Although the growth in expatriate assignments slowed significantly during 2007 and 2008, economic growth in newly industrialized countries is picking up in 2009. With increasing GDP-figures a growing number of expatriates are sought to fill managerial positions in developing economies. Despite the increased demand for expatriate employment, expatriate failure rates remain high and costly. Overall, financial costs of failed expatriate assignments have been estimated between $2 and $2.5 billion in recent research. Personal effects include for example reduced self-esteem, ego and reputation, which may affect careers. It has also been observed that employees who fail in an overseas assignment have more difficulty in adjusting to corporate structures when back at home.
Not surprisingly, expatriate selection practices have been critically reviewed during the last decades. Where leadership skills, technical competence and domestic track record were viewed as the prime selection criteria until the 1990s, senior executives in 2005 considered the ability to control emotions as more important than technical skills. Traditional selection criteria are now considered additional to softer selection criteria. The observation that technical training and current cross-cultural training programmes do not seem to address expatriate failure complicates matters. During the 1980s and 1990s it became obvious that expatriate maladjustment was a main cause of ineffective expatriate performance and premature returns. Which additional skills and competencies are then required to make expatriation a success?
Firstly, several selection criteria are not related to individual skills but are of utmost relevance. Family suitably, opportunities for spouse employment, possible disruptions of the children’s education, for instance, will affect expatriate job satisfaction and the intent to complete the assignment. The Global Relocation Trends 2005 survey report found that for 67% of respondents family concerns were the dominant cause of premature return and that spouse/partner dissatisfaction was the number one reason for assignment failure.
Secondly, soft skills such as relation skills affect expatriate success significantly.
Agreeableness or non-judgementalism were, in a recent study, considered to be an important predictor of both adjustment and performance. Further, cross-cultural communication skills and personal characteristics in dealing with host country nationals have been found key variables. Noteworthy is that the relational ability of expatriates in regard to host country nationals has been found to support both interaction among expatriate and host country nationals and expatriate effectiveness. As well, relation skills are also important when adjusting to new cultures. A meta-analytic study of 8,474 expatriates in 66 studies concluded that cultural adjustment is “perhaps the strongest determinant of disengagement and withdrawal decisions (Bhaskar-Shrinivas et al., 2005, p.273).” A clear relationship between levels of adjustment and overall performance was established.
Lastly, group processes on the work floor play role that were previously unaccounted for. Individuals recognize that memberships of various groups get incorporated into the self-concept, therefore, these social identifications have important consequences for behavior. Group categorization was found to be negatively related to the provision of social support by host country nationals in recent research. Interaction between groups has a positive effect on group and work effectiveness, however, expatriates’ ethnocentric beliefs have been found to emphasize group differences resulting in various negative consequences. These negative consequences are related to intergroup behaviour and fall back on social identity and categorization processes. Therefore, appropriate expatriate selection processes should emphasize non-ethnocentric traits and soft skills in expatriates next to additional harder selection criteria. A ‘misfit’ will likely affect the expatriate’s adjustment process as well as the psychological wellbeing of expatriates.
Cross-cultural training could provide potential expatriates access to the evaluations of their strengths and weaknesses in acculturation-related skills in order to focus training on skills that need development. However, not all skills and traits are ‘trainable.’ Appropriate expatriate selection procedures focusing on the right balance of soft/hard skills and non–ethnocentric traits may prevent future expatriate failure. The potential valuable input in cross-cultural training of the host country employees in identifying specific work interaction demands could assist expatriates in making the required transition. Expatriates do not act in a vacuum; the interaction in a social web strongly impacts on their adjustment and wellbeing. Appropriate attention to strategies that enhance positive interaction at the workplace therefore seems desirable.