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Reasons for Expatriate Failure During International Assignments

Once an employee begins an international assignment, there are challenges that can come up during the posting that could prevent expat completion, or the business success of the assignment.  Some of the reasons for expatriate failure can be prevented by strategic planning, pre-departure training and support, as discussed in this prior article.

However, a company cannot anticipate every situation that arises, and in some cases the international assignment will fail and require remedial actions.  In order to mitigate potential failure during an assignment, the HR department will be aware of the most common reasons for expatriate failure during an international assignment.

Expat Failure: The Employee on Assignment Drops Out or Does Not Perform to Expectations

Even with careful recruitment and training, an employee may find their assignment difficult to handle, either personally or professionally.  Family reasons are the number one cause of failure during an assignment, and those pressures may be difficult to overcome if the family cannot adjust.

For some expatriates, the new responsibilities, different culture and daily stress may lead problems coping with their new position and location.  Others may find that living in a new country has many distractions, that can lead to decreased job performance.  In either case, the employee will not be meeting expectations and may need early repatriation.

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International Assignment Failure: Business Outcomes Not Being Met

It is important to remember that the primary motive for international assignments is to achieve some type of business purpose.  If for some reason, no progress is being made or the employee is not suited to their role, then it may be necessary to evaluate the business strategy and/or the assignee’s ability to carry out the objectives.

There are various ROI metrics used to measure the success of an assignment, and when the business value decreases there is a danger the assignment could be seen as a failure, even if it reaches completion.  More information on ROI metrics and assignment value can found in this article.

Failure Due to Challenges With Host Country Compliance

Multinationals name host country compliance as the leading challenge for international assignments, since those laws and regulations must be met in each country.  Non-compliance with immigration rules (obtaining proper work permits, scope of activity, location etc), tax withholding and illegal payroll structures can all lead to an assignment failure.

These issues should be fully addressed before the assignment begins, and it rests with the HR department to understand and comply with local laws.  The alternative is to engage a GEO solution to handle all matters related to employment compliance for the assignment.

Preventing Expatriate Failure During International Assignments

Just as with assignments pre-departure, there are method for preventing expatriate failure during the assignment.  The challenge is to determine whether local management will take the lead, or if it will be handled by HR in the home office.

Tracking Changes in Host Country

There are many issues in a foreign country that can interfere with an assignment and the related business activity.  While there is no way for a multinational to influence host country laws or business climate, it is possible to track any changes that may affect one or more assignments.

The key items to track include:

  • Changes in immigration policy, work permit renewals, time limits
  • Tax withholding and residency rules
  • Political and economic changes, security and safety issues
  • Market changes affecting business objectives

Any one of these can derail an assignment unexpectedly if there is no tracking mechanism in place.

Employee Satisfaction Measures

Since many assignments end prematurely due to employee dropout, there is value to implementing ways to monitor employee satisfaction.  By offering periodic surveys or personal interviews, management may be able to detect problems before they become insurmountable.  These steps should also be extended to spouses, partners and family members to make sure there are no serious barriers in adapting to the new country.

How an Employer of Record Solution Can Help Mitigate Expatriate Failure During International Assignments

When a company sends employees abroad they have two basic choices: set up a local subsidiary to employ the workers, or use a GEO solution with a local employer of record.  The DIY method is expensive and time consuming, requiring extensive knowledge and resources to comply with host country employment and payroll rules.  For smaller companies, setting up a local entity may not even be feasible.

The alternative to a DIY approach is the GEO employer of record, offering a cost effective way to quickly deploy assignees to any foreign location, obtain work permits and run payroll according to local rules.  The GEO can also help mitigate the primary reasons for international assignment failure, by providing third party oversight and support for the employees in the host country.  The GEO is in a position to track country changes that could undermine the assignment, and will also deal with any issues that arise around non-compliance.

Because the GEO takes responsibility for the regulatory aspects of local employment, it allows the client-company to focus on employee performance, satisfaction and support.  This solution is ideal for small to mid-size companies, or those exploring a new market location.

Get in touch to find out more about how an Employer of Record Solution can help your company mitigate International Assignment Failure

The information in this article is subject to changes in local legislation.

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