Here are a few things to remember when instituting a cross-cultural awareness program into your corporate relocation program. For a full account of information regarding this service visit our resource library.

Don't forget the family
Just as spouses should be involved in the assignment selection process, they should be involved in training for global assignments. Some experts estimate that nearly 80 percent of all failed global (international) assignments can be linked to the spouse's inability to adjust to the new environment. Each member of the family faces special issues in the expatriate environment that should be addressed.

Other cultural resources
Organizations should consider utilizing their returning expatriates for help with cultural awareness initiatives. Employees who have already completed similar assignments can act as subject matter experts (SMEs) to help new expatriates learn business customs and how to navigate foreign business circles. SMEs can also prove invaluable in helping new expatriates learn the hierarchy in companies with which they will be dealing. It's important to note, however, that companies should not rely solely on employees to provide guidance to new expatriates. Relying exclusively on veteran expatriates can be problematic if the guidance reinforces cultural stereotypes or results in the new expatriate adopting the predecessor's bad habits. While other international assignees have a role to play in helping newcomers adjust, they should not replace professional consultants/trainers.

Alternative views
Although cross-cultural awareness is important, some might argue that its importance is just a hyped up myth. In actuality, on average only 30 percent of American managers sent on international assignment lasting from one to five years receive any cross-cultural training. It can be argued that managing is simply "managing," so where it is done is irrelevant. Another point of view is that any type of short-term cultural training would be ineffective because people can't learn to work and live in a foreign culture after only a few days (or even a few weeks) of training. Others argue that an understanding of a country's culture is something people assimilate over many years based on personal experiences in that specific culture. Others will say that corporate culture takes precedence over country culture. For example, a local employee working for a "bullish" American firm in Thailand might show traits of aggressiveness and conflict, which are not traits normally associated with the Thai culture. These traits, however, may be common in the corporate company culture of the employee's organization, causing the Thai employee to act outside his or her normal cultural dimensions.

Nevertheless, in order to be successful, an expatriate must be comfortable with his or her staff, colleagues, clients and business atmosphere--regardless of location. Cultural specialists also agree that to be successful in dealing with people from other cultures, expatriates need knowledge about the cultural differences (and the similarities) among work locations. The global employee of today's business world can only benefit from gaining cultural awareness, either through direct training or personal experience, which would lead to greater professional effectiveness and company performance. Read more

If you would like more information about cross-cultural education and how it can be added to your international relocation package/program, please contact our corporate relocation consulting team.

SIRVA recently released a whitepaper dedicated to outlining our fixed-fee home sale program and how it can improve predictability and reduce real estate risk in a slow housing market. Below is an excerpt from this whitepaper, along with a link to the complete document.

The U.S. housing market is continuing to slow, and most economists and housing professionals predict the housing slump will linger longer than previous forecast. Total home sale costs become less predictable in sluggish real estate markets, and unpredictable home sale costs translate into unpredictable total relocation costs.

Relocation service companies offer several home sale programs, each with varying levels of risk, to help employers relocate transferees. Employers should consider the advantages of each program to determine the level of risk involved, and those employers who want a predictable and low-risk home sale program should consider a fixed-fee program.

For more information about our SIRVA’s fixed-fee program, view the complete whitepaper or contact us.

The complex and rapidly changing socioeconomic and political climate in China, together with a massive shortage of skilled workers, makes human capital and global workforce development particularly challenging. As a follow-up to SIRVA's China Urban Index, released in 2006, SIRVA Relocation recently completed a study to address the lack of readily available relocation data and trending on mobility policy and practices in China. The results are documented in "The SIRVA China Mobility Report."

Thirty-seven leading global companies contributed to this unique SIRVA research initiative, the results of which have formed a valuable benchmark framework for human resources professionals to observe current key mobility policy and practices in China. This benchmark report on key findings and trends represents SIRVA Relocation's analysis of the most up-to-date data spanning seven industry sectors in both Tier 1 and Non-Tier 1 regions in China. 

Substantial differences in infrastructure and accessibility exist between Tier 1 and Non-Tier 1 regions, which companies must evaluate when creating policies to introduce employees to these varied conditions. 

Below is a check-list of key findings for this study.

Key Findings
Current Assignments: While all participating companies reported traditional international short- and long-term assignments, there is an emerging trend of new assignment types. Twenty-eight percent of companies have domestic short- and long-term and permanent one-way assignments and 33 percent of companies report permanent one-way moves into Tier 1 and Non-Tier 1 locations.

Emerging Trends and Associated Challenges: As companies in China look to expand their business with locally or regionally hired resources, rather than high-cost, international long-term assignments, it is anticipated that future permanent one-way assignments will increase more than any other assignment type. Companies have found permanent one-way assignments to be the most challenging, contradictory and controversial, making it difficult to establish a framework for policies and practices.

As a result, assignment terms and conditions are handled on a case-by-case basis due to lack of benchmarking data and experience among human resources professionals and global mobility managers. Consequently, inequalities are widening in remuneration packages as talent becomes more valuable, so new models will have to be developed to mirror evolution in emerging assignment types.

Domestic relocations are new to China. Like regionally hired permanent one-way moves, they are predicted to increase. These moves, which originate and conclude in China, are used predominantly in Non-Tier 1 cities where there is significant growth.

Cross-cultural Awareness: Most companies provide cross-cultural awareness programs to transferees: however, few companies currently enforce mandatory sessions. SIRVA expects more companies will emphasize cross-cultural training to ease the transition into Chinese culture and create an understanding of language and customs.

Assignment Administration Outsourcing: 70 percent of companies surveyed outsource assignee administration and between 86 and 92 percent outsource various assignee support services. However, companies outsource contract preparation and international compensation. SIRVA is witnessing an increased trend in companies consulting with external providers for mobility policy development due to a lack of available resources and global mobility expertise in-house.

Assignment Representation across Industries: The following graph provides a snapshot of industries and assignment types in Tier 1 and Non-Tier 1 locations. Click here to view the graph.

Of the surveyed companies, IT/telecom and petrochemical industries show the highest representations of assignee population in Tier 1, followed by manufacturing and pharmaceutical.  IT/telecom and petro-chemical industries also show the highest representations in Non-Tier 1 regions, followed by manufacturing and automotive.

The study also indicates the majority of assignments in Tier 1 and Non-Tier 1 regions are long-term and short-term assignments, followed by permanent one-way moves. 

For more information you can visit http://chinaindex.sirva.com/study.asp

The complex and rapidly changing socioeconomic and political climate in China, together with a massive shortage of skilled workers, makes human capital and global workforce development particularly challenging. As a follow-up to SIRVA's China Urban Index, released in 2006, SIRVA Relocation recently completed a study to address the lack of readily available relocation data and trending on mobility policy and practices in China. The results are documented in "The SIRVA China Mobility Report."

Thirty-seven leading global companies contributed to this unique SIRVA research initiative, the results of which have formed a valuable benchmark framework for human resources professionals to observe current key mobility policy and practices in China. This benchmark report on key findings and trends represents SIRVA Relocation's analysis of the most up-to-date data spanning seven industry sectors in both Tier 1 and Non-Tier 1 regions in China.

Substantial differences in infrastructure and accessibility exist between Tier 1 and Non-Tier 1 regions, which companies must evaluate when creating policies to introduce employees to these varied conditions.

Tier 1 includes major capital cities in China, which offer better infrastructure regarding health, housing, education, communication, access to facilities and security. Non-Tier 1 locations are generally four to six hours away from capital cities, some with very limited expatriate standard infrastructure, difficult environmental factors and obstacles relating to housing, education and health care. Beyond Tier 2 cities have minimal or no expatriate standard infrastructure in place.

Key findings of this study will be posted later this week.

Improving Accent Through Training
A foreign national’s accent may impede their communication ability, even though they are fluent in English. Research indicates accents are caused mostly through differences in rhythm and stress, as well as difficulty in making certain sounds linguistically. A common example is putting an emphasis on the wrong syllable.

Accent is almost impossible to improve without training. Speakers seldom can hear what they are mispronouncing and even if a listener points it out to them, they are unlikely to know how to correct it.

For example, certain regions mix up L and R sounds because they cannot hear the difference, they may not notice a mispronunciation, but others may not be able to understand what they trying to communicate.

Accent reduction training is provided by universities and private training companies where individuals are trained how to identify incorrect pronunciations and how to exercise their mouth and tongue to correct the problem. Other teaching methods include mimicry, which helps students correct pronunciation, rhythm and stress by watching videos of native language speakers, then mimicking what they hear and see, including body language. 

Typically, most training programs incorporate individualized programs developed as a result of a comprehensive speech analysis. These programs mostly last between ten and 20 sessions. For some, improvement can be seen immediately, but it can also take between three and six months for others.

Most programs can be provided one-on-one or in a classroom setting. Classroom programs generally take longer and are less expensive than one-on-one tutoring but one-on-one tutoring is more effective and quicker.

Linguistics Plays a Part
Accent and grammar are usually established by ages six and twelve respectively. In order to help someone change their accent, an instructor needs to be a linguistics specialist and have the knowledge of a speech therapist.

A language school may claim to provide this training, but beware, a language instructor will not have the skills and training of a linguistics professional.

Accents are influenced by the tongue, lip position, vocal cords and air movement through the mouth or nose; instructors must be able to show students how to manipulate these in order to limit mispronunciations as a result of their accent.

Many companies offer language training to international corporate relocation transferees, though few offer accent modification training which is often required more than traditional language training.

Companies often dismiss accent modification as being too expensive, or because they feel there is little that can be done to correct the problems caused by accents. In fact, there is much that can be done to correct accent-related problems, and as companies research the various options available they will find that it is surprisingly cost effective and beneficial.

Let me know if you require a referral to an accent modification specialist.

Mortgage expectations in the United States have changed as a result of the current lending market, and transferees will face a different lending process from what existed only a few months ago. While it is still easier to get a home loan today than it was eight years ago, transferees should be aware of several changes so they can avoid mortgage surprises.

"Transferees should be encouraged to be pre-approved and speak to a mortgage counselor once they accept a relocation, even if they are not yet ready to purchase a home," says Rick Hoover, director of client services at SIRVA Relocation. "A credit check can be completed up front, which allows transferees to be proactive in addressing any issues. They should also be prepared to provide relevant financial documentation, as programs that allow no, low or limited documentation have disappeared or been drastically curtailed in most areas."

In addition, transferees should also expect to buy within their salary range, since the use of projected bonuses or incentive pay is no longer acceptable. They should also expect to make a down payment, as zero down loans are not as accessible. Making a down payment-even a small one-also lowers the opportunity for negative equity situations in the future.

Another significant change is the availability of certain types of loans. Jumbo loans are now more restrictive than smaller conforming loans, and as a result, executives who may have been approved for jumbo loans last year may no longer qualify. Also, combination loans-such as 80/10/10 or 80/20 loans-which many transferees have used to avoid mortgage insurance or as a bridge loan, are more restrictive than ever. Pricing and underwriting guidelines have made these options less favorable, causing mortgage insurance to once again be more prevalent than in the recent past.

"Mortgage lending changes regularly, and it is important that transferees have access to a knowledgeable resource to answer any questions," continues Hoover. "SIRVA has mortgage counselors available to work with transferees within a company's relocation policy parameters. They can walk transferees through various lending options and help determine the right loan for them based on several factors, including risk levels, cost, credit qualification and housing needs."
Hoover emphasizes that if companies conduct their own counseling with employees, they should stress that transferees talk to a lender at the beginning of the process, even if they don't intend to purchase a home right away. This will help transferees better understand what will be required once they are ready to move forward. 

Regardless if transferees work with a SIRVA Mortgage counselor or another mortgage professional, they should have the proper financial documentation available before beginning the lending process. "Underwriting guidelines can change daily," explains Hoover. "The more educated transferees are about the process, the better prepared they'll be."

For more information about the latest mortgage trends visit Paul Klemme's Blog, "The Mortgage Insider" or visit our resource library to view our recent Webinar, "Today's Mortgage Industry and its Impact on Relocation."

fundamentals of relocation webinar
Thursday, May 22, 2008
1:00 p.m. EST (10:00 a.m. PT)

Speaker: David Barlow, SCRP, GMS, Senior Vice President, Client Support Services, SIRVA
Duration: One hour

This "relocation 101" webinar is designed for new relocation professionals, procurement managers and supply chain managers who would like an overview of relocation fundamentals, and for anyone who wants to stay current with the latest policy trends and best practices.

This session will provide a brief history of the industry, and a broad overview of the relocation process, including a review of the terms and concepts most common to relocation policy development and implementation. The discussion will include household goods and temporary living options, the home sale process based on IRS Revenue Rulings, and industry trends such as lump-sum benefits and high-cost area assistance.

Register at https://van.webex.com/van/j.php?ED=91994767&RG=1

Details for joining the session will be included in the registration confirmation e-mail

fundamentals of relocation webinar
Thursday, May 22, 2008
1:00 p.m. EST (10:00 a.m. PT)

Speaker: David Barlow, SCRP, GMS, Senior Vice President, Client Support Services, SIRVA
Duration: One hour

This "relocation 101" webinar is designed for new relocation professionals, procurement managers and supply chain managers who would like an overview of relocation fundamentals, and for anyone who wants to stay current with the latest policy trends and best practices.

This session will provide a brief history of the industry, and a broad overview of the relocation process, including a review of the terms and concepts most common to relocation policy development and implementation. The discussion will include household goods and temporary living options, the home sale process based on IRS Revenue Rulings, and industry trends such as lump-sum benefits and high-cost area assistance.

Register at https://van.webex.com/van/j.php?ED=91994767&RG=1

Details for joining the session will be included in the registration confirmation e-mail

fundamentals of relocation webinar
Thursday, May 22, 2008
1:00 p.m. EST (10:00 a.m. PT)

Speaker: David Barlow, SCRP, GMS, Senior Vice President, Client Support Services, SIRVA
Duration: One hour

This "relocation 101" webinar is designed for new relocation professionals, procurement managers and supply chain managers who would like an overview of relocation fundamentals, and for anyone who wants to stay current with the latest policy trends and best practices.

This session will provide a brief history of the industry, and a broad overview of the relocation process, including a review of the terms and concepts most common to relocation policy development and implementation. The discussion will include household goods and temporary living options, the home sale process based on IRS Revenue Rulings, and industry trends such as lump-sum benefits and high-cost area assistance.

Register at https://van.webex.com/van/j.php?ED=91994767&RG=1

Details for joining the session will be included in the registration confirmation e-mail

fundamentals of relocation webinar
Thursday, May 22, 2008
1:00 p.m. EST (10:00 a.m. PT)

Speaker: David Barlow, SCRP, GMS, Senior Vice President, Client Support Services, SIRVA
Duration: One hour

This "relocation 101" webinar is designed for new relocation professionals, procurement managers and supply chain managers who would like an overview of relocation fundamentals, and for anyone who wants to stay current with the latest policy trends and best practices.

This session will provide a brief history of the industry, and a broad overview of the relocation process, including a review of the terms and concepts most common to relocation policy development and implementation. The discussion will include household goods and temporary living options, the home sale process based on IRS Revenue Rulings, and industry trends such as lump-sum benefits and high-cost area assistance.

Register at https://van.webex.com/van/j.php?ED=91994767&RG=1

Details for joining the session will be included in the registration confirmation e-mail

Avrom Goldberg
Managing Director, Asia-Pacific and the Middle East
SIRVA Relocation

Lorraine Jennings
Manager, Consulting Services, Asia-Pacific and the Middle East
SIRVA Relocation

As Avrom Goldberg and Lorraine Jennings explained, it is important for relocation professionals to stay up-to-date on relocation trends in China because of the country’s power as regional and global economic engine.  For each of the past 30 years, China has demonstrated eight to 12 percent economic growth, and it is showing no signs of slowing down.  In order to provide attendees with valuable insights and analysis of the current relocation trends in this rising economic power, Avrom and Lorraine described the findings of the SIRVA’s China Mobility Report.  While Avrom and Lorraine could not summarize the entire 95-page report during the presentation, they shared highlights of their findings.

 

Increased demand for deployment to China, one trend discussed during the presentation, is expected to continue.  However, the sources of assignees selected for deployment are changing.  Traditionally, assignees to China came from Australia, Europe, the United Kingdom and the United States.  Recently, hiring has been more concentrated in Asia, with most assignees coming in the form of returning Chinese workers or locally hired foreigners.

 

Companies who continue to send assignees to China are using a variety of selection and planning processes that do not follow a pattern.  For example, pre-assignment visits ranged from a brief three days to a full week; some companies offer extensive cross-cultural training for assignees while others do not; certain companies assign mentors, some extend mentoring programs to leadership programs, and others offer no structured mentoring to assignees in China.  In these areas of their relocation programs, companies are not following a uniform trend, but rather they are doing what is in the best interest of their individual organizations.

 

On the other hand, companies are moving in the same direction in other areas of their programs.  For example, many companies are changing their philosophies of hardship allowances.  While 51% of companies offer hardship allowances across all assignments, many are developing new ideas of what places they consider “difficult.”  Avrom and Lorraine mentioned Shanghai and Beijing as places that recently necessitated hardship allowances, but may no longer justify as high of a level of compensation.  Furthermore, many companies are shifting from a host-based to a home-based approach for hardship allowance policies, which illustrates that companies are finding a home-based method more effective in China’s current economic framework.  

 

Regardless of which specific policies and programs companies decide are most useful when sending their employees on assignments to China, the companies within SIRVA’s study agreed on the obstacles that they must overcome.  They identified the following as the top-five human resources and mobility challenges they face when filling assignments in China:

 

• Creating effective policy frameworks for separate groups, such as locally hired foreigners or international new hires who are not full assignee
• Understanding, capturing and reporting the total cost of assignments to the company, including measuring the return on investment of the assignments
• Locating quality service providers in China with a strategic vision
• Developing a young workforce with global cultural competency
• Finding credible benchmarks for hardship allowances and housing data for assignments in China

 

The Panel:

 

Tim Callahan

Senior Vice President,

Global Sales

SIRVA, Inc.

 

Cris Collie, CAE

Executive Vice President

Worldwide ERC

 

Paul Kinsinger

Clinical Professor of Business Intelligence

Thunderbird School of Global Management

 

Kathryn Cassidy

Vice President/General Manager,

Global Assignment Services

SIRVA Relocation

 

Andy Ironside

Global Head,

HR International Services

Deutsche Bank

 

Marita Stricklin

Director,

Relocation

Abbott

 

Before leading a panel discussion on the 2008 relocation industry outlook, Cris Collie introduced his own ideas on the topic.  Focusing on “what’s great and what’s not so great in ’08”, Cris discussed a number of factors affecting the relocation industry. He began with the housing market; Cris explained that although the media has dwelled on the poor state of the real estate market, not all markets have crashed. Furthermore, the relocation industry has the talent and skills to handle this market and must remain confident moving forward.

 

Cris also discussed today’s workforce, including the battle for acquiring workforce talent as well as the diversity of today’s four-generation workforce. While it can be difficult for companies to attract and retain talent, a lucrative relocation policy, such as one with home sale assistance, can play an important role in attracting new hires. Additionally, companies must consider the diversity within today’s workforce, which is comprised of traditionalists, baby boomers, Xs and Ys generations. Aspirations, sources of motivation, and personal characteristics vary dramatically among these generations. Companies must consider these differences when creating relocation policies in order to develop programs that will appeal to as well as be effective for their entire workforce. 

 

Additionally, Cris was adamant that we use our workforce to bring innovation into the industry and discover “what’s next?” for corporate relocation.  To illustrate his point, he cited a number of examples of missed opportunities that should have been logical next steps for companies.  For instance, why did IBM miss the chance to become Microsoft?  Why didn’t VISA or MasterCard invent PayPal?  How did NBC, CBS and ABC all fail to develop CNN?  The relocation industry must strive for innovation in order to avoid such mistakes and to grow.

 

Following further predictions and analysis of the factors affecting this year’s industry outlook, Cris opened up his discussion to an expert panel that was able to offer several valuable insights into the industry, especially from a global perspective. Of the challenges facing the relocation industry in the coming years, many stem from global events and trends. 

 

In countries with strong populations and with a seemingly endless potential workforce, such as India and China, growing pains continue. For example, as Andy noted, Deutsche Bank has experienced that 64% of new hires do not initially show up for work in India, creating a logistical nightmare. In China, where families are limited to one child by law, most children grow up without the experience of siblings or teamwork within a family. Paul pointed out that this leaves those workers less inclined towards collaboration, creating difficulties for companies who want to incorporate the Chinese into their team-oriented workforces. The panel also discussed how the supply of both low-cost manufacturing and service workers are running out in India and China, which Paul predicted will force Africa and the Middle East to join the global economy as resources for inexpensive labor. Also in relation to global mobility and the relocation industry, the panel touched upon such topics as using global relocation policy in a strategic role for business development, the effect of a possible U.S. recession on global mobility, and using more diligence in selecting global relocation suppliers.

 

In addition, the panel also provided attendees with insights into the relocation industry from a domestic standpoint, such as the high occurrence of loss-on-sale in today’s market.  As Tim noted, developing strict programs, such as those that require employees to use preferred brokers, can decrease the potential for loss-on-sale. 

 

What is your own projection for the 2008 relocation industry?

As a kick-off to my blog, A Closer Look at Global Relocation, I wanted to introduce myself and explain what I plan to discuss over the next couple months.

As a global relocation services leader, I am in contact with a variety of global mobility customers and providers on a day-to-day basis and I’ve found that there are some topics that seem to be of interest to most professionals whenever they relocate employees—be it the U.S., China or anywhere else in the world. Since I have been able to benchmark and study these highly relevant topics, I thought it would make the most sense to start this blog with some of this information. With that said, I will be initiating a discussion on barriers to assignment acceptance and how to overcome them, then I will be covering the latest trends in relocating to and within China and the true cost of an expatriate assignment, how to measure and track—all of which I feel will instigate a solid discussion on the challenges and barriers facing global mobility programs and introduce some best practices for overcoming these obstacles.

Are there any other topics that you feel would be relevant to cover? I am open to suggestions.