International Relocation Assignments & The Value of Cross-Cultural Training

I consider Houston to be the global center of excellent for International Human Resources.  This should come as no surprise, because after all, I have the pleasure of serving as the Chairman of the Global Center of Excellence Committee for Houston International HR Roundtable!  This is a wonderful organization for Houston’s International HR professionals and their international and domestic service providers.  Each month our group meets at the offices of Deloitte in downtown Houston to provide networking and educational opportunities to its members.

For last month’s meeting, we were treated to a presentation by Dean Foster, who conducts cross-cultural training and consults with many Fortune 1000 companies worldwide.  His presentation was entitled, “Culturally Thriving, or Merely Culturally Surviving.”

This is a very important topic for those of us involved in global mobility and international HR.  When a company sends an employee and his or her family overseas, cross-cultural training or the total lack thereof, can positively or negatively impact the success of the assignment.  According to Foster, the real value is in building the strategic talent for the future in organizations, and talent that understands intercultural issues so that a global mindset can be developed throughout an entire organization.  He says that this is where the real value and long-term value are realized.

Foster also provided some interesting statistics with regards to the success and failure of international assignments.  He said that upwards of 60% of all international joint ventures do not work out as planned.  He added that 30%-50% of expatriate managers fail.  Considering the fact that the average successful relocation assignment represents an investment of over $1 million USD, failed relocation assignments can end up costing a company or organization about 3 times that amount. 

Then there is the issue of returning expatriates following a relocation assignment.  Foster said that 48% of all returning expatriates end up leaving their company within 2 years of returning home.  This is obviously a poor return of investment.

So what is the primary cause of unsuccessful relocation assignments?  Foster said that the number 1 reason has to do with the inability of the employee’s spouse or family’s to adjust to the cultural/physical environment of the host country.  The number 2 reason is the inability of the employee to adjust to the cultural/physical environment.

Conversely, Foster says that if organization retains the talent, they are getting an exponential value based on the initial $1 million investment per employee for an international relocation assignment.  Foster pointed out that if the employee leaves their company within that 2 year period upon returning home, chances are pretty good that when the employee walks out the door, that he or she is going to walk through the door of the competition.

Foster said that cross-cultural training costs only about 0.5% of the total relocation investment being made.  He said that the insurance policy with cross-cultural training is that people adjust, adapt and perform at peak levels of excellence.  “Cross-cultural training is an investment in the future of an organization,” according to Foster.

For information on Houston International HR Roundtable, please visit: http://houstoninternationalhr.com/.  Our February educational program will be on the challenges of international assignments for the “Dual Career Couple.” We hope to see you there!

To read more by Houston’s “Relo Guru” Michelle Sandlin, please click here:  Houston Relocation

In Cross-cultural Training
Houston Relocation