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The Rise of the Returnees

February 1, 2005
Related Topics: Expatriate Management, Relocation Management, Outsourcing, Featured Article
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While an intern at Apple Computer in San Francisco in the early 1990s, Harry Shum dined in Chinatown with friends, once even emerging from a street vendor’s booth with some fairly good recipes for armadillo, a dish that some in China consider a delicacy.

    Nearly a decade later, as a Microsoft executive, he invites visiting colleagues to taste a variety of dishes at an authentic Chinese restaurant a short distance from his office--in Beijing. It’s a city Shum never imagined he’d be living in after having left China a few years earlier to attend graduate school in the United States.

    Shum is just one many Microsoft employees born in China who have been plucked from its Redmond, Washington, campus and other branches to transfer to one of its facilities in that country. Becoming a "returnee," as people like Shum are called, is one of the latest trends occurring within offshoring.

    Returnees are non-native Americans, say Chinese or Indian, who spend some time in the United States (or other country) for school or work, maybe even after obtaining citizenship in the country where they’re working or going to school. But as the name implies, returnees ultimately go back to their countries of origin to work there.

    The concept is nothing new, but increased offshoring and even incentives from local governments are luring more of these people home.

    Hewitt Associates reports that the trend began in earnest in the 1990s. From 1978 to 2002, more than 580,000 Chinese went abroad and more than 150,000 returned. To give that some perspective, the number of returned students during this period exceeds the total number of students who returned from 1847 to 1978, according to the Hewitt report.

    Some returnees go back to their own countries and obtain jobs with local companies, but quite a few are transferred home by an American company seeking to launch or expand overseas operations.

    In Shum’s case, it is Microsoft Research Asia, which officially came into being in November 1998, although it didn’t formally open for another couple of months. Microsoft’s aim in opening the research lab, originally called MSR China, was to simplify computer usage worldwide. Its particular emphasis centers on computing challenges in Asia, especially given the complexity of the Chinese language, which has more than 5,000 distinct symbols. Because keyboards generally are designed for Roman characters, such complex languages can present problems. Shum was part of the first group of employees at the Microsoft facility and today serves as its managing director. He was born and raised near Shanghai as Heung-Yeung Shum, and he says that when he left China in 1990, he never intended to return to work in his homeland. After studying electrical engineering at the University of Hong Kong, he received a doctorate in computer science in 1996 at Carnegie Mellon University.

    During his years in the United States, Shum also had summer internships at Digital Equipment Corp. in Cambridge, Massachusetts, and at Apple, and worked as a consultant at a San Jose startup that did Web-based graphics before getting a research job in 1996 at Microsoft.

    He and his wife, who is from Hong Kong, have two sons, both born in the United States. After about two years of working on realistic 3-D graphics and virtual environments for Microsoft, Shum was tapped by Kai-Fu Lee, who had recently been appointed managing director of MSR China. Lee wanted Shum to join him in Beijing.

    Many multinational companies are relocating workers to China as a way to tap into the emerging market and to be closer to clients, suppliers and customers, a Hewitt study reports. Of the 17 companies surveyed in the 2003 study, only one said it was relocating employees to China to reduce costs--the top reason manufacturers and other enterprises moved operations to China in the 1980s.

"Perceived value"
    American companies always have sent employees abroad for a variety of long-term and short-term assignments, but traditionally, the average expatriate was an American-born Caucasian. Today, companies have "perceived value" in transferring employees to overseas assignments in their homelands, says Stéphane Brahy, a native of Belgium and the director of intercultural management training for Cendant Mobility in Chicago.

    The value is simply "perceived," he says, because many companies concentrate on the fact that the employee knows the language, the terrain, "looks like them" and is Westernized enough to know both worlds.

    "The fact that the person has a skill set based on their ethnicity is an asset that should be leveraged, but it doesn’t mean the person has all of the assets," Brahy says. It is important, he says, that a company also send a person who is best qualified for the job. The employees will have enough cultural concerns that they need to at least know how to perform their jobs well.

    "Some managers think, ‘Rajiv is Indian, let’s send him.’ In reality, he might be Indian (by heritage), but has never set a foot in India in his life and may not really relate in that environment. I think if you spoke to someone from India they will tell you, ‘Yes, we are Indian, but I am from Punjab and he is from Kerala.’ Or, ‘I am a vegetarian and he is from a region where they eat meat.’ Rajiv might have no relation at all to the value system in the northern part of the country. You don’t want to use the ethnicity of a person as a Band-Aid. Moving them abroad isn’t as easy as it first appears."


Many multinational companies are relocating workers to China as a way to tap into the emerging market and to be closer to clients, suppliers and customers, a Hewitt study reports.


    Once Shum had thought over the Beijing offer, he decided it would be "an interesting opportunity." But he soon learned that although "it is a good thing for a company to assign an ethnic employee to his or her home country, for the employee, it may take longer than expected to get accustomed to the home culture again," he says.

    "Moving my family to China was a challenge."

Cultural hurdles
    The biggest problem for employees often is family adjustments, followed by repatriation and burnout, according to a 2004 study by Cendant titled "Emerging Trends in Global Mobility: The Assignee Perspective."

    To combat these issues, Brahy recommends cross-cultural training--even for returnees, "because value systems change when you’re living in another country.

    "I go back to Belgium every month, but now I react to things differently because my living in the United States has shifted my mind. I react to things that would have been a no-brainer before."

    He notes that most employees born and raised in other countries are hired straight out of American universities into positions elsewhere in the United States and have never previously worked in a corporate environment in their home country. That makes it tougher for them to know how to react in situations where cultural norms are different than they are in the United States. In India, for example, the personal and professional worlds are more blurred than they are in the United States, Brahy says. "You are asked to go to weddings and events with employees in their homes. So when you get to work in an Indian environment, you want to overlap those two worlds more and do more at a personal level than you would before (in the United States.)"

    Issues of loyalty and trust can affect the staff the returnee manages. "As personal time becomes diffused into professional time, staff expectations are that (the returnee manager is) one of them," Brahy says. And this begins to create issues as the manager is torn between corporate governance compliance and what the corporate culture he is immersed in is requiring.

    "A lot of companies have made mistakes saying, ‘This is how we do it in the States, and this is how we want you to do it over there,’ " says Lewis Sacks, who is in charge of people and administration for Minneapolis-based software firm Adayana. The company has Indian returnees working in its office in Hyderabad, India’s fifth-largest city.

    Trying to implement issues that may be straight out of the employee handbook or sales tactics based on U.S. culture can be a hard sell to foreign employees if that’s not the way business is done there.

    One personal issue that some people don’t anticipate is the reaction of their friends and family in their home country. On the one hand, it is viewed as a family reunion. On the other, it potentially becomes an issue of losing face, says David Heenan, author of Flight Capital, a forthcoming book about the effect of returnees on the U.S. economy.

    Heenan notes that the biggest problem is dealing with parents and other family members who have never left home and who may have a very different perception of what the move means. "These are parents who had been bragging to their neighbors that ‘Our son is a big shot at Microsoft and got his master’s at Stanford and Ph.D. at MIT.’ But now he comes back home and it is a loss of face. The neighbors say, ‘You were in the big leagues there.’ They see coming home as a step down."

    The move to Beijing was not a step down for Shum, 38. In less than six years he has received three high-profile promotions, and now is in charge of one of Microsoft’s largest overseas operations.

Workforce Management, February 2005, p. 59-62 -- Subscribe Now!

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