Question

what are the costs and benefits of hiring home, host, and third country nationals for overseas assignments?

Answer 1

Pros of Hiring Expatriates (home / 3rd country nationals) for your International Business-

• Quality over Quantity-

Recruiting locals can be rather difficult, specially if you are trying to open an international workplace. That is because most local aspirants won’t understand your firm’s practices. On the other hand, engaging somebody who knows the ropes of your corporation will make it simpler to train local employees.

This implies that one talented & hard-working persons may really be worth 3 newcomers to the practices of the trade. Recruiting locals may appear like a cheaper short run solution, but the initial savings may be diluted by poor outcomes on the long run.

Obviously, this decision may vary from one circumstance to another. For instance, some firms operate with a combination of expatriates & local workers.

• The Target nation has a Limited native Talent Pool-

Another reason to invest in expatriates would be a limited native talent pool in your sector. In this case, the costs of recruiting knowledgeable local workers can be excessively high. Keep in mind that the capability to operate with particular computerized techniques specific to your sector is a critical competency possessed by only few individuals.

• Your works Must match the Standards of your Home Market-

This is one of the circumstances when sending in a team of expatriates makes the maximum sense. Several manufacturing firms choose bright persons to represent their international works & train local workers. He will act as GM, oversee works & ensure that all business endeavours are compliant with the policies of your domestic office.

Cons of recruiting Expatriates for your International Business-

• Expats are costly & Problematic-

The expatriates themselves are not problematic, but ensuring that all travel expenses, visa matters, host / home-country tax discrepancies & relocation payments are covered will be. You should expect to pay 2-5 times more on an expatriate than you would on a local worker. In any case, you’ve to decide if this considerably higher cost is worth it.

• High Rate of burnout-

Research has shown that expats, specially those performing extremely demanding tasks, have a high rate of burnout. It appears that 25 per cent of them are called back early as they take up too much stress. This is the outcome of many factors including language hurdles, being away from family & friends, having to deal with an totally new culture, & a feeling of isolation.

• Legal Risks-

Some firms ended up being fined / debarred from functioning in a certain nation because they did not obey its immigration requirements & permit stipulations. For an expatriate continuing work in a nation passed his permit’s expiration date may lead to detention.

Conclusion-

If you are still struggling to decide whether / not to send expatriates to oversee your international works you should consider the following :

1. Exceptional personnel, with company know-how & superior managerial skills, who can also operate well with restricted means are worth their weight in gold.
2. Do not take any decision without totally comprehending all the associated expenditures, regulations & implications of employing an expatriate overseas. We are talking about lodging , moving, expatriate packages, tax & social security stipulations, & support programmes for families.
3. The expat will require some time & training to adjust with an entirely new culture & language, so do not expect everything to fall into place overnight.