Employers Missing ROI When Expatriating Employees

 By Bud Roth

Employers may spend an estimated $1 million or more apiece when they send employees across national borders for temporary work assignments.  But they are likely to lose that investment when those employees return.

According to new research recently presented at the National Foreign Trade Council’s (NFTC) International HR Management Symposium, some employers estimate nearly half (49%) of these expatriates’ number one concern upon returning from assignment is uncertainty about what job awaits them.

Some employers estimate nearly half (49%) of these expatriates leave the company within two years, according to new research presented at the NFTC International HR Management Symposium.  The study was jointly sponsored by WorldatWork, CIGNA International Expatriate Benefits (CIEB), a business unit of CIGNA Corporation, the NFYC, which supports open international trade and investment.

The research was designed to assess employer and employee perspectives on a range of expatriate assignment issues from training to management to lifestyle.

Significant gaps

We see companies investing heavily, particularly in expatriation, to capture global markets, but as this survey demonstrates, employers are not protecting their investment, “says Virginia Hollis, vice president of CIEB.  “We found significant gaps between employer and employee perceptions of satisfaction, particularly among women expatriates.”

Ratings of the overall expatriate experience differed sharply, with 96% of employers feeling they meet expatriates expressing dissatisfaction with communication, educational opportunities and overall job satisfaction.  Gaps in perceptions of results may relate in part to the fundamentally different reasons why employers and employees choose expatriation.  While employers are addressing business needs (95% said they were addressing specific projects, 86% needed foreign operations management), employees are primarily seeking personal excitement (96%) and resume enhancement (92%).

“To get the best value from expatriates during and after an assignment, it stands to reason employers need to help them meet their personal objectives for going,” said Anne C. Ruddy, CPCU, executive director, WorldatWork.  “Expatriates need sufficient support abroad to enable a personally and professionally fulfilling experience, and they need to know the experience they are gaining abroad will be recognized when they return.  It’s all part of the employee-employer value proposition.”

You need to know how to facilitate globalization, and one step is to make sure the people who carry knowledge and skills abroad do their jobs well and bring the additional knowledge and skills they gain back to the employers who sent them abroad,” Bill Sheridan, senior director of NFTC, said.  “Protecting the expatriate investment by developing appropriate retention policies up front, carefully assessing candidates for personal as well as professional fit for the assignment, and securing the resources necessary to keep expatriates supported and secure while abroad is one recipe for success.”

A Closer Look

Employers and expatriates choose expatriation for very different reasons.  Employers who don’t keep sight of expatriate objectives may fail to provide the support expatriates expect. 

Top ranking reasons employers chose to send people on a foreign assignment were specific projects (95%), foreign operations management (86%), transferring knowledge to local nationals (84%), lack of local skills (81%) and management development (78%). 

In contrast, top reasons employees chose to expatriate include personal excitement (96%), resume enhancement (92%), interest (91%) and career development necessity (67%). 

More than half of employers (53%) felt they gave better-than-expected HR support, while only nine percent of expatriates rated HR support better than expected and, in fact, 42% of expatriates felt HR support was worse-than-expected.  When asked if companies do a good job in meeting the needs of expatriates while on assignment, 63% of employers said they do a good to excellent job, while only 32% of expatriates gave the same high rating.

The Return 

It’s unusual that companies do not measure the returns they receive from an expatriate assignment when they are measuring most other business operations and processes.  There are two areas that need to be measured.  1.  The business results less the expatriate investment.  2.  The application of the knowledge and experience shared by the expatriate, if they are allowed to share what they have learned.  Most companies ignore the expat after they have returned home.  Corporations are probably wasting millions in opportunity costs.

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