HR Challenges of Relocating an Employee from Melbourne to London

Brexit effect Question: Identify and Discuss the Human Resource Management issues that a HR Manager in Melbourne would have to Consider when relocating a Manager from Australia to Manage a subsidiary branch of an Australian Multinational Organisation that is Located in London in the United Kingdom. Answer: Moving to a new location, especially in a new country, in response to a job demand can be challenging to the employee as well as the HR manager. Several practical issues need to be tackled to settle in the new job and location. The new manager who is moving from Melbourne to London has other added challenges i.e. the employee is arriving in London in midst of Brexit turmoil. The decision of the UK parliament to move away from European Union may have much serious impact on the UK employment sector, its GDP growth, the foreign exchange rate of GB pounds, etc. The host country UK need to convert the thousands of EU laws to UK laws which ranges from workers wages laws to complex environmental laws that govern the carbon emissions.From a family perspective, the excitement of living in one of the popular cities of the world would be high, but a range of practical issues need to be managed before they settle as residents. Finding a suitable residence, identification transport to commute to work, finding right school for children, etc. can add stress to the incoming employee. Not only the employee and his / her family is concerned about the adjustment issues, The HR manager also has critical role in successfully relocating the employee and gain the targeted productivity from the employee. Managing a business at global level is challenging than running it in the native country. For many multinational companies, relocation has become a routine task, as more of them are relying on their inner resources to expand the business in other countries. The moving employee is likely to have intense emotional experience for some time during the travel and initial months of the new life. In order to facilitate the employee to reconcile with the new job and adapt to the social surroundings, the HR manager must apply the resources based on sound HR theories and practicality. Work - Life in London Expatriates are likely to be thrilled about working in London, because of the career and leisure opportunities the city is offering. The relocating employee will be landing in a multicultural and densely woven fabric of diverse population with backgrounds in cutting edge technologies and exposure to fine living. London is not only the political capital of UK, but also wields economic power. The expatriates are likely to find many business opportunities there. The business sectors that are well established in London include, finance, medicine, creative industries, law, IT, hospitality, etc. However, with the beginning of the Brexit, expatriates moving from other countries are required to get valid work permit before starting the work. At the moment the requirements to get the work permit is unclear due to the changes in employment laws. It is a known fact that London is one of the expensive cities of the world, and the relocating employees must earn enough salary to compensate for the living expenses, insurance and savings. Another challenge the city offers is about identifying affordable accommodation. Because of the high cost of living and the density of population, the expatriates may find the accommodation not matching to their expectations i.e. smaller accommodation at higher rents. Since London has a long history of housing foreigners for long time and attracts people from all over the world, there is significant expatriate population. Century old and well-established communities of Africans, Chinese, Indians, Australian immigrants are spread across the city. An incoming expatriate can get connected to them easily, who are prepared to welcome the new members. Because of the presence of multitude of cultures the city of London offers never ending opportunity for social stimulation and cultural exchanges. The city is perpetually energized by the diversity of the population. The creative assets of London are enormous; the expatriates are likely to be benefitted by many free festivals and events such as art shows, film festivals, exhibitions, etc. throughout the year. Brexit effect Even though the European Union collectively has contributed to the economic growth of the United Kingdom, it has decided to sever membership with the Union. Now, it is almost certain that UK will not be part of the EU and the political leadership has begun to prepare for the consequences of the fall out. The economists are predicting a slowdown in the economy of the UK, and it can affect other European countries too. Brexit has imposed burden on the economy and its complete impact cannot be fathomed at the moment (Grant, u.d). The trade barriers that are going to be imposed in the neighboring countries are expected to weaken the financial conditions and erode investor confidence. Apart from trade barriers, the labor movement also will be constricted leading to increase in unemployment and lower wages. In the long run the country is about to experience lower capital investment, lower immigration and retarded technological progress (Tilford, 2015). The labor productivity is also likely to be low due to lesser capital and revenue inflow, and lower skill acquisition. Within a decade the GDP growth will be lesser than it would have been with the European Union. Some economists are of the view; the Brexit not only hurts UK, but also other countries of the Union (Noe, et. al., 2006). With the formation of the European Union the living standard disparity was beginning to reduce, but now the economic impacts cannot be forecasted (Farndale, Scullion Sparrow, 2010). HR Practices in London /UK In United Kingdom HRM practices are delegated to managers and mist are involved in developing employee policy, designing learning and proactive resourcing (Adam, 2017). The essential HRM role is about strategic co-ordination and other broad range of activities such as recruitment selection, performance appraisal, etc. The management of HRM issues is entrusted to managers such as pay administration, recruitment, designing working conditions, performance appraisal etc. (Dowling, Festing, Engle, 2008). HRM activities are generally not delegated to other line managers or supervisors. The UK applies strategic HRM practices more than any other country in the European Union. Most organizations have an accountability framework to report various HR related issues and are linked to strategic goals. Salary Administration: Basic salary and bonuses are determined through collective bargaining with representatives. Executive and professional pays are fixed by centralized body meant for pay review. The salaries are revised usually on annual basis, and rarely other time frames are used for pay review (Schuler, Jackson Tarique, 2011). The department, qualifications and experience form the primary basis of salary and job content and performance are the secondary determinants of salary. In some organizations seniority is also considered for the pay administration. Working time: The average number of working hours per year in the UK is lesser than that of other European countries (Arrowsmith Pulignano, 2013). Similarly, the weekly working hours are also less .The public holidays and annual leave days are more excluding sick leaves. Promotions: Based on the number of staff available and needs of the organization, the vacancies are published transparently to all the employees in the organization. The companies follow merit based selection using assessment centers and competency based interviews. No much affirmative action is in place to give priority to specific groups. Performance appraisal: This function of HR is extensively used in the UK for pay rise, promotions and training. All employees in the UK are subjected to appraisal procedure that consists of an annual meeting and a written feedback. The typical appraisal content s include 360 degree feedback, quality and productivity of outputs, cost effectiveness in work, improvement in competencies, motivation to perform better, interpersonal skills, etc.( Waddington, 2010). Career advancement and remuneration is based on the appraisal. Expatriate Issues Expatriation is the process of transferring employees or managers to a new country to oversee a branch or sub unit of an organization. Before the employee leaves the native country, the expatriation process ensures a training to raise awareness about cultural differences and a strategy to tackle the culture shock (Oberg, 1960), (Dictionary of Human Resource Management, 2001). Expatriation can be Difficult and filled with challenges when moving to a new country for job reasons. Because the cultures of each country vary significantly, many issues can directly affect the expatriate through cultural differences, for example ethical dilemmas or security issues are frequently ones (Shimoda, 2017). Another common problem encountered by the expatriates is finding an accommodation and merging with the host countrys society. According to a HSBC Expat Explorer Survey (2008) the frequent problems bothering the expatriates include finding a suitable accommodation, learning the local language, socializing and making friends, organizing finances for local expense, managing healthcare issues and locating a suitable educational institution for the children. It is observed that younger expatriates have the knack to learn the local language quicker, but lag in socializing and making new friends. Also, skills to manage the practical issues are lacking among the younger expatriates. Older expatriates are capable of solving practical issues such as locating a school, finding accommodation, arranging transport for commuting, etc. they lag in learning the local language. It is observed that many expatriates miscalculate the difficulties and are over confident, until they face the issues. There are differences in cultures among countries; for example, Canada is a welcoming country, because most of the expatriates moving to this country form friendships with the local people quicker, while in United Arab Emirates, only about half of the expatriates are able to develop friendship with the local population (HSBC Expat Explorer Survey, 2012). Cross Cultural aspects and training In the context of globalization, managers have the responsibility to manage people from different cultural origins, and any misstep will affect the companys profitability negatively. People of different countries have unique ways of perceiving things, events, attires, etc. Diversity in cultures can cause problems to expatriates such as interpreting actions and comments, predicting behavior and responding to situations (Laznyi, Holicza, Baimakova, 2017). As per Edward T Hall, cultural differences can be explained in a multidimensional manner. Some of the cultural differences are due to high context vs. low context communication, monochromic vs. polychromic approach to time, future vs. past vs. present orientation, etc. Similarly, Greet Hofstede identified factors such as power distance and individualism vs. collectivism, etc to explain the cultural differences (Laznyi, Holicza, Baimakova, 2017). In various cultures, time is considered as a critical resource, and cannot be squandered. In other cultures, time is abundantly available and people show no hurry or urgency for the matters. In German culture, punctuality is appreciated and time is considered as limited. Another prominent cultural dimension is power distance. Power distance means the degree to which people can acknowledge the differences in influence. The cultures that have high power distance, hierarchy is accepted. In cultures with low power distance, people do not require explanation or justification to power distribution (Hofstede). Similarly, individualistic cultures value self reliance and achievements. Employees who show initiatives, work autonomously or are self starters are accepted. In collectivist cultures, people are expected to maintain harmony of the group and affiliate with them (Laznyi, Holicza, Baimakova, 2017). In order to overcome the cultural issues, awareness training is suggested. For example, the social customs; verbal and non-verbal communication; taboos and rules; management structures; business practices and customs; and decision-making processes prevalent in the host country need to be exposed to the expatriates. The country specific cultural awareness training should be imparted to the relocating employee. The training should include more than one cultural dimension at deeper levels of awareness. Involving the spouse and family enhances the success of the training and adjustment in work life (Kalra, Malhotra, Kondepudi, Nagarkatti, 2017). It is also suggested that maintaining positive attitudes towards other countrys cultures is essential for cross-cultural communication especially relating to economy, politics and social culture. (Christopher, 2012) Conclusion The key challenges for an HR manager are to identify the probable issues the expatriate may face at the relocated country. Once the key challenges are identified, setting up training to enhance the adjustment of the employee to the new world of employment is the next priority. In order to gain business in the globalised world, relocation and the process of training the employees is an investment for the company that can gain better profitability in the long run. References Adam, D. (2017). Book Review: Comparative Workplace Employment Relations: An Analysis of Practice in Britain and France. Arrowsmith J. and Pulignano V. (eds.) (2013) The transformation of employment relations in Europe Institutions and outcomes in the age of globalization, London, Routledge.. Christopher, E. (2012). Communication across Cultures. Hampshire. Palgrave Macmillan. Dowling, P., Festing, M. Engle, A. (2008). International Human Resource Management. London. Cengage Learning EMEA. Dictionary of Human Resource Management (2001). Oxford University Press, Oxford. Farndale, E., Scullion, H., Sparrow, P. (2010). The role of the corporate HR function in global talent management. Journal of World Business, 45(2), 161-168. Grant, C. How Brexit is changing the EU.CER Bulletin. Hofstede, Geert (December 1983). "Culture's Consequences: International Differences in Work-Related Values".Administrative Science Quarterly. Johnson Graduate School of Management, Cornell University.28(4): 625629. HSBC Expat Explorer Survey (2012) https://www.expatexplorer.hsbc.com/survey/, Accessed on 4th April 2017. Kalra, S., Malhotra, S., Kondepudi, T. B. S. M., Nagarkatti, V. (2017). STUDY OF ADJUSTMENT OF WESTERN EXPATRIATES IN INDIA.International Educational Scientific Research Journal,3(3). Laznyi, K., Holicza, P., Baimakova, K. (2017). Different Cultures Different People. InExploring the Influence of Personal Values and Cultures in the Workplace(pp. 183-200). IGI Global. Noe, R. A., Hollenbeck, J. R., Gerhart, B., Wright, P. M. (2006). Human resource management: Gaining a competitive advantage. Shimoda, Y. (2017). Transnational Offices. InTransnational Organizations and Cross-Cultural Workplaces(pp. 47-82). Palgrave Macmillan US. Schuler, R. S., Jackson, S. E., Tarique, I. (2011). Global talent management and global talent challenges: Strategic opportunities for IHRM. Journal of World Business, 46(4), 506-516. Tilford, S. (2015). Britain, immigration and Brexit.CER Bulletin,30, 64-162. Waddington J. (2010). European Works Councils and industrial relations. A transnational industrial relations institution in the making, London, Routledge.