Expatriate Management: Reducing Turnover and Enhancing Performance

Background and Company Overview

Oce Printing Systems is an international company that specializes in original ICT applications and productive, user-friendly systems, including monofunctional and multifunctional printers, plotters, copiers, and scanners, as well as print management, document management, archiving, color management, design tools, and image manipulation. Services provided by Oce Printing Systems include consulting, implementation, education, support, and facility services (Oce Website).

In addition to providing a wide range of products and services, Oce employs many European expatriates. As Oce continues to expand and stay current with the latest technologies, the company must retain high-quality employees and maintain a mixture of different cultures on its teams. One of the company's primary goals is to decrease the high turnover rate and increase employee satisfaction. European expatriates do enjoy better work conditions in their home countries, but their unique knowledge makes a valuable contribution to the company (N.A., Management of Expatriates, June 01).

This paper discusses effective expatriate management strategies, the challenges of integrating European and American workplace cultures, cultural diversities, differences, costs, and ethical issues. It also analyzes possible solutions and the results that can be produced by taking the time to meaningfully merge the two cultures together.

Oce Printing Systems has ambitions to continue expanding, signing new agreements and subsidiaries, developing unique technologies, and strengthening its product range. Oce Printing Systems is known for its originality, and one of the key sources of that originality is the versatility brought by employees of different nations, especially European expatriates.

Being original and staying ahead of the competition unfortunately comes with high pressure and highly stressful situations. It is not easy for employees and managers to continuously deal with high-pressure circumstances throughout the workday. When companies manage to retain the same employees and managers over many years, not only does the company benefit from the efforts and expenses invested in those individuals, it also establishes customer security and credibility.

Defining the Problem

The main challenge facing Oce Printing Systems is keeping employees satisfied, preventing burnout, preventing employees from stagnating at the same level for many years, and eliminating monotonous tasks. Addressing these problems brings the company closer to its goal of reducing the expatriate turnover rate and increasing productivity.

American employment conditions differ significantly from those of European cultures, with European conditions generally more favorable toward the employee. European wages are considerably higher, and unemployment benefits in many European countries cover the full amount of the employee's original paycheck with no time limitations. Europeans frequently work under union protections, which give employees a further advantage. In addition, some European workers benefit from a four-day work week (Went, Summer 2002).

The American labor system, by contrast, emphasizes the rights of the employer over those of the employee. In America, the minimum wage falls far short of a livable salary, and many minimum wage positions are part-time. In the event of a layoff, unfair discharge, or involuntary job loss, unemployment benefits represent only a partial percentage of the employee's earned pay and do not always last until the employee finds new work (Went, Summer 2002).

In Europe, a high level of financial involvement and employee participation — with flexible structure — is heavily encouraged. The European government actively promotes financial participation because it improves work organization and management in companies, decreases work intensity, reduces stress, and limits self-exploitation. Financial participation also improves economic performance and production overall (Poutsma, Huijgen, May 99).

Literature Review: Cultural and Employment Differences

The theory of employee financial participation promotes a sense of employee ownership within Oce Printing Systems, which would encourage employees to take greater interest in developing new concepts and ideas for the company. If employees were involved in profit sharing and felt a long-term connection to the business, they would no longer view their position as just a job they leave at the end of the day. Employees would become more receptive to new and changing technologies, and would feel personally invested in the company's increased profits and expansion. Commitment and dedication are elevated when there is financial involvement, even among employees who might otherwise consider leaving (Poutsma, Huijgen, May 99).

Increased sales and improved customer service are additional benefits of employee profit sharing. If even customer service employees had a sense of ownership in the company, they would better appreciate the value of customer satisfaction and the impact of increased sales. Employees of Oce Printing Systems would make the most motivated stakeholders, precisely because they are in direct contact with customers. Changing the way employees view the company promotes the idea that they are serving their own customers rather than simply working for someone else's business. Even when employees move on to another company, having held an ownership stake encourages them to refer customers rather than speak negatively about their former employer.

The entire reason Oce Printing Systems hires employees is to generate revenue for the company. An employee's salary and benefits represent only a small portion of the value that employee brings in. Oce Printing Systems employees are not liabilities; they are assets. Every person in the organization can be considered a salesperson. One practical approach is to give each employee and manager — including support staff — personalized business cards, and to provide a commission on their next paycheck for every new customer they bring in.

Because of the specialized nature of Oce Printing Systems, a high turnover rate is far more costly than investing in employee promotions and enhanced benefits. Employees who leave take with them knowledge of the company's strengths and weaknesses, and may either start competing businesses or share sensitive information with competitors. This is why securing employee commitment and dedication — by ensuring their reasonable satisfaction — is essential. The company will see multiple returns on its investment in retaining dedicated employees.

Oce Printing Company wants to stay ahead of the competition and continue to be the first to bring top-of-the-line technology to its customers. While the company has been very successful in achieving this goal, it now aims to set new benchmarks. Oce Printing Systems has identified one of the problems slowing its progress: the high turnover rate among European employees.

Creating a pleasant work environment and encouraging teamwork among employees fosters a family-oriented atmosphere that promotes longevity, commitment, and dedication. Building a culture of teamwork lowers the costs associated with high turnover. When employees form strong workplace relationships, they become more dedicated to the company's improvement and more focused on shared goals rather than internal competition. This raises the question: why do employees feel they are competing against one another in the first place?

In many cases, poor-performing employees draw unnecessary supervisory attention to their colleagues' mistakes — not to get those colleagues in trouble, but to gain the attention of management. This behavior, while unprofessional, is carried by some people from childhood into the adult workplace. Certain individuals feel a sense of power and accomplishment when they highlight others' errors.

Oce Printing Systems does value highly competitive individuals, but that competitiveness must be paired with a mature, positive attitude aimed at productive results. Internal competition for a supervisor's attention is counterproductive. The company seeks outstanding people who will compete to produce results — developing the best ideas, innovations, and more efficient processes.

Although Oce Printing Systems performs well and leads its industry, it could achieve even more with a more consistently positive work environment. Many employees bring outside problems into the workplace, compounding the challenges that already arise from demanding customers. A negative atmosphere significantly impedes progress by diverting the company's focus away from productivity and onto personal conflicts that have little to do with business objectives.

Oce Printing Systems has been losing significant capital due to unnecessary employee turnover. These costs include former employees taking customers with them to new employers, the expense of training new employees who do not remain long enough to contribute meaningfully, and the loss of knowledge that employees have developed while working at the company.

At present, Oce Printing Systems does not offer sufficiently attractive employee investment options. This may be a contributing factor to the high turnover rate, as employees feel little financial commitment or dedication to the company. The existing 401(k) plans, employee credit unions, and stock options are not competitive with those offered by larger firms, and the options that do exist could be significantly improved.