pulse survey - cartusmoves.com

®

2010

PULSE SURVEY

REPORT

Mobility Management • Outsourcing • Consulting • Intercultural & Language Training

MOBILITY TRENDS IN THE MIDDLE EAST The Middle East offers unique opportunities and challenges to global businesses and, therefore, to mobility policies and practices. This Cartus Pulse Survey, conducted in January 2010, examines demographics, policy trends, and company expectations against the business and intercultural context of the region.

PULSE SURVEY SUMMARY Scope and Policy Approaches The Middle East is a large, diverse region comprising, in our study, 16 countries/regions: Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates, West Bank and Gaza Strip, and Yemen.

East as a cost-saving measure to avoid full assignment packages and is sometimes applied in a limited duration situation. Local to Local moves place the assignee on a locally based compensation and benefits package with no additional perks provided, while Local Plus moves add some specific benefits (e.g., return trips, housing assistance, or lump sums). Intra-Regional moves involve mobility within one region and represent a category that has become more prevalent in recent years as companies offer packages that are different from their global program/policy approach to address regional or local nuances … and often more limited needs. Demographics Assignees are overwhelmingly male. Of companies with large Middle East assignment volumes (having more than 100 assignees in the Middle East), more than half said that less than 10% of assignees were female. This is not surprising, given the business challenges of local labor regulations and the dynamics of the Arab culture.

Companies use a wide variety of policy approaches and practices for assignments into and within the region. Our survey explored 12 policy types: Long-term, Short-term, and Rotational (sequential) assignments, Single Status, Commuters, Graduate/New Hires, Returnees, Intra-Regional, Permanent Transfers, Local to Local, Local Plus, and Outbound. Many of these are familiar in name but are increasingly being used in new ways. Some of these evolving types include:

Many employees are on their first assignment. The assignee mix does not reflect the shift toward a young, single population that is otherwise seen outside the Middle East, however. Instead, assignees are often tenured professionals who appear to be undertaking assignments in the Middle East later in life—a trend that also aligns with the hierarchy and culture of the Middle East.

Single Status is a form in which the assignee—even if married or with a partner—moves with benefits only for him- or herself. It is an emerging type used in the Middle

Destinations Dubai was identified by 42% of survey respondents as their Middle East headquarters location. It also ranked as the

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2010 PULSE SURVEY REPORT

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MOBILITY TRENDS IN THE MIDDLE EAST leading destination over the past two years, and respondents predicted that Dubai will continue to be the leading destination for their future international mobility activity into the Middle East over the coming two years (see Chart 1). Chart 1. Assignment Destinations for Cross-Border Assignments into the Middle East Actual (over past 2 years) Dubai, UAE 49%

Forecast (over next 2 years) Dubai, UAE 37%

Abu Dhabi, UAE 28

Abu Dhabi, UAE 28

Doha, Qatar 12

Cairo, Egypt 14

Riyadh, Saudi Arabia 12

Doha, Qatar 14

Cairo, Egypt 9

Riyadh, Saudi Arabia 14 Jeddah, Saudi Arabia 9 Tehran, Iran

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Abu Dhabi ranked second to Dubai in both past activity and future expectation, with Cairo forecasted to grow in popularity as well over the coming two years. Looking forward, we can also see a trend toward other locations, such as Jeddah and Doha. Survey respondents revealed the three most challenging destination countries to be Saudi Arabia (30%), United Arab Emirates (23%), and Egypt (16%). Policy Trends Asked how relocation activity has changed over the past three years, companies responded that all policy types showed growth. The greatest increases occurred in Permanent Transfer (65% of respondents), Local Plus (63%), and Short-term (61%) mobility types. The Single Status assignment type also showed growth. Shorter duration, project-based assignments align well with the main purpose companies state for moving employees: to fill a local skill gap. As well, the trend to localized assignment forms reflects companies’ continued interest in cost control. Companies also anticipate that activity will increase over the next two years in all types (see Chart 2).

Chart 2. Trends in Relocation Types Looking Ahead (next 2 years)

Looking Back (past 2 years) Long-Term Short-Term Rotational Commuter Returnee Graduate/New Hire Single Status Permanent Transfer Local to Local Local Plus Intra-Regional Outbound



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MOBILITY TRENDS IN THE MIDDLE EAST Short-term assignments continue to be preferred to Long-term, and Local to Local moves continue to overtake the more expensive Local Plus approach. More than half of respondents (53%) expect Intra-Regional moves and Permanent Transfers to grow. Factors Impacting Differences in Policy Levels According to our survey respondents, the greatest factors differentiating benefits (as shown in Chart 3) were level in the company (32% of respondents), job function (30%), and destination location (also 30%), followed by origin location (14%). Chart 3. Factors Differentiating Policy Levels Factor Frequency Level 32% Job Function 30 Destination Location 30 Origin Location 14

on assignees moving intra-regionally. Whether into or within the region, however, both types of relocation showed that a significant number of companies pay depending on location (approximately 40% for each location), as might be expected in this region. Influences and Challenges The top reason for companies to send employees to the Middle East, as illustrated in Chart 4, is the lack of available skills locally (cited by 51% of respondents), followed by new market growth and knowledge transfer (each at 41%) and project-based needs (38%). The gap in local skills and talent reflects a large young generation that is poised to enter the marketplace in the next 10 years but is not yet competitive with foreign nationals. When local nationals with the required skills and talent are found, however, they may expect high incentives and benefits similar to those of their international counterparts. Chart 4. Reasons to Relocate Employees to the Middle East Reason Frequency Skills not available locally 51% New market growth 41

While origin location was not the leading factor here, it nevertheless plays a significant role in distinguishing assignment packages and contracts, particularly between foreign nationals and local nationals. This reflects the fact that compensation practices operate differently in the Middle East compared to other parts of the world and are very much driven by origin and location. Some examples include housing and transport—provided on top of a “healthy” salary. Perhaps surprisingly, companies do not appear to be managing by exception to meet assignee needs: 32% of respondents said they allow exceptions sometimes, 48% rarely, and 8% never. This result raises the question, how are companies able to manage with global policies?

Knowledge transfer 41 Project-based work/needs 38

The challenges cited by organizations and employees relative to the Middle East indicate some interesting differences. As shown in Chart 5, organizations rated safety/security as their top concern (at 34%), followed closely by compensation and benefits (32%). Chart 5. Greatest Business Challenges to Mobility

Possible answers are the wide range of available assignment types and the high number of employees on their first assignments. Hardship Allowances For international assignments, nearly 30% of respondents indicated that they always provide a hardship allowance for employees entering the region. By contrast, for relocation within the region, 17% of companies always provide one—which reinforces the somewhat subjective nature of what constitutes “hardship.” It also appears to reflect a company attitude that there is (or should be) less impact



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MOBILITY TRENDS IN THE MIDDLE EAST As Chart 6 shows, however, safety and security was ranked fourth as a concern by employees turning down assignments (at 17%), behind compensation and benefits, quality of life, and spouse/partner employment (all drawing 26% ratings by respondents). Chart 6. Most Common Reasons for Employees to Turn Down Assignments or Relocation to the Middle East Reason Frequency Compensation & benefits 26% Quality of life 26 Spouse/partner employment 26 Safety/security 17 Children’s education 17 Cultural differences 14

Assessing and Preparing Assignees When asked about the systems and measures in place for candidate assessment, an overwhelming number—nearly 50% of survey respondents—indicated they have some form of talent selection process in place.

are built into assignment planning. The following best practice recommendations reflect this reality. 1. Review your candidate assessment tool for relevant content. Is your assessment program or process taking into account attributes such as flexibility and openness, in addition to technical expertise? 2. Train the host organization and functional areas. The hosting entity, as well as the assignee, must be aware of the dynamics and distinctions of receiving an assignee into their organization and work groups. 3. Encourage your assignees to speak with reliable resources. Organize contact with employees who have moved to or within the Middle East, including sessions with local nationals, to better understand the cultural nuances and impact of style switching. 4. Consider alternative policy and package types. The wide range of assignment types being applied to Middle East mobility activity reflects the wide-ranging variety of needs and on-the-ground realities. Look at your options to remain market competitive in the region and cost efficient in your overall mobility program administration.

For language training, 30% of respondents provide business language training, and nearly the same number provide conversational training (27%); very few (only 11%) reported offering immersion training. For cross-cultural training as it relates specifically to assignments into, or relocations within, the Middle East, one-third of companies (34%) indicated they provide formal 1- or 2-day training, and an additional 24% offer shorter business briefings. Survey respondents also mentioned other means of support, including local inductions, online training, intranet pages, and information from data providers. Best Practice Considerations Among global destinations, intercultural concerns play a greater part in assignment success in the Middle East than in many other settings. Of particular importance is recognizing the divergent dynamics of personal relationships and business plans: the host culture and receiving teams will focus on developing relationships, while relocating assignees may tend to focus on completing the task at hand without due consideration of relationship building. The result can be business disconnects, unless intercultural awareness strategies
