What is cross-cultural training?
Posted Thursday, July 31, 2008 by SIRVA Relopinion

There are a variety of training techniques that prepare people for long distance foreign work assignments. They range from documentary programs that merely expose people to new culture through materials about the country's socio-political history, geography, economics, language and cultural institutions, to intense interpersonal experience training, in which individuals participate in role-playing exercises, simulated social settings and similar experiences in order to "feel" the difference in a new culture.

Although generic programs exist, cross-cultural training is most effective when it's tailored to the specific needs of the expatriate and the host country. Because learning about a new culture requires an understanding of one's own cultural biases and behavioral traits, companies that use customized, cross-cultural training typically receive better results. Successful cross-cultural programs can include the following:
  • Host country information. Basic information about the assignee's host country, including its history, common religions, political structure and recent events, so employees can understand citizens' values and beliefs.
  • Behavior adaptation. Although people have a hard time challenging their cultural understanding, they can learn to alter their behavior to adapt to a new culture. In this phase of cross-cultural training, expatriates examine the way that they currently handle a situation and what is required in the new culture.
  • Local business etiquette. Even the most veteran and prolific employee can have difficulty without an understanding of business etiquette in other cultures. For example, the U.S. tendency to "get down to business" is regarded as rude in Japan, where business transactions often have a greater personal relationship component. An employee who appears impatient with Japanese traditions designed to establish friendship and trust will have little success in business negotiations.
  • Communication techniques. A manager going to live in a foreign country for the first time might not realize how communication styles differ around the world. For example, U.S. employees tend to use "low context" communication, which is direct and task-oriented. Many other cultures have "high context" communication, in which messages are more indirect, like in the Middle East.

For more information about components that make cross-cultural programs successful, view our white paper, "Importance of Cross-Cultural Awareness."

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Corporate Relocation Management: Home Loss-on-Sale Programs
Posted Tuesday, May 13, 2008 by SIRVA University
According to the National Association of REALTORS® (NAR), 2007 home sales were down 12.7 percent from 2006. And, excluding new construction, home prices in 2007 slipped 0.7 percent from 2006—marking the first nationwide decline since the Great Depression.

The sub-prime disaster led financial institutions to more closely evaluate borrowers, and as a result, those individuals that could previously secure a mortgage may not be eligible today. This drop in qualified buyers has meant an increase in housing inventories and the number of days homes are on the market across the country.

While the current real estate market means greater selection and reasonable prices for fewer qualified buyers, it’s especially tough on sellers. Loss-on-sale (LOS) assistance programs are typically used to partially protect home sellers from taking a loss on their home when relocating for business. LOS programs are typically employed when home market values depreciate at a faster pace than would be covered from having lived in the home long enough to break-even.

At SIRVA University, David Barlow, SCRP GMS, senior vice president of client support services at SIRVA Relocation, discussed best practices when developing
or revising a corporate relocation LOS assistance program. He discussed program management definitions, sample formulas, up-to-date facts, and eligibility requirements. He also discussed common pitfalls and how they can be avoided.

According to the NAR, the worst may be over but the national market is not yet in a positive price territory. While there is every indication the market hasn’t yet turned the corner to nationwide home price recovery, experts are confident a correction may begin as early as the end of this year.

“From indicators we’ve seen, downward price pressure in many markets will continue, but likely at a reduced rate of decline,” said Barlow. “The number of home sale losses is likely to stay relatively high but shouldn’t increase from 2007. It will get better, but the market won’t reverse itself overnight.”

Don’t Call it a Comeback
Loss-on-sale assistance programs were developed more than 25 years ago to address similar market conditions as what we see today. The need for these programs often diminished as the market strengthened, but they were sometimes employed during very short relocation intervals or with new construction to ensure sellers didn’t take a loss on their homes. In point of fact, in normal real estate times, it was nearly always the new construction that resulted in a LOS.

In poor market conditions, the amount of time between a relocation and the break-even point changes dramatically, and transferees essentially need to stay in their homes much longer to avoid taking a loss on their property.

According to Barlow, potential transferees have every right to want to wait out a bad market to avoid a loss on their home. They also have every right to expect their company to provide greater financial incentives if they are expected to relocate in a down real estate market. In fact, transferees are increasingly resisting and turning down corporate relocations if their companies decide not to help.

Correcting a common misconception, Barlow also noted that home LOS has nothing to do with the transferee’s equity position in their home. If a person has taken out a second mortgage or an equity line of credit the LOS benefit they may receive is often not going to provide the relief they need. Companies are strongly advised to limit LOS programs to the difference between what the transferee paid for the home and the home’s selling price.

% Loss-On-Sale Facts & Figures
95% of homes sold out of inventory result in loss to the company, even in good real estate times
50% of companies offer loss-on-sale assistance benefits
89% of SIRVA client’s share loss with their employees
75% of companies do tax protect the loss-on-sale assistance amount

Is it right for your company? Find out tomorrow as we continue to blog about LOS programs. Interested in learning more about reducing real estate risk? visit David's blog.
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