Challenges of Repatriation Management - Literature review Example

Repatriation Management Institution Date Introduction Multinational companies (MNCs) send some of their staff to their offshore offices to share knowledge with local employees, to run local units and gain management experience. These assignments end within one or two years and the company has to deal with repatriation; one of the most challenging international human resource management issues. How the HR functions handles the repatriation of employees has implications on the organization’s financial and competitive advantage. Repatriation is the process of bringing back employee to their native homeland after an overseas assignment (Storti 2011). However, many HR departments pay little attention to the repatriation phase and more emphasis is given to the stay abroad. Repatriation has been associated with low morale and high repatriates turnover rates. Unfortunately, even academic research has given the repatriation phase little consideration in comparison to expatriation which has been widely researched. In this report, the challenges of managing employee expatriation are highlighted and some recommendations to smooth the repatriation phase are offered. What are the Challenges? 1. Repatriate Turnover Attrition is one of the major challenges facing organizations that repatriate employees back home. According to Herman and Tetrick (2009), 54 percent of employees of employees repatriated to the home office leave within two years rejoining. Baruch and Altman (2002) found that 50% of returning expatriates left the financial services firm they studied a few years after coming home. Baruch and Altman (2002) observed that 30-40 per cent of repatriates left their company just after two years of returning home compared with 5-10 per cent of non-repatriate employees. This high turnover rate is a major issue for IHRM when recruiting for overseas assignment. Many talented employees are unwilling to be sent abroad as this is seen as poor career decision. HR is also unable to promise employee sent abroad a permanent position in the organization upon their return from overseas assignments. According to Hyder and Lövblad (2007), more than 60 per cent of repatriated employees come home to find there is no defined job for them. This apathy is one of the leading causes of poor morale and the eventual high attrition rate among repatriated workers. 2. Disconnect of expectations A disconnect of expectations between companies and employees is one of the leading causes of repatriation problems. Many employees believe they are being sent abroad as part of their organization’s leadership development programs (Sánchez Vidal et al 2008). The employees have good reasons for this assumption as they take up leadership roles during their international assignments. On the other hand, companies send their people abroad to transfer skills to local employees, to start new operations and to maintain corporate control (Storti 2011). Assuming that they are being groomed for leadership, expatriates expect promotions upon return to the home office. Many expect the company to reward them for the sacrifice of serving abroad, but such rewards are rare. Only a third of returning expatriates are promoted, a half remains in the same level, and 9 percent are demoted (Baruch and Altman 2002). As seen earlier many expatriates return home to find that there is no position for them in the organization. Lee and Liu (2007) found out that only 27 per cent of returning employees are guaranteed a position upon return from overseas assignment. Most of the returning expatriates feel abandoned by their companies and are left to seek position within and outside the organization. Lee and Liu (2007) argue that organizations are ignorant of the plight of repatriated workers as they do not support or recognize them. Many of the repatriates decide to leverage their international experience by seeking positions with other companies. This is a major loss for the organization as it losses some of its best talents to rival organizations. 3. Cultural readjustment Cultural readjustment at the home and work front are also a major challenge for repatriated employees. Many of the repatriated employees have spent years in other cultures and may not be in touch with some cultural practices at home (Miser and Miser 2008). For example, repatriates from Asian operations may be used to a different employee management style and may shout orders to their inferiors. They may have also changed their perspective and may be uncomfortable with the way things are done back home. 4. Knowledge Management One of the major challenges facing International Human Resource Management is how to build on repatriate skills and experience. Expatriates are put in charge of overseas operation of their company and they regard themselves as leaders upon their return home (Herman and Tetrick 2009). Unfortunately, HR uncharacteristically loses track of the accomplishment of employees it has sent abroad. Upon return home, the expatriate do not receive the promotions or recognition they deserve for their accomplishment. Instead, they have to contend with lower levels of remuneration and normal taxation rates. HR also has to deal with the more serious challenge of managing worker who have failed in their overseas assignments. Baruch and Altman (2002) observe that almost a third of international assignments fail, resulting in premature repatriation. These employees are talented as justified by their assignment to international duties and the organization cannot afford to lose them. Many times repatriated employees are offered holding position where there is no chance of applying the skills and knowledge gained overseas (Scullion and Collings 2006). These positions have less authority than the executive positions they held overseas and sometimes there is no job to do at all. These situations leave the employee frustrated and are one of the underlying courses of high attrition rate among expatriates. What can be done? 1. Retention and career management HR should plan and manage the career of expatriate more effectively and fairly. HR departments should ensure that returning expatriates are guaranteed permanent position in the company upon their return home. Where possible, the returning expatriates should be offered leadership positions that are more challenging and valuable to their career advancement goals(Harzing and Christensen 2004). HR should also track the accomplishment of expatriates in their overseas position and offer them positions that leverage the skills and experience gained. Failing to offer expatriate challenging position upon their return encourages them to seek employment elsewhere as other organization recognize their skills and experiences. 2. Reconciling employee and organizational expectations As seen earlier, repatriate expectation are high as they expect promotions and high offices upon return home. However, many companies pay little consideration to the returning expatriates’ assumptions (Paik, Segaud and Malinowski 2002). It is therefore imperative for the company and employees to develop a mutual understanding of the expectations of the repatriates upon returning home. It is good for the organization to inform the employee before returning of his future role in the organization. Going further and explaining why the expatriate is assigned such as role in the organization is also crucial for preparing the employee for the transition. 3. Maintain contact with the ‘home’ office The home HR department should ensure it maintains contact with employees on overseas assignments. Contact with the expatriate makes the transitions smooth and ensures that the expatriate remains loyal to his employees (Hyder and Lövblad 2007). Many competing firms will offer talented expatriate positions years before their own companies think of bringing them home. According to Hyder and Lövblad (2007), the home office can maintain contact with expatriate managers by involving them in staff and team meetings through conference calling, arranging visits to the home office and regularly updating them on plans and strategies of the home organization. 4. Knowledge Management Practices Returning expatriate bring a wealth of knowledge and experience gained in their overseas experience back home. The expatriate many have gained new ways of solving business problems, used and developed new and innovative business process and developed effective business strategies (Collings, Scullion and Morley 2007). The organization stands to benefit if it is able to leverage this knowledge and experience in its operations. To obtain and retain this knowledge, the company should arrange for a Debriefing session to learn about the knowledge and skills they gained and to also make them feel valued. Most importantly, offering the expatriate a position where they can apply the knowledge and experience gained will be most beneficial to the organization’s effort to curb repatriate attrition. 5. Cultural re-adjustment HR departments should support their returning employees in the process of readjusting to the home culture. Offering re-entry counselling is one of the easiest ways of ensuring returning expatriates easily reintegrate into their society (Miser and Miser 2008). Conclusion Repatriation management is one of the greatest challenges for international Human Resources managers. IHRM managers have to curb low repatriate job motivation and a high turnover rate in comparison to employees who have not worked abroad. Many returning expatriates end up leaving their employers a few years after returning from their overseas assignment. The reason for this high turnover includes poor support and failure to recognize and reward their contribution to their organization’s success during their stay overseas. Failure to promote or offer challenging leadership position to returning employees is arguably the leading cause of high repatriate turnover. For expatriates used to position of authority, holding positions and unchallenging duties are unfulfilling and compel them to seek desired positions with other organizations. Therefore, organizations need to carefully plan the repatriation process to ensure it does not lose valuable knowledge and experience gained by employees returning from overseas assignments. References Baruch, Y & Altman 2002, Expatriation and repatriation in MNCs: A taxonomy. Human Resource Management, Vol 41, issue 2, p.239-259. Collings, D. G., Scullion, H., & Morley, M. J. (2007). Changing patterns of global staffing in the multinational enterprise: Challenges to the conventional expatriate assignment and emerging alternatives. Journal of World Business, 42(2), 198-213. Harzing, A. W., & Christensen, C. (2004). Expatriate failure: time to abandon the concept?. Career Development International, 9(7), 616-626. Herman, J. L., & Tetrick, L. E. (2009). Problem‐focused versus emotion‐focused coping strategies and repatriation adjustment. Human Resource Management, 48(1), 69-88. Hyder, A. S., & Lövblad, M. (2007). The repatriation process-a realistic approach. Career Development International, 12(3), 264-281. Lee, HW, & Liu, CH 2007, An examination of factors affecting repatriates' turnover intentions. International Journal of manpower, 28(2), 122-134. Miser, A. L., & Miser, M. F. (2008). Couples coaching for expatriate couples. The Routledge Companion to International Business Coaching, 203. Paik, Y., Segaud, B., & Malinowski, C. (2002). How to improve repatriation management: Are motivations and expectations congruent between the company and expatriates?. International Journal of Manpower, 23(7), 635-648. Sánchez Vidal, M. E., Sanz Valle, R., & Barba Aragón, M. I. (2008). International workers' satisfaction with the repatriation process. The International Journal of Human Resource Management,, 19(9), 1683-1702. Scullion, H., & Collings, D. G. (Eds.). (2006). Global staffing. Routledge. Storti, C. (2011). The art of coming home. Nicholas Brealey Publishing. Read More