International Human Resource Project

8/8/2019 International Human Resource Project

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Human Resource

Assignment

By

Atish Madan

Fp-2

Roll no 18


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Content

1. Introduction

2. Why companies operate overseas

3. The role of expatriates

4. Compensating expatriates

5. A critical note on expatriate compensation

6. The use of locals vs. the use of expatriates

7. Conclusion

8. A note on the group work

9. Growing Expatriates in Indian Companies

10. Reference


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Expatriates

1. Introduction

The world economy is moving away from the traditional economic system, where

national markets were considered as distinct entities - which were isolated from each

other by trade barriers, barriers of distance, time and culture - towards a modern

economic system, where the national markets are merging into one huge global market.

In many industries it is no longer meaningful to talk about the American market, the

German Market or the Japanese market. Therefore, as the development in the

international business environment are forcing companies to think of the world as one

vast market, the companies are being forced to set up their manufacturing and

marketing facilities in different foreign countries in order to do business globally. Ford

Motors, for instance, has production plants in 38 countries and sales outlets in over 200

countries (Ford 1997 Annual report, www.ford.com). In this regard, there are in today's

world a still increasing number of people, who are sent by companies on foreign

assignments for a longer or shorter period of time - and it is those people that we in thispaper will refer to as expatriates.

In this paper, we will seek to present a critical discussion of expatriates from a cost-

benefit point of view. However, since we only are allowed to do this paper in about 15

pages, we acknowledge that this paper cannot be seen as a full-developed academic

work, but only as a preliminary academic description and discussion of the subject,

instead. Our approach will be a brief introduction to Dunning's Eclectic Theory in order

to open the door for explaining why companies may choose expensive means to run

overseas operations. In continuation, we will explain the actual roles of expatriates,

which then will lead us to this paper's main discussion of how expatriates are

compensated and which critical issues such compensation packages bring along for the

companies in today's and tomorrow's world. We then finally end this paper by opening a


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discussion of expatriation in the future by considering the potential challenges and

benefits of using expatriates versus local nationals in foreign operations.

2. Why companies operate overseas

Firms that are operating in a domestic market may find that they possess certain

attributes that allow them capture international markets, but the rise of the multinational

corporations (MNCs) confuses traditional micro economists because: "Operating

overseas usually costs more than operating at home because a foreigner does not have

the same contacts and knowledge of local customs and business practices asindigenous competitors" (Hennart, 1982, p.82). As the use of expatriates in MNCs can

seem confusing because of the cost involved in training and sending managers

overseas, we therefore need to understand why firms then choose to produce in

different countries and find the need to send their own people abroad. Dunning's

Eclectic Theory (Dunning, 1992) offers a theoretical based approach to why

corporations go abroad and consequently prefer to use expatriates. The fundamental

starting point for Dunning's Eclectic theory is that firms exist to turn inputs into outputs

and whether this is done at home or abroad it depends on an enterprise's resource

endowments. Dunning's three criteria's - location and ownership; specific resource

endowments; and the incentive to internalize the need to be met for firms to find it

desirable to operate abroad - are briefly discussed in the paragraph below.

2.1 Resource Endowments

Resource endowments are assets that are capable of generation of a future income

stream for a corporation. Resource endowments can consist of tangible resources

(manpower, capital and natural resources) and intangible resources (such as

knowledge, organizational access to markets and information technology structures).

These two characteristics of resource endowments become uniquely important when

location specific resource endowments exists. This is when the resources are


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originating from a specific country and are available to all firms that are located in that

market but because these resources cannot be exported they lose their value. The

second resources endowment criterion is called ownership specific resource

endowments. Ownership specific endowments are internal organizational resources of

the home country but are capable of being used with other resources in the home

country or anywhere in the world. Examples of these are patents, trademarks and scale

of economies. In the Eclectic theory the pattern of location endowments - that is

resources available to all firms in a specific country - will likely explain whether firms

supply a market by export or local production. The possession of ownership

advantages, internal organizational resources, will determine which firm will supply a

particular foreign market.

2.2 Internalization

The above mentioned resource endowments, however, do not explain why companies

use expatriates, but only gives an understanding of the markets in which corporations

will operate. Expatriates first enter the picture when corporations have strong incentives

to internalize activities. Typical, enterprises will engage in the type of internalization

most suitable for the factor combination, market situations and government policies

which they face: "When it is more profitable for this company to exploit its ownership

advantages in another country itself rather than to sell or license them" (Hennart, 1982,

p.10). Corporations will normally internalize for two main reasons: First, an enterprise

may try to capitalize on the advantages of imperfections in the external mechanisms of

resource allocations. Various aspects of market imperfections include actually structural

imperfections, where there are barriers to competition and where Ricardian rents are

earned. Cognitive market imperfections are the information about a product or a service

that is unavailable and expensive to acquire. Second, enterprises will try to avoid the

disadvantages that are apparent in the market. Examples of such disadvantages are the

protection of property rights, the control of organizational information flows, the defense

of a company's reputation, quality controls for good and services and where the market

does not permit price discrimination.


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Dunning's Eclectic theory can shed some light on why enterprises go abroad and why

corporations indulge in the use of expatriates. When a firm desires to extinguish

bilateral monopoly because of market imperfections: that is, when some markets incurs

lower cost through hierarchical co-ordination (FDI) than through co-ordination by market

prices then the need to use expatriates becomes evident. When an enterprise has

location and ownership specific resource endowments and finds the need to internalize

these because of market imperfections then the expatriate is born (Hennart, 1982, p.

84). The expatriate will likely be used to take out the imperfections of the market by

being the liaison for the organization to that market. Having a manger that knows and

understands headquarters desires and wants is therefore of great importance when

investing and operation in foreign markets.

3. The role of expatriates

From the HR-literature we know that expatriates are divided into three types: PCNs

(Parent Country Nationals); HCNs (Host Country Nationals); and TCNs (Third Country

Nationals). As we in this paper assume that there is no need to define these types of

expatriates, we will instead focus on the different roles of these expatriates by point of

departure in the following four general approaches to international staffing (Harzing,

1999; Welch, 1995):

1) Ethnocentric Approach: Because of a lack of qualified HCNs, PCNs occupy all key

positions in the foreign operation, which means that the subsidiary is highly dependent

on the headquarters' decisions. Some drawbacks from this approach could be limited

promotion opportunities for HCNs, income gaps between PCNs and HCNs, and that

PCNs cannot be involved in local matters.

2) Polycentric Approach: In this approach HCNs occupy positions in the foreign

subsidiary. Some transfers of HCNs to headquarters also take place. The approach

eliminates the language barriers, and typically HCNs are less expensive. Some

drawbacks from this approach could be communication problems between headquarter

and subsidiary and limited career opportunities for HCNs as they cannot be promoted to

headquarter.


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3) Geocentric Approach: In this approach the best people are selected for key

positions regardless of their nationality. Nationality is not taken into account and a

worldwide integration of employees takes place. In this approach an international team

of managers is developed. Some drawbacks from this approach may be related to

situations, where host governments prefer employment of locals because of i.e. labor

issues.

4) Regiocentric Approach: Here a company's international business is divided into

international geographic regions (i.e. the European Union). The staff can only transfer

within these regions.

In order to understand in the roles of expatriates, we then combine the above four

approaches of international staffing with the earlier mentioned Electric Theory. In doing

so, we then finally are able to suggest the major roles of expatriates as

1) securing transfer of technology/filling positions, as companies send the

expatriates abroad in order to transfer their technology to the foreign subsidiary.

I.e. in countries where qualified people are not available, companies send the

PCNs to fill out the positions. This is mostly used by multinational and

international firms.

2) securing the headquarter control, where the companies can exercise this

control by using the PCNs in their foreign subsidiaries. In such situations firms try

to incorporate the headquarters' culture into the foreign operations, which in

some cases may create cultural problems. Especially MNCs tend to demand

administrative and financial control in their foreign operations.

3) opportunity for international experience/ management development, as several

firms find international experience highly important before promoting their

employees. Foreign transfers are here important in order to learn foreign cultures


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and environments. In such situations qualified HCNs are available but managers

are still transferred to foreign subsidiaries to acquire knowledge and skills.

4) securing organizational development, which also is called the "Geocentric

approach". This role is performed only by the best people at the best places

without nationality barriers. Transfers can take place from headquarter to

subsidiary, from subsidiary to headquarter, or from subsidiary to subsidiary.

Nationality of employees does not matter in this situation, as the objective of this

staffing strategy is to get to know about different cultures, create international

networks, decentralization, and interaction between managers of different

nationalities. In general, this strategy is mostly followed by larger globalcompanies.

4. Compensating expatriates

4. 1 Why do companies compensate their expatriates?

The purpose of compensation packages for expatriates is first of all to enable a

company to attract potential job applications, and secondly to be internally

equitable and externally competitive in order to retain suitably qualified

employees. Thirdly, compensation packages should stimulate employees by

rewarding performances that are essential to a company's success, and fourthly

to enable a company to optimize its total wage level. In general, the longer a

planned assignment abroad is, the more the principles and local environment of

the host company determine the compensation packages for the expatriates

(CBS, lecture 15/10 1999, NMN). Also when speaking of compensation, it is

relevant to determine the time period of an assignment, as the literature

distinguishes between three different assignment stages for expatriates: a) short-

term assignment, which is up to one year and without the family, b) long-term


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assignment, which is for more than a year, and c) permanent assignment. Both

long-term and permanent expatriation include moving the family along.

4.2 How do companies compensate their expatriates?

4.2.1 Types of compensation packages

When designing a compensation package, companies usually choose among the

following six approaches (Briscoe, 1995, ch.5):

a) Negotiation: When firms first start sending expatriates abroad (and while they still

have only few expatriates), the common approach to determine compensation and

benefits for those expatriates is to negotiate a separate compensation package for each

individual expatriate. This approach is build up around each expatriate, and because of

the inexperience of the company of sending expatriates, it can be a difficult task to find

the right balance of compensation. In such cases, the expatriates are often

overcompensated, and it can lead to inconsistencies between many expatriates and the

firm.

b) Localization: It is a relatively new approach used to address problems of high cost

and perceived inequality among staff in foreign subsidiaries. The expatriates are paid

comparably to local nationals, which can make it relatively simple to administer.

However, since expatriates come from different standards of living than they experience

in the foreign country, special supplements may still have to be negotiated.

c) Lump sum: To avoid intrusion into expatriate's life-styled decisions, the lump sum

approach can be used. Here the firm determines a total salary for the expatriate, and

then lets the expatriate determine how to spend it.

d) Cafeteria: This approach is increasingly used by highly salaried expatriate

executives to provide a set of choices of benefits. This enables the expatriate to gain

benefits such as a company car, insurance, company-provided housing, and the like

that do not increase the expatriate's income for tax purposes.

e) Regional systems: For expatriates who make commitment to job assignments within


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a particular region of the world, some firms are developing a regional compensation and

benefits systems to maintain equity within that region.

f) Balance sheet: As this approach is followed by most companies when their

international business expands to the point where the firm has a larger number of

expatriates, we have chosen to dwell on this approach for a moment. The balance sheet

approach is primarily used when the MNCs are sending expatriates from the parent firm

to its foreign subsidiaries. It is particularly used for experienced senior and mid-level

expatriates and keeps them whole compared to their home country peers while

encouraging and facilitating their movement abroad and return home at the end of their

assignment. In essence, the balance sheet approach involves an effort by the

multinational to ensure that its expatriates are "made whole" (that is at a minimum the

expatriates should be no worse off for accepting an overseas assignment). Ideally, the

compensation package should also provide incentive to take the foreign assignment, to

remove any worry about compensation issues while on that assignment, and to ensure

that the individual and his or her family feel good about having been on the assignment.

The balance sheet approach of an expatriate's compensation begins with the

employee's existing parent-company compensation in form of salary, benefits etc. To

this is added two more components: A series of incentives to accept and enjoy the

foreign posting and a series of equalization components that ensure the expatriate does

not suffer from foreign-country differences in salary or benefits. These components

should cover the foreign compensation the expatriates are to receive (see Appendix A).

The balance sheet approach becomes much more complex as the firm evolves into

moving individuals between foreign subsidiaries and from its foreign subsidiaries back

to its headquarters or other home-country locations. With a large numbers of

expatriates, this approach can become complex to administer. Some firms have found

that this approach begins to lead managers to view the incentives and adjustments as

entitlements that are sometimes difficult to change. Other expatriate managers have

complained that this approach to determining their overseas compensation is much

more intrusive into their personal lives than is true for the traditional domestic

compensation package.


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that are necessary in order to convince its employees that it will be to the employees'

financial advantage to take the assignment abroad. Additional incentives usually include

housing allowances, either to ensure the expatriate lives as well as his ore her foreign

peers or to make the expatriate's housing comparable to what he or she had "back

home". In addition to the many incentives that firms have offered to their expatriates,

MNC's have also traditionally provided a number of equalization adjustments, like

compensation for any fluctuation in exchange rates between the expatriate's parent-

country currency and that of the foreign assignments.

4.2.2.2 The intrinsic compensation approach

As mentioned earlier, we use the term "intrinsic compensation" to describe the

incentives that companies use to motivate their expatriates - that is incentives, where

the expatriates do not directly get "money in the pocket" compensation but more in

terms of benefits, instead.

Intrinsic compensation includes scope for development, career movement, and personal

development. An interesting job could compensate for a comparably low pay or long

transportation hour or even move abroad. One example could be to give fast track

managers experience in running a larger organization without close oversight from

headquarters.

5. A critical note on expatriate compensation

5.1 The need to adjust compensation packages

In finding ways of cutting costs as much as possible, several MNCs have in their recent

annual reports stated that they now are seriously beginning to focus on the high costs of

using expatriates, as they in average estimate that their typical expatriate costs are

about three to five times as much as a comparable domestic employee. Several

companies do not even have an exact handle on the costs of using expatriates,

because their accountings are so fragmented - i.e. some of their accounting is in the

local country, some in the regional headquarters, and some at the home office


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(www.euromoney.com). But even without a clear picture of what is going on, companies

that are operating in foreign countries are becoming more and more aware that the

actual costs of their expatriates are very high, and in many cases too high for them to

compete in their foreign locations. For instance, if a company is using expatriates and

its competitors are using locals, then the company may have a rather big cost

disadvantage. And in addition, in some multinational companies the culture is about to

change toward a climate, where it is understood that career development requires

taking a foreign assignment, and where these companies therefore do not pay

compensation premiums or generous cost-of-living adjustments to attract good people.

However, only very few companies have today actually managed to change their

expatriate compensation packages (www.hbs.edu), as it is our opinion that most

international companies still are locked into expensive compensation packages that

were developed in a much different era - that is when globalization and career boosting

through overseas postings were unknown issues, and where these compensation

packages were formulated primary according to the earlier mentioned "balance-sheet"

approach. This point of ours should by no means be misunderstood, as we

acknowledge that if today's companies are simply exporting or using wholly owned or

licensed distributors to sell their goods in a few international markets, a balance-sheet

approach makes sense. Those companies are simply using their overseas business as

an extension of the domestic operations. But in contrast, what we are claiming is that

when companies become truly multinational, with substantial manufacturing, marketing,

distribution, and management investments in many countries around the world, and

when international revenues account for a large part of total revenues, then the

company's business is no longer simply an extension of the home office, whereby

adjustments of the compensation packages are needed in order to keep up with reality.

Theoretically, we can rephrase this as the more global a company becomes and the

more involved it is in foreign markets, the more flexible its compensation policies should

be, as for multinational or transnational companies, the goal is to maximize operations

for the good of the global organization, not just for the home office. Therefore, expatriate

compensation must take into consideration such things as what competitors are paying


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or how expatriate compensation compares with compensation of local employees in the

same job.

5.2 What are the new industries doing ?

Companies in the newer industries, especially those in information technology,

biochemicals, and electronics, have reported to be more flexible in formulating

expatriate-compensation packages and more willing to break with the balance-sheet

approach (www.fortune.com). These companies are more and more using younger

members of the staff and sending them abroad for shorter periods of time - often

technical people in 6 months or less - as most of today's young skilled employees are

much more flexible in terms of cross-culture orientation/exploration and family life. The

shorter assignments also seem to be better for the employee-company relationship

because it means that the employees are not "out of sight, out of mind" long enough to

lose close contact with the parent company.

Companies in the new industries therefore seem to be riding on the fittest wave in terms

of expatriation expenditures, as their talent pool primary are among younger people

(www.borsen.dk), who in general seem to consider short-term assignments as a

combination of a personal and a professional development (and a good career move),

whereby these employees agree to make some extrinsic and intrinsic sacrifices when

going abroad. As a consequence, the expatriate compensation packages in these

newer industries do not aim to keep the employees' standard of living whole, instead the

companies want the expatriates to live as local as possible - and not as part of an i.e.

German expatriate community. However, this does not mean that the person taking a

development assignment will be paid in local wages. For instance, from their web-site,

Deloitte & Touche states that they pay the same base salary in the foreign post as the

employee gets at home: "We don't want someone from Lisbon (Portugal) working next

to someone from New York in London who is making a lot more money, but we

recognize that in some cases we may have to increase the base pay if the person is

going to a higher-paying country like Switzerland" (www.deloitte.com).


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6. The use of locals vs. the use of expatriates

From the previous chapter it becomes quite clear that (in light of cost-cutting strategies)

the managers of today's internationalized companies are increasing their efforts to find

new ways of minimizing the costs of their global expansions by questioning the costs of

their expatriates in terms of adjustments of expatriate compensation packages and

increased use of younger and more globalized employees. As also mentioned in the

beginning of the previous chapter, most companies are in addition increasingly

questioning whether they should continue to send costly expatriates to run foreign

operations or to take advantage of the local workforce. However, going through the HR-

literature it has become obvious to our group that there is no fully developed theoretical

framework for weighing the exact challenges and benefits of employing local talent

versus expatriate employees. But with background in our disperse HR-readings we

suggest to summarize an approach to such weighing in the model found in Appendix A

building upon the works of Doz & Prahalad (1986) and Hamil (1989). With respect to the

restricted limit of this paper we will, however, not comment on each of the parameters in

the model, but use the model as point of departure for further discussion, instead.

In our view, managers should determine the advantages of both types of employees

(expatriates or locals) with regard to the general strategic goals, costs and productivity

of their companies. Different strategic objectives of a company will typical dictate when

to send expatriates and when to localize the business, so it is therefore crucial to

determine whether expatriates can meet these objectives most effectively or whether

local nationals can accomplish them as well. In order to clarify this perspective we

suggest - with reference to the model in Appendix B and to the work of Boyacigiller

(1990) - that a manager in such situations could solve this dilemma by comparing each

of the company's assignment situations with the in chapter 2 earlier mentioned four

most common reasons for using expatriates: 1) to establish a corporate culture

(communicating and translating the corporate vision), and in addition, if the company is

setting up a new business, it only has the expertise to establish it through expatriate

transferees; 2) to transfer knowledge (locals as a choice, but expatriates to transfer


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technology to three or four locals at one time, which can be a major cost advantage); 3)

to fill a skills gap (providing skills that are not available in the local marketplace); and 4)

to develop the individual worker for future assignments (which has long-term

implications for a company and continued understanding of the global market).

If the manager looks at the value of each of the above four reasons for sending

someone from the home office, then the business case should become more clear

because of the fact that if the assignment fits into all of these four common reasons,

then the price of an expatriate might be worth paying. We recognize, however, that even

if the above reasons speak for expatriation, there surely are abundant difficulties as

well, when choosing to expatriate. From the expense of moving an individual or family

overseas to dual-career concerns to the down-time that it takes for expatriates to adjust

to culture and life abroad, expatriates can be "high maintenance" and present a raft of

complications in administration. Also according to the literature there are even more

concerns when expatriates after a longer assignment return to the home location and

face readjusting back to life at headquarters.

On the other hand, if a company already has a strong global mindset, it will most likely

be able to find talent anywhere around the world and assign them based on expertise -

and not on geography - and then the company should consider using local talents as

soon as possible, as local staff brings its own set of benefits: 1) understanding the local

business environment and how to transact business most effectively; 2) knowing the

local culture and the nuances that are important in that country; 3) grasping the

marketplace from an insider's perspective and being more in-tune with the quickly

changing market; 4) providing insight into local marketing, sales and product

development. However, using local staff also has its challenges - from availability of

talent to training so they understand the corporate culture of the home office. Though,

choosing locals are not without costs as practical evidence (www.kmpg.co.uk) shows

that when managers discuss staffing overseas, they often see local employees as

cheaper, as they do not actually stop to consider the real costs of bringing a local

onboard (as these costs can be considerably higher than the cost of a expatriate


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employee because of a wide range of regulations regarding overtime, mandatory time

off, and severance benefits). Further, some local laws (i.e. Germany) require a

thirteenth month pay, and there can be enormous issues surrounding retirement and

social security, so a company's labor costs can therefore skyrocket depending upon the

location that the company chooses.

In short, this group will not recommend any final solution whether companies should use

expatriates or locals, as we recognize that both choices seem to present an array of

benefits and challenges dependent on the companies' specific assignment situations.

Instead, we therefore argue that most companies might be better off finding their own

best combination of expatriates and locals, as the time it takes to "nationalize" an

operation (from expatriates to host country individuals) is as unique as each company.

7. Conclusion

As we have learned from Dunning's Eclectic Theory, an expatriate is born when a

company has location and ownership specific resource endowments and then finds the

need to internalize these because of market imperfections. The expatriate will therefore

likely be used to take out the imperfections of the market by being the liaison for the

organization to that market - especially by securing the transfer of technology; securing

the headquarter control; and securing the organizational development.

With point of departure in the general compensation literature, we conclude that the

financial (extrinsic) and the non-financial (intrinsic) factors are crucial components for

clarifying the issue of why and how companies compensate their expatriates. However,

since the costs of using expatriates are estimated as three to five times as much as a

comparable domestic employee, we have in this paper focused upon some of the

different ways companies can keep such costs down. By looking on how the companies

in the newer industries are doing, we conclude that one approach to minimize these

costs is to incorporate more flexible expatriation programs that are willing to break with


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the ordinary compensation packages and terms for expatriation. Especially younger

people and shorter assignments are suggested as means to achieve lower costs, as

younger people in today's world seem to consider expatriation as a combination of

personal and a professional development, whereby such employees agree to make

some extrinsic and intrinsic sacrifices when going abroad. On the other hand, as most

companies still are locked into ordinary expatriation programs - as i.e. the balance sheet

approach - these companies are increasingly about to question whether they should

continue to send costly expatriates to run foreign operations or to take advantage of the

local workforce. However, as we have found that both choices seem to present an array

of benefits and challenges that are related to the specific situations of each company,

we conclude that most companies might be better off finding their own best combination

of expatriates and locals.

Looking ahead, our group is of the opinion that as the world will become more and more

globalized, companies and people may develop such strong global mindsets that the

use of locals instead of expatriates may be more efficient and more in-tune with the

quickly changing globalized market. However, as we acknowledge that this opinion of

ours needs much more study in order to be accepted as an academic statement, we

hope that by bringing this opinion into discussion the door for further research of this

issue has been opened a bit wider.

8. A note on the group work

Intense healthy discussions combined with a climate of cooperation and critical honesty

were the main conditions while performing this term paper. All the group members were

actively involved in the process of gathering, analyzing and interpreting the available

literature and data, as well as, critical constructive comments with the objective of

widening the group's perspective. In short, the results established in this paper can

therefore best be described as a process of motivation, cooperation, self-discipline and


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busy coffee machines

The background diversity of the international members in our group was another

important factor that led to the creation of creative solutions and helped open the

spectrum of our discussions.

9. Growing Expatriates in Indian Companies

The Indian job market is full of attractive opportunities, not only for domestic talents but

for foreign workforce as well. The number of foreigners seeking jobs in India is

increasing every year. Not only are the middle and senior level expats coming to India,

young graduates, who are on the threshold of beginning a new career are taking up

jobs in Indian sectors other than IT like pharma, retail, telecom and hospitality. Around

30,000 to 40,000 expats are working in India presently and the number is still growing.

Job portals like Timesjobs and MonsterIndia are now having more than 3,000 resumes

of foreigners, who look for jobs in India, in their databases.

Even major IT companies like Infosys are having special programs for getting students

for premier universities like Stanford and Harvard to work with them. Recognizing the

fact that India is a growing economy, foreign universities are sending their students to

work in India so that they can have an understanding of the Indian markets an

environment, work practices and culture of the Indian organizations.

Why are expats ready to work in India? What attracts these expatriates fly to India?

Some of the reasons that add to the trend of expats looking for more jobs in India are as

follows:

y Growth Opportunities: India, being one of the fastest growing economies in the

world, offers a large number of growth opportunities to expats. More expats seek

jobs in India on account of job cuts, outsourcing, and high taxes in western

nations.


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y Compensation: The compensation provided by Indian companies maintain

external equity and are almost at par with what is being paid in foreign countries.

Expats with specialized skills which are unavailable in India, due to financial and

technology constraint like molecular research, are being offered highly attractive

packages. Attractive Positions: Companies are offering attractive leadership

positions to experienced expatriates. Key roles ranging from middle level

managerial roles to Departmental Heads are also being offered to specialized

expat.

y Adds value to resume: There are no second thoughts about how Indian

experience adds values to ones resume. It reflects an individual's hard work and

ability to adapt and deal with diversity. One gets to know the different cultures,

improve networking skills, and knows how to deal with people.

y Increasing Unemployment: The rate of unemployment is increasing in

industrialized economies while the growth opportunities are increasing in South

Asian countries. As a result of this fact, many expats who have a saturation in

their careers in their countries are heading towards Indian markets to grab the

opportunities here and move ahead in their careers. Apart for the advantages of

working in India, there are certain factors that reduce the chance of an expat to

become successful in India. Difficulties in communication and difference incultures are two main factors for the same.

Expats in various sectors in India:

y Pharma Sector: There is a huge dearth of clinical research professional in

pharmacy sector in India. There is a need for core skills in drug research. Expats

with such superior skills are adding value to the drug pharma sector with theirexpertise. They have experience in high end research and thus prove to be a

strength for the company who hire them.

y Banking Sector: Expats, especially from South East Asian countries are keen to

work in Indian banks. Private banks like ICICI, ABN AMRO and Standard


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understanding of Indian markets and environment and ability to deal with diverse

workforce.

References


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y Brewster, C. and Sparrow. P. (2007, August). People Management.Advances in

Technology Inspire a Fresh Approach to International HRM. (Vol. 13, Issue 3).

y Du Plessis, A. J. (2007). Change, organisational development and culture: human

resource managements role in a future South Africa. International Review of Business

Research Papers.

y HRM review October 09 (Vol. 8, Issue 13)

y cometonada.tripod.com/HRM.htm

y www.naukrihub.com

y www.expatica.com

International Human Resource Project

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