The global economy has created a whole new corporate culture, with lots of business trips to far-flung locations, virtual meetings at odd hours and “expatriate” programs designed to ensure that workers assigned to work abroad are happy and productive.
For human resource professionals, expanding into foreign markets creates a wide range of challenges involving compensation, different tax systems and cross-cultural relations.
David Wudyka knows the challenges firsthand. He worked for Raytheon Co. for four years as an in-house international compensation consultant prior to starting a human resource consulting firm called Westminster Associates in Wrentham, Mass.
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Finding the “right person” for an expatriate assignment is one of the greatest challenges for human resource professionals, he said. Beyond having the right skills and knowledge, Wudyka said, other things such as family status and “openness” to foreign culture are major considerations. If the worker’s family can’t adjust to the culture or is unsupportive, the assignment could fail.
GTECH Corp.’s expatriate program allows family members to move to a foreign location with the employee, said Leo Perroni, director of corporate benefits, expatriates and business travelers at GTECH. Workers on foreign assignments can go home every six weeks.
“The difficulty is meeting their unique needs,” Perroni said. “Every person has a different situation.”
Sending an employee abroad to handle a project or contract renewal or oversee the integration of companies, as GTECH does, can cost two to three times the employee’s base salary, Perroni said. Because the expatriate pays taxes in the United States and in the foreign country, GTECH hires a tax consultant with specific expertise.
“Hiring tax consultants is expensive but beneficial,” Wudyka said. “It will save them in the long run.”
Wudyka added that companies also have to make cost-of-living adjustments for workers assigned to countries with higher costs than the United States, providing housing and living expenses allowances.
Foreign assignments are often expensive, Perroni said, so before GTECH sends anyone abroad, it evaluates the assignment to “make sure it is the best business decision.” If it’s something that can be done locally or by a local manager in the foreign country, he said, there is no need to send someone.
“We work with a relocation company that helps us relocate them with ease,” Perroni said, adding the outsourced company takes care of working permits and visas.
Perroni said GTECH has regional human resource managers on six continents, who communicate through e-mail, virtual meetings and phone calls. All speak English, he said, which makes communication easy.
GTECH also stays in touch with as many as 40 business travelers at any given time, tracking them with software so the company always knows the location and status of workers abroad.
Communication is essential for Dave Himsey, a regional human resource director for the Austrian company Swarovski, which produces, designs and markets crystal products such as figurines, jewelry, vases and stemware and has its U.S. headquarters in Cranston.
Himsey is one of five regional HR directors. The others are located in Singapore, Austria, China and Switzerland. All report to the senior vice president of human resources in Switzerland via phone every other week or so, he said. The group as a whole meets three to four times a year on a rotating basis in the different countries.
At the meetings, they provide input for HR policies that are implemented globally. Himsey said one of the greatest challenges is modifying the global policy to meet local needs.
For example, due to cultural differences, an employee performance review form that works in Singapore might not work in Austria or Texas, he said. The group then has to decide what are the main components that should be required by the form and let the local HR professionals tailor it to their region.
“We need international relationships to be successful here,” he said. “It can’t be any other way because we’re foreign-owned.”
