ANATOMY OF AN INTERNATIONAL BUSINESS

Transcription

1 ANATOMY OF AN INTERNATIONAL BUSINESS 1

2 INTRODUCTION Globally there s a firm trend for businesses to look beyond their borders in pursuit of growth. Yet, to date, this trend to globalisation is not replicated in the UK which remains primarily an import orientated economy. This concerns the UK Government which is keen to encourage businesses to look into the opportunities international markets afford them as a route out of recession. TERMS OF REFERENCE ABOUT THE REPORT Based on independent omnibus research among British SME businesses, the Expacare report aims to: u Establish whether British SMEs are heeding Government advice to move overseas and if not why not. The message appears to have struck a chord with corporate businesses. A growing number of corporate and SME companies are extending their reach onto new markets across the globe. From a growing business perspective, an estimated 20 % of SMEs export overseas and while the needs of corporate businesses extending their business beyond these shores are fairly well documented much less is known about SME requirements. Indeed a report from Barclays suggests that our assumptions of the size and age a company starts thinking of doing business overseas is outmoded and that today s businesses may be thinking globally from outset. But if we don t know who s interested in going overseas, it s reasonable to suppose that we probably don t understand their wants and needs, e.g. healthcare, once they get there either. And if this is the case, what chance do we have of boosting overseas trade. u Consider triggers for moving overseas and any stumbling blocks for doing so u Hotspots in terms of destinations and why u Examine how they recruit and maintain key staff in foreign bases u What their healthcare provision is like RESEARCH Expacare s Anatomy of an International Business report aims to examine which SME businesses are moving overseas, why they are moving overseas and asks how we can help them build their international footprint. The research sample was 1,000 businesses with between 5 1,000 employees. Research was conducted using a telephone poll. The results were then categorised by size of company, region and nature of the business. 2 3

3 HAS UK BUSINESSES GOT THE DESIRE TO EXPAND OVERSEAS? 44% Research conducted has revealed just how many businesses are looking to expand overseas, with a quarter (25%) of businesses stating that they are hoping to do so in the future. Number of businesses wanting to expand overseas The Government has been working hard to encourage UK businesses to consider expanding overseas and it would seem that the message is getting through. - 44% of businesses stated that as we re living in a global marketplace they want to be a part of this in terms of expanding overseas. - 32% said that as a client of theirs has an international presence they want to support them in the marketplace. - 36% think that doing business overseas is to become more common for SMEs in the future. However, this is not necessarily something completely new: - The majority of businesses are already making the most of the EU rules allowing them to operate overseas with over 34% admitting that they already operate in Eurozone countries. - SMEs are also looking to spread their wings to a number of countries, with 39% hoping to operate in Scandinavian countries and over a 36% are looking to operate even further away from home in BRIC countries. - Businesses have also tended to avoid certain countries for business altogether with, 41% stating that they would not operate in Switzerland and 48% of businesses stating that they would not consider doing business in South Africa. In addition, businesses were also concerned about a number of issues: - 30% stated a lack of knowledge as being a key challenge and just over 32% stated that set up costs would make this an expensive process. - Meanwhile, funding healthcare provision was less of a worry for most businesses, with this not being seen as a barrier to moving abroad, with just over 13% of businesses concerned about this. In fact, when considering the desired elements of a benefits package for international staff, private health insurance was the most popular (32%). Globally there s a firm trend for businesses to look beyond their borders in pursuit of growth, which is encouraging. Yet, to date, this trend to globalisation is not replicated in the UK which remains primarily an import orientated economy, with companies not currently operating outside the EU. The UK Government is keen to encourage businesses to look into the opportunities international markets afford them as a route out of recession. Beverly Cook CEO Expacare 32% Number of businesses considering private health insurance for overseas staff as part of a benefits package 13% Number of businesses concerned about funding healthcare provisions 4 5

4 70% of employers feel more responsible for overseas employees WORKING ABROAD - THE EMPLOYER / EMPLOYEE RELATIONSHIP With more and more businesses expanding overseas, it is interesting to examine employer s duty of care towards the staff that they are sending overseas. How long would you typically look to post an employee overseas? 9% 9% 1-2 years 8% 26% 13% 3-6 months Open ended 6-12 months Unsure 13% 33% No requirment The majority of businesses typically only look to place their employees overseas on a short term basis: - 33% for only 3-6 months, with regular return trips back to the UK. - While 10% planned an open ended placement, with staff operating overseas for as long as was required Interestingly, the options provided for staff moving internationally and domestically varied very little: - Non-contributory pension, share options and private health insurance are considered as the most important employee provisions (20% for international staff and 21% for domestic staff). - For those businesses operating overseas, four in ten stated that the package between UK staff and international staff is the same, but that the company needs to put more money into this. - Surprisingly, 29% stated that there was no difference in provision between UK and international provisions. It is encouraging to see that employers feel such a duty of care to international staff, as a result of this it is important that they have the right packages in place to ensure that their employees remain healthy and happy when working overseas. Beverly Cook CEO Expacare When it comes to deciding who to send overseas, experienced junior managers were the most likely to be recruited internationally. However, despite the package not varying greatly, employers clearly feel a duty of care to their international staff. - 30% say that when they relocated employees they felt more of a responsibility towards staff members, but not towards family members. Number of businesses concerned about funding healthcare provisions 6 7

5 THE VALUE OF HAVING THE RIGHT HEALTH COVERAGE With businesses increasingly expanding overseas, employers need to be sure to check the small print of the policies that they have purchased for staff- rather than assuming all the crucial aspects are covered. Our latest research revealed exactly what was most important for employees in terms of their international health insurance policy. Especially valued was: 39% 36% 10% 20% 30% 40% 50% Surprisingly, few valued palliative cancer care and only thought that this should be included in an international health insurance policy, despite rating cancer cover highly. Employers revealed varying attitudes to health insurance provision for employees: 10% 20% 30% 40% 50% However, perhaps most worryingly was the fact that: - 16% of businesses believed that travel insurance would cover them in the event of a medical emergency. - The majority of businesses believed that UK businesses expanding into the EU did not have to take out International Private Medical Insurance.. This implies that there is a need for more transparency with policies. Policies should be more transparent. In addition, costs for cancer and chronic can quickly escalate and it is important for those moving overseas to be covered. The quality and cost of medical cover abroad varies considerably and it is worth remembering that sourcing medical help in foreign countries can often prove difficult than we re used to in the UK. Beverly Cook CEO Expacare 29% 20% 39% 36% Medical evacuation 24 hour medical helpline Choices of treating doctor and medical facility Cover for Cancer 29% Personal choice for employees Would like to provide it but that they can t afford it Essential for international employees What would you consider the core / desired elements of a benefits package for domestic staff? Choice Non contributory pension Share options Private health insurance for staff Relocation allowance Private school for children Extended holidays (for traveling home) Orientation course - language training/ cultural support 15% 8% 24% 1% 8% 10% 6% 5% Private health cover for dependents Health / social club 33% Income protection 17% Critical illness cover None of the above 14% 23% Other % 30%

6 THE HIGHEST LEVELS OF MEDICAL PROTECTION GLOBAL HEALTHCARE PERSONAL SERVICE COLUMBIA CENTRE, STATION ROAD BRACKNELL, BERKSHIRE RG12 1LP, UNITED KINGDOM T: +44 (0) F: +44 (0) E: