Return of the expats

With an economic recession stifling business activity in most of the developed world, 2009 was not the best time for making big international moves. Many employers limited the number of international assignments on offer during the downturn, which had ripple effects throughout Asia’s relocation industry.

But what goes down may well come back up, if expert predictions are correct. They are expecting much more movement among international workers in 2010, particularly to and between countries in Asia. This is expected to bring new and different challenges for each of the parties involved in any given relocation experience.

Employers, their international recruits or transfers, the families of those staff, and any relocation consultants hired will all be called on to work harder than ever before in order to ensure a successful outcome. Everyone has plenty to lose in a bad relocation effort; but the rewards are also great when things go right. If this risk-benefit analysis wasn’t apparent before this year, it will most certainly be high-of-mind in 2010.

After the downturn

Money was the biggest problem of this year. Finding the kind of budget needed to effect a successful international assignment – whereby both employer and employee get real value for their time, effort and money – was certainly difficult. Most companies focused their available cash on investments with surer returns.

Each international assignment naturally includes a certain amount of risk. Will the relocated employee adapt well to their new surroundings? What about their families? And just as importantly, will the host office adapt well to the new international recruit? If problems are encountered at any of these points-of-contact, the whole assignment can fall through. That means lost investments in relocating, and possibly also reduced engagement from the employee involved, wherever they end up working from.

With those sorts of risks apparent, it’s no wonder employers handled fewer expatriate jobs in 2009. But with the economy now turning to more positive times, the hold-off is likely to be reversed next year.

“2010 will be a rebuilding year,” says Bill Cain, Managing Director of Sante Fe Relocation Services. “We will continue to see companies restructuring and positioning themselves in Asia – with Hong Kong and Singapore being the main places to be.”

Alfred Ong, Managing Director for Southeast Asia and Australasia, The Ascott Group, agrees. He says the serviced apartment group is gearing up for a much busier year. “2010 is looking to be a busier year for Ascott whose serviced residences have been preferred by those on relocation,” he says. “These positive trends will generate higher demand.”

Challenges for employees

There are a wide range of challenges facing every international assignee to any new city. From simple things like finding appropriate transport and food, to the more cumbersome duties of setting up visas, bank accounts and leases, everything is new and often bewildering to the newcomer.

Ong says a serviced apartment can often create an expatriate community within the wider local community to help new arrivals acclimatise to their city. “A major issue for employees relocating to Singapore, or any other country, will likely be whether they can adjust to their new environment and assimilate into the local community,” he says. “That is why we believe in helping our residents settle in quickly and feel at home.”

Many serviced apartment complexes, including those in the Ascott Group, will offer regular group social and sight-seeing events for their residents. Not only do they give newcomers a better feel for the city they are soon to call home, it creates an informal networking opportunity among people in a similar position. Many expatriates’ first and best friends are met during such activities in their first few weeks in-country.

Cain says the concerns of relocating staff can be summed up in just a few words: “security and stability”. Staff heading to a new destination, particularly those with families in-tow, want to know they are safe above all else. It’s why both Singapore and Hong Kong, with strong reputations for the rule-of-law and fairness in business dealings, are typically among the top choices for regional headquarters in Asia. Companies want to know their staff are happy to move there, and confident their homes and families are safe.

Challenges for employers

The challenges for the year ahead will also lie with employers. This is particularly true when it comes to cost-containment. Just because the economy is improving doesn’t mean organisations are simply swimming in newfound cash. Budgets are still tight, and those spending it will still need to still justify every dollar and work hard to get the best deals possible.

Ong says many are likely to choose serviced apartments over hotels. “Value and cost-effectiveness are major considerations for employers,” he says. “This explains why they increasingly opt for serviced residences when finding accommodation for their relocating employees.”

He notes that serviced apartments can even work out cheaper than providing a separate housing allowance and allowing the employee to go their own way. “In the usual rental housing market, it is necessary for tenants to commit to long leases of one year and above. This would mean that the lease would still have to continue even if employees complete their projects earlier,” Ong says. “In contrast, Ascott’s serviced residences enable residents to commit to lengths of stay that suit them, including options for extension.”

Who’s paying?

It used to be a foregone conclusion that the employer paid for all relocation costs. But market trends are slowly placing more onus on the employee’s purse strings. This is particularly true where employers can leverage on the experiential aspect of the assignment.

Cain says many employers are promising much less to their international recruits, while for others the costs of relocation will always be an employer responsibility. “Multinationals are redefining their expatriation policies,” he says. “There is (now) a mix of both private and corporate-paid moves.”

Ong notes that many expatriates choose to stay in serviced apartments, even when their bosses aren’t footing the bill directly. He says accommodation providers are becoming more flexible as a result. “We can customise packages and offer greater value. For example, if employees do not require breakfast or daily housekeeping, we can offer the savings back to them,” he says.