MANAGING EXPATRIATES

The management of expatriates is a major factor determining success or failure in an international business. Expatriates are expensive; they can cost three or four times as much as the employment of the same individual at home. They are difficult to manage because of the problems associated with adapting to and working in unfamiliar environments, concerns about their development and careers, difficulties encountered when they re-enter their parent company after an overseas assignment, and how they should be remunerated. Policies to address all these issues are required, as described below.

Resourcing policies 

The challenge is that of resourcing international operations with people of the right calibre. As Perkins (1997) points out, it is necessary for businesses to ‘remain competitive with their employment offering in the market place, to attract and retain high quality staff with worldwide capabilities’. 

Policies are required on the employment of local nationals and the use of expatriates for long periods or shorter assignments. The advantages of employing local nationals are that they:

● are familiar with local markets, the local communities, the cultural setting and the local economy; 

● speak the local language and are culturally assimilated; 

● can take a long-term view and contribute for a long period (as distinct from expatriates who are likely to take a short-term perspective); 

● do not take the patronizing (neo-colonial) attitude that expatriates sometimes adopt.

Expatriates (nationals of the parent company or third-country nationals) may be required to provide the experience and expertise that local nationals lack, at least for the time being. But there is much to be said for a long-term resourcing policy that states that the aim is to fill all or the great majority of posts with local people. Parent companies who staff their overseas subsidiaries with local nationals always have the scope to ‘parachute in’ specialist staff to deal with particular issues such as the startup of a new product or service.

Recruitment and selection policies

Policies for recruitment and selection should deal with specifying requirements, providing realistic previews and preparation for overseas assignments.