A look at why and how firms are changing the way they do business with the next generation of expats – now being called GenXpat.

Eager to live and work abroad, this younger generation – now being called GenXpat – doesn't typically expect the full expatriate package their older counterparts enjoy. But that doesn't mean they don't have their own set of needs in order to make a smooth transition.

Consider LEGO. Several years ago the toy maker began hiring more young designers from overseas for positions at their headquarters in Denmark. As recent graduates, many were thrilled about the chance to land a job with an internationally recognized company in a foreign work environment.

But HR managers soon noticed that the batch of new recruits required different support. For example, many arriving in Denmark were unable to pay deposits on an apartment. Because they were typically single and just out of university, they didn't have the kind of savings of an older professional.

"We just figured out we needed to make a policy on this," said Deanna T. Rasmussen, Global Mobility Consultant for LEGO.

As part of the new policy for younger international employees, LEGO included one month's extra salary to make sure new employees could rent an apartment and cover immediate incidentals, such as curtains or kitchen supplies.

LEGO's package for its GenXpat employees, which are contracted as local hires, now includes tax advice for the first two years, language training, cultural awareness training, and oftentimes removal costs to return home after a minimum of two years of employment.

The process of revising HR policies for GenXpat is only just beginning as companies are still weighing the pros and cons.

Michele Shamblin is a project manager with The Human Resource Department (THRD), a Cleveland, Ohio-based outsourced provider of human resource support services. One of her clients is moving some of its operations to China and looking for ways to keep costs low. She suggested the company consider recruiting young Chinese-Americans with university degrees, explaining that they are already bi-lingual, have a western business sense and an understanding of Chinese culture.

Despite considerations about young employees requiring training and not having a strong sense of company culture, Shamblin is convinced the trend toward GenXpat will only strengthen in the coming years – especially as more companies re-locate to less expensive locations.

"They aren't going to send an expatriate and pay a huge package…," she said. "Bottom line will always be the issue."

Rasmussen at LEGO said the trend is starting to catch on though it is still on the periphery. She has, however, noticed that a growing number of companies are considering a re-write of policies for young international recruits.

She recommends offering a compensation package that helps younger employees initially. "Provide them with a package so they can settle in smooth and easy," Rasmussen said.

Shamblin agrees and expects the young professionals will be increasingly brought in as local hires. Nonetheless, there will still be costs associated with helping them re-locate.

"You can't not pay for some of these things," Shamblin said. "You don't want them stressing over unnecessary issues." To that end, she said, companies should expect to provide destination services.

To get maximum value, objectives and expectations of the assignment should be outlined from the beginning, said Lisa Johnson, director of consulting services at Cendant Mobility, a provider of global mobility workforce and management development services. This will enrich the overseas experience and make the employee more conscious of what is being learned.

"One way to really guarantee a return of investment is to have clear expectations from the beginning," said Johnson, adding progress on these objectives should be tracked during and after the assignment.

When arriving for the new position, Rasmussen said it is important to provide some kind of social network support for the new employee, connecting them with peers who are living at the same level.

GenXpat compensation packages are generally less lucrative. This is a function of several factors: having less savvy when it comes to negotiating a contract, being eager for an international experience and also a feeling that they don't need all the company support. For example, Michele Bar-Pereg, managing director of Foursquare Relocation in Amsterdam has noticed in her work with young professionals relocating to the Netherlands that they have a more do-it-yourself attitude.

"There is a new breed coming up and they think they can do it all on the internet," she said.

But this self reliance is perhaps one aspect of GenXpat that makes them an attractive commodity for companies looking to cut costs.

"Companies are saying, 'How can we hold down costs,'" Shamblin said. The best way, she tells them, is to find young, single, educated, adaptable professionals who want to see the world.

Lower costs can mean higher volume. Rasmussen said if had LEGO paid the rising number of young designers full expatriate packages, it would have only been able to hire a small percentage of the 50 local hires brought on board over the last few years.

For both the company and young professional, Rasmussen said, "it is a win-win."

June 2004

Jennifer Hamm is a freelance journalist based in the Netherlands.