A new paradigm for international transfers?

International transfers
Tom Haak

I know a company where, in the past, non-performing senior managers were ‘punished’ with an international transfer. This was the best punishment that could ever happen to you. You were appointed as country manager of the Philippines, Kenya or even better Australia, and you could have a very good life as an expat. You were far away from HQ, and if people from HQ visited you, they were not visiting to audit you, but to have a relaxing couple of days away from the daily rat race in their home country.

Traditional expatriation is too expensive

Those days are gone. Many multinationals are struggling with their international transfer policies. Expatriates with the traditional conditions have become too expensive, and the somewhat colonial expatriate model also does not work very well in the modern world.

At the same time organisations want international mobility to increase. For several reasons. The most important one is the transfer of capabilities. Multinational clients who buy service A in country X also want these services in country Z, on the other side of the world. If the required capabilities are not available, they have to be built by transferring some people and by building up local capabilities in country Z.

Organisations also need leaders with broad international experience. It is very difficult to be a leader in a global company if your experience is limited to the country where you were born and bred. New generations increasingly see the world as their domain, and they are looking for companies that can offer international exposure and experience.

Many people are not internationally mobile

Although it looks like the world is moving to one global labor market, where people happily move from country X to country Z, the reality is different. Many people are not willing or able to transfer when a concrete opportunity arises. They have a partner with a career. Children who are very happy at their schools. They have older parents who need care.

This is very understandable and difficult to change. People who are willing to transfer often take their ‘home country’ situation as the starting point (and the international transfer policies of companies are often based on the principle: you should not be worse off, materially, than in the home country situation). This makes international transfers often (too) expensive.

Other ways to increase an international mindset

How can we change this? How can we make the labor market more international, without too many internal regulations, policies and procedures? Some initial ideas:

  • Let’s stop using terminology out of the old Expatriate Handbook, as “Home country”, “Host country”, hardship allowance, net spendable income, cost of living index, home leave etc.
  • Let’s not fool ourselves by assuming many people are internationally mobile. The reality is that most people are not mobile. Many people want to travel as tourists to nice locations. That is different from relocation to another for a couple of years.
  • Let’s focus on people who are really mobile. Who are excited by the idea to enrich their lives by living and working in different countries. Not as tourists, but as true internationals.  Companies need these people. Not only in leadership positions, but also in various technical and client facing positions. When people really want something, the discussions are more about the opportunity than about the terms & conditions they are entitled to. In Hong Kong housing is expensive. Why should it be cheaper for someone who is used to the relative low costs of housing in the Netherlands?
  • Let’s be more creative and flexible when it comes to capability building. It is often easier to transfer work than it is to transfer people. Often it is easier to transfer people for 3-6 months than it is to transfer them for years.
  • Hire people who already have international experience.
  • Make sure the international career opportunities are accessible to all, be clear about the terms & conditions that apply, and stimulate the true internationals to apply for the opportunities. People who invest in their own career will get the return of this investment.

Can we do more?


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