Last month, the International Monetary Fund (IMF) cut its global forecast for the fourth time in nine months, which has become a major concern for businesses operating on a global scale. While this is troubling for businesses on a macro level, it also can be disconcerting for employees either currently on an international assignment or those slated for one.
Foreign assignments aren’t something businesses haphazardly dole out. Recognizing the financial commitment they demand, organizations conduct extensive planning and budgeting before sending their employees to another country. Still, regions and places with unstable and volatile governments and economies offer global businesses high-risk, high-reward opportunities. With emerging economies, businesses have an opportunity to get in on the ground floor, or to get set up in a place where resources are cheap.
With that said, businesses operating in these countries must pay close attention to the economic and political climate as their most important capital – the men and women on the ground – can be put at risk. And should a situation arise, businesses need to have a plan in place to not only communicate with their people, but to potentially remove them from a dangerous climate at a moment’s notice.
Countries Facing Turmoil
Here are several countries that have had trouble retaining global businesses in recent years because of their current economic and political landscapes.
For many companies looking to expand their international operations, Honduras is an intriguing option for several reasons. It’s close to the U.S., and the country is actively investing in its infrastructure and simplifying many of its bureaucratic procedures to improve its stature as a business destination.
Despite its favorable economic outlook, Hondurans face some of the highest levels of economic inequality in all of Latin America, according to the World Bank. This inequality, combined with some of the most significant security concerns in Latin America, has made the prospect of moving international assignees to the country less appealing.
Known for the likes of Leonardo Da Vinci and the Leaning Tower of Pisa, Italy has positioned itself as one of the hottest tourist destinations in the world. And while Rome may be appealing for travelers, economic turbulence and political unrest have plagued the country when it comes to attracting and retaining businesses. Major economic organizations, such as the Organisation for Economic Co-operation and Development (OECD) and the IMF, forecast that domestic growth in Italy will stagnate in 2019. Additionally, Italy has repeatedly decried immigration into their country and has a national debt that is more than 130 percent of their GDP, drastically cutting into their international business prospects.
Political unrest has led to extreme economic volatility facing the close to 32 million residents living in the South American country. The political and fiscal issues have brought Venezuela into the forefront of people’s minds around the world, offering us a glimpse into the burdens and stresses international assignees may face when working in a country where nothing is guaranteed. The IMF predicts that the country, now facing food shortages and astronomical prices on consumer goods, will see their inflation rate top 10 million percent in 2019. If that prediction even comes close, it will prove to be one of the highest rates ever, essentially making the local currency valueless and business propositions unlikely.
Communicating to International Transferees
Operating in countries facing volatility can be necessary, but it’s important to recognize how economic reports or geopolitical events may create additional stress to employees on assignment in these destinations. To a business, these stressors may seem minor, but be careful not to underestimate their impact on staff, as most foreign assignments fail because of assignee stress.
Here are a few tips to assist your care and outreach to international transfereesworking in potentially high-risk countries.
- Be responsive and proactive in communication with international assignees. Helpful and timely communication is the first step in easing the stresses of an international assignee.
- Let assignees know the business is aware of the current or potential issue(s) and should the need arise, resources will be provided to help them and their families be secure and supported.
- Make sure international assignees have several different avenues to ask questions and express concerns. More importantly, be sure to provide prompt and personal responses to their concerns. There is a time and a place for canned answers, but this is not one of them.
- Be willing to invest in resources that may be helpful to make stressful or uncertain times more palatable such as a paid vacation or virtual counseling services.
- Have an exit strategy – should the time arise, businesses need to have a plan in place to get international assignees and their families out quickly and safely.
While a solid employee communication plan won’t alleviate all of the burdens resulting from economic hardships or political unrest, it’s a critical first line of defense when faced with these types of circumstances. If you need support or have questions about your organization’s global assignments, contact Hilldrup’s international division!