HR Actions Multinational Corporations Should Take to Facilitate Expatriate Adjustment - Essay Example

Module of the Assignment: Critical HR Actions Multinational Corporations Should Take To Facilitate Expatriate Adjustment Name of the Student: Student Number: Submission Date: Introduction The extreme rivalry brought about by globalisation has resulted in many organisations relocating in foreign locations in efforts to enhance their capacity and growth. National economies have being integrated within the global economic system, while companies have taken advantage of easier communication and the borderless trade to expand internationally thus meaning major corporations have erected operations in almost all corners of the globe. However, in their international endeavours, multinational corporations are majorly hampered by the high turnover of their expatriate staff unable to cope with the rigors of overseas postings (Swarts and Plessis, 2007, Pg. 47) Black and Gregerson (1991) have described expatriate adjustment to foreign assignments as “the degree of psychological comfort with various aspects of a host country,” (p. 463). This has led to many of the domestic employees being exported into exotic locations and countries with diverse cultures and economic systems. Similarly, local companies lacking appropriate expertise and human resources are increasingly seeking expatriates to operate their expansive production units as well as provide training to the domestic workforce. Experienced labourers in saturated markets also seek employment abroad as they lack employment opportunities within their domestic locations or crave for better remuneration that accompanies foreign assignments (Swarts and Plessis, 2007). Foreign assignments and postings generally prompt exuberant excitement from those employees chosen to undertake such tasks as the prospect of career advancement, finance increments and other benefits beckon. However, these feelings of career windfall quickly wane once they get to the actual locations. The probable causes of the trauma are ‘cultural shock, language barriers, and severance from the relatives’ will ultimately impinge on the work, efficiency and expenses to the organisation. The expatriates’ agitation means that they either adjust to the locality conditions or abscond from the assignment and return to their home countries (Koteswari and Bhattacharya, 2007). The dysfunctional cost of stress in overseas postings may lead to detrimental consequences like, skiving, drunkenness and drug addiction, high turnovers, untimely exit, internal and external antagonism, nonattendance, among others. Reasons for Hiring Expatriates The University of Pretoria (2008) has identified several reasons why corporations endeavour to engage expatriate labour. These include: Labour shortage in the host country Ethnocentrism in the corporation’s global HRM direction, Provisional goals of the enterprise Induction of fresh projects, Offering intercontinental experience to talented managers, Upholding its global brand Assisting the corporation’s skilfulness and control of its operations Reasons for High Turnovers A study by the University of Pretoria (2008) on expatriate turnovers in foreign postings, principally on their attitude to the jobs revealed that ‘organisational commitment and job satisfaction are inversely related to turnover intentions’ (Pg. 194). Nevertheless, according to Sims and Schraeder (2004, Pg. 76), an average of 16-70 percent of foreign postings fail due to the host country’s unfavourable conditions thus costing the corporations losses that vary from $250,000 to $1 million. These losses do not include other consequent expenses including lost opportunities, less yield and dented image among other hidden costs. The high turnovers also negatively affect the company’s ability to discharge its duties in the relatively expensive overseas ventures that had required heavy outlays. Takeuchi et al (2005) have attributed the high turnover of expatriates to the pull of family ties as the emigrant workers are affected psychologically. In a study on Western, foreign workers in China also found that workplace strains as well as adjustment to new environment were major contributory factors. Language Barriers Expatriates not proficient in the local language are therefore doubly hampered in their foreign adjustments, as communication is a major medium for assimilation and acclimatisation (Xu, 2009). According to Selmer (2006, Pg.364) expatriates without a smattering of the local languages may find it difficult to transact business due to their limited vocabulary, consequently leading to loss in business and ultimately curtailing their continued stay in the overseas posting. However, Xu (2009) argues that proficiency in the business language is not enough as the need to interact with the local staff and people will require a smattering knowledge of the local dialects that can eventually enhance individual adjustments to the environment. Inability to communicate effectively with the local employees often lead to lack of information and effectiveness in the expatriate duties thus rendering them incapable of conferring as required (Welch and Welch, 2007). Apart from exiting back home, workers may underperform their duties due in several ways as outlined by Briscoe (1995, Pg. 57) including: Deficient value performance in overseas projects Individual unhappiness of the expatriates or spouse to the foreign assignment The failure to amend to local environment Non-acceptance by the local citizens The Failure to recognize instruct a local beneficiary A Swarts and Plessis (2007) study on South African companies expatriates found that as many as 46 percent foreign workers intended to quit their jobs and a further 27 percent were anxious to return within the first year. A higher proportion of US citizens (70 percent) posted to developing countries indicated a propensity to return home whule 25 percent of US expatriates left their posts within a year of their posting. The Swarts and Plessis study also found that there was a higher penchant for those expatriates posted within the developing countries to get quickly disillusioned as compared to those sent to developed countries (Europe). Managing Stress among Expatriates Recruitment and Retention Due to the human and organisational cost that entails failures in expatriate assignments, there is a need to manage stress to avoid such attritions. The most effective method recommended is for organisations to embark on the most elaborate and exhaustive recruitment methods for the right candidate capable of such tasks. There is a need to employ efficient recruitment strategies for appropriate staff with adequate capacity and value to generate affirmative effect on the corporation’s operations (Welch and Welch, 2007). The hiring process should follow a five-step method as illustrated by the U.S. Department of Transport: recruitment, selection, hiring, training and retention [See Figure 1 below]. Figure 1 Source: Adapted from U.S. Department of Transportation (2007) Youthful employees or fresh alumni are more capable or displaying a higher likelihood of acclimatising faster to international assignments as opposed to older employees who are more constrained by their nuclear family ties. The more mature employees are laden by the demands of their immediate families who may not be overly passionate about the new job hence companies prefer younger workers for overseas postings (Koteswari and Bhattacharya, 2007). Koteswari and Bhattacharya (2007) cite family members’ failure to acclimatise to the host or overseas environment as being the foremost rationale why individuals quit these lucrative international missions. Numerous married workers generally desire to educate their family within their domestic country instead of the foreign location where they are working while not willing to live far away from the same families (Black and Gregersen, 1991). This problem persists even while employees are deployed in countries even more advanced than their home countries e.g. British workers opposed to American educational system and vice versa. To deal with these anomalies, many multinational organisations have set up facilities to accommodate their families including schools and social centres that are fashioned in their own domestic structures (CIPD, 2009). Nonetheless some of the nascent developing nations like the Middle East oil producing countries, have set up emigrant schools which utilise international syllabus to educate the expatriate workers children, conversely many of these migrant families are still unenthusiastic in educating them there. The other civil liberties accorded the foreign workers include allowing social centres, though in confined settings to reduce conflict with the locals. Adaptableness to overseas environment is however still a major challenge for global corporations (Welch and Welch, 2007). Welch and Welch (2007) have come up with the main aspects that can assist in identifying those individuals most appropriate for the overseas positions and that are not likely to abscond from duties due to acclimatisation problems. These include: career workers that are fully dedicated to their employment and are ambitious about advancing their positions; unattached or single workers who have no family ties; similarly married couples who do either have children or have older children that have already left the domestic homes; those with prior overseas expertise who may usually have favourable international experience including hefty remuneration in the foreign duties (Sims and Schraeder, 2004). In order to lessen unnecessary expenses accrued in relocating fresh candidates, most corporations now demand the selected workers do a bit of pre-posting service in the domestic home office to assess their competence. Nevertheless, most corporations offer acclimatisation implements for those selected staff that would assist them in the overseas assignments. These comprise of rigorous training programs and workshops that compliment the fresh employee’s aptitude to survive high pressure in the new environment including adjustment to the same company’s organizational culture, social acclimatisation, and the immediate family integration among other factors (Takeuchi et al (2005). Among the main inducements to enhance employee retention according to the University of Colorado’s employee manual are: ‘flexible work schedules (flex schedules) provide a powerful tool for management that can be used to fulfil business needs, accommodate a changing workforce, assist with recruitment and retention, and help employees achieve a better work-life balance’ (CU-Boulder, 2008, p. 10). Selmer (2006) also advocates for the use of non-traditional worker motivation techniques that encompass recruiting from the correct standpoint; employee participation in the objectives and vision of the company; practical principal statutes of management; involving workers in commercial ideas; and initiating substantial sweeteners or reimbursements. Xu (2009) conversely proposes maintaining the traditional rigid approach that he insists is more efficient than the modern casual system of indulging workers. He therefore recommends a mentoring arrangement in which fresh employees are integrated in the corporation’s standards and vision by the more accomplished seasoned workers. This allows them to be quickly assimilated in the environment and company while ensuring a more prosperous lasting career. Swarts and Plessis (2007) deduced that adjustment dilemma that induced an individual to quit or adapt easier to the local situation were not the identical, hence asserting that, ‘variables that facilitate adjustment are not the same variables that hamper adjustment’ (Pg. 63). The authors refer to Frederick Herzberg’s dual factor Motivation-Hygiene Model of Management as a possible explanation for such scenarios. Herzberg (1959) argued that factors causing satisfaction differ from those causing dissatisfaction, but however, are not contradictory, since the opposite of satisfaction is not dissatisfaction but rather no satisfaction and vice versa. This was therefore a dual concept of two distinctive human needs: physiological and psychological needs. Physiological needs include monetary or material satisfaction while psychological needs encompass an individual’s accomplishment and development hence is ultimately satisfied by activities that encourage this. Organisations must therefore ensure they take care of both the physiological and psychological needs to minimise absconding expatriate staff (Welch and Welch, 2007). Xu (2009) assert that expatriates must consistently be backed by their headquarters to boost their morale as well as enhancing their capacity in the distant postings. Cross-cultural adjustment to the local situation enhance an expatriate’s success in foreign postings thus firms are encouraged to ensure their employees undergoes training on this prior to embarking on such assignments (University of Pretoria, 2008). Xu (2009) argues that expatriate staff serves as a useful link connecting the overseas locations and the headquarters of the firm as well as helping disseminate information from both ends. [See illustration Figure 2 below] Figure 2 Koteswar and Bhattacharya (2007, Pg. 90) using Selye’s (1976) General Adaptation Syndrome [GAS], have categorised expatriate stress into four stages namely: Pre-alarm, Alarm, Resistance and Exhaustion stages. The Pre-alarm stage illustrates when an expatriate seem ill equipped for the overseas transfer however instruction is administered to the staff to manage the expected cultural shock and other stress activators. In the Alarm stage, the employee is already at the foreign station but is not fully adjusted to the new experience despite the preparation, as they do not conform to his expectations. Experienced staff and HR professionals are required to help in acclimatisation. Resistance stage is when the employee endeavours to adjust to the ‘difficult’ circumstances he finds himself in applying all physical and psychological assets at his disposal to prevail over the challenges. Exhaustion stage is when the expatriate is the turning point in the assignment when the employee either conforms to the local situation or resigns himself /herself to the inevitable thus attempts to return back home. The company must ensure the employee is positively directed to avoid disenchantment with the assignment. Cultural intelligence (CQ) Analysis Cultural intelligence is used to explain why some individuals are able to withstand the rigors of exotic environment while others are repelled or incapable. Cultural intelligence (CQ) has been described as “a person’s capability to adapt effectively to new cultural contexts’ (Earley and Ang, 2003, Pg. 26). This hypothesis postulates that persons with higher CQ are more likely to be successful in foreign assignments since they more easily adjust as opposed to those with low CQ. Takeuchi et al (2005) assert that personality traits for specific individuals affect their orientation and adaption of different environments. This individualism is drawn from the ‘Big Five’ factor model that includes conscientiousness, poignant strength, consideration, candidness to skill, and forthrightness. The firm is obliged to identify the employee with appropriate Big Five factors. Conscientiousness has been described as being focused, iron-willed, and resolute, vigilant, consistent, and in accord with the circumstances (Koteswari and Bhattacharya, 2007). Conscientious individuals are more likely to exhibit better performance in their jobs particularly in difficult overseas assignments. Likewise Earley & Ang (2003) link conscientious individuals with those employees perceived to have high CQ behavioural levels capable of amenable and adaptableness in remote locations. Conclusion Foreign assignments are expensive affairs for the firm due to the hefty outlay required to set up operations overseas as well as deployment of expatriate staff. The incidence of high employee turnovers makes these investments make huge losses not only in monetary terms but also on lost opportunities and brand image damage. Likewise overseas postings are considered a major step for individual careers hence the failure to adjust to the difficult foreign environments may spell end of their careers as well as lost earnings. To overcome the many disadvantages consequent to these failures, corporations are therefore compelled to critically examine and eliminate those candidates deemed as unlikely to withstand the rigors of foreign assignations. Corporations must doubly ensure they accord the most appropriate support schemes that cushion the expatriate staff from the predominantly isolated postings by offering support in the field, pre-training programmes and acclimatisation programs with the local culture and environment. References Ang, S., Van Dyne, L., Koh, C., Ng, K.Y., Templer, K.J., Tay, C. and Chandrasekar, N.A. 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