Expat 4.0: European Expats Interconnect Businesses Around The World

March 27, 2018

Organisations today are faced with an increasingly complex talent landscape. The global workforce is becoming more agile, diversified and on demand, leading organizations to re-evaluate their views on mobility and their global talent.Deloitte’s 2017 Human Capital trends survey, including more than 10,400 respondents from 140 countries reported that nearly 70% of business leaders agreed that Global Mobility was an enabler of business and talent strategies. The report identifies four Global Workforce trends, complementary to the broader trends that are disrupting the mobility landscape and fuelling the digital age

4 Global Workforce trends

  1. Employee-driven global workforce programmes – Agile Global Mobility models acting as ecosystems to address the requirements of a diverse employee landscape
  2. Mobility and talent acquisition – Building a global talent pool through harnessing data, partnering with talent and appealing to new demographics organically through building a global employer brand.
  3. The human side of mobility – Global Mobility programmes having a greater focus on employee experience and inclusivity as a component of assignment success.
  4. Mobility analytics – Predictive analytics used in a holistic manner and driving workforce planning on a global scale.

How is global mobility reflected in Central & Eastern Europe Global Organizations?

In the nineties, foreign companies were sending their workers to Czechia to help manage or establish a local subsidiary. Today, however, the situation is different. Local managers are oriented in the market environment, they have gained enough experience and they are managing well the companies. However, this mobility trend has grown to another level.

Our definition of who is considered an expatriate must be defined. In general, we can talk about all persons who temporarily or permanently dwell in a country that is different from their country of citizenship. However, the term is understood to mean a professional or experienced worker, who was sent to a business overseas by the company where he/she works. Companies send employees to other countries to pass on the ‘’know-how”  and help the local branch get a global overview. Parent companies also have, thanks to the expats, better control over their foreign affiliates.

To be sent as an expat abroad traditionally meant a demanding move associated with family relocation; finding a new home and/or employment for a life partner and a school for children. In today’s globalized world and global workforce, the conditions have changed. More and more short-term projects (usually lasting three months to a year) that do not require relocation of an employee’s staff are becoming more common. These include working on a specific project, solving specific problems, or passing on knowledge to local business staff. Another type of commuting is – the employee works in a country other than the one he lives in and commutes at home at a weekly or bi-weekly frequency. A special case is a workload that involves frequent international journeys and, more recently, more and more enforceable virtual work, where an employee uses online tools to coordinate colleagues from foreign affiliates.

This trend has been reinforced in a recent study published on April 18th, 2017  in All markets by Aditi Sharma Kalra under the title Global Employee Mobility in 2017: 5 Trends To Watch, this shift into the new expats points out 5 major trends that global organizations need to consider. Trend 5 is clearly in line with our local assessment of the expat low-cost policy approach we have experienced in Western & Eastern Europe.  

Examples of expat low-cost policy approaches

  • Expat lite: A less robust version of the traditional policy
  • Local plus: Using host location compensation and benefits as a base, and providing a few benefits where living as a local is unrealistic for a temporary assignee
  • Local-to-local: The transfer of an employee from one location to another with relocation support, but not ongoing assignment benefits
  • Localisation: The transition to the local status at the end of an assignment in lieu of repatriation, or the transfer of an employee to a new location to live as a local
  • Core-flex: The most popular approaches, this offers a “core” set of policy benefits for all assignees, such as immigration and tax), while allowing for flexible options based on employee needs or business needs
  • Managed lump sum: While this is rarely offered for international moves (as it leaves too much room for employee, family or company error), it is popular for early career assignments

In 2017, the managerial positions in foreign companies’ branches are mostly occupied by local managers. The managers in charge of the region of Central and Eastern Europe more and more often come from these countries. Between 2000 and 2005 the number of foreign managers dropped but has remained stable in recent years.

Central and Eastern Europe is still attractive for new investors even though not as many of them are flowing in now as 10 years ago a result of 10 year’s HR initiatives like ‘’Agile Global Mobility programs” and other types of HR development programs” from the traditional ‘’each investor brings its own management to the country”.

The trend of seconding managers abroad, however, is linked to the global trend of “continuous internationalization of the economy”, says David Buchberger, the President of Glasford International Deutschland GmbH, one of the leading global executive search firms. Buchberger explains it: “Especially well-established industrial countries in Western Europe and the US must ensure their future growth by winning over new markets.”

Among the crucial factors for the rising importance of expats, globally, are the several reasons for seconding them abroad. The first reason is still setting up a branch abroad, closely followed by targeted engagement of managers abroad, which is vital in their career-planning and skill development.

This trend currently works both ways – from the West eastwards and vice versa. You can see more and more managers coming from Central and Eastern Europe working in corporate management in Paris, London or Zurich. “It is a common part of our HR development policy, the purpose of which is to acquire special experience abroad for future managerial jobs on the local market. Or, the reason may be another step-in career development, if the managerial post is in regional or global headquarters,” says Erich Weinhandl, HR manager of Mondelez Europe Services (former Kraft). The number of expats from Central and Eastern Europe working for this global FMCG group has constantly been growing.

Having expats from the Central and Eastern Europe is a benefit for companies in the West. “They usually have a good education, good foreign language skills and their own experience from dynamically developing companies,” says Oliver Schmitt, Managing Partner of Teamconsult partner Glasford International Czech Republic.

Thanks to their expertise and skills they are especially suitable for rapid construction of the corporate structure in new markets, Schmitt adds. “Compared to expats from the West, the managers from Central and Eastern Europe are more flexible and willing to work abroad,” says Christian Stieglitz, HR manager in EGIT International. According to Erich Weinhandl, a considerable advantage is that the costs incurred on managers from Central and Eastern Europe are, as a rule, lower than those incurred on overseas managers. “Besides that, together with their families they are more willing to integrate into the new host country,” adds Weinhandl of Mondelez. Moreover, expats from Central and Eastern Europe are more willing to commute between the workplace and the family’s home.

Many local managers showed their readiness to commute already during their training period. This was the case with Miloslav Langer who grew up near the border between the Czech Republic and Austria, went to an Austrian school and while studying in Prague, he decided to study one semester in Vienna. Having worked in Prague and Munich, now, aged 38, he oversees an international team made up of Austrians, Croats, and Hungarians at BMW Austria Bank in Salzburg.

What is more, managers from Central and Eastern Europe find the possibility to earn more money at Western companies’ headquarters attractive. “This was crucial especially ten years ago when the differences in incomes earned in the Czech Republic and those at the global market were even bigger,” explains Jan Mikšovský who a finance manager at Procter & Gamble in Brussels and Geneva was for ten years. Rather than the financial benefits, he appreciated the chance to compete with the best experts in the industry and, as a result, become more qualified for his future career.

His main motivation was and still is improving his career opportunities. “For me, it was a great chance for a promotion,” says a Polish manager, 43, who worked as a CFO at Novartis OTC in Switzerland for two years. “On returning home, my stay abroad was considered a clear advantage” he adds. Now he is gone again, this time as a member of the Board of Directors in charge of the financial matters at an international pharmaceutical group in Singapore. He also considers his compatriots suitable for a work abroad and, based on his experience, he says that the “the Poles overseas have a very positive image. Employers appreciate our language skills, good education and the ability to cope with tough challenges.”

The positive image can help managers abroad get quickly used to the new environment, says another Polish manager, who has worked for two years as a Marketing Manager for Northern Europe at L’Oreal in Paris. Since he was the first expat from Central and Eastern Europe at L’Oreal, his colleagues showed great interest in him. “They wanted to know a lot about me and my homeland,” he says.

On the other hand, it is not possible to succumb to illusions. When a manager from the West goes to the East, he is untouchable and well-protected by his parent company. However, when a manager from the East goes to the West, he must show he is better than the local managers in order to be able to establish himself there in the long term.

Expats, especially from Central Europe, are valued for another of their assets, Oliver Schmitt, recruiter and Team Consul managing partner and partner of Glasford International Czech Republic says: “Especially when managers are seconded to more eastward countries, they can make good use of the advantage of a similar mentality, common experience from the economic transition and the command of a Slavic language.” This is a great advantage compared to their colleagues from the West, which expats themselves are aware of. “The experience that we share from the socialist era and the Slavic languages was a major asset to me. The Russian top management speaks only a little English.” reminisces Jan Grünwald, who worked four years in Moscow, first for Jungheinrich and later for Linde Gas.

The advantages ensuing from the similar mentality and the language can be priceless. Studies revealed that the period during which expats get used to their new environment may last up to ten months. “Without the knowledge of Russian, it would take much more, maybe forever,” estimates Grünwald, who needed only six months for his assimilation. This 42-year old member of the Board of Directors in charge of financial matters at Phönix Zepellin in the Czech Republic, Slovakia, Poland and Ukraine points to another aspect typical for Russia: “Not all foreigners from Central and Eastern Europe are treated the same by the Russians. The Poles are not as popular due to historic conflicts between the two countries. There are almost no Hungarians in Russia, probably due to language barriers. On the contrary, Czechs are treated neutrally in Russia because they have more pro-Western orientation while still being Slavs.”

Similarly, companies have come to understand the importance of regions with cultural similarities. At EGIT, the IT services provider owned by the Austrian Erste Group, managers from Central and Eastern Europe rotate throughout the whole region that the company operates in the Czech Republic, Slovakia, Hungary, Romania, Serbia, and Croatia. Kerstin Schuster, the Group Learning & Development Manager at Austrian packaging company Constantia Flexibles, also considers expats as her first choice when a special expertise is needed abroad.

From west to east and back

On the other hand, Czechs are also being sent abroad. They are especially valued when establishing new branches in Eastern Europe. A huge plus is also the lower language barrier in other Slavic languages and a similar mentality. Expats but not only from the West to the East. Often, the opportunity to work in a foreign branch or headquarters of a company is perceived as a chance for career and personal development. For example, managers from Central Europe working in London or Paris, have the opportunity to improve their language and professional skills and to prepare for future leadership in their home country.

When being asked, managers from Central and Eastern Europe would not hesitate to go work abroad again. Most of them have worked there several times and some of them have decided to stay there forever.

These global trends are being observed at a local level and we at Glasford International could facilitate clients in their search for mobile managers.

This post was originally written by Glasford International Czech Republic and Glasford International Germany

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