Problems of Employing Expatriates and Their Solutions - Literature review Example

Problems of Employing Expatriates and Their Solutions

Introduction

Currently, becoming successful in the national market is not enough for companies. Globalization has constituted to enormous mergers and investments internationally. Such activities have triggered companies to think of ways of how to establish competitive advantage and maintaining this advantage in the global market. Likewise, global companies need to have international experience as an asset as globalization increases. It leads to the urge of transferring knowledge as a way of developing the international management across the world. As a result, expatriates and expatriation have become a crucial part of international management as well as the company’s success within the international market. However, according to Vilet (2016), most of the organization’s expatriates quit their job within a shorter duration than expected evidently due to the problems that they face in the foreign countries. Such results occur due to the various problems that come up with the employment of expatriates. Therefore, the main goal of this study is to evaluate the challenges of employing expatriates and the suitable solutions to these problems.

Literature Review

According to an article authored by (Nikolaeva 2010, p.24), expatriation refers to the process of sending managers to other countries for them to run subsidiary multinational organizations. Expatriates commonly abbreviated, as an expat is a person who temporarily or permanently resides as an immigrant in a different country other than that of their citizenship. The article claims that the major drawback associated with the employment of expatriates is the cost incurred to sustain these employees. Companies tend to spend a huge amount of money on most of their expatriates compared to their employees working in their home country as they get an average payment of two to three times more these individuals.

On a different study by Verma (2016), expatriates have a problem of adjusting their spousal needs when working in the foreign country which is a major problem with the employment of these individuals as this problem has always been there with no solution from the affected organizations. The problem persists because two-thirds of these expatriates move with their spouse, children or even both. As a result, most of these expatriates tend to encounter with the pressure of cross-cultural transfer of their family. Subsequently more than half of the expatriate families are double career couples thus increasing the quantity of the associated family problems. Verma (2016) continually adds that dual-career couples face higher refusal rates of relocating internationally. In addition, spousal dissatisfaction, adjustment, together with the career development are the major reasons associated with the failure of these expatriates.

Vilet and Vilet (2016) claims unclear expectation of the expatriates is another problem in the employment of expatriates. Before sending managers to the foreign countries, the top management emphasizes the need for the international experience so that the company can survive in the global environment. However, after visiting these countries, the management fails to utilize the acquired experience. Besides, most of the expatriate jobs in the overseas are challenging and autonomous for the expatriates. With such difficulty, expatriates fail to fully represent the company, as they are the company’s representatives in these foreign countries thus under-utilizing the experience of the overseas. Lastly, Vilet and Vilet (2016) claims that expatriates have a difficulty in learning the new organization. Most of the expatriates face the difficulty of adapting the changes quickly as well as the management culture, and the used strategies.

Moreover, Black and Gregersen (2016) claims that the returns of the expatriates are anemic compared to the made investments. The cost of maintaining an expatriate is two to three times of the normal person implying that they consume a huge amount of organization’s monetary resources (Abdullah, & Jin 2011, p.24). The company sending them to the foreign country incurs all the travel expenses home-country tax issues together with the visa issues. Black and Gregersen (2016) continually argue that the adjustment difficulty to a new environment causes most of the expatriates to underperform. As a result, 10 to 20 percent of most of the managers from U.S. sent in foreign countries returns home earlier than expected. Most of the constituting reasons become the difficulty of adjusting to a foreign country with different working conditions or job dissatisfaction (Black & Gregersen, 2016). Significantly, most of the expats who persevere the foreign conditions tend to leave the companies that sent them abroad for a more competitive company. It acts as another problem associated with the employment of expats as they reduce their reliability.

Another problem with the employment of expats is the high rate of burnout. The expats working for extremely demanding jobs faces high-stress levels in the foreign country. Most of them, therefore, leave earlier to their home than expected (Kraimer, et al. 2012, p.406). In most cases, increased levels of stress with these individuals is due to the factors such as language barrier or even being away from their family or friends. In turn, these expats have to cope with the new culture and the emotion of seclusion in the foreign country. The increased legal risks are yet another problem linked to the employment of expats. Some companies violate the immigrations requirements by permitting obligations thus being barred or fined by the foreign countries(Kraimer, et al. 2012, p.414). In some of these cases, expats extend their stay in a foreign country and even extends their permits expiry date, which is a danger to the expat and his company.

Moreover, another key problem with the employment of expats is the increased likelihood of the expatriate failure. According to Faas (2009 p.9), expatriate failure is the immature return of an expat manager. In addition, it includes all the expats who leave their company due to job dissatisfaction either in the host country or the country. Despite the incurred costs of ensuring that the expat has gone abroad, some of them fail to adjust their stay thus quitting their job. Moreover, despite the training adjustment made to ensure that the expat will adapt in the foreign country, there is no guarantee that they will adapt and socialize in the new environment that they are about to change to.

Analysis and Discussion

Participation of a company in international market is a key factor in excelling in the global markets. Most of the companies aim to achieve this competitive advantage by sending expats in the foreign country to either market the organization or conduct businesses in these countries. However, most of the expats lead causes problems to these organizations following the faced difficulties in the new country. Most of the experienced problems by the expats are the difficulty of adapting to a new country or the new working environment (Takeuchi, 2010). This problem comes along with the cultural diversity issues, as expats are not familiar with the new culture. The isolation from family and friends also constitutes a major problem of employing expats (Hasleberger, & Brewster 2009, p.383). As a remedy to such a problem, most of the expats opts for carrying along their spouse and children to the new country. This, in turn, increases the cost of sending the expat in the new country as the company has to cater for their travel expenses and visa issues among others thus making the process expensive.

Correspondingly, most of the expats constitute to the expatriate failure, a situation that occurs once an expat returns to the home country after failing to adapt the new working environment. Legal issues also relate to the expat problems as some organizations violate the permits given to the expats in the new country. Stress levels are high for the expats, as they have to handle the job expectations as they still handle the new working conditions in the new country such as cultural differences.

The increased problems associated with the expats demands an immediate solution bearing with the advantages that they bring to an organization in the global market. The core solution to these problems is ensuring that the company sends the right people in the foreign country (Laird, 2015). It is not that companies send people without technical skills to handle the required tasks, rather these skills are the ones that the selected individuals use to qualify for the post. However, managers send people who do not have the ability to adjust to different customs, business practices, and perspectives. In other words, the sent people are culturally illiterate while they have the capability.

Another solution to the expats problems are the extroverted and enthusiastic people in conversations. Most of the expats attempt to communicate with the local people in the foreign country (Wagner 2012, p.5). Some of them get frustrated and give up on their trials as some get embarrassed. However, enthusiastic people are not afraid to try speaking other languages and they hardly give up even after numerous frustrations. As a result, they tend to learn the new language and get new friends in the new country who will give them company, thus reducing the feeling of isolation of the expats (Black & Gregersen, 2016). Significantly, such people tend to create social ties with the locals to the government officials, which promote the organization that has sent the expat.

Another solution to the problems of employing expats is by facilitating the cultural flexibility of the expats sent to the overseas. In various instances, most of the expats associate themselves with the activities that they are familiar such as an American manager eating lunch at McDonald’s restaurant in a foreign country (Wagner 2012, p.5). Such behaviors occur, as that is the only thing that they are familiar with. However, expats should be willing to mingle with other people and learn their culture (Hasleberger, & Brewster, 2009 p.386). Such an instance requires a person who is culturally flexible, willing to experiment different cultures and customs. This not only makes their stay enjoyable in the new country but also market their organization in the new country (Takeuchi, 2010). Consequentially, expats will be in a position to effectively negotiate with the foreigners once they learn their negotiation styles accompanied with their culture.

On the same, the organization sending expats to the overseas countries should ensure that they maintain contact with their family, friends, and co-workers in their home country. The importance of this communication limits the loneliness associated with the expats in the foreign country. Moreover, the company should encourage the expats to find people whom they can confide in the new country (Black &Gregersen, 2016). That someone should not be a spouse who increases the burnout rate of the expats. Rather, it should be either a former expat or a friend who will understand the frustrations that one experiences in the new environment.

The company also has a key role in solving most of these problems. The company should clarify the goals of the assignment at hand. Before sending expats, they should first understand the company’s expectation from them so that they can learn ways of executing these duties (Laine 2013, p.7). On the same line, an organization should conduct a quarterly review of the progress of the expat. This is important to evaluate whether the expat is whether achieving the assigned tasks or not. Besides, such assessment identifies the difficulties that one is facing and tries to address them in the appropriate way possible in an attempt of ensuring that expats will fully function as required by the company. Lastly, the company should abide by the foreign country’s legal requirements to ensure that they do not violate the expats permit.

Recommendations

Overall, having said that it is important for the organization to enter into the international market to reap the benefits of the global market, an effective way to achieve this is with expats who will conduct businesses in the foreign country. Nevertheless, before making this move, organizations should first make appropriate people who will be its expats. These people are enthusiastic in conversations and willing to learn a new culture. Another effective recommendation is that the companies to provide necessary support to the expats in ensuring that expatriate failure completely reduces as well as ensuring that expats do not shift to other organizations.

Expatriates should be willing to learn new cultures of other society. It is an effective way of ensuring that expats will not only run the organization in the foreign country but also promote the business by introducing the locals to the products dealt with by the organization (Rozkwitalska 2012, p.23). On the same, organizations should reduce the chances of sending an expat with their spouses as this increase the levels of stress. Instead, they should send them to a friend of a person with the same experience who will understand their situation and attempt to help them.

Conclusion

Indeed, most of the organizations are moving to the global market to achieve and maintain a competitive advantage in their respective industries. Sending expat in foreign countries is the most effective way of participating in the international market. However, the problems they are encountering reduce these advantages as they limit the company’s capability in expanding in the foreign country. Most of the core problems faced by the expats involve the difficulty of learning a new culture, stress levels in the new company, sending and maintenance cost of expats in foreign countries as well as the legal risks, and failure to complete the assigned task. As a way of solving these difficulties, organizations should adjust the mechanism used to select and send the expats in a new country. There is a need for selecting the suitable people who will employ their capabilities in representing the company in the foreign country while overcoming the challenges of working in the new environment.