Challenges for SME's with Expats

September 1, 2020

Since then the globalised economy has meant that expatriate assignments are no longer the preserve of enterprise sized companies. Although global research on the topic of SME expats is scant, research undertaken in expat hubs like Saudi Arabia shows 70% of employees are working for SMEs. There is a similar pattern emerging in Japan where one third of employees in 2016 SMEs were likely to be foreign born, filling skills shortages amongst an aging population.


For SMEs with global vision, expat employees may be part of your roadmap but what are the challenges you might expect to encounter and how can you overcome them?

Selecting the right employee for an expat assignment is critical to success for businesses of all sizes. For SMEs, the cost of expat failure may be particularly detrimental commercially and reputation-wise. In the past organisations relied on capability and role related skills to choose an appropriate candidate for an overseas assignment. Studies into expat failure show having a global mind-set and soft skills like confidence, flexibility and interpersonal skills are more important when it comes to achieving goals in new markets. 

If your SME does not have the resources for a thorough expatriate selection process, consider outsourcing to a specialist recruitment consultant. Although it may seem expensive initially, when compared to the cost to the business of an expat returning early or not reaching the intended goal, it could be a sound investment. 

As an SME, you may not be able to offer the traditionally generous compensation packages associated with expatriate assignment. But this may not be necessary. Expatriate compensation packages are changing. Research from Mercer shows many larger businesses are moving away from the traditional packages. Instead many are opting for local plus compensation. This is when financial compensation is linked to a typical salary for your role in your destination country with some additional benefits for expats.

As an SME don’t forget to highlight the other benefits this opportunity might provide to a potential candidate in terms of their career, experiencing life overseas or paying reduced tax on their salary. 

Most enterprise businesses provide pre-departure training for expats. Training courses contain cross-cultural awareness training, information about the host country and project alignment meetings. As a HR manager in an SME, you may not have the capacity to provide this kind of training in advance of an employee’s move overseas. However, it is worth considering sending the employee to outsourced pre-departure training tailored to the region they are moving to. This allows you to focus on the project alignment element in-house which is tailored to your specific business needs.  

Even the most prepared or experienced expatriate is likely to have challenges during their time overseas. Everything may be going well professionally but personally they may struggle to settle into their new location or have family difficulties that they need support with. With limited resources, it may make most sense for you to focus on the work-related challenges your expat employee has.

For more personal issues, see if your SME international health insurance provides an expat assistance programme where they can access expert counselling and wellbeing content to help cope with the unexpected on assignment. 

There is no doubt that there are challenges for Small and Medium Sized Businesses sending expats overseas. However, the changing nature of expat expectations and the availability of outsourced support is making it much more accessible.