When faced with the challenge of expatriate selection, many companies are not properly informed on the importance of their decision. Nor are they properly equipped to effectively carry out an expatriate selection process. Because expatriate assignments are such expensive endeavors for international companies, the success rate should be a high priority.
Expatriate assignments can cost up to 400 percent more than just the base salary and benefits of the employee in his or her home country. In addition to normal salary costs, the company typically pays the expatriate allowances for housing and cost of living, host-country taxes, and relocation expenses. Therefore, when an expatriate assignment fails, this can be a large loss of investment for a company. To ensure the success of an overseas assignment, a company needs to select the best candidate for the assignment the first time around.
Jill Armstrong, a global employer services senior manager at Deloitte Tax LLP, Chicago, Illinois, said, “Most of the time, failed expatriate assignments are not due to a mismatch of technical or business expertise, but instead failure happens because of personal issues related to the expatriate. Expatriate assignments can fail for several reasons; for example, general stress, culture shock, lack of support, feelings of isolation and loneliness, family dissatisfaction…. Careful candidate screening and selection of expatriates can lessen the failure rate due to those reasons.”
The figure above is a quick guide of common mistakes organizations typically make during the selection process, along with a list of recommended practices.
To avoid the above-mentioned issues, companies need to be proactive and ready to handle the expatriate selection process. This can be accomplished by setting up procedures so that when an international assignment does occur, the company will be ready to act, not react. A good way to avoid last-minute mistakes is to have an effective selection process that examines possible expatriate issues ahead of time.
|
Common Mistake |
Recommended Practice |
| Little lead time for decision-making. |
Allow sufficient time (90 days) for careful consideration and assessment of candidates. |
| Single choice of candidates. |
Have a pool of multiple candidates that already has been identified as strong contenders for international assignments. |
| Job’s technical factors and required skill sets used as most paramount decision tool. |
Skill sets balanced with intercultural and spouse/family criteria. |
| Spouses not included in decision process. |
Employee and spouse treated as a unit (Other family members’ needs considered, as well.). |
| One decision-maker—home country manager. |
Include international human resources (HR) and host-country management as part of the selection team. |
| Assignment considered a single event in employees’ career. |
Make the international assignment part of a career plan. |
| Financial incentives used to convince employees to take an assignment. |
Emphasize to employees the international experience and career advancement. |
| The original concept of this table was created by Michael Tucker of Tucker International, Boulder, Colorado. |
Important Traits
To identify employees with the communication and adaptability traits most suited to foreign environments, the selection process ideally should focus on the evaluation of the candidate via several methods (i.e., behavioral interviews, cultural tests, stress tests, and evaluations by the candidate’s superiors and peers).
Many employee screening specialists have concentrated their attention on personality traits; more specifically, the predictive power of the “big five” personality characteristics for expatriate success. The five characteristics examined are:
- Extroversion. Individuals who successfully assert themselves and gain acceptance in a social environment through social relationships.
- Agreeableness. Being identified as a team player through the formation of reciprocal social alliances and the building of social capital in the organization.
- Conscientiousness. Trusted, diligent cohorts who are productive and supportive of increased organizational performance.
- Emotional stability. The intrapersonal ability to adapt and cope with stress in professional and personal spheres of one’s life.
- Openness and intellect. Having the ability to effectively complete their functional assignments and at the same time possessing an awareness of the environment that allows for adaptation of their behavior to changing conditions in that environment.
In addition to the “soft” skills (that is, skills not directly tied to technical training and functional expertise) above, many assessments have extended the number of categories to include: global awareness, corporate strategy, cultural empathy, locus of control, cross-cultural team-building, ethical understanding of conducting business in foreign countries, and self-confidence.
Selection Is Key
To support international growth, companies increasingly are sending employees to live and work in other countries. An unsuccessful expatriate assignment is costly for the company and possibly even damaging to the employee’s career. Therefore, it is recommended that organizations have adequate processes for selecting their expatriate workforce based on the steps outlined above.
This article does not constitute tax, legal, or other advice from Deloitte Tax LLP, which assumes no responsibility with respect to assessing or advising the reader as to tax, legal, or other consequences arising from the reader’s particular situation.
Patrick Callahan, GPHR, is global employer services manager for Deloitte Tax LLP, Dallas, Texas. He can be reached at +1 214 840 1418 or e-mail pacallahan@deloitte.com.