I recently sat beside an SVP from a large staff relocation organization on a flight to Texas, I asked him what this entailed and he gave a pretty detailed overview of why relocations fail.
So, if you’ve ever wanted to know, here it is (paraphrased) from a man with 27 years relocations experience.
“In my experience around 3% of staff relocate, 1% internationally. Few relocations are under 2 years and few are over 4 years. The average is 3 years. The partners of those relocating are often career orientated themselves and will be putting their career on hold for the perceived greater good.
In the old days relocations would make you big money, now the focus is on delivering career growth with parity of living or increases being tied to the promotion that may be part of the relocation. So a driver would be to recognize you went from VP to GM, not as a freebie…even if really, it is.
The most popular reasons relocation fail is family reasons. The employee is moving to an exciting new role, usually more senior than their existing one and within the same organization or a newly acquired business. Each day the employee will continue to be in contact with colleagues back home and the corporate culture will be familiar. New challenges will allow the employee to feel growth and their life will become focused on proving they can meet and exceed the expectations of their new role.
Meanwhile the partner may not have work authorization and is taking a career break. If the relocation is to a developing area such as Hungary, then there it is likely drivers and maids are taking care of the chores. Each evening the partner will be greeted with stories of how the company HQ is impressed and numerous work stories that increase the partner’s sense of isolation from their normal life and the career they left behind.
Children may be finding school isolating and certain countries have deeply entrenched resentment of the US, which is being communicated. Eventually the partner, usually but not always female, and the children want to go home. This is why relocations must treat the whole family as integral to a successful relocation; get the partner an opportunity for career progression or a role in a charitable organization to make sure they have no resume gaps.
The second most popular failure is actually after the fact, and many companies fail to recognize it.
The staff member has gone abroad, and upon arrival has become “the man”, running the foreign operation, with status akin to a local CEO. Suddenly evenings are spent with government ministers, local media report his or her comments and even US government staff may seek their local insight. If they are doing a good job, the local staff may show considerable respect and loyalty in a way unusual to casual US business in say California. After 3 years, the executive return home, but the hero’s welcome is a brief meeting with facilities to be shown a modest not quite corner office. The pace of life slows and a view over Cincinnati isn’t quite the same as the palatial office in Budapest. Shrugging such materialism aside, the executive tries to focus on the job, but now it’s back to running a vertical not a country, and their influence is again limited. Being away from HQ has hurt their network, but a good track record aboard will see they are secure. Life is boring.
This is where an intelligent competitor comes in and lures them away. “We loved what you did for XYZ in Hungary, we are expanding operations and need a head of Eastern Europe, we want you to lead it, let’s talk”
And in a few weeks all of the learning and investment of the original company is lost to a competitor who now has an established and well connected figure to exploit that market. You’ve just paid to enhance your competitor’s management.
Some companies will resort to litigation; better ones have identified this pattern and invest in the executive as they return and recognize they are now challenged to retain the talent. Oil companies do this most professionally.”
Bill Staples ---/--- Bill on Business 