Business processes are inextricably linked to the social tendencies which change the environment of activity and influence the operational scale, technology, labor force market, and customers’ demands. Globalization belongs to the leading factors in modern social and economic development which cause significant shifts in all areas. Thus, expatriation is one of the most challenging phenomena that result from globalizing processes and affect the interests of both the employee and the organization as the primary business stakeholders. Companies should create a set of international assignments and are interested in qualified specialists able to implement the company’s strategy in the scope of the global dynamic environment. Alongside this factor, the professionals aspire to the new career opportunity while securing their physical and emotional comfort which is under threat when they should be relocated. Therefore, this paper shows the issues and challenges with which the expatriates face in the host country and the ways in which human resource management (HRM) practices can help them in adjusting to the new environment.
Primarily, it is worth to seize the essence of the central notions and processes. In this regard, the first steps in the paper’s structure refer to explaining the phenomenon of expatriation as the instrument of global talent management, disclosing the notions “expatriates” and “adjusting”. Further, the paper highlights the main issues and challenges for expatriates in the host country. Finally, the ways of increasing the success of expatriate assignments through the set of HRM policies and practices are explored.
Expatriation as a Primary Means of Global Talent Management
Human capital is the core element of every business organization worldwide. The increasing pace of globalization makes a stronger emphasis on human capital strengthening the importance of the HRM practices, especially global talent management (GTM). To be the best company on the world market, the companies should mobilize all personal activities of HRM to attract, develop and retain the professionals with a high level of competency, motivation, and personality consistent with the company’s strategic directions (Tarique and Schuler 2009). The company should not only attract the qualified personnel but also anticipate the needs for human capital and then set out the plan on meeting them within a short period to avoid financial losses (Cappelli, 2008). The best company strategy ought to follow the ideal standpoint that emphasizes the crucial need for “right people in the right place at the right times” (Bennett, Aston, and Colquhoun, 2000:240). For this purpose, the organizations involve foreign specialists invited or removed from the other company’s assignments. In this context, “the employees who were selected for the international assignments and were relocated to the overseas operations for the extended period were known as expatriates” (Witting-Berman and Beutell, 2009:77).
Foremost, each professional is an individual who strongly depends on cultural values, behavioral habits, and social norms. Any changes in the mentioned influential factors destroy the moral state of employees and their ability to function successfully. Occupying international assignment implies changing everything in life and may cause low professional performance. Thus, the adjustment is the way to minimize the possible negative effect of unavoidable changes and provide the condition for the employee’s realizing his/her best potential in an unknown environment of the host country. Some of the observers called adjustment as a degree of “perceived psychological comfort” and this interpretation is utilized in the scope of the paper (Hippler et al., 2014:1939).
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The Key Challenges and Issues the Expatriates Encounter
Native land, family, and profession belong to the primary human daily values which lay on the basis of a person’s way of life and allow them to feel as meaningful social representatives and self-sufficient personalities. Withdrawing the person from the familiar environment is always stressful in spite of all the proposed benefits and opportunities. Moreover, people could not be satisfied with having only one form of life units. Specialists explicate cognition, feelings and behaviors as major dimensions of the repatriation process and expatriate adjustment at the same time (Haslberger et al., 2013). These dimensions also predetermine the challenges with which the expatriates face and primary issues they should solve in the process of adjustment.
The cognitive dimension is one of the most complicated to understand because the intellectual potential is the reason for hiring the person for the work on international assignments. Indeed, having intellectual resources or talents is not the same as operating them successfully. It easy to apply the knowledge, logic or strategy planning within a well-known environment where the professional is aware of hidden nuances of human behavior that predetermine the business strategy. Nonetheless, the strange surrounding makes this process complicated to realize to the full. Thus, the cognitive frames are the first significant challenge that requires a great effort to overcome it. The expatriate is mostly observer until one can find sense in the behavior of local counterparts, partners, and competitors.
Understanding the emotional dimension is easier, while feelings are an integral part of each personality. Changing the work and place of living is a significant stressor itself, and it is also inextricably related to the numerous individual aspects. The family is the first and the most significant among them. According to the survey conducted by Bennett Associates and Price Waterhouse, 75.4% of expatriates are married (Bennett et al., 2000: 242). The expatriate faces the need to choose between leaving the family and replacing it with the new appointment. Both variants are equally stressful. As a rule, spouses are engaged in “tied moves” (Eby, 2001). It creates the need to solve the issues of spouse’s employment, children’s education, and renting a dwelling among others. Moreover, daily communication in the host country requires operating with the set of elementary skills from all the family members, such as local language, laws, traditions, and social rules. Additionally, leaving aging parents in a native country belongs to the most important aspect of the feelings dimension. In contrast, the emotional aspect can also be positive if the person, for example, was dreaming for long about the pace in the international assignment, or living in a particular country.
Human behavior is often the outcome of environmental regulation, the influence of culture, religion or state laws. Apparently, being in an unknown environment, people would not know how they should and can behave as well as how to treat the other’s behavior. Because of this issue, the adequacy of expatriate’s behavior is rather low just after arriving, especially when the differences between native and host cultures are sufficient.
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Due to the fact that the process of adjustment is primarily the relationship between the person and environment, all these dimensions have internal and external variables. Specifically, knowledge may not be enough for decent performance as well as the cultural environment may limit them with the unexpected local way of behavior that does not allow applying the cognition to its full potential. The facets of the environment are unique and depend on a person’s individual differences and contextual factors. Summarising the mentioned challenges, one can see that there is one common issue implying the need for a person’s reassessment of his/her values, adapting them to the new environment, including both individual and professional concern. It is the formation of a new way of viewing life and career (Briscoe et al., 2006).
Possible Practices of HRM
Organizations face significant social pressure and should choose the socially responsible policy that involves and influences multiple stakeholders. Because employees are one of the most important stakeholders in the business process, the companies should count on their needs and challenges (Schuler, 2000). In this regard, the adjustment HRM policy and practice ought to be among the primary directions in international companies.
Compensations belong to one of the most important practices for international companies. Relocation is inextricably linked to the significant financial expenses, and for this reason, this challenge could not be ignored by the employer. Although it is related to the economic aspect, it directly concerns the psychological condition that is likely to influence the employee’s professional performance. Thus, many companies worldwide offer their employee’s significant compensations to their employees for the need to be relocated. It is the most widespread practice in spite of the fact that the level of compensation dramatically varies across the countries (Schuler, Jackson and Tarique, 2011).
Moreover, some of the observers argue about the effectiveness of the compensation practice emphasizing on its destructive impact. For instance, Paik et al. (2007) claim that the expatriates are the most expensive talent that organizations employ and their compensation packages tend to be two or five times larger than the benefits of home counterparts. This aspect is considered to obstruct the process of adjustment by creating the ground for tension between the expatriates and local employees. In addition, adopting the decision concerning working oversees the expatriates are guided by their “intrinsic motives” implying individual interests and ambitions (Stahl et al., 2002). With this in mind, numerous companies tend to reassess their way of the expatriate adjustment through compensation limiting it to meeting the elementary needs of the relocated employee.
Relocating not only the employee but also his/her family is another way to minimize the adverse outcomes related to the feelings dimension and contribute to increasing the level of the expatriate’s satisfaction alongside performance. It is a justified policy whereas separation from the family is the primary depressive factor that lowers the motivation and makes adjustment more complicated. Indeed, the family unit is considered to be the major supportive team (Bennett et al., 2000). Because of this circumstance, proposing the opportunity of relocating the whole family and providing it with a minimal set of needs is also the leading successful practice in the HRM.
The company should pay special attention to proactive planning as a preparation practice that helps to soften the possible stressful situation. The majority of stresses are related to the fear of the unknown and need to react immediately. Proactive planning implies expatriates’ playing a more active role before and during the re-entry phase and help the employee become aware of the future challenges, be ready to them. Such an approach promotes enhancing the level of boundaryless orientation that plays a significant role in the adjustment process because the individuals with low boundaryless orientation demonstrate lower job performance (Rodrigues et al., 2015).
Training is the most effective adjustment practice bringing the best outcomes for both organizational and personal development. Many analytics agree that education and training are the most significant investments in human capital (Cooke, 2005). The world business practice also demonstrates the efficiency of this adjustment approach. Today, in such progressive countries as Austria, Czech Republic, Germany, and Hungary, where numerous international companies have their assignments, one on two adults attain vocational upper secondary or post-secondary qualifications (Valle et al., 2015). Indeed, the quality of training varies across the times and territories considering the actual challenges. Thus, early training programs were focused on didactic activities only implying providing with the information. Modern training is thematically broader and includes attribution, culture awareness, experiential, cognitive-behavior modification, as well as interaction and language activities (Littrell and Salas, 2005). Attribution is aimed at the development of attitudes and skills necessary for building explanations of host national behavior from the host-culture point of view. It is likely that the person who appreciates one’s native culture can be more effective in the other cultural environment. Taking into account this suggestion, training on cultural awareness, which is focused on the understanding of native culture, become an integral part of educational programs in multicultural companies. On the other hand, cognitive-behavior modification implies acquiring cognitive skills for making correct attributions in life situations, while developing the habitual behavior desirable in the host country. Apparently, language training is one of the central training options as well as the ability to speak fluently allow people to express their individuality that is so important equally in professional and individual life. Moreover, language is a way to increase work productivity and provide faster adjustment (Tyler, 1999).
HR Diversity Policy
Due to the fact that international assignments imply a multicultural environment, diversity policy should be the primary focus of HRM. Cultural diversity is positioned as a positive factor that suggests sharing the unique knowledge, but quite often it is the ground for social division and hostility (Mannix and Neale, 2005). Because of this issue, cross-cultural training aimed at creating multicultural tolerance should be the first adjustment step. In particular, such a strategy helps acquire the cognitive, behavioral, and affective competencies required for effective interactions across different cultures. It is the instrument aimed not only at the expatriate’s adjustment but also at the adaptation of the environment or the host country counterparts to the traditions of the expatriate (Shen et al., 2009). Indeed, motivating and educating the local staff plays an equally important role as expatriates training. A local employee in the host unit is an organizational insider that is a source of valuable information for the newcomer as well as emotional support, so-called “social agent” (Toh and Denisi, 2007). Creating a tolerant insider is the core axis of the adjusting strategy because it promotes a friendly environment and a high level of team spirit.
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Multicultural understanding is a crucial factor in the business environment, while societal and cultural values greatly affect organizational practices (House et al., 2002). Alongside this aspect, in many practical cases, it is redundant, and economic, political or institutional factors provide better explanations of behavior or strategies (Hofstede, 2002). The Chinese example demonstrates that using the Western progressive HRM policy does not warrant the repetition of success as a vivid confirmation to this statement (Shen and Edwards, 2004).
Additionally, some observers argue about the need for adjustment claiming that corporative culture promotes it (Kostova and Roth, 2002). Indeed, many institutional elements are often specific to the nation, and there are considerable variations in the manner in which markets and other institutional arrangements operate (Farndale et al., 2008). Thus, underestimation of the adjustment meaningfulness and ignoring the expatriate’s challenges may cost much to the company. To illustrate, research shows that the company losses from $250,000 to $1 million because of expatriate’s early returning from international assignments (Littrell and Salas, 2005)
Based on the findings of the analysis, expatriation is a rather challenging but inevitable process because of the high value of the human capital for business activity. Considering this fact, adjustment lays in the area of common interests of the expatriates and organizations. Understanding this fact, both stakeholders make significant efforts to overcome all the challenges and solve the urgent issues related to successful adjustment. Thus, when the expatriates should be open and ready for the new opportunities, the organizations have more tasks to help adjust their employees. There are numerous HRM adjustment practices, such as compensations, family relocation, and different types of training and diversity policy, which can contribute to the adjustment process and provide mutual benefits to individuals and organizations. Apparently, cultural, political and economic factors, as well as the company’s strategy, cause the varying approaches to this complex process across the nations. In any case, the importance of expatriates’ challenges should not be underestimated by the companies because the successful adjustment is the precursor for business prosperity.