A new major study has revealed that approximately one fifth of multinational overseas assignments don’t work out with many executives returning to their home country within two years of their initial relocation.
The research, which was published by The Korn/Ferry Institute, the research arm of the FTSE 100 headhunting group, revealed that, despite the effort that was placed into securing the right overseas roles for executives, insufficient support was provided during their transition abroad. Just two of the 120 executives interviewed as part of the research revealed that their employers had offered them an acclimatization scheme and 40 percent of those questioned asserting that the support they had been given during their relocation was “poor” or “moderate.” Many of the participants felt that they hadn’t been provided with sufficient support and guidance in matters relating to taxes, finances, schooling, housing and networking.
While the number of successful relocations is clearly under question, many companies are continuing to expand overseas and increasing numbers of executives are being sent abroad to take advantage of booming emerging markets. Last week Cactus Corporation released research that suggested that 57 percent of companies would be increasing overseas assignments over the next two years. Their findings are supported by the latest research from Aviva, which found that 58% of employers sending staff overseas are posting employees to new locations, with the emerging economies such as China (41%), India (41%) and Russia (25%) featuring prominently on the list of destinations. Commenting on the outlook, Teresa Rogers, Business Lead, International, Aviva, UK Health, said: “Relocation is not an easy task and staff rely on their employers to give them the appropriate support to make their relocation a success.”
Tony Vardy, UK managing director of Korn/Ferry agrees with her, stating that companies may be limiting the chance that these assignments will be successful if they do not support their staff to settle in: “Companies must do their homework to make sure candidates have the right characteristics to make an overseas posting a success,” he said. “For example, failing to consider how a candidate will integrate into the local culture and community can have a negative impact on the hiring organization’s bottom line.”
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