Career

Helping Employees Adapt to International Assignments in Emerging Markets

28 April, 2018
  • Mario Ferraro

    Global Mobility Practice Leader - Asia, Middle East, Africa and Turkey Singapore

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“Considering the significant financial investment made in deploying an employee overseas, assignment failures are to be avoided at all costs.”

Over last few decades, globalization has pushed many organizations to turn their focus towards emerging markets in search of new clients and competitive advantage. But the draw of the growing middle-class consumer base is often matched by the struggle to find talent with the rights skills and competencies. The solution is generally to import foreign employees to work alongside local hires, to provide the skills and experience necessary to run the business in the short-term and help build local capabilities for the long-term. 

But asking an employee to uproot her life and move isn’t an easy sell, especially for assignments of long duration. Add a challenging economic, social or geopolitical environment, and you leave employees with a difficult choice. To bring the whole family with them has clear advantages, but would also mean exposing their spouse and children to the same level of hardship. The alternative—leaving the family behind—brings all the emotional challenges associated with long-term separation. Some organizations offer the intermediate option of stationing the family in a nearby alternative location, reducing the distance between the employee and family members and allowing for more frequent family visits. For example, it’s not uncommon for employees on assignment in some middle eastern locations to relocate family members to Dubai.

Irrespective of the situation, differences in living standards deserve serious consideration for a number ofreasons. Firstly, they can create anxiety for the employee and his family, which may lead to reluctance to undertake the assignment. Secondly, living condition may erode the employees’ morale and affect his performance over time. This could ultimately lead to “assignment failure”: the employee falling short of achieving the objectives of the assignment and/or a request to be repatriated prematurely.

Considering the significant financial investment made in deploying an employee overseas, assignment failures are to be avoided at all costs. More importantly, poor planning and preparation for differences in living standards can expose employees deployed abroad to a number of risks with potentially harmful or even lethal consequences. Employers have a “duty of care” obligation towards their employees that extends to overseas assignments.

There are several factors that can contribute to differences in living conditions when moving between locations. The annual mercer quality of living survey evaluates local living conditions in more than 450 cities surveyed worldwide. Mercer’s proprietary quality of living methodology compares living standards in terms of 39 factors grouped into 10 categories:

  1. 1. Political and Social Environment
    In some countries, the political environment may expose the employee to prosecution for saying or writing the wrong thing. In others, the social environment may be characterized by high rates of violent crime or exposure to terrorist attacks or social unrest.

  2. 2. Economic Environment
    Employees and their families may not be prepared for life in a country going through significant economic stress, or with a less developed economy.

  3. 3. Socio-cultural Environment
    Social and cultural differences can make going about one’s daily routine or making new connections difficult for foreign employees and their families.

  4. 4. Medical and Health Considerations
    Some countries may not have the medical infrastructure in place to meet the needs of employees with health conditions, or to provide reasonable standards of care in case of accidents or emergencies.

  5. 5. Schools and Educational Standards
    Employees with children may be forced to pay for private schooling or overseas boarding schools in locations where international schools are lacking.

  6. 6. Public Services and Transportation Infrastructure
    Others may not be able to drive due to legal or safety concerns, forcing them to rely on poor or still-unsafe public transportation.

  7. 7. Recreation
    Some locations may have very limited recreational facilities, depriving employees of much-needed diversion outside of work.

  8. 8. Availability of Consumer Goods
    Employees deployed to remote locations are likely to find a very limited range of everyday goods, and a shortage of many of their favorite items and brands.

  9. 9. Housing Standards
    Housing standards can vary widely between locations. In many areas it is important to pay particular attention to the security of the premises, as foreigners can be tempting targets for criminals.

  10. 10. Natural Environment
    Certain locations are notorious for natural hazards such as floods, monsoons, earthquakes and volcanic eruptions—unfamiliar occurrences for many employees.
     

It’s easy to see why it’s important to plan, prepare and support the employee to manage differences from the home location to the assignment location. Even the less urgent factors cited above have great impact on employees’ quality of life. We recommend organizations respond on two fronts:

  • In terms of planning, the company needs to carefully evaluate the risks, brief the employee and provide as much “on the ground” support and advice as possible. The company may need to develop crisis management processes and procedures. Proper planning also includes ensuring that adequate insurance coverage is provided for medical emergencies, accidents and fatalities. Extra care is required when deploying employees to conflict zones or locations prone to natural disasters, as many insurance policies exclude “acts of war” or “acts of god,” and may therefore require additional policy riders.
  • From a pay standpoint, the company needs to adequately incentivize and compensate employees for undertaking assignments in difficult locations. Failure to incentivize these moves can ultimately result in high refusal rates and strong bias towards locations perceived as “easier”—leaving the company with the same talent shortage it was attempting to address.
     

What Emerging Markets Can Do To Attract Skilled Talent
 

Having run the quality of living study for 19 years, we observed that infrastructure deserved its own ranking, as there is a strong connection between quality of infrastructure and a city’s attractiveness for global talent. We focused on power and potable water supply, telecom penetration, public transportation and international air travel connectivity with this new ranking.

Singapore topped the chart, leading all other cities in the developed world. The correlation between the city state’s world-class infrastructure and the number of foreign workers who call Singapore home—including this writer—is clear. 

Asia is leading the world’s economic growth today, but also its infrastructure growth. Governments in Asia and elsewhere across emerging markets recognize that investments in infrastructure go a long way in attracting multinational companies and the skilled talent that comes with them. A positive cycle of progress is created as their local economy gets a boost from the new skills and opportunities available.

In the meantime, however, organizations in both emerging and developed markets looking to expand must keep in mind the considerations enumerated above as they deploy their talent abroad. There is no such thing as too much planning when it comes to ensuring the safety, happiness and productivity of a mobile employee.

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As its name indicates, a sidechain is a type of blockchain that accompanies a master chain. In the relationship, the master chain is the parent chain and the sidechain is the child chain.   In order to trade assets from the master chain for assets from the sidechain, the user would first need to send their assets on the master chain to a certain location. This would effectively place a lock on the assets for the time being. After the transaction completes, the sidechain would receive a confirmation and release a designated amount of the sidechain to the user—equivalent to the amount of assets locked up by the main chain times the exchange rate. This also works in reverse to trade assets from the sidechain to the master chain.   As sidechains store data and process transactions, they help to uphold the integrity of the master blockchain while making it smaller and more agile. When implemented correctly, sidechains relieve the master chain of some of the work, helping to solve the inherent scaling problem associated with blockchain solutions. Sidechains have practical applications for stock exchanges.   7.  Artificial intelligence (AI) & blockchain are teaming up.   While both AI and blockchain involve high levels of distinct technical complexity, there is potential for these two technologies to team up and score major technological victories in the next five to ten years.   The first change win might be in optimizing data management. Blockchain currently relies on hashing algorithms for data mining and these operate in a brute force style, meaning the algorithm inputs all possible sequences of characters until it finds the one that matches with the verification process. This demands extra steps, lags and effort. AI can step in to offer an intelligent data mining system that streamlines the entire process and cuts down total costs exponentially. This streamlining also has implications for improved energy consumption for blockchains.   AI can infuse natural language processing, image recognition and multi-dimensional real-time data transformation capabilities into a blockchain’s peer-to-peer linking. This allows data miners to turn a large-scale system into a series of micro-economic environments. In turn, this can optimize data transactions in a secure and effective manner. Most importantly, machine learning intelligence adds flexibility to the process.   On the flipside, blockchain’s data decentralization technology can help AI step up its game in creating better machine learning models. Introducing secure data sharing across systems, which have traditionally stored and operated data in an isolated manner, introduces higher quality data. Richer data means better models, better predictions and better insights.   Data decentralization will offer companies of all sizes access to analytics and insights they could not possibly generate from an individual data source. When AI’s deep learning algorithms gain access to multiple data points from multiple data pools that have been standardized by blockchain, the competitive advantage of an AI technology will no longer be about finding the data itself. Nor will it be about having the resources and funds to gather the most data. Instead the focus will be on writing the most innovative algorithms. This evolution ushers in a new era of scalability for deep learning where AI finds itself in new marketplaces, opens doors for smaller players and gains trust with the public at large.   The future looks bright for blockchain and it will likely innovate business processes in many industries, including human resources. However, its widespread adoption and full potential have yet to be seen. The next phase of development for blockchain will be in addressing scalability and accessibility challenges, which will pave the way for more applications and varied use cases across more industries.   Amid the rapidly evolving digital landscape, one thing is clear: blockchain is in a state of metamorphosis with many disruptive trends on the horizon. For HR professionals, it is important to keep an eye out on how this nascent technology is impacting various industries and making its way to the world of work.  

David Anderson | 22 Aug 2019

The smart city. The connected city. The intelligent city. The agile city. The data-driven city. The integrated city. The blockchain-powered city. The sustainable city. The future-proof city. There is no shortage of vision, aspiration and genius when it comes to today's cities. Still, they must attract foreign direct investment, along with blue-chip firms, start-ups and top talent, and have access to the best technology to drive growth. But growth in the world's GDP won't come from the same old sources. It will follow the fortunes of tomorrow's most competitively smart cities, many of which are overlooked urban areas with opportunities to leapfrog established megacities that were once the de facto homes to the world's most successful employees and businesses. Through investment in information and communication technologies that enhance the quality and performance of urban services, such as energy and mobility, these smart cities are competing for the highly skilled workers who will sustain their organizations and ensure growth. The Questions Facing Employers and Talent   Deciding where to work, live and raise their families, these employees prioritize the human and societal factors cited in Mercer's recent study, People First: Driving Growth in Emerging Megacities. Workers were asked to rank 20 decision-making factors by importance against four vital pillars: human, health, money and work. When deciding which city to live and work in, respondents ranked human factors — such as overall life satisfaction, safety and security, environmental considerations and proximity to friends and family — as the most important. The study also looks at how some of the fastest-growing global cities, from Kolkata, India, to Lagos, Nigeria, grow economically, attract people, enable new residents to thrive and lay a path toward a better life for its citizens. From these insights, city leaders and policy makers around the world can glean valuable lessons on what is not only needed to sustain but also power growth. Indeed, in an increasingly urbanized world, where highly skilled talent is scarce, employers and cities are asking important existential questions: ·  What makes professionals move to and stay in a particular city? ·  How can employers and cities retain talented workers with the high-level skills demanded by rising start-ups, upcoming unicorns and global brands in emerging hot spots? ·  What, exactly, do productive employees want from an employer and home city? The answers may lie in how well the world's emerging megacities prioritize their transformation from urban afterthoughts to global power players. Thus, it's helpful to take a comparative look at a sampling of cities that show serious potential to succeed and sustain their success over the long term. What they have in common is a commitment to regional superiority of opportunity and resources, to establishing themselves, in their way, as versions of Silicon Valley — where tomorrow's most highly skilled talent can thrive, building purposeful lives amid the evolution of artificial intelligence and advanced technology. From 'Cyberabad' to Other Contenders   A prime example of an emerging megacity is Hyderabad, the capital of India's southern state, Telangana. With a population of eight million, Hyderabad is the sixth most populous urban agglomeration of India and is popularly known as Cyberabad — the "Silicon Valley of India" — for its growing reputation as a global hub for information technology. (Megacities are defined as having populations of 10 million or more; the cities discussed in this article have either reached that milestone or are projected to.) Along with IT, though, Hyderabad is experiencing growth in the automotive industry and pharmaceuticals, as well as its traditional agricultural base. With extensive investment in digital and property infrastructure, the city is upgrading itself to host IT companies, especially via the development of its HITEC City, a township with state-of-the-art tech facilities for American IT giants. Retail has thrived, as well, as international and national brands open stores in the city. By contrast, the somewhat larger city of Chennai (a 2017 population of 9 million and a $59 billion GDP as of 2014) is known as the "Detroit of India" and leads the nation's automotive industry, but growth in software services, medical tourism, financial services and hardware manufacturing (along with petrochemicals and textiles) also add to its economic depth. It's also a major exporter of IT and business process outsourcing services. For sheer economic scale, the emerging megacities of China are impressive. With a 2014 GDP of $234 billion and a 2017 population of 14 million, Chengdu is Western China's No. 1 metropolitan area, and it thrives with emerging industries — notably an energy conservation and environmental protection industry that makes it an attractive destination for skilled workers. Indeed, the emphasis on "new energy" industries (in materials, hybrid and electric automobiles and IT) is propelling Chengdu. Meanwhile, China's second largest eastern city, Nanjing (with a 2014 GDP of $203 billion and a 2017 population of seven million) is dominated by service industries, led by financial services, culture and tourism. IT, environmental protection, new energy and smart power grids are becoming additional pillars of Nanjing, and a wealth of multinational firms have been establishing research centers there. Nanjing's unemployment rate has been below China's national average for several years. From Kenya to Jalisco   While China and India may dominate the scale of emerging economies, other geographies are very much on the emerging megacity map. Nairobi is not only the capital and largest city in Kenya; it is also on track for population growth from four million in 2017 to 10 million by 2030. Home to more than 100 international organizations, such as the United Nations Environmental Programme and The World Bank, as well as regional headquarters for major manufacturing and IT corporations, Nairobi shares its agricultural preeminence with a foothold in today's and tomorrow's economy. Likewise, Guadalajara (a 2014 GDP of $81 billion; 2017 population of five million) is more than the capital and largest city of Mexico's Jalisco state. It's known as the "Mexican Silicon Valley," according to the Financial Times, and is considered the city with the highest investment attraction potential in Mexico. It's the sort of social/cultural center — with an International Film Festival and International Book Fair — that strongly complements the growth of high-tech industry, chemical and electronic manufacturing, making it a hemispheric magnet for talent. These cities each make their case for talent in their own ways, creating an environment for highly skilled employees to thrive across multiple dimensions. This requires putting people first and focusing on what matters most to them. Mercer's Emerging Megacities study shows that employers often misunderstand what motivates people to move to a city and remain there: Human and societal factors are more important than money and work factors. For emerging megacities, the model of Silicon Valley may be a potent aspirational strategy, but in each case, they must prove themselves as places to live—today and tomorrow. Originally published in BRINK News.

Katie Kuehner-Hebert | 22 Aug 2019

As companies continue to migrate to all things digital, this wave of transformation will inevitably wash over every area of work, digitizing everything from finance functions and tax compliance to data analytics and beyond. Approximately 73% of executives predict significant disruption within their industries in the next three years, according to Mercer's Global Talent Trends 2019 report. This number, up from 26% in 2018, is greatly due to digital transformation. More than half of executives also expect AI and automation to replace one in five of their organization's current jobs. While this might worry some organizations, these two earthquake changes stand to create 58 million net-new jobs by 2022. Business leaders responding to Mercer's annual survey have mixed opinions on the economic growth these technological advances will have across the globe. Digitization may promise increased opportunity, but it also bodes increased competition from a host of new — and possibly more nimble — players. Assessing the Economic Outlook Across the Globe   The turbulence within the global economic landscape is compounded by uncertainty over how trade tensions between the U.S. and China are resolved, according to the Mercer report Economic and Market Outlook 2019 and Beyond. The U.S. economy may slow somewhat due to higher interest rates, while the Chinese economy will remain dependent on how the trade tensions are resolved. Other emerging market economies should continue to grow at roughly the same pace, with the possibility of stronger growth when trade tensions ease. Mercer's Themes and Opportunities 2019 research report notes "mounting evidence of over extension of credit" is creating further white-water turbulence, with the uncertainty over how the central banks' retreat from market involvement after massive liquidity infusions will impact economies. The report also notes that there is a distinct possibility "the pace of globalization could slow, pause or even go into reverse" due to political influence, particularly on trade. In addition, there are increasing expectations from governments, regulators and beneficiaries to have asset owners and investment managers incorporate sustainability as a standard action. Digitally Transforming Tax Compliance   Companies navigating all these shifting sands will increasingly look to digitization to help manage and respond to both opportunities and obligations — including tax compliance across geographies. This is also a moving target, particularly in Asia, as some countries are now implementing digital technologies to improve their tax collection efforts. In 2015, the average tax-to-GDP ratio for 28 economies in the region was only 17.5%, which is just over half the average tax ratio of 34% among OECD economies. There has been a great deal of progress with the use of electronic filing of tax returns for major taxes in India, Kazakhstan, Malaysia, Mongolia, Nepal, Singapore and China. Moreover, mandatory electronic payments are now required by revenue bodies in the People's Republic of China, Indonesia, Mongolia and Vietnam.1 Digitization and increased tax regulation are also intended to vastly improve collection efforts, though much more push is needed. Governments are making great strides within their tax administration efforts with the aid of digitization — including sending eAssessments to businesses for taxes owed, based on electronic auditing systems.2 If the systems find discrepancies within sellers' monthly tax reports, it automatically issues an eAssessment that includes interest and penalties. Andy Hovancik, President and CEO at Sovos, puts it plainly: "Bottom line — tax enforcement is now embedded in the most important business processes, changing the world of tax and disrupting decades old business processes. As a result, tax is driving digital transformation in finance and accounting departments. Now more than ever, businesses need a new approach to tax automation to ensure compliance."2 Finance executives agree, including Michael Bernard, chief tax officer for transaction tax at Vertex Inc. He states, "Governments worldwide are turning to new forms of compliance, like e-invoicing regulations, which require IT departments to embed workflows in core processes, and real-time VAT compliance checks. In 2019, finance organizations will begin to factor tax considerations into their digital transformation strategies. An effective road map will include actions for using data to link business processes and tax compliance obligations."3 Guiding Business Strategy With Compliance   Digitization alone won't enable companies to better comply with new tax regulations — making compliance a central business strategy will. This includes implementing training sessions across the enterprise to help employees develop a state of mindfulness when it comes to compliance. But in this era of increased accountability, Leila Szwarc, global head of compliance and strategic regulatory services at TMFGroup, states that companies should re-imagine the notion of compliance as a "business enabler" that can distinguish it from competitors.4 According to Szwarc, "Compliance should be seen as a business enabler rather than as a drain on development, but this can only happen if businesses work in an integrated way to bring creative solutions to the related organizational challenges." She continues, "As APAC firms face up to a new regulatory era, compliance teams have a key role to play in both protecting their firms' interests and helping to drive long-term competitive advantage." With an uncertain market ahead and vast changes on the horizon, it's more important than ever to get ahead of the curve and think about how your business can not only survive the wave of digital transformation coming but also thrive with it. Start planning your business strategy, placing compliance and digitization at the heart, with these considerations in mind today, and you'll be better off tomorrow. Sources: 1.Suzuki, Yasushi; Highfield, Richard. "How digital technology can raise tax revenue in Asia-Pacific." Asian Development Blog, 13 Sept. 2018, https://blogs.adb.org/blog/how-digital-technology-can-raise-tax-revenue-asia-pacific./ 2.Hovancik, Andy. "How Modern Taxation is Driving Digital Transformation in Finance." Payments Journal, 16, Jul. 2018, https://www.paymentsjournal.com/how-modern-taxation-is-driving-digital-transformation-in-finance/. 3. Schliebs, Henner. "2019 CFO Priorities: Experts Predict Top Trends." Digitalist Magazine, 18 Dec. 2018, https://www.digitalistmag.com/finance/2018/12/18/2019-cfo-priorities-experts-predict-top-trends-06195293. 4.Szwarc, Leila. "Regulatory compliance – The new business enabler." Risk.net, 18 Mar. 2019, https://www.risk.net/regulation/6485861/regulatory-compliance-the-new-business-enabler.

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