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Regional Staffing, the end of the expat?

As we know international HR management development is no longer confined to ex-pats. International HR Managers have overseen the scaling back of ex-pat strategies in favour of regional solutions. This has created new opportunities not only for companies seeking Managers for locations in Eastern Europe and other Emerging Markets.

In the past, when companies needed support outside their home countries, they often relied heavily on home country employees. This was seen as a way to spread knowledge and culture to foreign subsidiaries, it was also very expensive. An expat abroad, once housing, school fees etc. are added in, can cost over four times their base salary. Furthermore, retention is not good with many leaving for alternative employers in the same location, or leaving on completion of their assignment.

It is primarily the cost which has meant an increasing focus on regional staffing programs, putting local managers and executives in charge. Multinationals frequently recognise the need to have local people in key positions, and train regional executives at HQ before sending them back to their home regions.

The presence of dedicated regional employees has in turn created new staffing opportunities. If a Sales or General Manager is needed in Korea or Russia for example, a company might transfer an experienced employee from the PRC or Poland rather than send an employee from the Paris, the UK or the US. With flexible, capable employees available in all regions, to fill a vacant emerging markets position with an internal candidate no longer has to mean transferring an expensive home
country expat. Although regional transfers are not easy, moving employees within the same region is less expensive and requires far fewer resources than transferring an employee from a mature market.

In the case of smaller companies seeking a local Representative to break into a new market, the overriding consideration is trust and protection of the parent companies interests. While in the past this has meant an ex-pat is the de-facto choice for Rep Office Manager, with associated housing & benefits costs. Now, an increasing number of emerging markets nationals educated in and having worked in many of the developed market countries for well known companies, brings a cheaper and still reliable option to the fore.

Is this the end of the expat? We don’t think the expat will disappear even if expatriate programmes will be redefined. There will always be demand for professionals with rare skills overseas. But rather than long-term (c. 5 years) assignments, it is increasingly likely to happen via secondment, allowing for training up of local talent. In any event, imposing home culture is not what companies want and negates the very is differences which make global business and International HR a dynamic and
challenging environment.

For further information on international recruitment, local hire or ex-pat, contact Jonathan Farn on
+ 44 20 7309 0322.