Future Strategy 2006 – Work-life balance crucial for expats

Work-life balance is becoming an increasingly important issue for expats, and family matters are often central, says Alison Coleman

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As the pace of globalisation continues to accelerate for UK businesses, flexibility will be the theme that underlines their international benefits strategies.

Until recently, firms may have required large numbers of UK managers to establish and oversee trade in Africa and Asia but these continents have developed to a point where their own skills base can manage the task equally well.

Professor Malcolm Higgs, dean of Henley Management College, believes the shifting dynamics and continued growth of overseas markets will have an impact on expatriation and the international benefits market.

"Obviously, organisations will continue to send people overseas, but not to the same extent as they have done in recent years," he says.

Reduction in the costs of expatriation will become a driving factor.

"In recent years, benefits packages for expats have been exceedingly generous, with housing, schools and healthcare bumping up the cost. Companies will welcome an opportunity to reduce that if the need for expats is reduced," adds Higgs.

However, he does see expatriation, and the benefits that go with it, continuing as part of a career development strategy. "This sort of activity will focus on the top talent; people who need international experience in order to fulfil their career potential," he explains.

But not everyone is agreed that globalisation will have that big an impact on international benefits. Angela Hulme, head of consultancy at ECA International, a membership organisation for international human resources, explains: "You could argue that as companies invest more in recruiting and developing native workers in the destination country, they won’t need to spend as much on expatriation.

"But in fact they will still need to despatch key personnel, people with specialist skills, who can pass on the relevant business and IT skills and ensure that everything runs smoothly."

Hulme is adamant that these gold collar workers will be able to negotiate their own benefits packages.

"They will become increasingly individualised. People who are taking young families with them will still expect the best accommodation, schooling and medical care," she says.

Another trend that is likely to impact on future benefits strategies is that of incoming personnel. Skills shortages in the UK have seen a rise in the recruitment of staff from overseas. The NHS, for example, is currently looking to fill its depleted nursing ranks with qualified nurses from countries such as the Philippines and parts of Europe.

But what kind of benefits packages will need to be put in place to attract overseas personnel to fill the skills gaps?

"There is no set formula. The type of benefits that organisations offer people will depend on the skills and the country they are recruiting them from. How much of an incentive they will need to attract them will depend very much on their current salary and standard of living," says Hulme.

UK salaries are quite high compared with those of India, Africa and some Eastern European countries, so skilled workers may be lured by a fairly basic salary and minimal incentives.

But those from countries such as Singapore, where salaries are much higher by comparison, will not be enticed by basic pay and reward packages, and UK organisations will have to adjust their offer accordingly.

The UK will also find itself competing for overseas workers with other countries that share the same skill shortages, such as the US. But simply offering the highest salary and the most lucrative benefits package may not be enough.

"Not everyone is [motivated] by money. [Employers] must consider the lifestyle and cultural implications as well as the financial ones," says Higgs. He cites one example of a British organisation that wanted to recruit two skilled workers from Spain. Both candidates were perfect for their respective jobs, but both turned the assignments down, simply because their families wouldn’t tolerate the UK work style.

"Work-life balance is becoming an increasingly important issue for expatriates, both outgoing and incoming. Particularly where you have the issue of trailing spouses or partners and dual careers. It will have to become an integral part of any international benefits package," adds Higgs.

And the US, against which the UK does compete for overseas talent, is already ahead of the game when it comes to the concept of work-life balance.

"The top employers in the US have made that a priority, and are really starting to address the work-life balance issue," says Higgs.

The issue of attracting and developing top talent and highly skilled labour will become more of an challenge as the emerging economies of India and China gain strength.

Sir Digby Jones, director general of the Confederation of British Industry, believes that British businesses will have to focus their efforts on developing skills and delivering high value services and products if they are to compete with these countries.

Once employees both in the UK and overseas are fully aware of these factors, some of the less financially-orientated benefits, such as flexible working, and staff training and development, could conceivably carry a higher premium than more traditional components of a benefits package.