Ten New Year’s Resolutions for Expatriates (and those who manage them)

I’ve been an expatriate, I’ve managed numerous expat assignments, and I’ve led one of Asia’s largest consulting practices for global mobility. So here are my suggested new year’s resolutions for expats, and for those who manage them.

For Expats

  1. Find peace–if you took your assignment partly for the adventure, to avoid regretting not taking the assignment, that’s wonderful–I’m with you. But adventure can lead us away from our roots, our families, our values, our identity. Make time this year to find peace and solitude and reflect on who you are, what you believe in and what your priorities are. This step will enlighten all other resolutions. This post is a result of such reflection, while on “home leave” in the U.S.
  2. Call home–Put this in your calendar every month. Call home and speak with a family member you have not spoken to. Sure you call home every week already, but what about parents, or siblings or cousins or other relatives or friends? My younger brother and I had a long overdue conversation yesterday and he told me his circumstances will probably prevent him from ever moving from where he is. I realized how happy he was for me that I had the chance to see the world.
  3. Travel–Taking an international assignment is not travel. It’s work. If you are posted in China, see China! If you are posted in Australia or Africa or Switzerland or anywhere else, don’t let the months fly by only to find you have lost your chance to see that part of the world. I’ve made about 25 business trips to China, and every now and then I build in a weekend, so I can visit other cities. This way, I’ve seen the temple where Confucius taught (in Nanjing), the home of Chiang Kai-Shek (near Ningbo) and climbed breathtaking mountains and hills with work colleagues and friends.
  4. Manage your career–I once made the mistake of telling my boss that my expat assignment was the fulfillment of years of career development, as if to suggest I no longer needed a career development plan. Big mistake. From that point onwards, I was lazy about career development, assuming that global experience would be so valued by my company, it could only lead to better things. Guess what–being an expat doesn’t mean yochecklistu are high potential. And unless you are a high potential (in a company that manages careers for its hi-pos), you are on your own, buddy, when it comes to career planning.
  5. Localize where possible–think you’re worth twice what a local is worth? You’d better be, because your package is mostly likely 2-3 times the cost of a local talent. From the day you arrived in Hong Kong, Shanghai, Singapore or Zurich (or wherever), your company has been looking at succession plans for your role, and expecting you to either 1. find and train a local talent to take over the work at some point or 2. localize. So if you want to extend your stay, help your company extend it’s budget a bit and localize. Specifically, move out of that $10k/month condo, into a very nice $4k condo. You will not die.
  6. Learn the language–At a minimum, learn one common phrase per month. In Hong Kong, it’s not enough to just say “Jo-san” (good morning) and think you’ve mastered Cantonese. Many companies pay the cost for language lessons for expats, perhaps up to 40 hours or 100 hours, etc. Take advantage of this. It will immensely enrich your experience of living and working where you are. You will earn the respect of the locals, and possibly their acceptance. That fact that your local colleagues all speak English is a poor excuse!
  7. Manage your taxes–Do not, let me repeat, DO NOT, assume your mobility managers are doing this for you, even if you are tax equalized. I was tax equalized for more than four years, and tax issues are still haunting me. Theoretically, the company simply deducts a “hypothetical stay-at-home tax” from your paycheck and they pay all your actual taxes, so you can relax and focus on your work. In reality, your company may deduct a hypo tax, AND require you to pay/remit your home and host tax payments up front , and later make you whole. Do not assume your company is sending payments directly to tax authorities. And do not assume they are sending the returns either. You have got to take 100% responsibility for how your taxes are managed.
  8. Use home leave wisely–many expats ask their companies if they can use their home leave tickets to fly to another location, as long as it’s not more expensive than going home. Some companies agree. I think this is a mistake for the expat (and for the company). Reason? You need to visit your home office and keep your home country network strong. Truly go home for home leave and drop by your office in your blue jeans for an informal visit to see your boss (if he/she is there) and your colleagues, former colleagues, etc. When you reach year 3 or year 5, the “R” word will come up (repatriation) and you will be glad you invested in home office relationships throughout your assignment. Trust me on this.
  9. Stay healthy–when you are placed in a different climate, with different cuisines and meal patterns, with a demanding role/assignment, it’s easy to gain weight and use tobacco/alcohol more than you should. Build exercise into your schedule, not leaving it to chance. Live a healthy lifestyle.
  10. Learn respect–yes, learn respect. I have known hundreds of expats, and I have gained the trust of quite a few of the local people who work with them, and I hear their comments. The most common remarks made about expat bosses–or expats in general–is that they are privileged, add no value beyond what locals can do, drive up housing costs, don’t connect with locals, don’t understand the culture, don’t respect local tradition or beliefs, don’t learn to eat local food, buy local coffee, etc. The point is, we as expats think we are the greatest. Fact is, we’re no better or worse than anyone else. Learn to respect the people, the culture around you. Remember, you are a guest in their country. Take your shoes off, and keep your mouth shut once in a while. Seek time with locals and build relationships, so you can learn from them and become a better person. It’s fine to share your perspectives with them too. They want to learn as well. But we’re equals, dummy.

For Those Who Manage Expats

  1. Choose expats carefully–If you’re in HR, shame on you if you continue to let your line managers continue to tell you who is taking an assignment and limit your role to preparing a contract. You are HR! Learn the talent management essentials for expats (see my blog on What’s Next in Global Talent Mobility), and demonstrate good assignee selection practices next chance you get. Add value at the start by selecting the right assignee, and you’ll save everyone a lot of headaches down the road.
  2. Be wisely inconsistent–we in HR are trained from the start that consistency is king. We believe and preach that everyone must have the same package, and that whatever you give one person you must give to all. I’ve been doing comp and ben since 1985, and only in recent years have I come to the belief that you must differentiate in a variety of ways. Sure, housing budgets vary by job level and family status, but I would suggest we differentiate who gets company-paid housing in the first place, and revisit our 20-year-old policies on this matter. Some use the term “segmentation” which is helpful. Not all expats are the same. In fact, not all expats are truly expats (locally hired foreigners, for example). Let’s differentiate more in 2014. A simple one-size-fits-all expat policy is not a good thing these days. AIR-INC recently found that on average, multinational companies have 3.8 different mobility policies. How many do you have?
  3. Treat your expats like adults–do you offer a defined benefit pension anymore? Do you promise pay raises based on inflation? Do you pass the hat every time an employee has a misfortune that’s not covered? If you said yes to any of these, your company is paternalistic. If so, you are probably keeping your expats “whole”, promising they will be no worse off financially. You expats have you well-trained to make them whole every time their payment currency weakens, or when their landlord raises the rent above your allowance. You feel obligated to protect every penny they earn. STOP this! Treat your expats like adults. Pay them for the value they deliver. If they deliver the same as a local talent, why pay them more? If they are key to running a region or a country operation, then pay them richly to retain them. But the principle here is value, not entitlement. Eliminate the words “no worse off” from your policies. Occasional financial hardship is real life.
  4. Manage taxes and immigration right–it is inexcusable for a company to screw up taxes or immigration for an expat or their family members. This creates a permanent black mark with the authorities. If your tax or immigration firm keeps making mistakes, fire them this year and replace them. Build performance guarantees into your service agreements with your tax/immigration providers, so that when they screw up, they pay a penalty. Don’t let these firms get too comfortable or secure. They are only as good as the most recent case.
  5. Localize one expat–chances are, your company has an expat on a full package for more than five years. If this role could be staffed locally, you are throwing money away. Localize the role or localize the expat’s package. But don’t mention the ‘L’ word until you really have a qualified local talent lined up who can do the job with some training and support. If you have no local alternative, the expat may call your bluff and claim they are indispensable, threatening to leave the company. If you have a local talent, then there should be no reason to fear if the expat threatens to resign. The company will save big money, you’ll retain the local successor and you’ll send a great message to your local workforce. You will also send an important message to all your other expats.
  6. Man up–that’s an American term for ‘have some courage’. If you feel changes are needed to what expats are getting, you need more than benchmarking data and expert advice. You need courage, which goes beyond willingness. Courage involves conviction, boldness and risk. If you need a new policy, or need to localize, don’t shrink back when it’s time to implement. Go for it and show no weakness. Believe what you are doing, and do what you believe. I am speaking to the CEO or MD, not HR. If you’re HR, have a talk with your MD before sending out any emails or making announcements about changes to expat policy. Make sure the MD has your back 100%. If they cave to “mob” pressure from the expats, everyone loses. Don’t undertake change if organizational courage is lacking.
  7. Be a closer–we all want sales people who can close a deal, get it across the finish line. But we are terrible when it comes to international assignment closure. We feel it’s enough to have a section in our policy on repatriation or localisation. But what about extension or reassignment? Is there a formal assignment review 6 or 9 months in advance of the scheduled assignment end date? Do you have an assignment end date for each expat? Too many companies spawn expat assignments as if they’re trying to build a global army. One expat leads more easily to the next. Remember, expats often hire in their own likeness! In 2014, learn to be an effective closer.
  8. Rediscover cash–one way to treat your expats like adults is to pay them cash, and let them handle their own housing, taxes, cost of living, etc. This is how “local plus” packages are fashioned. If you are seeking to keep people whole–no worse off, and possibly no better off–then you still need to do things like tax equalization, cost of living allowances and company leases. But if you are pulling away from that philosophy, to more of a value-driven package, then consider providing a a simple cash package consisting of base salary (locally equitable if there are no repatriation plans) and a reasonable cash allowance designed to help with, not necessarily cover fully, the various costs. In 2009, I introduced a cash “assignment allowance” equal to 10-15% of base salary for all our expat packages (and locally hired foreigner packages) below a certain job level. We hired/assigned 26 foreigners over the next year (in Singapore and Shanghai) and saved about $2 million on an annual sustainable basis. They were happy to receive cash, due to its flexibility. They also appreciated being treated like adults. I told our first local plus people that “we find today’s mobile talent to be more connected and more savvy, happy to receive cash and make their own decisions how to spend it”. This hit all the right psychological buttons. It remains in practice to this day at my former company.
  9. Talk to your expats–Dear mobility managers, please talk with your expats on a regular basis. They need someone they can trust to look after their needs. Please do not simply operate by email alone. Talk to expats and really listen. Try to hear what the expat is telling you. Acknowledge what they say to prove you hear them. If you’re really good, try to hear what the expat is channeling from their spouse, to you. It’s an art worth learning.
  10. Stop dropping tax bombs–Please give as much advance notice as possible if your expatriates need to come up with a large tax payment from their own money. Nothing ruins your day like an email on December 1 stating that you must make a $40,000 payment to the IRS by December 15. If your tax equalization process puts the burden of making payments on the expatriates themselves, AND you are deducting hypothetical taxes, that puts an enormous cash flow challenge on the expat, and this can also strain a marriage! (I speak from experience). You may not like your expats. You may think they’re a bunch of rich crybabies (some are, yes). But this does not make it OK to stress them out over taxes with unrealistic payments on short notice.

Here’s wishing you expats, and your employers, a great 2014!

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