Reasons for expatriate failure and how HR can help

September 13, 2018
As a HR professional managing expatriates, one of the most costly issues your business may face is expatriate failure.
It is a term used to encompass a range of issues that prevent return on investment from an expatriate including early return, underperformance or adjustment problems. Rates of expatriate failure vary significantly by both industry and destination. Research from INSEAD showed failure rates could be anywhere from 10% to 50% with destination playing an important role in this. Expatriates sent to emerging economies are likely to have higher rates of failure than those sent to developed countries.

A study by Cornell University showed some of the most cited reasons for expatriate failure were:

Culture shock: The ability to adapt to new and different cultures is key to expatriate success. Professionals who do not possess these skills innately can often struggle in a new environment. A good beginning is not always a sign of success, culture shock has many phases and a honeymoon period at the beginning is common.

Family: Often ignored by companies sending employees abroad, the families of expatriates have a significant impact on their success. If a spouse or child is struggling to settle in to the new environment, it is highly likely to impact on the employee’s performance and willingness to complete the assignment.

There are several ways HR can help prevent expatriate failure including:

Just because an employee has the hard skills needed to excel at a role at home, it does not mean they are the right person to send to do that role abroad. It is essential you are involved from the very beginning of the process and interview potential expatriates to identify those with skills like:

Cultural flexibility: a love of travel may not be an indicator of cultural flexibility if the candidate spent all their time with people from their own country and ate familiar foods most nights. Look for those who love to learn about and interact with people from different cultures.

Enthusiastic communication: was there someone in your office who tried their halting Spanish with a client or wanted to learn some Mandarin from suppliers visiting from China? They may be the right person for an international role as they may be more willing to pick up the local language and adapt their communication style to local norms.

Cosmopolitan outlook: when interviewing potential candidates look for examples of understanding other cultures, whether that is a diverse social network, learning other languages or adapting to another culture while studying or travelling abroad.

Providing holistic pre-assignment training improves expatriate success by helping the individual (and their family) feel more prepared for potential stressors that lie ahead. For an assignment lasting a year or more, you should work to design a training programme that lasts for more than a month and takes an immersive approach. This programme should include extensive language training, information on healthcare, support for families and cultural training to help them adapt to ‘how things are done’ in their new home. If possible a visit to their new location would also be ideal.

HR support should not end once the expat is in situ. A lack of local support can be a contributory factor to overall expatriate failure so building a support plan once they arrive at their new destination is key. Elements to include are:

Local support: pair the new arrival with a fellow expat or local colleague who can offer them advice on getting set-up in their new country. Things like having cable installed or finding a family doctor can be confusing and very frustrating when you don’t understand the process.

Updates on home country: keep your expats up to date with what is happening in their home office with fortnightly calls or emails from a nominated contact. This helps the person remain in the loop with what is going on in the office but also prepares them for their return home as their assignment comes to an end.

Satisfaction surveys: have employees working abroad complete short satisfaction surveys at regular intervals to identify problems before they become serious. Use the feedback provided to optimise pre-assignment training for future expats.

Plan for repatriation: the companies with the most successful expats took repatriating the employee at the end of their assignment seriously. Unfortunately, many businesses do not take such care. Former expatriates are expected to return to their home office as if they had never left despite the fact colleagues and company objectives may have changed in the time they were away.

Providing your expatriates with the healthcare they may need while they are working abroad is key to their physical and mental health and wellbeing. We offer a wide range of group schemes for employers and would be happy to answer any questions you have.