29 May Permanent Transfers Help Tech Giants Stay Relevant,  Secure Information

Some call it permanent transfer. Others call it expatriate localization. For decades, expatriates have been around to expand the reach of their companies. However, a “permanent transfer” is radically different from the traditional expatriate assignment which usually lasts for three to five years. Younger assignees seeking fortune in Silicon Valley might have a shorter contract, e.g., one to three years.

But one thing is clear in their case: they are expected to return home to their country of origin after the contract is done, if the talent and employer find their engagement mutually beneficial. In simple language, employer, global mobility manager, and assignee recognize that they are a professional fit—a status that is in everyone’s best interests to continue.

Permanent transfer, however, disrupts all that. Everyone knows it is a one-way ticket. Assignees or expatriates who do this job are NOT expected to return to their home country. All of them are well aware that they will not be just relocating to their country of employment, they are in effect setting a path for eventual relocation.

Somewhere along their assignment, they will stop being tourists and become natives. Some of these assignees also bring their spouses and kids in tow. There is a slight variation, though, for some companies and assignees who want to keep their options open. The transfer is regarded not as permanent but as indefinite. The assignee may or may not come back home — although there is the implied acknowledge that their chances of resettlement in their new country of employment are higher.

This trend may sound radical but it is catching on. According to a study done by Cartus, 66 percent of the companies who participated said that they already have a permanent transfer policy in place. Another 80 percent said they are actively preparing for it.

The same study gave the three main reasons why the employers are not just open to this kind of arrangement, but are in fact advocating it. Cost is not the immediate thing that comes to mind—relevance does.

First, their local office in the country of employment could not find enough people with the right skillset to accomplish company objectives, such as market expansion or installation and operations of a new structure or system. They also need someone from the home office familiar with the corporate culture and the way that the company does things.

A permanent transfer is preferable to the usual three-to-five-year expatriate assignment because it does not place a time limit on the accomplishment of said objectives. Another factor that counts in its favor is that the staffers being sent from the home office are hands-on, highly skilled middle managers or rising executives who focus or specialize in a particular field that qualifies them to do the assignment.

In contrast, a highly paid CEO who is given a hefty compensation package will be doing oversight, executive strategy planning, and overall management for the next few years.

The second reason given by the participants in the Cartus study is that employees themselves ask for the permanent transfer assignment. A lot of these assignees who ask for the job are in their twenties to early thirties; they do not just want to see the world—they want to live, breathe, and immerse themselves in its various cultures.

Some of them are motivated by career advancement, especially after they have done the math and realized that they might have more options in the outside world rather than competing with their colleagues to crack their home office’s glass ceiling.

The third reason has to do with security.

For global companies like Google, bringing in talents from abroad to do translation work at their offices in Sunnyvale or Mountain View make perfect sense if they consider the importance of securing company assets. Employees are reportedly not encouraged to work outside of offices which helps protect any information from leaking out.

While many like to live permanently in the States, Sirva Relocation points out that some assignees who had spent years or even a decade in their work now want to return home to their home country–with a caveat. They want to continue working and keeping their ties with their employer who has a branch or office in their native city or region.

Springing from this subset are children of immigrants who want to explore their legacy and cultural roots and are prepared to stay and work in their parents’ home country for the foreseeable future.

For example, it’s not unusual to hear stories of Asians who have experienced working in Northern California, but still opt to go home. It’s common among the Chinese who may not be able to adjust to the Western lifestyle.

Cartus said that these two reasons — the urgent need for skilled people in the foreign office as well as the pro-active request of a employee for a permanent transfer has given birth to a third: globalization strategy.

Companies are using permanent transfer to expand their markets or penetrate new ones and are actively recruiting for qualified employees among their ranks to help them do so.

Finally, we come to the economic reasons. Sirva Relocation points out that cost reduction has made permanent transfer to executives who are keen to strengthen their bottomline.

Assignees who accept a permanent transfer stint accept that their compensation package and other benefits will be at par with what their local colleagues are enjoying. It is a far cry from the enviable salaries and other perks that the traditional expatriate CEO or executive is getting.

Just to give an example: Salary.com says that an IT Manager based in silicon Valley receives an annual salary that ranges from approximately $108,000 to $138,000.

A CIO sent to foreign shores with a traditional expatriate package will stand to receive the same, if not more. Now compare that with the annual salary that IT Managers in some emerging Asian countries receive:  $19,000 to $29,000. An IT manager who accepts a permanent transfer in one such country saves his employer about $89,000 to $119,000 at the least.

Permanent transfers have always been popular among the executive leadership.  Global mobility managers know this to be the norm and prepare accordingly.