Becoming an Expat: When the CFO Is Assigned Abroad

by Cesar Bacani, 06 June 2012

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topics:
Human Capital Management Management

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Professional Development talent management

What happens to the international assignee after he or she has returned home? Is that person likely to then go on to greater things within the company?

That was the assumption in the past. I think now it’s less clear because we do see that sometimes expats with international assignment going back to home country find it difficult to reintegrate. They’ve been out so long they’ve lost the connection and the visibility within the home country.

You would assume, in a well-integrated workforce planning strategy, the person with the international experience should come back and be able to progress, be promoted. Whether that actually happens, that’s difficult to say at this point.

Organisations haven’t been able to track this carefully to make sure that that’s the workforce movement.

This is where we talk about measuring and tracking the ROI. Part of that metric is to look at the overall career progression of people coming back from international assignment. Given that the company has put in that much investment in the individual, do you really get that much in return on that investment?

So what’s the answer? Are companies really getting a good return on international assignments?

Forty percent of all companies regardless of the region have an average turnover rate of 12% of expats after the second year coming back from an assignment. This is more prevalent among European companies – 63% indicate that 12% or more of expats leave after the second year of repatriation.

Only 28% of Asian companies say that there is at least more than 5% turnover rate among expats repatriated after the second year of repatriation.

So Asian companies are getting better ROI than the Western companies. What may be some of the other key metrics?

We talk about career progression or promotion, achievement in terms of individual contribution to the local business. There’s a number of metrics that could be looked into.

Is there a metric that directly correlate how much was spent on the assignee and how much he or she then brought back to the business?

That’s what we talk about in terms of doing a cost-analysis, looking at the amount that you invest on an individual on an annual basis versus the contributions brought in to the local business.

This would be an HR and finance issue, wouldn’t it?

That makes sense. If finance and HR team up to look at the financial implications, this will make a compelling message. Without statistics in terms of showing the cost and ROI, I think it makes it difficult to measure how effective the overall process is.

Your survey actually found differences among Asian, European and US companies in terms of assignment failure.

When you talk about family issues and challenges, US companies and European companies consistently list that as a key challenge. A lot of that also has to do with distance and geography, and also dual career, dual income couples.

Another factor in

Submitted by Faisal Azaid on 23 June 2012 - 9:24am

Another factor in encouraging hiring locally is how the expat cash subsidy has been gamed. See here for instance â€“ http://hligroup.wordpress.com/2011/04/01/parsing-the-expat-cash-subsidy/

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