Head: Expatriates Come Home

Deck: As business goes global, companies send star employees around the world on assignments spanning years instead of days or weeks. But the repatriation process can be bumpy. Without proper management, morale drops, attrition rates spike and employers are left wondering how to guarantee international experience -- and a hefty amount of money -- don't go walking out the door. What can your company do to keep your expatriate investment safe?

What a difference a few years make. Nancy Dawe, president of Calgary consulting firm, Families on the Move, says she knows how expatriates feel when they come back to their home countries after being away on assignment.

Standing in line at a local grocery store one summer a few years ago, Dawe noticed the person in front of her pulled out a bankcard and used it to pay for food. Dawe had been living in Kuala Lumpur for over six years with her family and had never seen a debit transaction before.

"I said to the cashier, 'Can you pay for groceries that way?' " she says now. "I was totally flabbergasted and she looked at me like I was from Mars. There was a lot that came in while we were away."

Reverse culture shock is only one symptom expatriates experience on return. Finding a home, fitting back into the community -- even moving back into a job -- is not always easy -- especially if the company takes a hands-off approach to repatriation.

Retaining employees after long international assignments can be a challenge for companies that fail to understand the correct procedures when bringing someone home. Understanding how to repatriate properly is imperative, however, as globalization forces industry to locate new markets around the world to be competitive. But while more companies send their best and brightest talent away to fill international positions, they fail to do much in the way of ensuring their return.

In fact, according to a recent study sponsored by U.S. organizations, CIGNA International Expatriates Benefits, the National Foreign Trade Council and WorldatWork, some employers estimate nearly half (49%) of returning expatriates leave the company within two years of repatriation. Perhaps just as disturbing, other studies, such as the KPMG International Human Resources Survey released in January, indicate that many companies fail to keep records of attrition rates after international assignments. Between a quarter and a third of respondents replied "do not know" when asked about the percentage of assignees that left the organization within 12 months of the end of their assignments.

"Retention is such an issue and it goes hand-in-hand with repatriation. If companies lose someone, they have to replace them somehow," says Joseph Smith, national director for international human resources services for KPMG. And considering that many companies spend up to three times the money on each expatriate as on employees back home -- a full expatriate package including benefits and cost-of-living adjustments can run anywhere from $300,000 to $1 million annually -- it's no wonder retention is important.

Mercedes D'Angelo is the national director USA for FGI, a professional counseling and services company that helps corporate clients develop and implement expatriate support programs. FGI also has offices in Canada. D'Angelo has read the KPMG study and sees attrition as enemy number one.

"I think if the companies were just organized enough to understand what the attrition is, they would be horrified," she says.

In the 1999 article, The Right Way to Manage Expats, written by J. Stewart Black and Hal B. Gregerson for the Harvard Business Review, the authors stated they came across one company that over a two-year period lost all its managers sent on international assignments within a year of their return -- 25 in all. "It might just as well have written a check for $50 million and tossed it to the winds," they wrote.

Considering all the damning evidence, why are companies not treating repatriation seriously? The KPMG study shows 23% of respondent companies only start planning for repatriation three months in advance, and a full 21% say they don't plan at all. No wonder two-thirds of respondents stated their organization could improve their repatriation program.

One reason these programs may not have a strong following is due in part to ignorance of the management team, say some experts. There is a strong unwillingness to accept that expatriates need help and these top-level employees need, what some see, as coddling. And unless they have been expatriates themselves, many in high-level management just don't realize how taxing the big jump can be. Coming back to the office isn't simply coming back to the office after all. A lot happens to a company over the course of a few years.

"The whole environment changes. It's not just a matter of simply getting back into their office on Monday morning and picking it up. There's a lot to be done in terms of assimilating back into that culture," says KPMG's Smith.

Then there is the small matter of money. D'Angelo says in many companies, the business unit leaders who hold the purses are rewarded for making short-term decisions and keeping costs low. Yet by not investing in an expatriate program, the long-term vision and growth can be thwarted. "They're not realizing that spending $4,000 on supporting a family and an employee when he comes back -- and keeping that international investment -- is going to mean a lot down the road in ROI. A lot of companies aren't seeing that," she says.

But there is even worse news. Although many companies are starting to talk about repatriation, 49% of respondents to the KPMG study in 2000 said assignees take too much time and effort to administer -- up from 43% only a year before.

Large, multinational companies are of course better at developing and implementing repatriation programs simply because their economies of scale are different that that of smaller companies. As they send more people overseas, making sure they're happy with the company is easier. Because it is the company that takes the brunt of the blame if an employee is unhappy with the arrangement upon return, says D'Angelo.

"The normal vehicle for aggression and anger is the company. Employees say things like, 'You didn't do enough for me coming back. You as a company uprooted me. You haven't taken care of me -- and here's a headhunter calling me.' "

Understanding and communicating expectations is one of the best ways to ensure employees stay put, however. But employee versus company expectations are usually different. Many employees see an assignment abroad as a chance to show the company what he or she is capable of. They work long hours, take on much more responsibility and see the experience as a sacrifice and a route to promotion. Many companies, however, see the assignment as merely a position to fill. If these expectations are left unsaid, the employee often thinks his or her accomplishment overseas has gone unrecognized and feels unappreciated.

Further animosity develops if the expatriate comes home only to discover her equals have surpassed her, her new job is a demotion compared to the position overseas, or no job exists at all.

"If there is not any planning for that employee to come back, they quite often become easily frustrated," says Dawe. "They find that nobody really values their skills."

One of the easiest ways to ensure that doesn't happen is to develop a written policy and plan. It also helps to set goals that can be monitored while the assignment is taking place and after the expatriate comes home. By keeping everyone on the same page at all stages of the assignment, there is little room for misunderstandings, especially over contentious issues such as the job the employee is coming back to.

The repatriation process should also start as early in the assignment as possible. D'Angelo says companies should begin talking to the employee and planning for departure at least six months before the assignee moves back to the home country -- and should continue repatriation counseling or mentoring for as long as 12 to 24 months after.

This does not mean, however, that the expatriate and family necessarily needs more than debriefing on return and one or two personal counseling sessions to fit back into the culture they left behind. But from a professional standpoint, in order to ensure the expatriate stays with the company, the company wants to give the expatriate a means of using the skills he or she picked up while abroad to feel fulfilled and valued. Even something as simple and informal as a lunch and learn, in which the assignee passes on information to his or her colleagues can help -- both the expatriate and the other employees who benefit from the global viewpoint.

Giving the expatriate a mentor back home also helps while they're away. By having someone to talk to -- and represent them -- the mentor can have real impact on where in the company the expatriate comes back to, says Dawe.

"When they're working on staff planning and development, somebody's got to be there to lobby for that expatriate because they're not there. And out of sight, out of mind."

Dawe mentions other ways a mentor can keep the expatriate in the loop: Give the employee quarterly updates as to what's happening back home and let the rest of the company know what the expatriate is doing abroad. D'Angelo says another way to help the expat move back into the company smoothly is by allowing for a return visit at least three or four months before the end of the assignment for networking purposes. And not surprisingly, including the expatriate in the entire process of repatriation is imperative as they often complain of feeling their lives are out of their own hands.

Some companies take responsibility for the whole family, not just the expat, such as giving the expatriate's spouse some career training if he or she was unable to work during the assignment. Many "trailing spouses" in that situation complain their skills are out of date when they return, which results in extra stress for the entire family if they can't find a job.

Peter Simpson, president of the Canadian Relocation and Expatriate Taxation Resource Centre in Calgary came across another matter in which a company did not take responsibility, but should have. An expatriate came home early from an assignment in France, only to discover the early departure might mean a huge personal income tax bill.

"The company is saying, 'Well, that's not our problem.' It really should have been because they sent him over there. They should have thought this one through, but they didn't," he says.

Responsibility aside, if there is one way to look at successful repatriation, D'Angelo says companies can't go wrong if they treat repatriating employees as people who are going on another international assignment. After being away for three to five years, the home country is not the same -- and neither are they.

"If each company took the perspective that this is another assignment and gave them the same kind of support they would give people who are outbound, they would go a long way in reducing the resentment, anxiety and anger that impacts not only productivity, but retention," D'Angelo says.

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Sidebar: World Wide and Web

Considering that most expatriates now have some access to the Internet while away, the technology is a superb way to keep expatriates up-to-date about what is happening back home using the company Intranet. No matter where they are, employees can login to learn about internal job descriptions or the next company picnic.

Some companies, such as Shell International, have also sponsored Web sites for expatriates to help them fit into their new country's culture. Outpost (www.xs4all.nl/~outpost/index.html), for example, contains a listing of global resources for expatriates both at pre-departure stage and for settling in.

Canadian CMAs interested in learning more about the tax implications of expatriation, might want to visit www.expatax.com, a site developed by the Canadian Relocation and Expatriate Taxation Resource Centre in Calgary. It includes information both for expatriates and the companies that send employees on assignments. U.S. and Canadian companies can contact Peter Simpson, with questions about Canadian taxes.

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