1. Overseas/paul.pittman/feb.1/2013/wc=2093
The cachet of working abroad no longer exists for children
of baby boomers.
Commentary
Mobile employees and the stay-put generation
By Paul Pittman
Special to The Northern Miner
If you manage a mining company with assets abroad, sooner or later you will have to
consider whether you are going to staff up the key positions there with local nationals or
send someone from the home office.
Earlier this year, we wrote about employee benefits for the mobile workforce (“How
to craft benefits packages for globe-trotting employees”, T.N.M., Jan. 14-20/13). Now,
we expand that discussion into the other areas that employers must consider when
transferring staff — particularly younger managers — into positions outside of Canada.
“Now let me make sure I understand this offer: you are going to send me to another
part of the world to work, cover all of my relocation expenses and pay me more than I
would earn at home . . . when do I start?” may have been the reaction in the past from a
baby boomer to an offer to go and work abroad, but don't expect the same response from
their kids.
The children of the generation that put McDonalds and Starbucks on every corner, that
helped homogenize the world, that have already been everywhere, traveling with their
parents, during their gap year or as part of their education.
The cachet of working abroad no longer exists.
Later generation’s values are different and lie in community, a safe environment, and
the raising of children close to support systems that accommodate dual parental careers.
Consequently the same relocation arrangements, compensation systems and assistance
programs that were used with their parents are not going to work.
A successful international company will have at the top, experienced management that
have lived and worked abroad, that are able to make better informed international
decisions.
Companies that try to do without this depth of experience (say by substituting foreign
assignments with travel and video conferencing) will likely see subpar performance. At
lower levels in the organization, successful organizations will need the best available
technical skills to get the job done in the most efficient and productive way and these
may only be available in another country. Using mobile talent is a requirement today at
all levels in the organization.
Globalization has narrowed cultural gaps and cost of living differences, and the
internet age has further contributed to a more globally aware workforce. In fact today,
there are very few attractions to a young family in taking on an international work

2. assignment. Media and peer pressure place enough stress on those raising young families,
without the added dynamic of foreign schooling, healthcare and social development.
For their baby-boomer parents, an international assignment was appealing because it
was well-compensated, with some inconvenience rewarded by later promotions during a
long career spent with one employer. And it provided an exciting opportunity for a family
to experience another part of the world.
Their children, on the other hand, see fewer tangible rewards coming from overseas
assignments and consider time away from the head office as career idling, especially if to
a location that they may have visited already. They also witness few companies
attempting to retain an internationally experienced workforce through well-managed
career pathing.
So the best candidates for international assignment are single? Well, if you can find
someone with the proper level of experience, of course. Or maybe empty nesters with no
elderly parents, but will they still have the energy and commitment to drive your project
in line with the demands of shareholders?
If you can't find the perfect applicant at the ends of the age spectrum what's to be
done? Here's a checklist of ideas that may be helpful when it comes time to building
experienced international bench strength:
1. Recruitment — The days of reaching out to headhunters to solve mid-level hiring
problems are disappearing. The more reputable ones are now turning away those searches
that appear too difficult, and international assignments certainly fall into that bracket. To
attract a young family, you will need to answer every single question that they have about
the location, the assignment and so on. The one-page brief traditionally given to the
recruiter is not enough.
A web-based solution, where candidates can choose you via the brand and culture that
your company promotes, is rapidly becoming the proven approach. However, don't
assume that your HR person working LinkedIn for a few hours a day will solicit the right
candidate. Whether the appointment is a single key manager or a group of skilled
workers, they are likely to be potentially high-risk for your company and you will want
the best possible candidates to minimize the risk of failure. Spending the time to discuss
the most cost-effective and productive method of recruiting mobile talent with an expert
or a recruiter that understands this trend will be worthwhile.
2. Compensation — What do we need to pay these new mobile workers? The
traditional method of compensating expatriates was developed around the assumption
that they would return to a role in the home location after the assignment and
consequently, they had to remain in the home country’s pay system. This meant a costly
and administratively cumbersome method of equalizing costs of living, housing and taxes
between home and host country.
Today, a variety of alternate approaches should be considered that, as a generalization,
reflect the likely career path of the individual following this assignment, its term and/or
the nature of the host location.
Differences in the costs of living and taxation levels have reduced with globalization.
However, they continue to exist and in some circumstances remain significant, but the
manner in which they are recognized and compensated for has changed. This might be a
modified local pay scale if the expatriate is likely to remain in the host country for some
time, it could be a fixed allowance paid in addition to salary or a single “all in” contract

3. amount with appropriate back-end incentive if the employee is not expected to remain
with the company after the assignment. Finally, if there are a number of employees in the
host location from different home locations, an international pay scale might be the right
answer.
Factored into compensation potentially, should be recognition of whether food and
lodging are provided. Host location accommodation is usually paid for the company,
particularly if the employee has a home elsewhere with its associated ongoing costs. The
style and size needs to be in keeping with peers in the expatriate and/or local community
and appropriate for family or single living.
3. Taxation — No matter how hard you might try, taxation cannot be avoided. As a
general rule, expatriates will be subject to tax, often on worldwide income in the location
in which they are resident.
Residency is complicated and professional advice needs to be sought on its
determination in the host and home countries. If the expatriates enjoy a locally
competitive salary or a contract amount, you may conclude that your employees should
be responsible for their own taxes and simply seek confirmation each year that tax returns
have been submitted (to protect your company's legal position and reputation with local
authorities).
However, if your employees remain on the home country compensation system, you
may choose to adopt a formal policy that ensures that either, they pay no more than they
would at home or one that reimburses just any excess tax (i.e. they keep the differences if
host taxes are less). Such decisions should generally flow from the career-path decisions
outlined earlier.
There could be circumstances where an employee is resident in more than one country
and — notwithstanding the type of policy adopted — may be taxed on non-cash elements
of compensation, e.g. home leave (see below), housing, relocation expense, etc.
There may be a legal obligation for the company to collect taxes in two or more
countries. A well-defined policy outlining the company's commitment regarding tax
reimbursement (if any) aligned with your career strategy and culture, needs to be
considered and communicated to the transferring employees.
We briefly discussed social security in our earlier article on employee benefits.
Contributions during employment are often regarded as a tax by employers and treated
similarly to income tax however, it must not be forgotten that contributions confer a
benefit at retirement or some other life event. Preventing employees from contributing or
placing them in a position where they cannot contribute by virtue of a payroll decision
may result in a loss of state benefits at some point in the future. Further, many foreign
country social security plans require minimum periods of contribution before any benefit
at retirement is payable, often 10 or more years. Any contributions made that do not
result in the required minimum are forfeited.
4. Benefits — We covered employee benefits for mobile employees extensively in our
earlier article and won't repeat that here other than to point out that a younger workforce
perceive employee benefits as not only providing security for some of life's challenges
but also providing lifestyle features such as massage, chiropractic, Employee Assistance
Programs, legal services and other features that will be expected to continue while on
assignment. An assignment will be more attractive to a younger mobile family if benefits
and perquisites enjoyed at home remain unchanged.

4. 5. Relocation — Travel expenses including some hotel time until local
accommodation is found or made ready, and the transportation of reasonable household
goods and personal effects will have to be provided. Possibly an allowance is needed too,
as an offset for all of the one-time costs associated with replacement of electrical
equipment, disconnection and reconnection of utilities, the replacement of licences, etc.
6. Home Leave — Ongoing, there will be the question of home leave. So many
questions crop up: How often can the employee (and family) return home each year?
What is defined as the home country? What class of travel is allowed? Is car rental
included? Is accommodation included if the employee has no retained home? Do business
trips to the home office count as home leave? Can family members travel separately? Can
family members not resident in the host location use home leave to visit? Is travel time
deducted from vacation? The answers will all need to be considered in your policy, and
preferably in advance. If people are working in hardship locations, you may also need to
consider R&R leave to a local destination.
A large organization does not succeed globally by travelling business class, staying at
the Four Seasons and using video conferencing. There is no substitute for international
experience at the top, and the best return on investment may be from using skilled
expatriates in other parts of the organization.
The supply of mobile talent is diminishing and employers will need to work harder to
attract and retain this competency. Younger people who regard work as a commodity are
far less inclined to rely on the “trust me” response that their parents accepted when
companies were in the throes of developing international assignment programs and
careers last a life time. Thoughtful, informative and exhaustive policies will need to be
available during recruitment of potential new recruits that cover not only security and
care, but also career and post-assignment opportunities.
When developing international terms and conditions for their mobile employees,
companies typically benchmark the prevalence of their program against other
organizations to determine “competitiveness”. In other words, if we do what everyone
else is doing we shall be in good company.
But this is not like domestic compensation. The international project that you are
trying to staff is more often than not crucial to your business and so developing programs
that uniquely support your strategy, and align with your culture and values will be key to
retention and attraction.
Most mobile employees tend not to job hop because of features in international
programs. Your organization's success will be measured by how it deploys talent globally
to execute key strategies ahead of its competition.
These measures include: the return from talent deployed internationally; how well
skills are matched to assignment objectives; how the competency of mobility is used and
retained; how international experience is utilized post assignment; and increasing the
speed and effectiveness of skill and technology transfer to local operations.
As international projects become more important and the supply of employees willing
to relocate diminishes, employers following these principles may help reduce risk and
improve the effective deployment of this new breed of mobile employee.
— Paul Pittman is the senior partner and founder of The Human Well
(www.thehumanwell.com), a collaborative HR consulting practice located in Oakville,
Ont., with clients globally that helps mining companies developand manage expatriate

5. programs. He previously held executive HR positions with Alcan, RJR Nabisco/Japan
Tobacco, Laidlaw and Massey-Ferguson, and was the Canadian HR practice leader for
Arthur Andersen. He has lived in the U.K., Canada and Switzerland, and managed
pension, benefit and compensation plans globally.