The Role of the HR Manager in Reducing Expatriate Failure

By Vidhya Munuswamy (Cahiers Des RH 2008)

Globalization and internationalization of companies is leading to a more strategic role of the human resources management (HRM) and a change in the content of the HRM. The main focus of IHRM is on the management of expatriates. Know-how, technology and capital cannot be used effectively and efficiently in the host country nor be transferred from the home country without using human power (Tung 1988). When multinational companies build up subsidiaries or look for new markets, they send their expatriates to ensure success through better technical knowledge and company-specific skills. However, knowledge and skills are not the only concern of the company. Posting expats gives the opportunity to the company to control and coordinate their subsidiaries better. As an interface between the parent and host companies the expat reduces the problem of culture in communication, the risks related to security and quality can be minimized. Problems are detected earlier and communicated in time to the parent company, helping them make strategic decisions effectively.
However, not all expat assignments are successful. As companies continue to expand overseas at a rapid rate, they're also incurring millions of dollars in costs in failures attributable to poor expatriate assignments.
Some of the most common reasons for failure are:
- Companies don’t have policies and procedures in place and a clear directive from top management to abide by them.
- Companies avoid dual career issues, as well as childcare, elder care, and other family concerns.
- The human resources managers lack assertiveness in the decision-making process related to selection and training.
- The selection planning processes are inadequate: the companies don’t have the right selection process of identifying and matching qualifications among the available talents, and following through with training, orientation, development, and performance evaluation of the selected executive.
- Companies have career management and placement planning activities which are focused on short-term goals, rather than being future oriented.
The cost of expatriate failure can be overwhelming. Direct and indirect costs could range from the company losing face and trust in the local market to totally losing its market share and incurring losses. On the individual front too it has its repercussions. Lack of confidence, stagnant career development and resulting psychological problems affecting the failed expat and his family.

Ronan’s Model (1989) describes five categories of attributes as the predictors of success: Job factors, relational dimensions, motivational state, family situation and language skills.
For discussion here, we are going to see how problems related to relational dimensions, motivational state and family situations could be minimized through careful selection.
Relational Dimensions like tolerance for the uncertain and behavioral flexibility are qualities highly appreciated in a candidate being considered for selection. Drawing comparisons and reference to the parent country environment and working style often leads to frustrations and aggressiveness. Recognizing the fact that social, political, climatic, religious and labor law factors play a major role in the host country environmental instability is important. Cultural factors like the notion of time could also contribute to delayed projects or non-respect of deadlines. The right candidate must be one who anticipates the uncertainties and finds amiable solutions without resorting to dealing with the situations under stress. Adaptability to change, flexible management styles, non-judgementalism and cultural empathy are qualities that a HR Manager should look for in his candidate. While interpersonal skills are relatively easier to detect through standardized tests and interviews of the candidate, his colleagues, subordinates and superiors, cultural suitability could be a challenge to identify. Few MNCs resort to standardized tests and interviews to determine the personal characteristics of a candidate, selection being mostly centered around the technical qualifications and job experience. Cultural shock both for the expat and his family could be a reason for failure and lack of adjustment to the host country. Training, information sharing and exchange between families already expatriated could reduce culture shock.
Motivational state means the candidate’s willingness to relocate, interest in working abroad, cultural curiosity, openness to learning, adapting and taking on new challenges. Interviews at different levels and open discussions on the host country positive and negative points and sometimes even a pilot trip to the host country could be organized. The company policy related to the expat relocation package, and career prospects during and on repatriation could play an important role in the motivation of candidates. An HR Manager’s role would be to be transparent and clear about the policies and support regarding expatriation and repatriation. Communication through well documented policies shows the professionalism of an HR Manager and the trust he can build with his candidate.
Family situation though highly underestimated as a selection criteria is often the most cited reason for failure. Relocation experts say that most expat assignments fail because of personal, not professional, issues, and divorce rates are higher than average.
Expatriation can put immense strain on the relationship in couples. Companies are slowly waking up to the importance of taking the expat's personal life into consideration when planning selection and relocation. Most executives who move overseas for work go with a partner. Among more than 31,000 expatriates surveyed for a 2003 GMAC Global Relocation Services report (expatica.com), 60 percent were married. But only 16 percent of spouses who worked before they left home also worked in their new country either because the new country's work visa rules don't allow it or because the spouse chose not to seek employment–or couldn't find a job. Dual career is a major concern among couples and one that the HR Manager needs to look into, to facilitate the move.
"Family adjustment" ranked at the top of the list of concerns among expatriates, GMAC notes. Keep the spouses happy and you can keep your expatriate happy and successful. Expatriate policy can’t be written without input from the spouse,” says Yvonne McNulty, who initiated the Trailing Spouse survey (www.thetrailingspouse.com). From the 80 respondents to McNulty’s survey, she was able to determine that the internal environment (self-esteem, identity, career opportunities) is just as important to spouses as the external environment (housing, medical, schools for children). Yet, she says, expatriate policies typically only address the external environment, resulting in long-term losses for the company.
Many companies avoid the topic of personal life when preparing expatriates, preferring to focus on job descriptions, compensation, taxation, health care and moving practicalities. The HR Manager should include families in pre-assignment discussions, relocation briefings, cultural and language training sessions and even in the pilot trip to the country of assignment. It is important for a HR Manager to better understand the ways in which organizations can help encourage work-life balance among their global assignees.

Training: Though the expatriates are often critical to a business's success, most often investment and skills are not given to the expatriate assignee to ensure they can do the job properly.  Training is often a neglected area in expatriation. Intercultural training could provide expats with knowledge of the culture, customs and practices, political and social environment of their host country, to prepare the family sufficiently well to face the culture shock and be more receptive and adaptable. Pre-departure training also includes language training sessions, relocation practical issues like visa, work papers, housing assistance, school admissions and remuneration and tax procedures.
While it’s often difficult for HR to find program money for training, communicating on a regular basis is now an easy possibility with the internet and emails.

To conclude, expectations from a HR Manager could be manifold: from the Management,
the expat, his accompanying family, the host country etc., The Management wants Return on Investments from the expat, the expat wants to know that their career progress would be well outlined and that they would have the support during the assignment and not be lost in the organization, once repatriated. Spouses want to know all the practical issues involved in the moving, their own career prospects, their social life and their children’s educational prospects. A successful pre-assignment program that includes the family and an on-going employee-assistance program with effective communication could reduce expatriate failure due to personal factors, to a considerable level.