Overwhelmed staff, inexperienced staff, or simply looking for ways to cut costs — all are reasons companies seek outside help with the expatriation process. Robin Pascoe provides an overview of expatriate-related services and how they can affect expat families.

As companies extend their reach into the global marketplace, new and expanding organisations are taking on the role of international HR consultants, providing the administration and services needed to support expatriate populations.

"Often, it’s simply the case that an HR department is not large enough to handle the necessary international support services," according to Nancy Lockwood, HR content expert and researcher for the American Society for Human Resource Management (SHRM).

"In the past 10 years or so, the complexities of international assignments have contributed to the growth of outsourcing, which offers an avenue for the company to best serve the needs of the expatriate and their family. It's able to offer the many types of services needed.

"Many HR professionals have never lived overseas so they don’t have a very good idea of what support is needed for the expat and family, nor do they even appreciate the importance of this support," adds Lockwood.

Contracting out HR functions such as payroll or employee benefits administration is not a new idea and has been around for many years, according to Mark Hodges, the managing partner of an outsourcing advisory services firm in Texas.

"But now, in the interests of saving money and streamlining business so they can focus on what they do best, companies are more often bundling all HR processes under one business-process outsourcing (BPO) contract," Hodges told a US outsourcing conference held in February, according to published reports.

BPO contracts literally take the administrative HR function out of a company and hand it over to a third-party. For instance, multinationals such as BP and AT&T have signed multimillion-dollar, long-term contracts with BPO firms to handle their HR needs.

Within expatriate assignment management, there are many unique services that outsourced relocation services provide, Lockwood says, including language training, relocation services, cross-cultural training, and destination services.

"And if the company is wise, repatriation training is also included in the package," she notes.

Outsourcing services also serve to fill gaps in an IHR practitioner’s core competencies to ultimately benefit international assignees who need to know about international tax matters or require the help of an Employee Assistance Program (EAP), another service which may also be contracted out.

In uncertain times, more and more companies are contracting with organisations that specialise in security services or deal with medical emergencies, according to Lockwood.

Globalisation has also pushed outsourced international HR functions onto a much larger and strategic playing field. In many instances, a company going global may now rely on outside consultants to help it develop a competent, qualified global workforce.

According to Terry Hogan, VP of client services-Americas at Cendant Mobility, the role of international human resources has moved from assignment administrator to partner and facilitator of the business objectives of globalisation.

In the Spring 2002 issue of International Human Resources Journal, Hogan notes that in the past, HR has outsourced transactional functions such as benefits, tax, retirement and investment plans as well as mobility services.

"What makes global workforce development different," she writes, "is that the transactional and the strategic are not ready to be separated. On the one hand, assignment administration is characterised by fluctuations in activity, changing demographics, and forays into emerging markets in pursuit of global expansion — aspects that make a compelling case for transactional outsourcing.

"On the other hand, much of global workforce development is tied to the organisation’s molding and deployment of its global talent, as the company evolves into a globally competitive entity."

Outsourcing — or "co-sourcing" as Hogan labels it — of assignment administration "requires a holistic approach….that takes into consideration the organisation’s long-term approach to globalisation."

Regardless of business strategies, if companies do choose to outsource functions in the short term as a way of reducing the rising price tag of an expatriate assignment, they would be well-advised to keep a close eye on its vendor contracts, according to David Leboff, president of Expaticore Services in New York City.

"Companies pay millions of dollars to vendors because of poorly negotiated contracts for expat services," Leboff writes in a recent issue of Mobility Magazine. "Key areas of focus include relocation companies, tax consultants, and technology fees."

His advice: "Find the existing contracts and have them reviewed. Renegotiate or get competitive proposals when possible,"

While outsourcing can certainly be both a key administrative and strategic tool for companies building global workforces, it can also created yet another barrier between families and the companies which move them overseas.

For that reason, HR expert Lockwood advises expat spouses to call HR at his/her company if an outsourced company is poorly handling their relocation.

"Good HR professionals who are service-oriented will track this down and contact the outsourced company themselves to find out what the problem is. The outsourced company may lose their contract if they don’t listen," Lockwood believes.

"The key is ensuring that the service loop (planning-delivery-feedback-planning) of an expatriate assignment includes the spouse as a separate and distinct feedback from the expat," according to Lance Richards, a global HR consultant based in Washington, DC.

"Communication between the outsourced company and the family ensures that the spouses understands that he/she 'counts' and it allows the client HR group to development even more meaningful metrics around assignment satisfaction."

February 2003

Robin Pascoe is the author of four books on global living. She can be found online at www.expatexpert.com