Expatriates and HR Presentation

• 1. SUCCESS AND FAILURES FOREXPATRIATES Dr. Lynn Wilson and Jonathan NorrisSaint Leo University

2. EXPATRIATES AND DATA ON MNCS (2009) The success of international business operations mainly depends on expatriates In 1997, American multinationals had 150,000 expatriates stationed abroad and 83,000employees of foreign companies worked in the United States. >> 31.3 million international workers globally >> worldwide sales by MNCs were over $11 trillionCurrent rates continue to decline somewhat in both areas because of the global economicdownturn. US Department of Commerce, Bureau of Economic Analysis 3. HR has to be concerned with more than just employee welfare. HRs role, because of globalization, has to become more strategic.Farndale, Paaluwe, 2005 4. Globalization has elevated the importance of HRM in developingorganizations: The HR function is realigning itself in response to this process ofcross function globalization (building new alliances with thesefunctions), creating new activity streams, and new rules and skillsrequired of the HR professional.Sparrow, Brewster, Harris, 2004 5. 4 NEW ROLES FOR HR DUE TOGLOBALIZATION 1. function as a steward of human capital2. to become a knowledge facilitator3. to be a relationship builder and4. to become a rapid deployment specialist with emphasis onadaptability, tolerance, and a capacity to learnLeggnick, Hall, 2002 6. WHY THE INCREASING NEED FORINTERNATIONAL WORKERS? Whats to blame? Global shortages in population and a dearth of skills amongpopulations. Culture 7. CULTURE Defined as socially transmitted beliefs, behavior patterns and valuesthat are shared by a group of people (Varner et al., 2005. p.1) Influences the way people communicate with each other Influences how we negotiate business, contracts and organize ourbusiness 8. STEPS FOR PREPARING TO FUNCTION EFFECTIVELY IN ANOTHER CULTURE Understand own cultural orientation and acceptable behaviorwithin that cultural context Overcome the belief that ones own self reference criterion isuniversal and avoid judging culturally different behaviornegatively. We do not as individuals take the time to study our culture indepth Expatriate needs to not only know his priorities but also befamiliar with the companys priorities. Less wording 9. SELECTION >> PERSONAL QUALITIESTHAT PREDICT SUCCESS IN THEINTERNATIONAL ENVIRONMENT >> Strong language skills >> An extensive cultural knowledge >> Positive personality traits >> A positive attitude towards other cultures >> Cross-cultural communication skills (the new norm) >> Mature emotional regulation, such as coping ability 10. WAYS TO ASSIMILATE CULTURAL COMPETENCY Develop cultural relativism--accept a point of view vs. assuming something must be right or wrong Demonstrate inclusiveness --incorporate perspectives from diverse points of view Learn to value cultural differences--consider cultural differences as positive vs. as obstacles Expand ones cultural intelligence (CQ)--what dont you know, that you dont know? 11. DIVERSITY CHALLENGES INHERENT IN INTERNATIONAL CULTURES The Explicit culture observable reality of the language, food,homes, buildings, monuments, agriculture, shrines, markets,fashions, and art. Yet, another cultural layernorms and values (these reflectdeeper layers of cultures, i.e., the norms and values of anindividual or group)a. Norms are the mutual sense a group has of what is right and wrong. Norms can develop at the formal level as laws or the informal level as social control.b. Values determine the definition of good or bad. They are closely related to the ideals shared by the group 12. FOR AN INDIVIDUAL, AN EXPATRIATEPOSITION PROVIDES Opportunities for personal and professional development A higher salary (often comparative to the local cost of living, do yourresearch) A good life experience Greater employability for future assignments 13. EXPATRIATE FAILURE Rates : 10% - 50% depending on the country Emerging countries are at higher risk than advanced nations The U.S. 30% - 40% Europe 20% 14. REASONS FOR EXPATRIATE FAILURE Cultural adjustments Language differences Foreign Service hardship Length of assignment Schools Living Accomodations Health Care Access 15. STAGES OF EXPATRIATE ADJUSTMENT 1098Satisfaction Scale76543210Honeymoon Culture shock GradualCompetence Mastery (5 to(2 to 6(6 to 8 adjustment (1 (2 to 4 years) 7 years)weeks)months) to 2 years) 16. STAGES Honeymoon lasting 2 to 6 weeks Culture Shock lasting 6 8 months Gradual Adjustment lasting 1 2 years Basic Competence - 2 to 4 years Mastery 5 to 7 years 17. HOW SUCCESSFUL EXPATRIATION ISMEASURED How effective is the expatriate during his/her stay? What knowledge has the expatriate gained and how the companyutilizes it? How long does the expatriate stay with the company afterrepatriation? 18. AREAS THAT DETERMINE EXPATRIATECOMPETENCE Ability can be trained Knowledge can be trained (including language) Personality more innate, difficult to manipulate Emotional Coping abilityDevelopmental Goals for the Expatriate Focus on international business Increasing ability to function in another culture Increasing openness and flexibility Decreasing ethnocentrism 19. STEPS FOR SUCCESSFUL EXPATRIATION Develop comprehensive, culturally appropriate corporate plans Establish clear realistic international objectives with biculturalstrategies for implementation Selection process Accurate and adequate information Communicate frequently and clearly Training and Orientation Support Services Strategic planning for re entry Re-entry support 20. DISCUSSION The most popular training content is not associatedwith higher organizational performance Two less popular skills are associated with higherorganizational performance Interpersonal & political savvy 7th on the list of 12 Expansion of organizations brand 10th on the list of12 If analysis is correct, companies are emphasizing leadership training on the wrong competencies 21. DISCUSSION How do companies decide which leadership competencies toemphasize?- The ones that are easier to teach?- The ones the leaders request?- The ones the consultants can provide?- Why dont multinationals emphasize on more cultural awarenesstraining? Why dont multinationals employ a different policy instead of anethnocentric policy? 22. REPATRIATION "Expats repeatedly cite repatriation as the area of highestdissatisfaction with respect to organizational policies. 23. REPATRIATION ISSUES Grasping Opportunity --The No. 1 issue for expatriates is career management support. --Should involve the assignee in discussions regarding possible orlikely positions and opportunities to which they might return. Keeping in Touch --Expats often come home to a company that has undergonesignificant change. 24. Reduce Reverse Culture Shock --If theyve adapted well in the host country, then going home is notreally going home. Give It Time --Dont assume the repatriation is finished when the person is backhome and has started the new role. 25. HRS ROLE IN THE GLOBAL ENVIRONMENT HR, as a strategic partner, is becoming the new guardian ofculture because it oversees the implementation of globalcorporate values in the global corporate system Sparrow, et. al, 2003 26. HRS GLOBAL CHALLENGE HR must develop robust global recruitment practices whilerealizing that turnover will occur; ...must know the business aswell as HR practices;...must tailor retention efforts to individual employee needs; ...must know how business operates globally;and ...must be accountable for retention. Lance Richards, KellyServices 27. Thank you for your interest.