HR Spectrum Article - Expatriate Management: Is it in Crisis?

Expatriate Management:
Is it in Crisis?

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The management of expatriates has never been more complex than it is today: never have there been so many companies sending so many employees on assignments abroad; never have there been so many specialized vendors and other resources available to the manager of expatriates; yet never has the function faced such a difficult time in mastering its own destiny.

The days of the expatriate “have six-gun, will travel,” with the expat foraging about on his own during the relocation and the assignment itself, are long gone. Today expatriates demand a great deal more in terms of support and services when relocating overseas. And corporate managements are putting ever increasing pressures on expat departments and programs, especially to cut costs.

So, is there a crisis in managing expatriates?

Some Specific Issues

A number of concrete issues stand out:

* The perception (by others) that expatriate HR is “not working” The tremendous range of subject matter, from tax to culture, comp to spousal assistance, hardship to payroll, a range no other HR activity encompasses

* Segmentation of work, with each niche area requiring its own focus

* “Client” – i.e. business unit – pressures, in that expat HR typically exists as a corporate unit but its corporate “clients” are multiple business units

* Pressure from the expats themselves (the 300 E-mails-a-day syndrome)

* Resource constraints, as in constant pressure to cut staff and reduce costs

* Shortage of people with seasoned skills and in-depth knowledge of the expatriate world

* And, possibly, a slight lack of self-confidence in expat HR

The Broader Issue

Doubtless other specific issues could be raised for individual circumstances. But whatever the specifics, if there is a crisis, it arises as part of a broader issue, which is how to manage a global HR strategy and fit expat HR into it.

Key questions in this broader context include:

* Who decides on the use of expats vs local nationals?

* Who owns the expats during – and after – their assignments?

* What is the long-term strategy in using expats?

* How does expatriation fit into career development?

The Structural Issue

The structural issue centers around 2 sets of facts. On the one hand, the expertise required to manage expatriates is so specialized that it is uneconomical to replicate it in different business units or major countries. Therefore, its administration is usually centralized. On the other hand, since expat HR is typically only a support activity, the big questions like these are asked and answered (if at all) out of its purview.

Furthermore, expat management has become increasingly viewed as an administrative, not a strategic, issue. Structurally it has tended to be pushed down in the organization (if not actually out, in the form of outsourcing). As companies have reorganized in the ‘90s, they have tended to create small corporate departments dealing with global and strategic issues, while delegating implementation. Expat HR is too often too far removed, both from the line organizations running the businesses and policy-level HR.

One nitty-gritty example: does expatriate HR play the role of “enforcer”? Assuming the usual case that it does not “own” the expatriates, is it put in the position of insisting that rules be followed that may be at odds with, for example, the business unit and its overseas entity?

Is There a Crisis?

So what is the bottom line? For any individual company or more broadly, the issue revolves around how effectively expatriate management fits smoothly into a global HR strategy, which in turn truly supports global business objectives.

This requires strong organizational linkages and role definition, to wit:

* The role of HR vs. line management

* The role of expat HR vs. corporate HR departments, as well as regional and business unit HR

* The role of expat HR vs. other functions

Role definition then includes resolution of issues such as who formulates policy, what approvals belong to whom, is expat HR an advisory or control unit, who permits exceptions, how are budgets established, etc.

In essence, the crisis – if there is one – boils down to the role expats play, or do not play, in leading a company’s global business, and how to manage that highly specialized sliver of a company’s total population.