Global HR

Why Can’t Organizations Retain Their Expatriate Employees?

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With the rise of globalization, international experience is becoming a critical asset for global companies. International assignment experience is valuable. In the right context, it can create a competitive advantage — both for expatriates and the companies that employ them.

I realize there are many problems with expatriate/family repatriation back into the home country. However, I will limit the discussion here to career issues.

Returning expatriates (returnees) bring these things to the company:

  • Ability to work and manage effectively in other countries.
  • Information about specific local markets and customers.
  • Ability to accelerate the transfer of knowledge between countries.

Why is this process so difficult

So why is the repatriation process so difficult? It should be simple. Returnees should be placed in jobs that utilize their newfound skills/knowledge.

However, a 2010 survey by Brookfield Global Relocation shows that 38 percent of returnees quit within 12 months. What is worse is that these figures have been consistent for the past 30 plus years.

That results in a terrible ROI for companies that have spent 2-4 times the returnee’s pay during the assignment. Not only is it costly, but having returnees leave the company sends a warning signal to employees that taking an expatriate assignment may be “career threatening.”

This is not just a problem for small to medium size companies that have little experience with expatriates. It includes large multinationals that have been sending expatriates overseas for years. Some of the problems include:

  1. Unclear expectations: During pre-assignment, top management may emphasize that international experience is critical for the company to survive in the new global business environment. Post-assignment— it is as though top management is suffering from amnesia. Management doesn’t quite know how to utilize that experience.
  2. Learning a “new” organization: Returnees see old co-workers that have been promoted while they have been gone. They wonder if the assignment hurt their career. They also must get up to speed quickly about changes in organization, strategy, management, culture, etc.
  3. Under-utilization of overseas experience: Many expatriate jobs are highly challenging and very autonomous. Expatriates are chief spokespeople for the company with the host country government, professional business organizations, customers, legal entities, etc.

Management simply does not grasp that a reassignment as a sales manager for Wyoming, Montana, and Utah, doesn’t cut it for a person that has been the regional sales manager for Europe, for example. Then they are surprised when that person leaves. And to top it all off, the receiving company is thrilled to hire someone with international experience!

What can be done about it? What advice can be given to companies wanting to keep their returnees, and to returnees themselves?

What companies can do

Companies can:

  • Clarify objectives before the assignment as well as how knowledge can be used and what kind of job will be targeted upon return.
  • Appoint a key line executive as a sponsor for each expatriate. This needs to be someone that is high enough in the company to have easy access to top management and preferably from a different business unit/division/functional area than the expatriate.
  • Quarterly reviews should be held with expatriate, home/host manager and a VP. Having a VP present sends a positive message and recognition. It also allows the VP a chance to understand the challenges and accomplishments of the expatriate.
  • A year before repatriation starts, expatriate/sponsor need to discuss positions that are suitable back home.
  • Sponsor/returnee link should continue for a year after return to make certain “re-entry” works.

What returning employees can do

In turn, returnees can:

  • Find someone to confide in and “vent” to (preferably not the spouse!) — a personal friend, former expat — who will understand, or at least listen to frustrations.
  • Keep in touch with home country friends and co-workers.
  • Use the sponsor relationship to focus on career advancement issues as well as to highlight accomplishments and results
  • As part of repatriation planning, take inventory of new skills gained during the assignment. Discuss these with the sponsor to begin job search at home that will be a good “fit.”

Companies must be able to capitalize on their returnees’ skills and knowledge. In order to do so, they need to cultivate a global vision and corporate culture. Companies that support returnees, value their international experience and utilize their global knowledge and contribution will realize true growth in the strategic development of the company.

Jacque Vilet, President of Vilet International, has over 20 years’ experience in International Human Resources with major multinationals such as Intel, National Semiconductor and Seagate Technology. She has managed both local/ in-country national and expatriate programs and has been an expat twice during her career. Jacque has also been a speaker in the U.S., Asia and Europe, and is a regular contributor to various HR and talent management publications. Contact her at jvilet@viletinternational.com.
  • http://twitter.com/MoveManGroup Move Man Group

    As always, this is a timely topic that always interests those of us in the global mobility industry.  30 years of the same dismal retention rates for repatriating employees is probably why!  I’ve posted the link to this article in several mobility and expatriate LinkedIn groups.  Thanks for sharing this information.

  • Patrick

    Excellent and timely article. Interesting that 38% of returnees leave their company within 12 months. Great recommendations for what companies can do to improve the ROI of the assignment and retain their valuable employees.

  • http://www.management-mentors.com/ Ranae

    Wow! I found the information you shared here to be fascinating, Jacque. I am studying International Marketing and would have believed that the sponsoring company’s would do everything they can do hold on to the talent pool they have invested so dearly into. I also work for a company that sets up business mentoring programs. Talent retention is one of the key goals of mentoring programs. So, I would have to include mentoring programs as a solution to returning expatriates. Thank you for the great post!

  • http://twitter.com/ExpatEquanimity Belinda Brown

    It is very interesting information, Jacque. Your analysis is correct regarding the opportunities organizations have to retain their expatriates. To capitalize on the experience both the organization and the expatriate would certainly like to engage in a Global Leadership & Expat coaching program. Indeed, the process taken at any stage (pre, in and post assignment) will allow the organization, the expatriate and even his/her spouse to benefit from the extraordinary opportunity to work and live abroad. A successful (success will be determined during the process) assignment will motivate the individual and the team which will lead to higher performance, greater engagement then creativity and innovation. 
    On the other hand, a failed assignment may cost up to $250k to an organization, without counting the impact on the organization reputation. In addition, an early termination of an assignment usually means that a top talent will leave the organization and discourage potential candidates to the expatriation. 

  • Efren Olivares

    Thank you Jacque. This is an excellent article. I am at precisely the point of returning to the US after almost 6 years in Europe with my company. There are points you make that I have clearly thought about. I agree that I would have little desire to go back to a role that involves only the US business and US colleagues. As you say, I now bring a different skill-set and more international knowledge and interests and I would be very concerned with these not being fully leveraged and satisfied. 

  • Sudhir Sinha

    Dear Jacque,
    thanks for the inputs and its very helpful. I was wondering if you can give some advice for the person who have spent almost 23years at home country in an organisation and he is posted as an expat to other country. what would be the requirements if he thinks to return?

  • Larne Nelson

    As an Expat since growing up to now in full working life. I only ever went back home as education was only thing I could do early on and after study got my degrees and experience I left Australia fast. As once you been an expat you enjoy working, you see things differently. Case in point when you come back to base companies forget how to use your skills or you come from a zone where red tape or OH&S items are none ( not saying none). So you come back to Aust, USA, Europe from asia or Africa or other parts. Where you had to do all in at some point yet when in office your back to singular role or unable to weld something or drive the forklift or get into accounts to see the problems cause now you have issue like not your section, don’t have license.
    These issue face expat returning and if companies don’t realise that before a person return your best off keeping that person oversea as many do stay.