DGFP // Schwerpunkt: Global Mobility in a VUCA World

About the challenges of expats in a changing environment.

In a globalizing world, many globally operating companies have recognized the necessity of international assignments as a means to develop global competencies, implementing international business strategies and securing competitive advantage (Knocke / Schuster 2017). Compared to the management of domestic jobs, the management of global employees and international assignments remain more complex and challenging (Brewster et al. 2014), imposing a variety of tasks on the International Human Resource Management (IHRM) of organizations. Due to the increased complexity in the global context, the issues expats are faced with differ from those domestic employees deal with in terms of degree and type.

Issues in the global context involve, among others, increased levels of connectedness, boundary spanning, ethical changes, tensions, teamwork, and large-scale change. Further changes comprise the increasing importance of artificial intelligence (A. I.), social media, teleworking, agile working methods, changing roles of leaders. They all have a great influence on the expat’s role. Besides, working and living in a global context often creates transformational or crucible experiences in expats and produces new mental models in those individuals (Ko / Rea 2016). The changing environment is best described by volatility, uncertainty, complexity, and ambiguity, abbreviated as VUCA.

First, the “V” in VUCA stands for volatility. Volatility describes a turbulence that makes it difficult to predict the pattern of change in terms of its nature, speed, magnitude, and volume. The turbulence is fostered by digitization, connectivity, and global competition. Second, the “U” stands for uncertainty. Uncertainty means the lack of predictability in issues and events, despite the knowledge of the basic causes and effects (Bennett / Lemoine 2014). Uncertainty makes it difficult to use past issues, events, and experience as predictors of future outcomes. As a consequence, forecasting and decision-making become extremely challenging and difficult (Sullivan 2012). Third, the “C” stands for complexity. Complexity refers to various internal and external confounding factors of issues and chaos that surround an organization and its people (Bennett / Lemoine 2014).

When many interconnected parts and variables exist in a certain situation, the overall situation can be overwhelming to process despite having the information on and understanding of each factor involved. Last, the “A” stands for ambiguity. Ambiguity means the obscurity of reality that results from the mixed meanings of conditions or the lack of clarity about the meaning of an event (Ko / Rea 2016). Ambiguity describes the situation where the causes and the “who, what, where, when, how, and why” behind the events that are happening are unclear and hard to ascertain (Sullivan 2012).

CREATING GLOBAL STAFF

Globalization and the VUCA environment urge both enterprises and managers to rethink their strategic approaches and behavior. New forms of global interaction and cooperation increase the level of efficiency. Samovar et al. (2011, 2) summarize this trend as follow: “Broadly speaking, globalization has brought about the realization that modern societies must learn to cooperate in order to prevent their mutual self-destruction.” At the same time, volatility, uncertainty, complexity, and ambiguity might be decreased. The globalizing corporate world is boosted by a number of key trends that will shape the nature of work in the near future. These trends include changes of how the workforce will collaborate and share information such as the shift to the cloud. The rise of collaboration platforms has important implications for connecting and engaging people anytime, anywhere, and on any device. Big data also facilitates better decision-making (Collings / Isichei 2018).

The use of international assignments in globally operating companies and the coordination under which individuals accept or decline international roles have altered over the last years. Companies that seek to compete in a global economy face the need for leaders with global competencies. International assignments are an important tool for developing such talent. Employees are often reluctant to take an international assignment owing to concerns about their families and their careers (Bolino et al. 2017).

CHALLENGES FOR GLOBALLY OPERATING COMPANIES

The VUCA environment poses a range of challenges on globally operating companies and their expatriate management: The legal framework changes often and in unexpected ways, making the procedure necessary to send an assignee abroad backed with a robust legal contract, and sometimes even making it more difficult and costly. The countries’ political orientations constantly swing between isolationism and openness (which affects the degree to which a country is likely to accept foreigners). Countries’ economic stability is volatile, which makes expanding an organization’s activity to a new region risky: will the investment of sending an assignee abroad be worth it?

The success of an international assignment heavily relies on the employee‘s wellbeing: how to ensure it in an uncertain world? Volatility, uncertainty, complexity, and ambiguity can also bring opportunities as they demand more mobility from the employees, the elaboration of new processes (which can be exciting for young staff), and also more curiosity and the taste for learning. A VUCA world can thus appear thrilling if one figures out how to manage the challenges it brings along effectively as to turn them to one’s individual advantage (Asi Movers 2016).

BUILDING BRIDGES

When the new manager arrives at the company’s subsidiary as an expat there are high levels of expectations on both sides. The staff will obviously ask themselves: Will the new manager understand us? Will he or she try to change everything, so it looks like the way things are back home?

For the expat, this assignment is probably part of a major career move and a lot may rest on the success of this assignment. For him or her there are the issues of a new country, new language, and a new marketplace. In any case, trust needs to be established as quickly as possible, but how to do it where everything is so different?

Expectations of the expat have changed in the last decade and are challenged by the VUCA environment. Today they are expected to go anywhere from anywhere. They need to demonstrate cultural dexterity having the ability to be flexible and adapt to new cultures and roles. The successful expat should possess a certain amount of humility and intellectual curiosity. The leader of today, in the role of an expat, is faced with a multitude of internal issues as well. Additionally, today’s workforce is much more highly educated and demands more entitlement and involvement in decision-making in their roles.

MANAGEMENT STYLES AND AUTHORITY

Agrawal and Rook (2014) look at how different cultures perceive effective leadership. Findings stress that the globalized work environment means that one is not dealing with only one culture, but with individuals coming from different cultures either in-company or virtually. Not only the national culture should be considered, but also the individual himself or herself when communicating as not all behavior is culture-bound.

Most managers manage with their personal style, personality, and their own culture. This is not a problem when everyone in the organization belongs to the same culture. However, if the organization is multi-cultural, culture plays a crucial role in the way people are managed. This influences several aspects, such as the performance of the individuals and teams and the perception of credibility of the manager, whereas from the manager’s standpoint, the perception of the credibility of the staff. However hard an expat tries, typically when the work pressure goes up, he or she has a tendency to revert back to their own “default” cultural behavior.

Saee (2007) shows the management styles and perceptions in different cultural settings (fig. 1). Expats must be aware that these perceptions exist, and that they have an impact on the way their team members will respond to them.

VITAL SKILLS FOR EXPATS

Mary Kay, Co-founder and CEO of “About Leaders” identifies six vital skills that leaders need to learn and practice on a daily basis in order to keep the edge both inside and outside the international corporation:
- building trust,
- communicating effectively,
- resolving conflict,
- motivating others,
- setting expectations,
- instilling accountability.

In addition, Cook (2009) states five learning stages that a manager needs to go through in order to achieve success in international management:
- Understand that the cultural factor contributes to international business success or failure but is often an ‘invisible’ problem.
- Understand that our own cultural values affect the way we behave.
- Understand that other cultures have different values from our own (not “better” or “worse” – just different).
- Understand why conflict between cultures occurs as a result of different values.
- If this is understood it is possible to: adjust our own behavior, build bridges across cultural differences, having accepted and agreed on different priorities, develop and modify our cross-cultural model through observation and experience.

MAKING THE ASSIGNMENT EASIER ON THE FAMILY

About 70 percent of expatriates who take an international assignment are accompanied by their family (Brookfield Global Relocation Services 2016). An international assignment involves the crucial question of how the family considers and evaluates the expatriation experience (Brewster et al. 2014). Family adaptation is a complex and many-faceted process (Haslberger / Brewster 2008) and family-related problems are the main reason for a failure of an international assignment (De Sivatte et al. 2019).

DUAL-CAREER PARTNERS

When employees are offered an international assignment, many of them will need to consider their partner’s career as part of their decision-making process. Rather than emotional aspects the decision comprises mere economic thoughts: a significant income source is probably going to be eliminated. (Crown World Mobility 2018). Besides, an international relocation presents varying degrees of threat or challenge to an expatriate spouse (Collins / Bertone 2017).

Following the data of the Global Mobility Trends Survey conducted by Brookfield (2016), the majority of expats are married men (fig. 2).

Chen and Shaffer (2018) consider the importance of expatriate spouses’ adjustment on the international assignment experience. For example, spouse adjustment can positively affect expatriates’ adjustment and performance. On the other hand, spouse maladjustment can significantly influence an expat’s premature return and psychological withdrawal.

Spouse maladjustment may even lead to marriage dissatisfaction and divorce (McNulty 2015). Consequently, a happy and supportive spouse is one of the most important success criteria for both male and female expats. Expatriate spouses have the most difficult role of any family member during the international assignment. They are often more immersed in the host country culture than either the expat or the children. Whereas expats have their company and job structure that continue from the home country to the host country, and children have the continuity and routine of school, expatriate spouses often leave behind many of the most important aspects of their lives. These might include the social network with friends and relatives and even their career. A lot of expatriate spouses experience crucial interruptions to or loss of their career, leaving them feeling diminished and unrecognized. Due to the loss of their social network and social support, expatriate spouses might become victims who have the least capabilities / resources but who have to cope with the most demanding foreign cultural situations (Chen / Shaffer 2018). Another challenge remains with the missing self-career realization of the expat partner. Future assignments would be considered only if both partners arrange relevant employment for themselves (Kierner 2018).

In spite of these manifold challenges, the majority of globally operating companies do not offer spouse / partner assistance support for international assignments, beyond only language and cross-cultural training (McNulty 2015).

ADJUSTMENT OF CHILDREN

Within an international assignment, the role of children needs to be considered. The number and the age of children influence an expatriate’s adjustment into the new environment (Bin Mansor et al. 2014). Many globally operating companies tend to assume that children are “passive participants” within an expatriate assignment. Expatriate children are typically regarded as part of the expatriate’s belongings to be sent abroad at the earliest convenience. The acculturation of expatriate children is seen to be of minor consequence for an expatriate’s performance during international assignments (De Leon / McPartlin 1995).

Older children increase the complexity of an international assignment. The younger the children, the higher the success of an international assignment. Problems arise once the expat returns home because the children have grown and were educated in a different culture. The quality of education and schooling of the children are a major issue during a stay abroad (Bin Mansor et al. 2014). Some countries further lack the access to international schooling (Brookfield Global Relocation Services 2016). Attending international schools helps expatriate children to interact with other international children (De Sivatte et al. 2019).

ARMED AND DANGEROUS: ENSURING SECURITY FOR EXPATS

Within the VUCA world, the security of expats remains an issue for the IHRM. When the international assignment takes place in hostile environments (i. e. politically and socially unstable, violent), the IHRM of globally operating companies has a moral dilemma about the extent to which it can protect their expats in hostile environments due to the unforeseen nature of threats and threatening changes (Gannon / Paraskeva 2019). Many organizations still lack efforts to address perceived weaknesses in the way they manage the health, safety, and security of expats, including evacuation policies in the case of a crisis (Fee et al. 2015). Hostile environments put pressure on the IHRM to focus on expatriate training methods, develop crisis management procedures, and invest in post-crisis support (Fee et al. 2019).

REPATRIATION PROCESS: COMING HOME

The repatriation process continues to be a current challenge for many globally operating companies (Knocke / Schuster 2017). Following the findings of Crown World Mobility (2018), the vast majority of the companies define repatriation support from a tactical angle, e. g. household goods shipment or temporary living. Only a small minority of the globally operating companies address elements such as repatriation integration briefings in their HR policy.

Black and Gregersen (1999) paint a grey, but honest picture of the end of the expatriate cycle. They illustrate how companies spend millions on preparing the expat candidate (and his / her family) for the overseas assignment, and perhaps supporting him or her during the time abroad, but do little, if anything at all, to prepare for the repatriation. They quote one UK expat as saying “If you have been the orchestra conductor overseas, it is very difficult to accept a position as second fiddle back home.”

They mention that the experience abroad is valuable for both the expat and the company itself. However, the returned expat finds himself / herself filling temporary positions since their original position has been filled during their absence. In many cases, they are demoted as there are no further opportunities for them within the company. It is no wonder that they move on to a competitor where their experience abroad is highly regarded – it is estimated that the turnover rate of returning professionals is 25 percent. Homecoming is difficult, not only for the person’s professional life but also for his or her private and family landscape: the children have to readjust to life back home such as the school system and reuniting and / or making new friends again. The stress stretches across the entire family.

DESIGN A REPATRIATION PROCESS

To manage the repatriation process, different contents must be included to create a win-win situation for both the expat as well as the sending organization:
- setting objectives at the beginning of the international assignment,
- linking career planning and individual development plans to the international assignment,
- preparing for repatriation at key milestones during the international assignment,
- defining roles and responsibilities of key stakeholders (assignee, HR, manager),
- including repatriation integration briefings in HR policy and programs (Crown World Mobility 2018).

Following the findings of the Global Mobility Trends Survey (Brookfield 2016), the most discussions regarding repatriation planning take place less than six months before the process of repatriation starts (fig. 3).

IMPLICATIONS AND OUTLOOK

Some expatriate trends have changed recently. Although expatriate assignments have increased due to globalization, improvements in transport and communication has alleviated some of the stress. Traditionally, expatriate assignments could be categorized into long-term and short-term assignments. The tenure for long-term assignments is usually one to five years and for short-term three to twelve months. Now, however, we also have commuter assignments making it easier for the expatriate since he or she does not have the hassle of relocating his or her entire family and it is also cheaper for the company. The commuter expatriate is moved in to address a specific problem and then returns home. These types of assignments have a higher success rate because there is less family stress involved. Nevertheless, every assignment requires the expatriate to become fully immersed in the culture in order to build the necessary trustworthiness and teamwork, which is always vital to the success of the assignment.

Today, globally operating companies need to place more emphasis on attracting highly-skilled workers than on financial gains. Globally, there is a lack of supply of talent and next generation business executives and this shortage is likely to continue because there are more workers retiring than entering the workforce. In future, it might make more sense to utilize the talent within the country than send someone from the host country. This bright, young talent would not require the rigid training and cost that an expatriate assignment brings with it. Only those globally operating companies willing to adapt their HR practices to the changing global labor market conditions will be able to attract and retain high performing employees and the right talent.

HR’S NEW ROLE

In the past, the function of HR was typically considered a cost center and an administrative overhead. However, as modern organizations face new global challenges in order to exploit opportunities abroad, the role of the HR department is transforming to deal with the rapid changes within the organization. Globally operating companies with the ability to foresee and sustainably manage their workforce needs – especially for high skills – will gain the decisive competitive advantage. Some of the challenges facing HR directors are long-standing. The new role of the IHRM will be to build a global mindset and leadership ever more deeply into the organization and create much better linkage between their international mobility and global talent management functions. The biggest challenge for globally operating companies’ HR departments is to manage a workforce diverse in culture and language skills and distributed in various countries.

Global staffing, global talent management, and global leadership development are the critical components of global human resources with the greatest potential for powerful leverage for globally operating companies. The recent uncertainty in global politics and continued business risks embedded in the VUCA environment mean that global HR directors will be facing some difficult challenges in the near future. The world is, to varying degrees, de-globalizing as the public mood is changing and many globally operating companies are scrutinizing their ability to regulate and manage their global supply chains. Transparency is becoming the order of the day as globally operating companies are beginning to pull more and more of their operations back into the host country. This too, will reduce the need for expatriate assignments or render them unnecessary altogether.

Being at the center of globalization, globally operating companies need to learn to integrate diverse value systems and espouse shared global work values to create an environment, where talent is able to communicate and coordinate the activities to reach common goals. It is vital that globally operating companies are familiar with local ways of doing business, understand the needs of local consumers, and also develop a global mindset among their employees. The IHRM must play new roles in leading the organization in the uncharted waters of globalization. ●

Literature

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