Interview: Challenges for Expatriates in Saudi Arabia

In researching challenges for energy companies into key markets I had the benefit of being introduced to John Douglass, SPHR, CCP who was, at the time, head of compensation and benefits for Tatweer Petroleum.  I'd sent him some questions by email and though he was in the final weeks of his assignment in Bahrain he took the time to provide compelling and informative answers.

John Douglass, SPHR, CCP

John Douglass is an experienced human resources professional with significant expertise in leading Mideast organizations compensation and benefits strategies.  He is known for his development of domestic and international compensation and benefits programs, as well as his leadership and succession planning, and manpower analysis and planning skills.   A scholar of the region, he leverages his HR expertise with an understanding of the local language, culture, and religions in the Mideast region.  He may be contacted through his LinkedIn profile:  http://bh.linkedin.com/pub/john-douglass-sphr-ccp/4/4b4/ba5

Below are my questions to Mr. Douglass and his answers.  I am very grateful for his assistance in providing me a real and first-person account of what it's like to be assigned to the middle east and the challenges faced by companies in supporting assignments during the Arab Spring of 2011.


LS:  According to HSBCs survey of expats regarding their assignment conditions, they indicate that Expats into Saudi Arabia rate it as #1 in the way of financial advantages of that location - however, it rates as the least desirable location from an assignment experience perspective.  What are your thoughts on this?

JD:  Most Saudi employers have reasonably well-developed HR functions that allow them to understand compensation trends throughout the ME region.  They know that for expats from western cultures the leap to the Saudi culture is a long one, so they normally incorporate a premium for this in their cash compensation packages.  Most expats have no home country tax obligations – the tax break is less favorable for Americans and Canadians.   

The other positive financial factor is the propensity to save since there is little else to do during off-duty hours.  A lot depends on the social inclinations and family situation of the expat in question.  The single expat that likes the social scene after work and on weekends would find the KSA scene a chore.  Likewise the Saudi environment is no longer a great place for a married person to bring up/educate children. 

For the expat who is comfortable with compound living, the friendships made within a closely knit expat community can make the Saudi experience a positive one.  I have found the female spouses, with all the Saudi restrictions that apply, to be very special people – they tend to get together with other women and be determined to turn the overall experience into a positive one.

LS:  Do you think it's more difficult to get an American or European to accept assignments in the middle east?  Or, is it not a factor as most who are offered such roles have been there many times as business travelers and so by the time they get an assignment offer - they are not afraid of the location and have no issues with accepting?

JD:  It’s generally easier to attract Europeans with good English skills.  Skilled American workers who have not been in an expat role tend to believe fictional stories about the Middle East and look for higher compensation packages.   

Additionally, it’s just a shorter trip from Europe than from North America – flying home for the weekend is a realistic expectation for the European – and as my good friend, Paul Diggins, says:  “…it is also a lot longer plane ride here from Kankakee than from Kaiserslautern…”.  Recruiters indicate they generally have difficulty getting job offer acceptances from Americans and Europeans when they are misinformed about the region (often) and/or have had a bad experience here (rare).

LS:  We've seen a lot about the Arab Spring's effect on assignments into countries like Egypt and Syria.  An article published by SOS (an emergency evacuation company) indicates there were a record number of evacuations following these events.  Do you think these evacuations were really necessary?  

JD:  Those of us who were in the region during the “Arab Spring” found the coverage by the international press to be abysmal.  The press had the opportunity to investigate the nature of the unrest in a number of nations and educate our friends/families/colleagues in the West about the nuances and cultural differences here and blew it.  They wanted to paint a picture of a wide spread movement of democracy and the ouster of cruel despots – indeed, there was some of this, but each of the situations in the different countries was different and far more complicated. 

Evacuations in Libya and Syria have been necessary given the level of violence in the unrest.  The instability of these populations and governments made the conduct of business impossible and rendered moot the need for employees on the ground.  In other places like Bahrain where I was, the press completely misrepresented what was going on and grossly exaggerated the time and level of violence.   

While there were some evacuations in Bahrain, most of us believe they were generally knee-jerk reactions on the part of a few risk averse companies (and individuals in some cases).  The reality is that expats on the ground know exactly how dangerous things are and the areas they should avoid when they are hot spots.  Bottom line:  evacuations not necessary in large part and somewhat damaging from a business, economic, and employee psyche standpoint.

LS:  What would you say are the biggest challenges that energy companies in particular face in sending assignees into the middle east?  

JD:  The first concern is for the cultural differences.  The oil and gas companies tend to send expats who have been working the fields primarily in North America and the North Sea area.  They do so all too often without first orienting them to the significant changes in local customs, culture, religion, and language.  For many expats this is a much larger leap than they expected and the result is a poor ambassador for his/her home country and company. 

Another challenge is mercurial and unpredictable nature of local companies and their managers when it comes to expat employees and their roles in the organization.  Expats have to understand that “nationalization” takes priority and they will always be treated as temporary workers or visitors.  Multinationals that deploy many of their top people to joint ventures in international locations have to ensure that proper repatriation is incorporated into the career development and succession planning of the global company.  Local ME oil and gas organizations are often joint ventures that include national government entities, multinational professional staff, and high-level local national managers; getting everyone on the same page in this environment can be challenging to say the least.

Many thanks to Mr. Douglass for taking the time to work with me and provide me with these thoughtful answers.

The Global Mobility Identity Crisis

Often, the international assignment function seems to suffer from an identity crisis.  I began to notice that colleagues managing this function seemed to vary in terms of the departments to which they were aligned.  Though each alignment presents it's own challenges, I would recommend each organization to look inward and examine if the international assignment program is located to best achieve internal goals.

"Self-portrait" 1861 Henri Fantin-Latour

Resourcing Alignment

I have observed cases where the global mobility program may belong, from a reporting standpoint, to the recruiting function as some of the tasks (e.g., relocation, immigration, on-boarding) seem to relate to bringing in talent to various areas within the company.  However some issues may be present with this alignment, for example:

• Separation from talent management and succession planning function:  resourcing is more concerned with filling gaps than planning next steps for successful candidates.  
• The tendency for recruiting to 'bend the rules' to attract a candidate could lead to more policy exceptions which in turn can make running a consistent program a real challenge.

Tax Concerns

This group is concerned with tax compliance.  Though this is an aspect of assignment management that is growing in importance, it is not the end all and be all.  Allowing audit-fear to run an international assignment program may be a 'safe' approach, this alignment may not enable a corporation to get the most out of its assignment program.  Instead of reporting to tax, or assigning a tax professional to the function - there should be a strong partnership to leverage the support-strength of the corporate tax function.

Reporting to Compensation and Benefits

Compensation professionals have an affinity for creating global alignment between job descriptions, and they may view the expatriate program as a series of perquisites or benefits enjoyed by an elite population.  Though this alignment will enable better connection to things like bonus, multi-year incentive programs, stock options and deferred compensation program - this alignment may lead to the expatriate function moving from strategy to more of an analytic support function.  

Connection to Talent

Though not often seen, I feel that the best alignment may be to the talent management function.  I feel that an expatriate program, at it's best, is a development program for the high-potential employees within an organization.  The talent group has a strong investment in retaining key talent and planning for key leadership positions within the organization through succession planning.  Often persons feel lost at the end of the assignment in terms finding a good fit for their next role (or worse, no role at all). 

Who owns the international assignment function communicates where the values of the company are focused in terms of the benefits expected from the global mobility program.  Consider the benefits of aligning to talent management and succession planning if developing and retaining key talent is your ultimate program goal.

“You are never too old to set another goal or to dream a new dream.”
― C.S. Lewis

For more on the topic of global mobility alignment, check out this white paper written as a result of my collaboration with Mobility Services International. In the article behind this link there is a further exploration of the link to global mobility alignment and program goal achievement (see pages 5 and 6).

An Inconvenient Truth: HR, you're only as good as your vendors!

All Human Resources professionals are either supported by (or at the mercy of) the providers that support their organizations.

For, among others, the following services:

Picasso, "Girl before a Mirror" - 1932  

• Employment Law & Immigration
• Medical Insurance
• Benefits Management
• Leave Administration
• Drug Testing
• Work Life Balance
• Training
• Recruiting
• Payroll
• Tax
• Relocation, etc.

It usually goes that we inherit providers selected by previous managers.  And, most of the time, the HR people dealing with the day-to-day issues with a vendor don't get to select those vendors, or learn to make up for what that provider may not do so well - as an act of preservation.  It's just what good HR people learn to do...

Much tips the scales towards one provider or another, usually its price and capabilities.  Because at most companies the RFP process is so arduous, it does save time to go with an all-in-one provider.  You may go with one provider for Relocation support and also look for the potential to add other services on an as-needed basis.

Smaller specialized firms deserve a closer look.  Some reasons include:

• VIP Client-Status: I've observed that some larger service providers you may be one of many clients and get lost in the crowd;
• Real Subject Matter Expertise: A law firm that only specializes in employment law or immigration just has a distinct advantage;
• Advocacy:  These firms may have their own lobbyists to influence positive change.

This means that some specialized providers may be at a disadvantage over larger firms.  Larger firms with sales departments just as large as their customer service group.  I'm not casting dispersion on this, it's just good business.

Time and time again, the same service providers have a habit of making the same mistakes.  Human Resources will call them in with a list of areas for improvement, see service improve for a time, and then slowly but surely things start slipping again.  

But, avoid some pitfalls, if possible:

1. Though you may be tempted, avoid asking specialized providers to do something they are not equipped to do.
2. Don't leave them hanging.  Ensure the provider is well-connected to point people in your organization and understands your culture.
3. Avoid being a 'guinea pig' for a new service they may be adding to their offerings.  Wait at least a full year or two until they work out the kinks.
4. Your provider may get bought-out by another larger organization.  

In my industry, international relocation, there has been a lot of consolidation of settling-in providers in particular.  Though it takes more time, finding the best provider with local offices in your key markets is the best approach, in my opinion.  

People in the Expatriate Management business will probably know who I'm talking about - because two major settling-in providers were 'swallowed' up by one.  What I've seen is the really good local consultants are putting out their own shingles.  I think there may be a reason.  

But even before the consolidation, I had some major misgivings about the service provided by some of the formerly independent agencies.  The usual breakdown is something like the following:

The Hourly Approach

• Half-day program for business travelers;
• Full-day program for short-term assignments;
• Three days for single assignments;
• Six-days for assignees with families.

Some providers offer a flat-fee approach.  Services such as Intrepid New Yorker offers a service that for a flat rate, they will do what ever it takes to acclimate your assignee to the area.  They often have consultants that have relocated internationally themselves and have a first-hand appreciation of its complexity.  They are able to offer a real-time cross-cultural training approach to their settling-in services.  

Other firms will hire current real estate agents; and while these agents have a lot of transferable skills and knowledge that will help your transferee - I worry that their real estate agent will rear it's head and before you know it they'll be showing houses to purchase not rent - which hurts assignee mobility and causes other downstream problems seen during the bubble when housing took a nose-dive.  

Recommendations:

1. Negotiate a flat rate, not an hourly rate with your settling-in provider;
2. Look for firms that only do settling-in support;
3. Identify firms who use former real-estate agents (not active ones) and transferees;
4. Find firms that have consultants that you can contact directly - not ones that you have to go through many layers;
5. Ensure that assignees only have to do one intake needs-assessment and that information is shared between the relocation consultant and the settling-in service.

“Those who cannot change their minds cannot change anything.”  

― George Bernard Shaw