Global HR Conference on World Trade and the Impact on International Assignments

Presenter : Martha PeñaManaging Director Chestnut Global Partners de México

Mexico CitySeptember 22,2008

Agenda About Chestnut Global Partners de

México Myths about international

assignments IAP Chestnut Global Partners Outcome data

About Chestnut Global Partners Originally created in 1990

as a division of Chestnut Health Systems Converted into a subsidiary in 2005 as Chestnut

Global Partners, LLC CGP has grown from being a traditional EAP

service provider in the USA to become a lider as an International Employee Assistance Program provider and Proactive International Assistance Programs for expatriates and their family

Chestnut Global Partners de Mexico created in 2006

Expatriate Strategy

Expatriate: a definition

Any employee or family member temporarily living and working outside of their country of origin for the purposes of leadership development and the sharing of knowledge, culture, technical skills.

Chestnut Global Partners refers to these employees as International Service Employees or ISEs.

Expatriate Strategy

Expatriate assignments are important, perhaps critical, to achieving global objectives

But. . . they are expensive and contain some risk

We assume ISEs cost 3+ times that of a home-based employee

Actively managing that risk is essential to obtain a ROI

Some Myths About International Assignments

Most expatriates are selected for assignment because they are high-potential, multicultural employees who perform well during valid selection processes.

Myth #1

A “failed” assignment only occurs when an employee is unable to complete his/her job duties.

Myth #2

A “failed” expatriate assignment may be viewed as . . .

Early repatriation of the employee and/or family

A lack of optimal job performance

Severe family distress

Negative interactions between cultures

Turn-over, even after repatriation

Anything that negatively impacts ROI

Benefits of an Expat AssignmentTh

e E

nter

pris

e

Others: m

arket, comm

unity,

profession, culture

Employees“Impact on our

People”

75% of Multinational companies have a expat recall rate greater than 10%. Harzig, 1995.

22% of U.S. expatriate employees turnover within the first year of repatriation. GMAC GRS – NFTC – SHRM Global, 2003.

50% turn over within 3 years. Black and Gregersen, 1991.

Expatriate recall and turnover

Most failed assignments are due to a lack of job skills, culture shock or inadequate compensation packages.

Myth #3

Why do expatriates fail?

Source: ERC 1993/1996 international Survey of 162 companies 0% 10% 20% 30% 40% 50% 60% 70%

Lack of technical competence

Inability to adapt to changing businesspriorities or organizational realignment

Inability to integrate job expertise withlarger responsibilities of assignment

Personality or emotional maturity

Lacks skills necessary to conductbusiness in host country culture

Other family related problems

Expat's inability to adjust to culturalenvironment

Spouse/family’s inability to adjust to cultural/physical environment

Risk factorsReasons for not accepting an overseas

assignment

Source: Cadden 2006, citing NFTC 1994; GMAC, 2005; Cendant Mobility 2004.

56%

88%

66%

88%

46%

70%66%

70%

0%

25%

50%

75%

100%

Partnerresistance

Familyadjustment

Partnercareer

Children'seducation

1995 2005

Risk factors- China

55% 54%

33%21%

7%

0%

25%

50%

75%

100%

Personal style Poor familyadjustment

Culturaldifferences

Businessconditions

Poor languageskills

Source: Cadden 2006, citing NFTC 1994; GMAC, 2005; Cendant Mobility 2004.

83%

38%

22% 20%10%

0%

25%

50%

75%

100%

Family or personalcircumstances

Spouse careerconcerns

Kids' education Impact on career Perceived culturalchallenges

Assignment failure in China

Assignment refusal to China

1-866-CAT-0565

High potential employees should be able to handle the stresses of moving abroad.

Myth #4

3.2%

12.7%

7.7%

17.5%

50.8%

3.7% 3.4%

0%

10%

20%

30%

40%

50%

Alcohol usedisorders

Depression Adjustmentdisorders

Anxiety

U.S. nationals National Comorbidity Study, 2006Expats, Valk, 2002

Rates of mental health problems

U.S. nationals vs. expatriates

1-866-CAT-0565

Most expats are satisfied with the support they received while on assignment

Myth #5

One half of all expats report their company does not do enough to support their personal needs (National Foreign Trade Council, Cigna, Worldatwork. 2002.)

Less than 20% of companies provide any assistance for the personal needs of the

spouse and family (SHRM/Willimatte university study, “Emerging Trends in Global Mobility: An Assignees Perspective. 2004)

The best approach to managing risk in international relocation is. . . Provide competitive compensation packages

Partner with best-in-class relocation vendors

Carefully select expatriates

Provide ample training

Provide supportive programs that address the personal needs of the entire family

Reality

Were we doing enough?

• Relocation

• Policy

• Vendor Mgt.

• Exception Mgt.

• Spousal career support and resume writing – US Domestic only

• Some destination services

• Housing

• Schooling

• Settling- in

• Referrals

•Orientation to local area

• Cultural training

•Language Trg

• Follow up training

• Personal Support

• Assessment, counseling, referrals

• Proactive outreach and support – pre, during and post assignment

Relocation Vendor

Spouse career consultation

Destination services

Training Family Support

Historically, we have not focused heavily on the “softer,” personal side of an ISE assignment. The IAP fills that gap.

Pre-implementation of IAP

Considerable dissatisfaction with kids’ education, emotional state, and social relationships

Frequent consideration of early repatriation due to social, emotional and workplace stressors

Strong dissatisfaction with the level support finding healthcare and the level of personal support received

Trends in expat surveys

About Chestnut Global Partners

U.S.-based EAP since 1983. International since 2000

Joint venture companies in Brazil, China and Mexico

Contracts in place with over 85 providers and organizations in 100 countries

Now serving nearly a 300,000 individuals in over 85 countries

Caterpillar EAP provider since 2002.

Why are traditional EAPs inadequate to serve expatriate populations?

1. Most EAPs are U.S. centric and do not fully account for local and cultural needs.

2. Expatriates & families tend not to use traditional EAPs.

3. Many EAPs are passive

4. Delivering consistent EAP services globally has proven complicated

5. Traditional EAP alone is not sufficient to meet the complex needs at each stage of an expatriate assignment.

Personality Traits- Cultural Empathy- Open-mindedness- Social Initiative- Flexibility- Emotional Stability

Theory of Expatriate and Spousal Adjustment

(adaptation of Caligiuri model)

Family Characteristics- Family Cohesion- Family Adaptability- Family Communication

Work-Life- Expatriate Work Satisfaction- Support from the international company - Other Social Support Networks

Intercultural Adjustment

- Psychological Adjustment- Sociocultural Adjustment

- Work- Family- Culture

Delivery Model Options for Expatriate Support

1. U.S. based telecounseling and online services

2. Home country professional- periodic expat “check ups”

3. Placement of home country professional in host-country

4. Face-to-face with local provider

“ThinkGlobal

ActLocal”

“ThinkLocalAct

Local”

Global PartnershipsMulti-local Approach

Local, in-country providers have an intimate knowledge of the host country

“High touch,” local presence with quick responses

Greater acceptance and integration by local management

Local providers can blend cultural issues with “personal problems”

Argentina Australia Austria Bahamas Bangladesh Barbados Belgium Belize Bermuda Bolivia Brazil Canada Cayman Islands Chile China Costa Rica Curacao

Ivory Coast Jamaica Japan Lesotho Luxembourg Malaysia Martinique Mexico Netherlands Nevis/St. Kitts New Zealand Nicaragua Norway Pakistan Panama Papa New Guinea Paraguay Peru Poland Portugal Puerto Rico

Czech Denmark Dominican Republic Ecuador El Salvador Fiji Finland France Germany Greece Grenada Guadeloupe Guatemala Guiana Haiti Honduras Hong Kong Hungary India Indonesia Ireland Italy

Russia Saudi Arabia Singapore South Africa South Korea Spain Sri Lanka St. Lucia St. Vincent and the Grenadines Sweden Switzerland Taiwan Thailand Trinidad and Tobago Uruguay United Arab Emirates United Kingdom/ Northern Ireland United States Virgin Islands Vanuatu Venezuela

CGP Provider Network

Case examples

1. Spouse - isolated and afraid to leave the house in Brazil

2. Child - not fitting in at school in the U.K.

3. Expat employee - extramarital affair in China

4. Expat employee - drinking excessively in Mexico

International Assistance Program (IAP) The IAP model was created jointly by Caterpillar

and Chestnut Global Partners

Piloted in 2003-2004. Implemented October 2004

Goals Provide confidential, global and culturally relevant

personal support for ISEs and families at no charge

Minimize the risks of family adjustment and personal problems

Enhance the ISE experience for the family and those in the company supporting ISEs

International Assistance Program (IAP)

The IAP is. . .

Confidential

Proactive and strategic

Free of charge to the ISEs

Ultimately voluntary

Emotional lifecycle of an expatriate assignment

Emotion & Energy Level

HOMECOUNTRY

LOW

HOMECOUNTRY

HOSTCOUNTRY

HIGH

Excitement/anxiety

Honeymoon Burnout Adjustment/settling in

Stages repeat

IAP Service DeliveryHOME

COUNTRYHOME

COUNTRYHOST

COUNTRY

Adjustment Stages Over time

Emotion & Energy Level

LOW

HIGH

Pre-acceptance consultation:Pre-acceptance consultation:

.Pre-departure outreach and counseling

Pre-departure outreach and counseling

.Destination outreach:Destination outreach:

.On going outreach and clinical services (counseling and referrals:

On going outreach and clinical services (counseling and referrals:

.

Repatriation outreach and support:

Repatriation outreach and support:

.Ongoing outreach and support 1 year post repatriation

Ongoing outreach and support 1 year post repatriation

.

IAP metrics

Phone call E-mail Phone call

1238

1014

687

1026

981

1922

974

6 18

821

2027

864

2313

785

1916

1239

1726

1103

1329

1084

1228

1054

1422

1046

27210

200

400

600

800

1000

1200

1400

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Outreach Contacts Pre-Departure Consultations Clinical Contacts

11,867 outreach Contacts in 2006 IAP Service Metrics

Performance MetricsProactive outreach dramatically increases

utilization

4%

45%

53%

0%

20%

40%

60%

80%

100%

Predeparturemeetings in 2004

Predeparturemeetings in 2005

Predeparturemeetings 2006

Pre departure consultations

Performance Metrics

100

164

0

50

100

150

200

250

300

Clinical cases 2005 Clinical cases 2006

8.4% utilization

N = 1188

13% utilization

N = 1264

Clinical Utilization

Performance metrics: employee vs. family

57%

53%

31%37%

11%10%

1%00%

20%

40%

60%

80%

100%

Employee Spouses Dependents Elderly parents

Where are services being provided?Host location of ISEs receiving services

CY 2005

2% 2%6% 2% 1% 1%

2%

2%

1%

17%

17%

17%3%3%

2%

16%

4%

United States United Kingdom Switzerland Canada Singapore China

France Belgium South Africa Brazil Japan Puerto Rico

Germany Italy Netherlands U.A.E. Mexico

Where are services being provided?Host location of ISEs receiving services

2005 - 2006

0%

5%

10%

15%

20%

25%

30%

35%

United

States

United

King

dom

Switz

erlan

d

Canad

a

Sing

apor

e

China

Fran

ce

Belgium

Italy

Other

20052006

Performance metrics: Presenting problem

0%

10%

20%

30%20052006

Survey DataPercent reporting dissatisfaction with . . .

Emotional state Socialrelationships

Maritalrelationships

Familyrelationships

Job Kids'educationalexperience

Pre IAP After first year of IAP

Support with policy Overall HR support Support findinghealthcare

Level of personalsupport

Prior to IAP After first year of IAP

Survey DataPercent reporting dissatisfaction with . . .

Considered early repat dueto personal problem

Considered early repat dueto work problem

Family considered earlyrepatriation

Pre IAP

1-yearfollow up

Survey DataPercent who have considered early repatriation

Survey Data“How has your personal life been affected while living abroad?” Percent reporting a “negative” impact.

Pre IAP 1 year follow up

49% decrease

Survey DataPercentage of ISEs reporting more than 4 days absent “due to a personal or emotional problem.”

Pre IAP 1 year follow up

39% decrease

Program Bantuan Pekerja Malay

Program Wspierania Pracowników Polish

Werknemer ondersteuningsprogram Afrikaans

Programa Internacional de Assistencia Portuguese

Programme d’Assistance International French

psykologisk krisehjælp Danish

Programa de Astistencia Internacional Spanish

Mitarbeiter-Beratungs-Programm German

medewerkers ondersteunings- programma or reïntegratietraject Holland/Dutch

雇员协助节目 orYuan Gong Fu Zhu Ji Hua Chinese

종업원 지원 프로그램 or Jik Won Ji Won Program Korean

Questions?Thank you.

Programma di Assistenza Internazionale Italian