“The inability to adapt to the host location is among the top three most commonly noted reasons as to why assignments are unsuccessful.”
– Brookfield GRS Mobility 2016 Mobility Trends Survey
If your company relocates employees internationally, you need to be laser-focused on helping those employees maintain their productivity. Your bottom line depends on it.
One of the best resources you have for enhancing the productivity of expat employees is a recent study by Altair Global. Altair is a global mobility services company. According to CEO Chad Sterling, Altair wanted to find out more about “the hidden cost of relocation on employee productivity.” So the company started doing research on what really affects productivity when an employee is relocated and how that loss of productivity can impact a company financially.
The Altair survey’s findings are fascinating. They point to some huge gaps in support for relocating employees — gaps that end up costing companies money. We’re also excited, but not surprised, that the study strongly affirms the business value of language and cultural training for employees who are relocating internationally. So let’s take a deeper dive into the results.
About the Altair Survey on International Relocation
First, a little background. According to Altair, the survey had three goals:
- Identify the areas that have the biggest impact on productivity for employees who relocate internationally.
- Measure the effect of those factors on workplace productivity and the ROI of international relocations.
- Translate the findings into action steps that employers can use to boost the productivity of relocating employees.
Altair conducted the survey between late 2016 and early 2017. The 149 people surveyed came from 12 corporate participants. All of the respondents had completed an international relocation within the previous six to 12 months. Among the respondents, there were 52 different departure countries and 32 different destination countries. The top departure country was the U.S., with 30 of the respondents moving from there. The U.S. was also the top destination for moves, with 54 of the survey respondents relocating there. Respondents came from all age groups. The top two were 35- to 44-year-olds (40 percent of respondents) and 25- to 34-year-olds (30 percent).
Altair asked the participants about different aspects of their relocations. The respondents rated each aspect on how distracting it was and how much time it took away from their jobs. “High-impact events” cost employees three or more days (combined) of productivity. “Low-impact events” led to fewer than three days of lost productivity.
The High Cost of Lost Productivity
Now let’s get to the question that’s probably most on your mind: What is the cost of lost productivity during international relocations?
First, let’s be clear that there’s no way to avoid some downtime when an employee moves overseas. But the total lost time, and the cost of that time, is probably more than you would imagine.
The employees that Altair surveyed experienced an average of 6.5 high-impact events on their work. Remember, those are events that cause a cumulative three or more days of lost productivity. When you factor in the low-impact events as well, the average employee who makes an international move loses just over 39 days of productivity, Altair found. Now let’s say your company is relocating 100 employees internationally, with each of them losing 39 days of productivity. You’re looking at a financial impact of $4 million.
The Biggest Productivity Drains
So how can companies avoid losing so much productivity (and money) when employees relocate internationally? To answer that question, let’s first take a look at the high-impact events that cost employees the most productivity during an international move during the first month or two. According to Altair, the top 10 are:
- Finding a new place to live.
- Setting up their life in their new home — getting a driver’s license, bank accounts, etc.
- Navigating the immigration process.
- Figuring out what the international move means for them financially.
- Moving their stuff to their new home.
- Deciding whether the relocation makes financial sense in the first place.
- Getting the kids in school.
- Becoming a part of a new community — making friends, figuring out where to shop, etc.
- Deciding whether the move makes sense for their personal situation.
- Selling their home or terminating their lease in their departure country.
Companies aren’t leaving employees on their own to deal with these challenges. In the Altair Survey, 92 percent of respondents said their companies offered destination services/settling-in assistance. And 89 percent said they took advantage of the relocation help they were offered.
Now here’s something interesting. Only 36 percent of respondents said destination services/settling-in assistance highly improved their productivity. Twenty-six percent such programs moderately improved their productivity and 18 percent said their productivity was somewhat improved. This is where companies focus their spending on relocation, so you’d think those numbers would be higher. What’s going on?
Language and Cultural Training Are Often Overlooked
We believe the answer to that question lies in Altair’s findings on language and cultural training:
- 43% of respondents said their company did not provide language training for them in connection with their move.
- 53% said their company did not provide language training for their family.
- 34% said their company did not provide cultural training for them.
- 46% said their company did not provide cultural training for their family.
When you also factor in the fact that some employees (and their families) did not participate in programs that were offered, you get these numbers:
- 30% of employees received language training themselves.
- 25% of employees’ families received language training.
- 35% of employees received cultural training themselves.
- 36% of employees’ families received cultural training.
There’s a big difference in the number of companies offering destination services/settling-in assistance and those offering language and cultural training (as well as a gap in employee participation).
That’s a missed opportunity. Altair found that employees “that were offered/provided and took advantage of the destination services/settling-in assistance, as well as the cultural and language training services, expressed a greater level of satisfaction and a higher level of work productivity as a result.”
It All Comes Down to Fluency, Both Communicative and Cultural
That makes a lot of sense when you think about it. Take a look back at the list of events that have a high impact on employee productivity. Many of these situations — like finding a place to live or setting up your bank account — get a lot easier when you have more understanding of the language and culture of the country where you are moving.
But we also want to emphasize the long-term productivity benefits of language and culture training (which Altair said they would try to focus on in the next study). Completing the initial work of getting the employee and their family settled does not guarantee that an international relocation will be successful. After the move is done, an employee will be more productive if they and their family know how to conduct their daily lives in their new country and if they are forming meaningful connections and community there. And all of that depends on their language and cultural training. “When these services are offered in conjunction with destination services and settling-in support, the overall assimilation experience is enhanced and the opportunities for success even greater,” Altair writes.
In the Brookfield GRS Global Mobility 2016 Trends Survey, they found that …“over a quarter (26%) of the assignees going abroad to take leadership positions do not possess the necessary skills for a leadership role in the host culture. In addition, nearly one in five assignees (18%) experience notable difficulty in adapting to the host location.”
Feeling genuinely at home after an international move also makes all the difference in whether or not an employee decides to cut a relocation short. And failed relocations are a whole other financial drain on your company!
They further state that, “…adaptation issues can lead to diminished performance – in some instances assignment failure, as well as potential attrition, either on assignment or post repatriation. The inability to adapt to the host location is among the top three most commonly noted reasons as to why assignments are unsuccessful. Ensuring that intercultural training and skills are consistently provided to assignees and the accompanying families are foundational steps to reducing the number of assignees experiencing difficulty adapting to the host location and business environment. Mobility leaders are in a good position to leverage their understanding of the cost of assimilation support versus total assignment cost and to educate their organizations about the benefits of a greater use of these resources.”
Relocated employees don’t go home because of the wrong house, but they might go home after 1.5 years of feeling they are in the wrong country due to not being able to assimilate with language and culture (i.e. the people all around them). It has serious effects on work productivity and the family.
How to Help Relocating Employees
Based on the survey results, Altair offers a number of recommendations on how to minimize productivity loss caused by international relocations.
Of course, as corporate language trainers, we agree with this one 100%:
Encourage participation in cultural and language training in addition to destination services. Consider mandating cultural training for the employee and accompanying family. If cultural training and language training are not core components of the current international program, consider adding these benefits as core program offerings for all employees moving internationally.
When choosing how to spend your relocation money, many participants put language and culture way down at the bottom of the list, and we understand 100% why they do this. When you’re first told of a big move like this, of course your children’s education, where you’re living and your spouse’s job, is at the top of the list. You’ll think about the language part later, right? But unfortunately, it’s often the key to making the relocation successful, so it needs to a part of the package if you want the relocation to work.
But that’s not the only valuable takeaway from the survey. We were also struck by how much employees want more help in assimilating into their new office after an international move. Altair suggests programs like roundtables and brown-bag lunches to provide information and support. We also recommend setting up a buddy system that pairs relocated employees with local employees. The expat’s work buddy can provide all kinds of useful tips, from explaining how meetings work in the local culture to recommending where to shop.
If you are relocating employees to the United States, there are also some specific findings from the survey that you should be aware of. Employees moving to the U.S. “seemed to have the hardest time adapting,” Altair reports. Some respondents who had moved to the U.S. said that their employers had underestimated the differences they would encounter and how challenging it would be to fit in. Remember, having an academic or professional working ability in English, doesn’t mean they’ll have an idea of how to work in the USA if they never have before.
Another factor some employees cited was that their destination services provider had never moved or traveled abroad and couldn’t relate to what they were experiencing.
Interestingly, sometimes language/cultural trainers step into that gap. Employees who received language/cultural training said their training providers often recognized needs that the destination services provider hadn’t noticed and were able to provide support and assistance.
If you’re involved with international relocations at your company, it’s well worth your while to download the full report on the Altair survey. It’s essential reading, and the findings back up what’s long been our approach at Fluency Corp. We provide language training from native speakers who give your employees (and their families) the real-world vocabulary they need to both be productive at work and to become a part of their community. Our instructors also become valuable cultural guides and are typically from the exact country or region that the employees are moving to. Invaluable! To talk more about your company’s specific needs, contact us for a free consultation: [email protected] or (800) 401-3159