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Expats Hearing Call From Their Companies to Come Home

March 5, 2009
Gone are the days an up-and-coming midlevel executive could anticipate spending a few years in London, Tokyo or Hong Kong to pick up management experience and some international savoir-faire.

Companies have been eliminating international postings solely for career development purposes and making other cuts to curb expatriate program costs for the better part of a decade, but the economy’s free fall pushed changes into overdrive, say corporate HR executives and expat program management consultants.

In recent months, companies have begun recalling expats from multiyear assignments up to 12 months early. Not surprisingly, expat programs at companies in the banking, financial services and auto industries are some of the hardest hit.

Margery Marshall, president of Vandover, a St. Louis-based career consulting firm that counsels expats returning to the U.S., has had discussions with one financial services company repatriating thousands of employees, a significant portion of whom are coming home early.

“Two years ago, not only was there a war for talent, there was a rage for global experience. That’s not the hot a ticket it used to be,” Marshall said.

Expats can’t even expect a job when they get home. Only 42.1 percent of 200 companies responding to a Mercer 2008 international assignments survey said they guaranteed some type of job to expats after an overseas tour. Some married expats whose spouses put a job on hold or quit to support their husband or wife’s expat stay find themselves coming back to nothing.

“It’s scary,” Vandover’s Marshall said.

At the same time, companies can’t afford to continue with the status quo, executives and consultants say. At U.S. companies, that’s typically meant paying a manager a six-figure salary plus three to five times that amount on housing, transportation and other expenses, said Geoffrey Latta, executive vice president at ORC Worldwide, an HR consulting firm that designs expat compensation packages.

The CEO of a Pacific Northwest manufacturer who requested his publicly traded company’s name not be used is pulling his European division manager home after only eight months of a two-year assignment because the business can’t continue to foot the $500,000 annual bill for his salary and living expenses.

A U.S. human resources manager based in Russia for a major oil and gas multinational who requested anonymity said significant budget constraints have led the company to cut assignments short and re-evaluate whether positions are needed. She’s spending considerable time on a “massive” repatriation of expats to their home countries—in some cases moving people who have been away so long that sending them home “is a real challenge,” the HR rep said.

She has also been directed to accelerate nationalizing former expat jobs and has to find candidates locally who “have the broad background and networks an expat typically has,” she said.

If companies keep expats overseas, it’s likely for a specific purpose, such as heading a construction project or a manufacturing facility in a remote location such as Vietnam or inland China, said Mike Norman, Asian practice leader and senior vice president at Sibson Consulting, a Los Angeles HR consulting firm.

Prerequisites for expats are changing too, Norman said. It’s not enough just to have the skills and experience. Companies want expats “who speak Mandarin or who’ve lived overseas before or been educated in another place” and don’t need to pay more to get them, he said.

According to expat program advisors, rollbacks could last an additional 18 months to three years. But if history is any indicator, overseas jobs will bounce back as soon as the economy does, Latta said.

“Every time I’ve seen a cutback, everyone runs around panicking for however long the downturn lasts, and as soon as it’s over they flip back.”

Post-Repatriation Job Outlook: No Guarantees

According to Mercer’s 2008 overseas assignment poll, close to six in 10 expats end a foreign assignment without a guarantee that a job will be waiting for them when they return home.

Post-Repatriation Job Outlook
 Policy All regions North America
 Company doesn’t promise a job
24.7%
48.4%
 Return position is assured before employee goes on assignment
32.2
29
Return position is assured before employee goes on assignment
22.4
12.9
Assignees guaranteed old job back
7.2
0

Assignees guaranteed job, but if position isn’t available in home country post in another country will be offered

12.5
9.7
Source: Mercer (www.mercer.com)

—Michelle V. Rafter

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