Tag Archives: HR

What Skills To Look For Hiring Global Executives ?

The most difficult challenge for an expat executive like a country general manager is to be able to find congruence between various opposite interests in a highly complex environment (see picture above).

The expat executive must be able to deal with local issues such  as specific regulations and laws then explain clearly the specificity of local markets and “sell” his decisions vertically and horizontally. Be able to dismantle silos in a matrix-type organization, managing up with board members, making internal alliances with peers and encouraging bottom up initiatives from multicultural cross-functional teams.

As an expat and multicultural team leader who lived and worked for 20 years in more than 10 countries for various industries and different management functions, I have seen many successful expat executives sharing same characteristics that for me are key skills to look for when considering sending people to international assignments or hiring locals at senior management level :

1- Attitude: Look for people who are leading by influence, able to federate people across cultures, able to lead trans-functional and virtual teams worldwide. Suitable personalities have high EQ and are pragmatic, open, curious, learners, risk-takers, negotiators, diplomats.

2-Cultural Intelligence: Knowledge about local customs,cultural traits,norms,social and business etiquette. Basic “survival” language skill is enough in most cases as business is often conducted in English. Don’t make the mistake to hire a local manager because he can speak English, check his leadership and technical skills.

3-Mentoring and Coaching Skills Usually an expat is sent from the HQs to share some technical knowledge or implement global processes such as performance evaluation. In each case make sure the person is  able to “glocalize”  or adapt locally  the company’s global vision, mission, values and principles, One very good example of “glocalization” of corporate culture is Starbucks

The challenge for global companies is to be able to have the right process to assess people globally both for internal succession planning, talent management or hiring new managers. Three components should be considered:

  1. Technical skills: operations, finance, markets, regulations, innovation, HR etc.
  2.  Leadership style: Top-down, bottom-up, influence, networking, lobbying, foster creativity
  3. Cultural intelligence: Group or individualistic cultures, knowledge of cultural dimensions, able to create a third culture team

Is It The End Of Expat Executives ?

BRIC leaders

Image via Wikipedia

International HR management is changing and it is not in favor of sending more expatriates. This new trend seems to go faster than International HR management (IHRM) experts predicted. In 2010 most global companies thought that there were not enough local talents in regions like the BRIC countries and were thinking of sending more expatriates: See previous post here “Developing Global Executives: Failure Is Not An Option” . However in 2011, many global companies are now comfortable to hire local executives instead of sending expensive expatriates. This is the case in India for example where Global firms prefer local executives to expats to run Indian operations. 

Traditionally  American and European companies used to send domestic expatriates to foreign offices to share knowledge and expertise. However the cost related to sending international assignees is usually three to four times the employee’s base salary. Repatriation is often a failure with a majority of employees staying less than one to two years with the parent company after returning from abroad. 

” High Tech companies are opening offices and labs around the world, putting local managers and executives in charge. As a result, companies often train regional executives in the US and send them back to work in their home regions.” Source: Recruiters World ArticlesInternational HR Management Part I: Not Just an Expatriate Game Anymore

 I think that the way expatriates are managed will evolve toward less costly benefits but more opportunities will be given to young western talented managers willing to learn other cultures and interested to become global citizens even for less money compared to “home” as most successful  companies operate in a global environment.

The “new expat executive” will be a kind of hybrid combining the low-cost local manager with advanced knowledge of cross-cultural issues and global leadership with technical expertise usually brought by a traditional expatriate executive.


Share your thoughts in the comment section

Want to be an Expat ?

How Is Expatriate ROI Defined In Global Companies ?

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Because of the financial crisis, the C-suite executives’ salary, benefits and advantages have been on intense scrutiny lately.  For expatriate executives, the costs can be three to four times the costs of local employees.

From a HRM point of view it might be tempting to cut the expatriate’s benefits and hire local talent which might not be possible for some senior executive positions such as country managers in China, Brazil or Russia.

In fact more and more global companies are sending expatriates not only to share knowledge but also to build global teams with local understandings of market constraints or regulations to define competitive global and local strategies.

When the corporate culture is very strong like for Coca Cola, L’Oreal or GE,  it is important to have expatriates moving every 3 to 5 years with some returns to the HQs’ home in between for developing “third cultures”. ” Third cultures” means people who think and act “glocally” and share strong corporate values.

Even if more and more people work in  a “virtual” environment, the physical presence of a human is necessary to build such “third culture teams”. If you are familiar with expatiate topics then you know that it is the same for children of expatriates who are called the “Third Culture Kids” or TCKs.

Many HRM in global companies want  to measure the return on investment (ROI) from expatriates to define global HRM practices and measure performance. However they might be a disconnection with business managers who do not see the value of such indicator.

ROI can be defined as “value the employee brings”/ total costs (direct and indirect)

If costs are relatively easy do determine, value can be short-term or long-term and a part of it is subjective such as the impact of the executive ‘s network. and his/her personal reputation.

Yvonne McNulty from Department of Management, School of Business and Economics of
Monash University conducted in-depth interviews with 50 mobility managers in global firms over a 2-year period from 2004 to 2006.  I highlighted her main findings but you can find the full report at the end of this article.

Our findings suggest that firms do not have formal procedures in place to measure expatriate ROI and instead rely heavily on informal practices that are seldom aligned to a global strategy

This is not really surprising because of the diversity of expatriates profiles, roles and impacts on the entire organization vary greatly from one individual to another and change with countries.

International assignments are considered a necessary cost of doing business for global firms, how expatriates are managed in terms of the HR practices that support their activities and how the outcomes of those activities impact broader firm performance may be important concerns

Even if it is important for HRM to have standards and guidelines, if a company wants to attract global talent willing to relocate and make sacrifices both from family, spouse and career points of view, flexibility is required and even today with 10% unemployment rate in the USA it is still hard to find good executives willing to become expatriates.

Based on evidence that the nature of expatriation is rapidly changing, we conclude that expatriate ROI remains a challenging and complex process that managers in global firms are currently not well-equipped to address

Reference: http://www.thetrailingspouse.com/docs/Industry_Report_May_2010.pdf

Managing International Assignments: Win The Global War for Talent

Today most companies are focusing on cutting HR costs including talent development, reducing number and duration of international assignments, increasing localizations and hiring frizz. I think this is a knee-jerk reaction to the global financial crisis to show pretty bottom line without really knowing the impact on the business growth on a long run. Mercer.com conducted a survey on Measuring ROI of international Assignments  and they found than less than 5 % of companies interviewed have a system in place for measuring ROI of international assignments.

On average, expatriates cost 1.5 to 4 times than local employees would cost.  However I think looking at costs only without knowing exactly the value you get for the price will have a great impact on the global company performance. It is like looking for a BMW or a  Maserati  car for the price of a Renault in France.

Some countries like China are developing so fast with an annual growth rate of more than 9%t, that the local talents did not get the time to be properly trained and do not have enough  international business management experience and skills (see more about China: http://bit.ly/Talentwar)

I think developed countries too like USA or Japan  see already some  gap of talent between the Babyboomers who are retiring, the Gen Y and the Milenials, a trend that will accelerate  by year 2020.  Today with the globalization and the internet, knowledge, technology, capital, goods and services are highly inter-connected as we can see with the global financial crisis.

Mobility management will be more and more complex and “one-size-fits-all HR policies” will not work to attract top talents who can adapt quickly to changes and will make a big difference in a highly competitive, fast evolving business environment. You can get details at the PwC report on Talent Mobility 2020

When the economy will start to improve, the talent scarcity will become a real problem for global companies who did not develop or retain enough good candidates for international assignments. 

The companies should benchmark best practices on talent acquisition, development and retention country by country. It is obvious that you do not require the same set of skills from a technical expert sent in Africa or a General Manager of an American company in China. I think the key is flexibility and speed, not bureaucracy.

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