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China Relocation Services Part VI (final)

Daycare may be a challenge as China adapts to the increased demands put upon this rapidly growing foreign community, prior investigation is key for this to be a success. All arrangements must be made and not left for chance if both spouses are working full time. Expat’s need to clear about healthcare:
Will it cover the family for the duration abroad? What exactly is covered? What is not? Will I have
access to an English speaking doctor and hospital that is near my residence? Will the prescriptions that I need be available in China? Are there alternatives? These are some of the questions which need to be
asked by the expat’s and family, too.

Getting around in a city like Shanghai with its population that growing by the day is not an impossible task if done with a bit of preparation. A sophisticated system of subways, trains, buses and motorways are all functioning like any 21st Century city. The trick is to master the methods of transportation and driving your own personal vehicle may just be not what an expat wants to put his family thorough
upon first arrival.  The cost of a taxi may just be lower than parking and safer than driving.

Overall, the reward of having the experience living in China as an expat are very rewarding and help advance the career as our world becomes smaller and smaller each day. Promotions are its just reward.
The expat can expect greater financial rewards, reduced taxes, increased salary and family will have a memory that will last a lifetime. Many will agree that the cultural exposure is just one fringe benefit that comes to mind as Mandarin Chinese is rapidly becoming the language to learn in most colleges and university settings these days.

Success or failure will be the ultimate determiner of a foreign company & the ability to transplant your corporate culture to china without any hitches. Salo Homes has the highest overseas expat success rate in China with the focus on your corporate success in china and your corporate bottom line in mind.

-Paul Salo

The author is owner of Shanghai’s most successful relocation firm with over 90% expat assignments under their care successfully completed.   Their goal  is two-fold: One to maximize corporate ROI by successfully integrating personnel to the Chinese corporate structure and to maximize the ease with which individuals cross the culture barrier thus allowing them to contribute their greatest gifts.

China Relocation Services Part V

The following suggestions may be found useful in lessening the impact on the spouse’s careers.  First, a one to one meeting should be set up with the spouse of the expat to recognize that there will be challenges and the journey may not be as smooth at the start but will improve as they adjust themselves. Preferably a meeting arranged with a previous spouse in China to give the low down on what to expect from a personal perspective.  In a few rare cases, compensation could be offered as an insurance against loss of income to the spouse.

Third, have the spouse become a partner in the offer by employing her. Fourth, have a chat with the spouses’ company to see if at all possible she may continue to work for her company in a foreign branch or online. Employing the spouse as a journalist for the company newsletter or annual report are a couple options our clients have chosen.  The key is to make both expatriate employee and spouse be a part of a team.  This can have real benefits as the divorce rate previously reached up to 50% in some of our clients prior to Salo Homes managing the relocation process.  Divorce obviously has a huge effect on the expats performance and usually spells doom for the whole assignment.

Education, day care and healthcare are also a major concern when considering the success of an expat and his family in China. Shanghai has a number of international schools, catering to American, British and Canadian school curriculum’s in so that they can easily transition in and out of the system with the grades that they will need when returning to the prospect of advanced learning like college and university programs.  Choosing the right school is difficult to say the least.   We like to arrange dinners with clients and current families whose children attend the school they are considering.  And we especially like to have one long term expat and a short term expat to give both perspectives.  The long term fallout from an improper educational choice is devastating:   Especially in the case of learning disabilities.

China Relocation Services Part IV

It should be noted there are countless articles of information about what not to do when in China but few take the time to understand the differences fully. Something like slapping somebody on the back for a job well done may not be a good thing, even though it was well intended. The communication between managers may be different and meetings may be longer and seem to have no objective all. Weekends are to be spent with the family right? Not necessarily.

Spouses may feel neglected as they may not be invited to dinners, golf on Saturday or nights out with clients on the town. Children may not see their father for extended periods until the transition has been completed and the company allows for the time off.  The expat may do more corporate networking than he is accustomed to back home. Company presentations may last for days or even a week. Depending on the industry, “face” can be quite a significant factor. For example, public feedback and criticism might best be given lightly as not to embarrass someone who has been with the company for a long time. Family, lifestyle issues, adjusting to the work, failure to fully comprehend the mission itself, performance, foreign recruiters and the like are just a sample of problems facing the placement of an ideal expat to China.

Age and not merit are most likely to be a driver of loyalty to one’s peers in the company. It is in the preparing for those cultural differences that may allow for lot less strife and smoother transition for both expat and family in the long run.

Many expat’s are afraid that if they stay too long, they may miss a chance for promotion and lack relevant experience to continue with where they left off prior to being placed on an overseas assignment and it is often found that fear of the unknown plays a significant role when confronted with success or failure of an expatriates life in China.

China Relocation Services Part III

Corporate culture is another factor in the transplantation of an employee who once was familiar with one way of performing and now is confronted with a whole new set of rules when posted abroad within the same company. This can be seen when a satellite company is managed, structured and based upon a different hierarchy or cultural norms unfamiliar to both the expat and foreign firm which may a cause a great deal of frustration and angst among both parties.

In this information age, it has been observed on various blogs, forums and expat community resources that the family is often the last to know what is really going on or how to prepare themselves for the new move abroad. When dealing with Europe it may not be such a difficult task to find international or American schools, the local leisure activities and welcoming committee for the spouse and family. China is emerging as an international, interconnected community but still has long way to go to
develop its daily migration of foreign staff who are arriving daily at its shores.

With respect to the family of an engineer it can have a dramatic impact on the spouse’s career and children. Will the spouse or mother be able to continue a career even remotely similar to the one that she is leaving? Will the children be able to find proper schooling, an international bachelorette program or something similar to the education that they left behind? Are they prepared to make new friends, learn a new culture, language possibly and go without some of the creature comforts left back in their home country. China has opened its doors greatly and is on a path of great economic growth but may lack the little things like easy access to Facebook, Youtube or other favourite social networking sites that may be a very important tool, the spouse and children may need to forgo. A bit of due diligence is highly recommended.  It’s the little things matter, things like excellent communication skills, the ability to prepare to go on short notice. It has been discovered that most firms give only 3 months to
prepare with at times, unclear objectives.

Who is most responsible for the success for the placement and transition of the candidate abroad?
There is no easy answer. Both corporations and their expat workers are responsible. First, there should be clearly marked objectives and timelines for completion.  However, time spent figuring out the lay of the new land in Asia takes more time than most allot.   The expat needs significant time to understand the differences in values, interpersonal communication and behaviour in the workplace.

China Relocation Services Part II

Today, few corporations will send their employees overseas if at all possible. Why? The expats of today have a heavy burden of responsibility on their shoulders compared to their forerunners of the past two waves of globalization. These days, success in the eyes of an international venture is what can make or break any new start up or large firm just because those expats who fail can blemish its reputation and lose face. It may take many years to repair those relationships; especially one’s made in China.

Large corporations believe it is just the cost of doing business because of the high level of responsibilities involved, expertise, the need for engineers, technical expertise and the like, most firms tend to send their best performing and most promising people, unwittingly to the field. With that said, those sent fully understand that the notion of success or failure abroad will have a major effect on the future of their position within the company.

Studies have shown that the chances of a successful fit are on average 20 percent. Most will return before their assignment is up. In fact, Sun Microsystems experienced a failure rates up to 63 percent employees returning home. This is with the knowledge that expat benefit package may cost upwards to almost 4 times his/her salary! It also has been noted that with those remaining 50 percent that stay, most operate at a very low level of productivity and that fewer than 40 percent succeed in completing their posting abroad successfully. It is clear, an expat’s salary are a financial risk.

Other unforeseeable circumstances neither well known nor discussed in great detail but nevertheless very important if the success of the corporate professional oversees is to become a successful fit. One of the more obvious causes for failure of an expat overseas assignment is the inability of the candidate to acclimatize his/her persona or those with family to the environment overseas.   i.e.: inability to adjust to the new culture.   However this often becomes a game of “blame the expat”.  “He probably never met a Chinese person the whole time he was in China” is something I have heard often.  However, in my experience, the expats that come to Asia often do it with “cultural experience” actually being one of their top motivations.   They are excited about the new culture and do their best to acclimate.  Obviously different personalities have varying language skills and ability to morph into new situations.  However, this is very difficult to predict even for the employee himself much less HR.

China Relocation Services Part I

We are in the midst of a third wave of globalization and North America and to a lesser extent some countries of Europe are at the core of this next wave of globalization as our economies are so closely interconnected, they are better seen as a single emerging global information economy, the third wave greatly affecting relocation services movement has emerged.

In order to fully grasp the first wave of globalization and how it affects relocation services, we should look at the role of global capital as it expanded during those historic times as a counter-response to independence movements and economic nationalism. As the traditional world powers began losing direct control, global capital became better at indirect control and military power ceded its influence to economic control.

Large corporations like the East India Trading Company in the UK together with the government amassed significant amounts of funds and made finance itself a valuable commodity. Firms like the East India Trading Company required access to new markets however these new colonies became more expensive than the funds they generated.  Although unforeseen by the UK, Hong Kong and Macau would turn out to be an excellent example of the second wave of globalization. In retrospect we can see that the third wave emerged from the information society created by computers and the internet in the 1980’s and 90’s.  Although the Japanese bubble saw a massive amount of Japanese expats relocated across the globe, for the West we can pinpoint this transition to an information society in the 1990’s and the dotcom bubble as event that catapulted relocation services to the forefront of the modern globalization movement.

Successful International Relocation Services

Hard numbers for expatriate failures in China would be hard to come by. I based my statement on what Harvard Business Review (June 2010) writes “HR professionals continue to rank China as one of the most challenging destinations for expatriates. Hard numbers are lacking, but anecdotal evidence suggests that under performance and early departures add up to a failure rate there that is twice that for expats in other countries for relocation services“.

In any case, I would think that the larger the cultural gap is between a home and host country – the larger the challenge and therefore also the higher the risk of an expat assignment failure. This would then work the other way as you say with Chinese moving to a Western country and are drawn to Chinatown or other areas with high Chinese population.

If providing an environment that allows an expatriate to feel ‘at home’ in order to function during his or her assignment, could this perhaps will prevent failures? Could it be that some personalities are less suited to adapt to a new culture? And if so, how is that measured? And how is the adaptability weighed and compared to the technical skills that the expatriate would bring to the overseas organization?

Its pretty important that proper “indoctrination” into the challenges ahead is given to the outgoing expat in relocation services (and perhaps their families) well before departure to China including cultural, business, living conditions etc etc. We used to say in the old days , even in HK, that wives would take 6 months to either fall in love or hate with the location !

And, there`s a need to choose people with a “flexible” approach to life and work in order to have the best chance of long term success in relocation services.
Chinese expats in UK, for example,for the first time, certainly experience issues too as other commentators have said. It can be a lonely experience at first and coupled with the tendency to hire only local Chinese people who may not be best fitted to the job ,leads to a relatively high failure rate of small scale private sector enterprises here.

What is the definition of failure in this…. cultural, economic or both… and is failure the correct terminology?…. take into account the logistics of modern society and people have greater choice than ever before to move. A key component in respect to relocation services in China will be children’s education. International schools in China are expensive and if you look at the number of school and number of foreign children who go there in comparison to the number of ex pats in China you will find that a low % of children go to there schools (say 20%). So the equation may = ex-pats with children are priced out of the market. Therefore ex-pats with no family (wife / children) are equated in to the China market. This may change the experience levels to some degree of the foreign workforce. In short living in China is economically tough with Children and rent without full company support.

Serviced China Relocation Services

As an international Serviced China HR consultant involved in expat reward and Relocation Services, I and my partner built my firm’s operations in Shanghai from scratch. Initially, we interacted a lot with expatriates, even writing up a free give-away for companies on the topic of Relocation Services. It’s been almost fifteen years now, but the lessons are still apparently apt.

The main lessons were:
* define the job you want the person to do over the length of their assignment – so many companies rely on one-year performance programs to manage their expats in China with no sight of the longer-term. Result: a continual flow of managers and higher long-term costs. My boss said: I want you to do three things over the next 5 years . . . ..

* picking the right person is crucial – in our view, unlike some of the comments above, most companies did actually send their best people for such an important role BUT they judged “best” mostly by technical competence. Our conclusion was that the cultural gap was so wide that the best people to send were “people people”. We meant that they were the most able to bridge the cultural divide and build loyalty to the expat and company and hence better able to take the local operations through change. Technical experts are needed but only occasionally on the ground.

* Language was not so important then: the cost of decent translators was relatively low. I suspect this factor is a little different today but still relatively unimportant. Attitude and ability to reach people are way more important.

* to approximate the cost of failure in relocation services, take:

.. the total cost of the expat (4xpay? – maybe more with high rents, school fees and taxes)
.. assume a level of effectiveness at the beginning of the assignment, eg 40%
.. assume a length of time to be completely effective in role, eg 2 years
Then use the formula for calculating the area of a triangle to find the cost of sending a replacement, eg, for a salary of $150,000, the answer is :
1. x $150k x 1/2 x 2 x (1-40%) = $360k.  There may be additional costs in terms of loss of future earnings and loyalty from a previously prized employee who is now likely to quit. Much more difficult to quantify.

However, there is a bigger prize here, rather than just the cost of a failed assignment in relocation services: how quickly can the company get its operations price competitive? That will involve replacing most of the expats with local people. That’s why you ideally need a longer-term perspective than just annual profit measures – a series of optimal yearly results will lead to higher cost than a longer-term perspective.

-Marion Wu

The Year of the Rabbit: Canadian moves to Shanghai, China.

-Where were you born?

I was born in New Westminster, BC Canada. It’s now incorporated within the Metro Vancouver area up in the Pacific Northwest on the West Coast of North America.

-In which country and city are you living now?

I live in Shanghai, China. It’s roughly 18 million people and considered world class city by the leading expats.

-Are you living alone or with your family?

I live with friends at the moment.

-How long have you been living in China?

Just relocated to Shanghai from the West Coast of Canada about a week ago, but have lived as an expat in Japan for over 12 years.

-When did you come up with the idea of living in China?

I chose to move to China because of my previous living experience in Japan. I had always wanted to use my skills that I had developed in Japan but at little use for them in my previous career working the oil patch in Canada.

After spending 7 years in Canada and long time friend that I met in Japan had kept in contact with invited me to work with him in Shanghai. So, I packed everything up and went on a 2000 km road trip back to my home province, spent Christmas with my family and left for China.

-Was it hard to get a visa or a work permit?

Not at all. If you have the right paperwork (supplied by your employer) and prepared to wait, it’s pretty routine. It is not that difficult to arrive on a tourist visa (make sure you get a multiple entry) in order to change to a suitable working visa in Hong Kong which is not far.

-Was it difficult for you to get medical insurance before you went there or when you first arrived?

Most employers will provide reasonably comprehensive medical coverage as part of a standard contract – I got travel insurance before I left and made sure that I could “top it up” in regards to paying for here in China to keep it active while abroad.

-How do you make your living in China?

I’m location independent and work on several online based businesses.

Unless you are like me having a business already established, you will most likely be looking to teach English.  There are a number of good sites that list English teaching jobs in China. It’s a good idea to be wary at first as there are a lot of cheats. The most important thing is to find out an English school’s reputation.

-Do you speak Chinese and do you think it’s important to speak the local language?

I’m learning, Mandarin (putonghua) and being able to speak it is a huge asset. I know that from my experience in Japan and made sure to be fully functioning to live properly. Otherwise, you are just completely off-limits to society here and need someone to baby sit you when you are getting around.

Being able to speak the language here not only brings you closer to the people,
but it provides you insight into local customs and promotes better cultural understanding.

-Do you miss your country sometimes?

Things like skype, msn or gmail phone, make it fairly easy to keep in touch.

Where do you like to do in Shanghai?

Of course their are lots of historic (the French Concession) and natural areas to keep me busy as well as develop my interests – namely learning Chinese and photography/digital design.

-Do you have other plans for the future?

As mentioned, I’ll be getting married in the not so distant future. We’re planning a small tropical beach wedding either in Southern China,

-What about housing, have you bought, or are you renting a home? How much do you pay for it?

I currently live in housing provided. It’s a beautiful two-bedroom apartment, and more than suits my needs. I’m not sure what local rental or purchase rates run, but it’s reasonable to assume you can rent a nice two-bedroom apartment in most places in Shanghai for between 4,000 RMB to 5,000 RMB  a month.

-What is the cost of living in China?

The cost of living in China is quite low, provided you live like everyone else lives. If you’re out at the pubs and clubs every night drinking imported beers and living large and eating at high end restaurants, you’ll blow all your money fairly quick.

However, one area where China is very unlike my home in Canada is eating out. Eating at a small restaurant that serves domestic Chinese food will often not cost you much more than cooking the meals yourself ($5 to $10 for two people to eat). A taxis are ride will rarely cost you more than $3 USD and a bus is 30 cents anywhere in the city!.

Big supermarkets like Tesco, Walmart and Carrefour are widespread and offer quality food at a fraction of the cost of Western countries. For an even cheaper, if a bit less hygienic, option – markets selling everything from pets to produce are also easy to find. A basic knowledge of Chinese and local pricing is a must though and another for foreigners. You need to learn how to bargain for things.

-What do you think about the Chinese people?

Generally speaking I would say most locals are friendly and extremely curious about foreigners.

-What are the positive and negative aspects of living in China?

I’m sure these are different for everyone. Personally, I hate red tape, and China’s cluttered with it. There is a lot of bureaucracy for darn near everything, and it can be stifling at times. Customer service is still a relatively new concept in China, and is bound to improve as the country moves away from State-run enterprises to private business.

Life is generally pretty easy here for foreigners. ESL teachers make a modest (by Western standards) salary,  often making 2-3 times the average local income, and is definitely not working full-time hours to earn it.

It is also an interesting time to be in China. There is lots of talk about China being “on the rise,” and though personally I don’t completely buy the hype, it is still a vibrant time to be in a country that everyone is so interested in talking about.

-Do you have any tips for our readers about living in China?

Many, and I suggest they visit my site on the subject that is listed below. Basically my only advice is “come with no illusions.” Expats in China constantly joke about newcomers and how they hop off the plane with images of how they feel China should look or act.

The only thing you can bet on is that it won’t be what you expect and you may be surprised to learn that it is a very interesting place to be in Asia as we enter the first decade of the 21st century.

Objectives of Serviced China Apartment Association

• To establish a set of standards for serviced apartments and their operators in the China.
• To monitor and audit the performance of its members.
• To promote corporate housing and serviced apartments to both corporate buyers of accommodation and agents directly.
• To establish, promote and maintain an acceptable code of conduct for all providers of serviced accommodation.
• To attract membership amongst all serviced apartment providers.
• To raise awareness of serviced apartments, as the preferred choice of the business traveler for stays in India of greater than 5 nights.
• To promote and encourage travelers and travel buyers to work with our member companies for their own security, in the knowledge that our members are committed to assessable quality.
• Make a plea to the Government to legalize this segment of the Hospitality Industry.
• Work on various suppliers and standardize the services and products available.
• Work on Training and grooming of the staff of the apartments.

About Paul Salo

Paul Salo Hi, my name is Paul Salo. I’m the Mandarin speaking American insider in the real estate business in China. I’ve been featured on TV across China, the US, Canada and Japan. I am inspired by a vision to provide clear and effective advice for real estate agents, developers and entrepreneurs to attract Chinese investors, build their business and greatly increase sales and revenue. I’m determined to carry out this mission with integrity and to serve Selling to Chinese clients to the best of my ability. I left the US to start my business in the PRC (China) in 1989 and have been an entrepreneur in China and Japan ever since. I might be the only non-Chinese to have both sold and leased properties inside Mainland China to local Chinese buyers and to Chinese overseas investors on almost every continent on the planet (Australia, Canada, The US, The UK, Japan among many others). My deepest wish is to pass on the things I’ve learned to speed up the selling to Chinese learning curve and help others to succeed in building a clientele of Chinese buyers.