expend discretionary effort

“It is important to know the level of responsibilities and expectations before departure. In my case, these were explained to me in vague detail and have seriously impacted my motivation and morale upon arriving and learning that the role I am expected to play is miles away from what I was expecting.”

In terms of well-being (Energy), expatriate employees feel they are able to sustain the necessary level of energy throughout the day to get the job done (90%) and the type of work they perform in their host organisations give them a sense of personal accomplishment (89%). However, 58% of surveyed expatriate employees feel that the level of stress that they experience at work seriously reduces their effectiveness, this result is very much in-line with similar non-expatriate employee managerial positions.

We can determine that the high levels of expatriate employees engagement are sustainable in the mid-to-long-term due to the high scores registered in the areas of enablement and well-being.

Survey respondent

4 Assessing sustainable engagement among expatriate employees towerswatson.com

Q

A

“Companies in emerging markets are increasingly turning to expatriate managers and executives for specialised knowledge to help in steering overseas operations; hence the surge in demand for expatriate employee talent in developing markets is increasing.”

Has the expatriate employee's productivity been affected by the

international assignment?

In order to be adequately equipped, the future expatriate must acquire knowledge

about the organisational culture they are entering, as well as its differences. They must also become competent in cross culture communication. This does not happen immediately and adequate preparation time is needed before departing from one’s home country.

In general, only 6% of expatriate employees feel that their productivity has decreased since they were assigned to their new host organisation, 40% feel there has not been any change and 54% feel that their productivity has increased. So, what drives productivity among expatriate employees?

• Ensuring the level of responsibility in the host company matches the description that was given to the expatriate employee before departure.

• Adequate use of the expatriate employees' skills and competencies.

• Clear understanding of the goals and objectives of the expatriate employees' international assignment.

• The belief that the international assignment is beneficial to the expatriate employees' future career advancement.

• The support provided by the host organisation to help the expatriate employee adapt to the new environment.

Expatriation success cannot be fully achieved without an understanding of the nature of the role that expatriate employees are playing in the company’s internationalisation process, and what components of this role are open to change.

The company benefits that have contributed the most to the expatriate experience and subsequent levels of productivity are:

• General logistical support (housing, car, schooling).

• Allowance for flights to the home country. • Administration support (tax, medical visa). • Introduction to new work environment (stakeholders, culture, markets).

• Co-ordinated HR support from home and host countries.

• Understanding and relationship with the line manager in the host country.

supportwork

team

home environment

housing

host

med

ical

insu

ranc

e

coun

try

scho

olin

g

car

sala

rym

anag

er

mobilitycountry benefits

allowance health

The view from abroad – Asia-Pacific organisations and expatriate employeesLesley Brown, Director of Organisational Surveys and Insights, at Towers Watson, Asia-Pacific believes the growth of the region has impacted on the flow of expatriate employees in and out of the area. “Due to the region's increased global importance the Asia-Pacific organisations are currently experiencing a rise in both the import and export of expatriates as they regionalise and globalise their businesses,” she says. “This is most evident in Japan, China, Hong Kong, South Korea and Singapore but no country in the region is immune from managing this challenge – especially when it comes to the rising cost of living in these countries which is making it more difficult for organisations to attract and retain the right calibre of expatriate employees.”

Benefits that have contributed the most to your expatriate experience

Assessing sustainable engagement among expatriate employees 5 towerswatson.com

Expatriate employee survey results vs Towers Watson Global Management Norm

Ranked by difference from benchmark Differences from benchmark

Energy (wellbeing)

Enablement

Engagement

Recognition

Performance appraisal

Retention

Empowerment and innovation

Cooperation

Supervision

Efficiency

Development

Communication

Pay and benefits

5

4

3

1

1

0

-1

-2

-8

-12

-16

-28

-29

Let us not forget that the impact of expatriate employees is felt not only by those assigned to international postings, but also by their host-country managers and colleagues. Specific HR practices need to be put in place for expatriate employees to remain competitive and sustainably engaged within their host organisation. HR practitioners who are new to managing international assignments should not treat expatriate employees in a similar fashion to those who are based in the home country. Due to the nature of the expatriate manager role in the company and their specific needs and expectations for their international assignment, the opinion gap between non-expatriate and expatriate managers is markedly noticeable, especially in

the areas of: pay and benefits, communication, development, efficiency and supervision. This is reflected in the bar chart showing our survey results below. These are areas where expatriate employees require additional support from their home and host organisations, it is a mistake to simply expect expatriate staff members to adapt to their host-country ways of doing things. If HR practitioners take into account these gaps in opinion and support expatriate employees integrate positively and effectively into their new workplace/host country, this is likely to avoid unnecessary misunderstanding, uneasy working relationships and potential loss of business for both the home and host organisations.

“One year away from contract ending and still have no idea where or if I will end up in the company. There have been no formal discussions with me other than performance review and that was only very brief with no detail to what may be available or where resources like me may be needed.” Survey respondent

6 Assessing sustainable engagement among expatriate employees towerswatson.com

How are companies managing their international assignment processes?

Companies in emerging markets are increasingly turning to expatriate managers

and executives for specialised knowledge to support overseas operations; hence the surge in demand for expatriate employee talent in developing markets is increasing. Many companies solely concentrate on soaring expatriate employee compensation packages, but tend to leave by the side those areas that really impact retention and engagement which would attenuate the battle for spiralling expatriation packages. Our survey indicates that surveyed companies need to address the following areas:

• Development: Although international assignments are considered an important milestone in immediate career development, once abroad, expatriate employees show uncertainty on their next assignment and long term professional development prospects due to the lack of contact with the home organisation.

• Pay and benefits: While not a driver of engagement; expatriate employees that took part in this survey felt other organisations in their host country offered better pay and benefits than they currently receive. The latter affects the levels of satisfaction with their international assignment to date, which is a driver of retention.

• Supervision: The relationship between expatriate employees and their line-managers in the host country is key and could improve. Expatriate employees would welcome additional support from their host organisations to help them adapt to the new environment.

• Communication: Although communications with colleagues and line-managers are good, expatriate employees do not feel well informed about wider/higher level company matters that affect their jobs.

• Efficiency in expatriation experience: Expatriate employees would appreciate additional support from their home organisation after being posted to their host organisation. In the eyes of expatriate employees, efficiency relates to dealing with the logistics of settling up in another country effectively: sorting out the personal technology problems quickly to enable one to start work; enabling systems to pay expenses; offering support for administrative tasks such as work permits, taxation, medical scheme-support or schooling for children. It makes the whole moving process easier and enables the expatriate employee to have better focus on the job and assignments especially on the first few months.

The results of this survey show that adequate support from the home organisation is highly valued by expatriate employees. Results also indicate that monetary factors and positive effect on career advancement are strong factors in the initial motivation to go abroad and the levels of satisfaction with their international assignment to date. Despite this, the softer values, like intellectual self-improvement, recognition, adequate use of skills and competencies, improved cultural awareness through cooperation, teamwork and the relationship with the host country colleagues and leadership become the most important traits in expatriate employee engagement once the expatriation assignment is well underway. Recognising these softer factors is crucial for any company willing to tap into the full potential of their employees operating in key developing markets overseas.

Q

A

Assessing sustainable engagement among expatriate employees 7 towerswatson.com

Towers Watson71 High Holborn London SW1H 9LL

Towers Watson is represented in the UK by Towers Watson Limited.

The information in this publication is of general interest and guidance. Action should not be taken on the basis of any article without seeking specific advice.

To unsubscribe, email eu.unsubscribe@towerswatson.com with the publication name as the subject and include your name, title and company address.

Copyright © 2014 Towers Watson. All rights reserved.TW-EU-2014-39168. October 2014.

towerswatson.com

About Towers WatsonTowers Watson is a leading global professional services company that helps organisations improve performance through effective people, risk and financial management. With more than 14,000 associates around the world, we offer consulting, technology and solutions in the areas of benefits, talent management, rewards, and risk and capital management.

/company/towerswatson @towerswatson /towerswatson