Is the Traditional Expat Model Declining? 3 Ways Organisations Are Replacing It

Written by EO Executives on Aug 20, 2018

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The term expat can mean a range of things, but the most common and widely known are those lengthy (2-5 year) international assignments at a mid to senior level.

Not so long ago these were the key ‘go to’ people moves for organisations.

It felt as if there was a whole range of problems that sending off your mid/senior leaders (and their families…) could fix - whether it be launching new products and services, running an ‘overseas’ market or simply rounding off the development of your ‘best and brightest’ with some time away from the corporate HQ.

The world is becoming more global and interconnected and having the right talent, in the right place, at the right time remains as important as ever.

With data suggesting more people than ever are living and working away from their home market - yet the expat model seems to be showing a decline. So what is going on?

I have been speaking with James Lloyd, Senior Vice President, Developed Markets at Nielsen, a $6b global company that operates in over 100 countries. Running the HR function across 18 of Nielsen’s most developed countries, James has some great exposure ensuring that Nielsen has the right talent in their key locations.

What do you think the key challenges are today for expatriate assignments James?

There’s definitely more scrutiny of the cost vs ROI. For anyone that has been involved in arranging expatriate assignments, there’s one word that springs to mind - EXPENSIVE. Rent, visas, school fees, allowances, medical insurance, shipping costs - and all on top of base remuneration. Trust me, it’s not even that hard to find a HR professional who hasn’t silently wept as they signed off that $10,000 invoice for transporting the family pet.

When does this cost become more obvious?

It’s easy for an expat to cost at least 3-4 times more than a comparable local employee, but eventually every organisation must pay attention to its bottom line - and when they do, expatriation can stick out like the proverbial sore thumb. Eventually CEOs and MDs ask - are they really that much better? Are their talents/skills so rare that we don’t have another option? (and the answer isn’t always yes).

Expatriation is now simply an expensive way to solve a talent problem. That’s not new news, but it’s better understood now and more scrutinised than ever.

Does the traditional expatriate model still ‘work’ today then?

It actually relies on an old fashioned, male orientated view of the world. There is an uncomfortable truth with the traditional expatriate model.

If you’re moving a family (which is very common given that most expats are mid/senior level) you’re only offering employment to one person. Even with exceptions (and the are some) the reality is that the expat model has always been a ‘man works/woman doesn’t model.

The thing is, the world is changing and increasingly doesn’t work that way anymore. Women are in the global workforce in increasing numbers, building careers and accessing roles that may previously have been out of reach.

Equality in the workforce is a positive force, we want more, it just happens that a side effect is that assignments that require one partner stepping away from their career are becoming less appealing to many - and the pool of potential candidates is getting smaller.

So, if cost /ROI scrutiny and changing demographics is pushing the traditional expat into a niche tool - but the need to have talent available when and where you need remains. The question has go be asked is; What are organisations doing to replace it?

Embracing virtual leadership as a viable and cost effective alternative

Running large international teams, across multiple countries and cultures has never been easy - but it is getting easier. Faster internet access, better conferencing software, collaborative tools added by cloud computing, HDMI webcams, smartphones, tablets and laptops have made communication easier - and collaboration quicker, coherent and more cost effective.

In addition, falling cost of air travel and investment in airport infrastructure is allowing virtual leaders to commute to multiple markets more frequently and still get valuable ‘facetime’ on the ground with their teams (although we should acknowledge it is poor for the environment).

Virtual leadership does require investment in different skills and tools though. The ability to work effectively and build relationships quickly (particularly across multiple cultures and timezones) requires investment in your flexible working arrangements, diversity practices and performance measurement processes (a method to obtain consistent feedback is especially key - assessing performance when you see someone once a year is impossible otherwise).

As is the ability to identify leaders with high levels of emotional intelligence that can work in this way - but not only can it happen, it already is.

Shifting international/cross cultural experiences to earlier career

What’s a faster and effective way to give your associates exposure to more countries and cultures? Easy, do it earlier.

International rotational programs for future leaders aren’t new, but seem on the increase with a focus on early career (the first 2-5 years). It’s cheaper (typically, you’re only moving one person) and its early enough that you rotate across multiple markets and business units, widening their exposure to your business faster and earlier than ever.

Of course, it’s not without its challenges. Identifying future leaders in their 20s remains an imperfect science (and will you hold onto them long enough to get the full ROI?) - but to build a diverse and global mindset (a must for most organisations) it’s gaining in popularity and effectiveness. 

Investing in growing their local leadership and improving their ability to find it

Finally (and perhaps most obviously) organisations are spending more time, energy, effort on identifying and growing local talent. Best in class talent management and leadership programs in particular are ensuring that identifying and developing talent from all their geographies (and not just in around the corporate HQ).

And even smaller organisations without the footprint to rely on growing their own talent in every market can invest in more proactive, localised hiring and branding. In the past, you needed to have a stronger presence in the market to find and attract local talent proactively. Now the reach and coverage of social/career networks (LinkedIn is an obvious example) are making building your local brand and accessing local labour markets easier - even from afar.

All in all, the expat talent move is moving from mainstream to niche. Should we be worried? No, there’s plenty of other options that will continue to allow us to have the right talent in the right place at the right time. Organisations just need to broaden out their options.

We would be keen to hear your thoughts on this, so be sure to comment below.  

James Lloyd

 

James is a HR leader with international experience, who thrives on running teams and helping businesses rapidly change and transform - particularly in the context of a more complex, global and digital world and always with an eye on finding the right way to grow and succeed. In the meantime, if you would like to connect with James on LinkedIn, please click here

 

 

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