Why Expats are Vital for Your Company's Success in Germany
Expanding your company's footprint into a new country is a more complex endeavor than it may initially appear. Many organizations erroneously assume that what works in their home country will seamlessly translate to success in a different one. Unfortunately, this misconception has led to numerous failures, notable examples being Ikea in 1970s Japan and Woolworth in Germany.
The primary reason for these failures often lies in a lack of understanding regarding the local market, consumer behavior, and preferences. What may be evident to local residents often needs extensive explanation to the distant "traditional management" at headquarters. Drawing from my own experience as an expatriate, I have found myself engaged in numerous management discussions, explaining what seemed obvious to me. Notably, I observed that the more exchanges occurred between the headquarters and subsidiaries, the more successful the company became, with improved management decisions. If you intend to foster these exchanges between your German subsidiary and headquarters, here are three critical considerations:
1. Selecting the Right Expatriates
Several personal factors, including psychological traits, age, and family circumstances, significantly impact the success or failure of overseas assignments. Notably, the well-being of expatriates' spouses and potentially their children in the host country is paramount but not always straightforward to address. These aspects should be given careful consideration in your management strategy.
It's worth noting that language proficiency, contrary to popular belief, is not the most critical factor for international assignments. Studies reveal that language skills exhibit a "negligible to weak relationship" with expatriate job performance. Instead, prioritizing individuals with an "open" mindset is advisable. Those with an open mindset tend to perform better abroad, as they are adaptable in their thinking and can embrace a new culture without negative biases or stereotypes. Such individuals are more likely to thrive when working abroad, enriching the company's working culture.
2. Preparing Expatriates
Effective preparation of expatriates for their overseas roles is paramount. Studies indicate that expatriates are at a significantly higher risk of experiencing depression due to the unique challenges they face. They must navigate a new work environment, adapt to a foreign culture, and cope with the absence of their usual support system. Additionally, managing the bureaucratic aspects of relocation can be overwhelming.
To alleviate these challenges, it is advisable to provide support through a relocation company to assist with document preparation for visa applications and locating suitable housing. When expatriates move with their families, it's crucial not to overlook their well-being, including helping them find suitable schools or kindergartens in a foreign setting. Many expatriates also value access to an external provider for private inquiries, such as finding a psychologist.
Intercultural training has become an established tool for preparing suitable candidates. This training fosters understanding of cultural contexts, adaptation challenges, and job expectations specific to international assignments. HR professionals and researchers should develop tailored training programs to equip expatriates with the knowledge, skills, and abilities needed to navigate challenges effectively and mitigate culture shock.
3. Expatriates' Perception of Germany
While we often receive inquiries from international talents seeking employment in Germany, it is important to note that Germany can be a challenging place for expatriates. In rankings, Germany is placed 48th in terms of being "easy to integrate" for expatriates. They find it more demanding to adapt and form friendships compared to other destinations, as demonstrated by studies. We recommend that employers provide expatriates with insights into what living in Germany entails before their relocation journey begins to prevent negative experiences abroad.
4. The Visa Process
Immigrating to Germany is considerably easier and less expensive compared to other highly developed countries like the UK or the US. Generally, Germany has regulations in place to prevent wage-dumping, which rarely applies to expatriates. Therefore, most visa applications are approved. Expats from non-EU countries usually apply through the German embassy for the so-called “ICT card” which stands for intra-company transfer.
However, it's essential to account for the time required for document preparation and communication with the government. We advise planning at least 2-3 months ahead when working with a relocation company. For those new to expatriate relocation planning, we recommend a timeline of 2-6 months, depending on your resources and capacity to support the visa application process.
Christine is a co-founder of Jetztpat. She was raised in the so-called Schwabenländle but fell in love with travelling to random places very early in life. After living in Japan and Taiwan for several years, she finally went back home to stay in the German beer capital (where she survives by drinking wine). If she is not watching her favorite Japanese Netflix show aggretsuko, you can find her Googling answers to the real questions in life.