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Martyn Swann, Head of SME Distribution

The challenges SMEs face when sending employees abroad

Doing Business Abroad

PUBLISHED: 16 June 2020 | LAST UPDATED: 2 August 2023

Martyn swann

Written by Martyn Swann

Global Head of SME Distribution, AXA - Global Healthcare.

In this article, Martyn Swann warns of some of the risks, for smaller businesses, of sending employees on international assignments. Read on to find out how to best prepare for these, and increase the chances of the assignment being a success for your business. 

When someone decides they want a job that will give them the opportunity to live overseas, the chances are that they’re more likely to send their CV to a large corporate with established headquarters around the world than they are an SME.

The reality is though, that this doesn’t need to be the case. The opportunity to travel is becoming more of an achievable goal for those who are keen to experience life abroad, while the need for businesses to expand their reach to an international level – even while still relatively small – is becoming increasingly prevalent.

However there are certainly challenges to having staff based overseas, and I would advise a smaller business to consider the following scenarios carefully before sending an employee to work for an extended period in another country.

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The strain on resources and budgets

Sending employees to work overseas can be a major investment, both in terms of time and money. Unlike larger companies, small businesses are unlikely to employ someone dedicated to looking after expat assignments, so supporting employees with requirements such as visa applications and getting to grips with local regulations can often add to the demands faced by small businesses. 

Likewise, where larger companies will often cover expenses such as accommodation, moving costs, healthcare and children’s education fees, providing a benefits package like this can be a challenge for a smaller business. If they try to offer such support, it can be costly, but if they don’t, the expat and their family will be under greater stress which could affect the outcome of the assignment.

Finding the right staff… and keeping them

Recruiting and retaining the right staff is always a significant challenge, however, the importance of choosing the right person for an overseas assignment is key to the success of the assignment. Finding someone who is flexible enough to embrace the change and dedicated to driving the business forward is essential.

What’s more, while many assignees start with the best intentions, they can easily feel lonely, especially if they’re used to working in a vibrant office in their home country or required to work alone in their new location.

In a recent piece of research, 1 in 5 expats told us that one of the most difficult parts of adapting to life abroad is building up a brand new support network¹. If you’re a small-medium business owner, it’s important to make sure that your staff are supported and don’t feel forgotten. This can be a challenge though, especially if the company has no local Human Resources contact for the employee to speak with face to face.

I would encourage regular, dedicated appointments with overseas team members, to catch up and understand their challenges and successes – both inside and outside of work. Discussing these together will help to reassure the assignee that they are supported and an integral part of the team.

I would also advise that the most comprehensive support possible is provided to help an expat employee settle into their new life abroad. Yes, it means additional spend, but a failed assignment has the potential to hit the company really hard if it doesn’t work out.

Culture shock

Depending on where your employee may be relocating for their assignment, the local culture can be significantly different to what they’re used to. Consider countries such as Japan or China for example. In most European countries, English speakers can read a word or phrase and make an educated guess as to what it might mean, but in locations further afield, even the alphabet is different.

Our research found that some of the most difficult aspects of transitioning to life in another country were the language (30 per cent), the weather (26 per cent) and the culture (17 per cent). It’s important to help and encourage your employee to research their destination and make preparations well in advance of their assignment. This could involve lessons in the local language or even helping to find social groups in the local area. Where possible, I would even recommend the assignee visits their new location at least once before the move.

Family matters

Around four-fifths (80 per cent) of expats relocate with family or a partner². With dependents and loved ones in the picture it shouldn’t be ignored that if they’re struggling to settle, plans to remain for the term of the assignment might well change. Likewise, leaving family members behind in their home country can be hard  on assignees, with two-fifths (40 per cent) of expats said that being away from friends and family is one of the most challenging parts of living in a new country. 

So whether they stay at home or move abroad too, it’s important for the employee’s family to be just as happy and supported as the employee if an assignment is to be a success.

Having staff based overseas nearly always comes with risks – but these can be far outweighed by the rewards of a successful assignment. My underlying piece of advice is to provide as much help as possible. Moving to another country can impact wellbeing, finances and family life but by offering the right support to assignees, you’ll be well on your way to sowing the seeds of success for your business. 

The information in this article is correct at the time of publishing.

¹The research was a sample of 501 expats living in a country different to that of their birth. It was conducted by Critical Research in January 2017.