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Foreign Expat Workers Heading Home in Dramatic Numbers

March 8, 2010
Related Topics: Expatriate Management, Retention, Workforce Planning, Featured Article, Recruitment

A 2009 survey by financial firm HSBC revealed that 23 percent of expats in the United States and 44 percent in the United Kingdom were considering going home because of the global economy. Although they originate from several countries, these expats from the U.S. and U.K. cited limited career prospects as the top reason for returning home.

Back in the U.S., the story is particularly startling, with one expert contending that the tide of expats heading home has reached historic proportions.

“For the first time in American history, expats are leaving,” says Vivek Wadhwa, senior research associate with the Labor and Worklife Program at Harvard Law School. “For the last decade or so, there’s been a massive outflux of talent, particularly to India and China. These are typically skilled professionals in the prime of their careers.”

Wadhwa says between 50,000 and 75,000 Indian and Chinese professionals went back home in the last 20 years. Those numbers will soon more than double.

“There will be another 100,000 to India and 100,000 to China in the next five years,” he says. “These people are driving innovations in their home countries that will become competitors to America.”

A shortage of green cards is a major cause for Indians and Chinese, as well as Brazilians and Russians, to return home. “We have a 10-year backlog for green cards,” Wadhwa says. “There are more than one million skilled immigrants—about 35 percent Indian and 25 percent Chinese—who are waiting. They came in on H-1B visas, and they are stuck in the same job unless they can get a green card.”

These expats can wait 10 or 12 years because the green card supply hasn’t kept up with the number of H-1B visas. While expats wait, they can’t move, change jobs or even get promotions. With plenty of good job opportunities in China and India, they see little reason to stay in the U.S.

“When we start seeing the next Google coming out of India and China, and people realize these advances are coming from former expats, that’s when the alarm bells will go off,” Wadhwa says.

Many of these expats would like to stay, says Lynn Shotwell, executive director of the American Council on International Personnel, an organization advocating improved business immigration policies.

“The perception is that if we really wanted to change things, we would,” she says. “The question is, are we losing our edge? The ability to attract the best and brightest from around the world was always a big strength for the U.S. Now we’re pulling up the welcome mat.”

Thanks to the recession, companies are evaluating the costs of international assignments and the need to bring expatriates home. . “Before, companies felt they needed to send people [abroad] to open markets and transfer technology and culture,” says Scott Sullivan, executive vice president of Brookfield Global Relocation Services, an international, full-service relocation company. “Now there are lots of capable people in those countries who can perform those jobs. [Companies ask] if they really need to send people overseas or can we hire locally. This is a big dynamic in global business.”

PricewaterhouseCoopers sees the same “evolution in mobility programs,” says Eileen Mullaney, principal for international assignment services. Twenty years ago, setting up and developing new operations called for high-level employees. Now, “it’s mostly filling specific skill-set needs,” Mullaney says.

Simultaneously, employers are asking if their mobility strategy supports talent development, especially for future leaders. “They’re looking at succession plans—who should have that [foreign] experience—and getting people out sooner,” Mullaney says.

Sullivan sees the linking of foreign assignments to talent development as “the most significant trend in the last 10 years. The purpose of international assignments has changed from ‘we need to get somebody there because the talent isn’t there’ to ‘we need to put someone there to develop the market so our leadership in 2015 will have all the tools to understand the business.’ Global mobility has become a tool for growing and developing talent.”

Despite this, many companies are scrutinizing all aspects of their mobility programs. “More companies want to bring expatriates home,” Mullaney says. “Companies are asking if it’s the right person and if it’s time to move or localize or separate the person. The economy has forced their hand.”

Workforce Management Online, March 2010 -- Register Now!

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