Assignments into New & C hallenging L ocations

2. Assignments into New & Challenging Locations

3. Agenda Topics • Understanding the issues • Providing support • Alternative options • Proper career planning

4. Understanding the Issues

5. Your phone rings…. We are sending someone to Myanmar to start up operations there. The assignee has already agreed to take the assignment. It’s a new location for us. Make it happen! Aaaaaah!

6. Do you have?..... New country setup protocol or a cross functional team Vendors who can help with immigration, tax, etc. Internal Security Department

7. Further considerations… Mobility Policy: Many “expat goodies” and soft services were eliminated during the recession and policies were adopted that were not well suited to challenging locations. Does your policy have Hardship? R&R? Cultural Training? DSP? Mobility Framework: Recruitment and retention issues will occur if your mobility framework is not adapted to meet the needs of challenging locations. Flexibility is important. Duty of Care: Evacuation and contingency plans are critical. Reputational and employee risk if not properly planned.

8. What makes a location challenging? Lack of International Schools Security Concerns Inadequate Medical Care Substandard Housing Frequently changing immigration or tax laws Limited Goods and Services Small or no Expatriate Community Remoteness BoredomPolitical Instability

9. Addressing Challenges • Perception of risk for taking assignment to a less “visible” location • Recognition for taking an assignment to a difficult location Assignee • Knowing when to allow or not to allow for accompanied status • Providing support to accompanied or unaccompanied families Family • Need to attract talent to the host location • Balancing operational requirements with frequent leaves • Developing markets may not have funds to support assignment Business Company • Coordinating with security department • Need to focus on duty of care • Retaining employee in talent pipeline

10. Classifying Challenging Locations B A C International School Variety of accredited international schools Only one or limited international option No accredited schools Security risk low; no additional company support required Security Security department recommends driver or other precautions Security department recommends major precautions; guards Medical Care Top quality medical care; all urgent needs met Local routine care is adequate; major care not available Limited clinic services Housing Only substandard or temp. accommodation available Wide range of international quality housing available Limited international quality housing available Shopping Basic goods only Some international brands unavailable All goods and services available Expatriate Community Moderate size expatriate community; may be of limited diversity Very limited expatriate community Diverse and large expatriate community

11. Alternative Approaches

12. A, B, and C Locations A B C Standard Long Term Assignment Benefits • Standard Long Term Assignment Benefits • PLUS - • Additional Provisions to meet Host Location Needs Alternate Mobility Approach Tailoring the mobility package to host location conditions adds to the safety and success of an assignment. Flexibility is important!

13. Resident Assignment in a “B” Location PRE-ASSIGNMENT VISIT • Allow the assignee to visit the location before moving; help set the right expectations SETTLING IN SERVICES • Ensure the assignee and family have adequate support from DSP; extra days may be needed MEDICAL • Assignee and family should have a medical check prior to travel • Evacuation insurance should be in place INVOLVE SECURITY • Corporate security department should review host location and approve residential areas • Evaluation of need to provide car and driver, guard, or other security measures EMERGENCY PLAN • Ensure you have an evacuation plan in place and assignee knows what to do in case of emergency and what is covered for self service HARDSHIP • Hardship should be offered and tailored to host location • Ensure your scale is high enough: 40% is becoming a more common max among non-Oil companies; among Oils, up to 80% REST & RELAXATION LEAVE • An R&R benefit should be part of the Standard LTA offerings for challenging locations • Up to two trips per year to a nearby location

14. Alternative Approaches for “C” locations • Unaccompanied: • Employee resides in host location, family stays behind at home • Additional home leaves provided • Commuter: • Employee travels to host location and returns home weekly or monthly • Accompanied, Proxy: • Worksite and assignment location are different, but both in an international location • Family lives in assignment location and employee travels to worksite during week • Rotator: • Assignee alternates between a scheduled amount of time working when in the host location and not working when at the home location

15. Choosing the Right Assignment Package Are host location conditions adequate to support a fully resident long term assignment? YES NO Is there adequate schooling? Do operational requirements require full time staffing of position? YES NO NO YES Is there schooling in a nearby city? Standard LTA 6 weeks on 2 weeks off Rotation 1 month on 1 month off Rotation NO YES Proxy Assignment Unaccompanied Assignment

16. Case I: Assignment from UK to Lagos Joe Accountant • Needed in Lagos for 2 year assignment • Spouse is a high income earner in UK • Has a special needs child and proper education not available in Lagos • Unaccompanied assignment: • 4-6 Home Leaves a year to visit with family • No R&R • Standard Lagos hardship payment • Host Location allowances based on single status • No housing deduction (Norm)

17. Case II: Assignment from Australia to Samara, Russia Julie Plant Manager • Needed in Samara for a 5 year assignment • Has two children • No international school in Samara, but Samara is 2 hour flight from Moscow Moscow Samara • Proxy assignment: • Family on assignment in Moscow • Assignee commutes to Samara on Monday, returns on Friday • Hardship premium based on Samara • COLA and host housing based on Moscow • Assignee’s lodging and transportation covered in Samara

18. Case III: Assignment from US to a Remote Construction Site in UAE Sam Engineer • Needed in UAE to complete 12 month construction project • Construction site in remote field location • Camp environment; no local housing, shopping, recreation • Rotator Assignment: • Employee works 6 weeks on, and is home 2 weeks not working • Hardship premium for days spent in UAE only • No cost of living support as daily needs provided in camp

19. Alternative Approach Watch-outs • Unaccompanied: • COST: If the assignee has a large family, unaccompanied status may be less expensive because education costs would not be paid and the housing budget would be less. But if the assignee has a small family, the cost of extra home leaves and potential additional taxes may cause an unaccompanied assignment to be more expensive than an accompanied one • FAMILY: Separation from family for extended periods may put strain on the assignee and family • POLICY: If rationale for unaccompanied status not clearly stated, policy may be abused • Accompanied, Proxy: • TAXES: The worksite and the resident location should, preferably, be within the same country. If in two separate countries additional and complicated tax liabilities may arise. • Rotator: • POLICY: A separate policy is needed to govern this assignment type • TAX: Employee may not be able to break home residency; additional tax costs may accrue

20. Proper Career Planning

21. Out of Sight, Out of Mind The biggest complaints from assignees in challenging locations are: I am worried about finding my next job in the company; it is hard to network while I am here. I found it challenging to settle into the assignment because I did not receive adequate company support. This assignment location is not a key center for the company; I feel like I am missing out on opportunities. When I returned from assignment, the valuable skills I learned working in a difficult location were not used or valued. Proper career planning is critical for assignments to new or challenging locations and can serve as more of an incentive than Hardship or other cash allowances

22. Talent Management Following the assignment lifecycle, there are three phases of talent management:

23. Career Planning • Targeting employees with “Global Mindset” and ability to adapt culturally • Setting assignment goals to drive success • Identifying potential roles for the next job within the company • Rewarding assignment with future career growth • International assignment as part of a well developed career plan • Assignee mentoring