It is common for people to travel far and wide for employment opportunities. It is a difficult task not just for the workers but their families as well. The living conditions, health sanitation and many other difficulties often cause these individuals to regret their choice and quit the job. The paper highlights the expatriate issues and the significant and life altering role that HR can play in this respect.
It is very important to understand what exactly an Expatriate Employee is before matters like: problems faced by them and the reasons for their high turnover rates are delved into.
In simple terms the word 'expatriate' refers to any person working in a country other than his or her native or birth country. This individual could be employed by one of their native 'Multi-national Corporations' and then selected to represent them abroad, in which case they can also be referred to as 'Parent- Country National'(U.S. Legal, 2012). All expatriates are required to abide by the laws of their own and foreign country, such as Income Tax laws.
Globalization plus development of faster and safer means of travel are reasons which induce many individuals to work away from home. These coupled with an increasingly wide job market have convinced workers to leave their native country and travel abroad in search of a profitable living. Often times MNC's wishing to establish themselves in the developing world take a few of their experts along. This means travel and distance from home, but added benefits for these employees. Then why do these countries suffer from a high 'Expatriate Employee' turnover rate.
When an expatriate first steps onto a foreign land, he is faced with the prospect of a huge cultural shift: different language, different customs may be even different religion. This more than often comes as a shock. People who are unable to cope with this huge change often quit. However, this shock is considered the fault of the employers who are ethically bound to provide expatriates with all possible knowledge of the area, and help him or her acclimatize to relevant culture and customs.
In case of developing countries major reasons for this high ratio revolve around medical concerns. But in some regions corruption, violence and political issues also cause expatriate turn over ratios to spike (Jones, 2000). However, this is not restricted solely to developing countries. In 80s, the expatriate turnover in U.S. was as high as 20 to 50% (Naumann, 1992).
Analysis / Discussion
South Asia is one of the fastest growing regions of the world, economically. The increasing Industrialization has changed the face of their labor force, which previously constituted mainly of agrarian population. But now a variety of professionals: computer programmers, technicians, heavy machinery operators, finance experts are needed. MNC's have the most diverse workforce, the reasoning behind it is the theory of human resource experts, which enjoins great importance to employing workers with a diverse set of orientations as well as skills.
Discouraging laws of Host Countries:
Thailand and other South Asian countries have often needed a large number of experts and professionals that their country can't or produces only in small quantities, so the MNC's had to transfer some of their natives. Malaysia, Indonesia and Malaysia have recently felt great need for skilled and technical employees because their educational system has failed to equip them with the required man power. In 2000, Thailand faced a shortage of 15000 workers in the Information Technology sector. 76% of Indonesian workers only have basic primary education.
Laws in these countries are not friendly to expatriates and allow them to fill a valuable position only if no local is available to do so. Even then the expatriate's position is considered temporary as he is encumbered with the task of training a local to work in his capacity after a set time period. Malaysia and Indonesia have imposed heavy taxes on expatriates and use the money to build a training pool for locals. In Indonesia the tax amounts to $100, in Malaysian it is around RM 360 and RM 2,400. Moreover, employers are laden with a separate tax for signing on the expatriates (Gross, 1997). These conditions are very disconcerting for expatriates especially if they have to pay tax on their income, in their home country as well.
'Cultural Shock' is categorized as a psychosocial problem that seems to increase with an increase in distance between the host and parent country. Analysts claim that the wider the gap between the countries the more negative the attitude of the expatriate. They also claim that this negative attitude translates to adjustment problems for them. The employees coming from developed nations are used to a life where facilities like clean drinking water, sanitation etc. are always available. But stepping into a developing country he would face great changes and the absence of a lot of these comforts.
Medical and Sanitation Issues
Let us now focus on the medical issues that have caused expatriates to abandon excellent employment opportunities. In developed countries expatriates face lesser problems because even if they get sick or catch a virus, they access to a sound and stable medical system which helps relieve any problem quickly. Another danger is the accidents they might meet with because they might not be aware of or familiar with traffic rules of the country.
Limited availability of clean, drinking water often leads to fecal and diarrheal diseases. Diarrhea is considered one of the most common diseases among foreign workers. Another side effect of diarrhea is its capability to impede absorption of drugs, especially 'anti-malarial drugs.' Gastrointestinal diseases have become common due to poor sanitary infrastructure. Other medical scares include lack of sleep and the critical issue of sexually transmitted diseases. A study reveals that Sub-Saharan countries pose a 30- 40% risk of HIV. Easy availability of Sex workers in developing countries such as Thailand increases the risk of infection (Jones, 2000).
In developing countries terrorism or exposure to incidents like muggings and kidnappings for ransom are also common. For instance if someone goes to Kenya, or any other African country they might be in direct line of fire of the opposition political parties.
People travelling to polar or cold regions from temperate zones or vice versa, have trouble acclimatizing to the weather of the host country. Extreme heat, for instance in Middle Eastern nations, Africa or Asia, can be cause of heat strokes and other such illnesses like skin conditions such as Tinea. Cold can lead to frost bites and other cold related injuries.
Role of Human Resource
Management Guru Mark Huselid conducted a research in 1995, in which he proved that good work practices are not only associated with improved corporate performance, productivity and lower turnover rates. The Human resource Department is responsible for measuring a firm's Human Capital and then designing Key Performance Indicators. When measuring Human Capital the HR professionals look at the degree of employee satisfaction and employee turnover rate among other performance influencing factors. The HR personnel analyzed the efficiency of the measures and policies already implemented. This helps them formulate effective policies and take timely initiatives and incentives which help the firm retain its valuable expatriate workforce. The senior or top management of the firm needs and values information related to performance measures because they are a key to sustainability and longevity for the firm. The HR Department provides the management with this vital information aiding them in devising policies and providing benefits that would tempt or induce workers to stay for a longer period. In developing nations this incentive could be protection from terrorism and violence.
A study reveals that high turnover rates often result from neglecting the importance and role of HR in guaranteeing high performance. In developed nations as well only…