The challenge of reintegrating expatriate talent


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New Thought Leadership from Heidrick & Struggles on the challenge associated with re-integrating talent upon conclusion of expatriate assignments.

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The challenge of reintegrating expatriate talent

  1. 1. Reintegrating Exceptional Expatriate Talent How to repatriate rising leaders, capitalize on their experience in emerging markets, and build a strong global people strategy
  2. 2. 8 Reintegrating Exceptional Expatriate Talent Reintegrating Exceptional Expatriate Talent How to repatriate rising leaders, capitalize on their experience in emerging markets, and build a strong global people strategy It’s no secret that many companies have done a poor job of reintegrating returning expatriates – failing to put their expanded knowledge to work and achieve a return commensurate with the investment in assignments abroad. Despite a business environment and critical emerging markets that demand more executive mobility than ever, organizations and individuals continue to under estimate the challenges of repatriation, needlessly underusing talent and, in many cases, watching it walk out the door. Fixing the problem isn’t rocket science, but it does require a comprehensive repatriation program grounded in common sense and a mutual commitment to success. A rising star in a UK-based multinational was tapped for what appeared to be a plum assignment: overseeing the company’s expansion in the emerging markets of Southeast Asia. The company was eager to give him international experience and to put his exceptional talent to work in locales projected to provide more growth than mature Western markets. So he uprooted his family and moved from London to Singapore for a three-year tour of duty there. Over the course of his stay, he exceeded the company’s market share goals in the four target countries, groomed a local successor, and established relationships with key influencers in the region. He returned from the assignment with intimate first-hand knowledge of multiple emerging markets, sharply honed cross-border and cross-cultural leadership skills, and greatly enhanced competencies in both operations and strategy. Re-entry, however, proved difficult. The company assumed that as British nationals he and his family would have no trouble repatriating, so he was offered little in the way of personal assistance. His colleagues greeted him lukewarmly, with little appreciation of his quantum leap in skills and knowledge. Further, leadership changes while he was away had left him with new superiors who had been uninvolved in the decision to post him to Singapore. Undervalued by them, he chafed in a new role that simply couldn’t compare to the extensive responsibility he had enjoyed abroad. Just eight months after his return, he left the company for a competitor who was glad to acquire his global experience. Thus he joined the approximately 40 percent of returning expatriate executives who leave their companies within one year of repatriation – a figure that has changed little over the past 30 years. Those losses of talent are costly. Supporting expatriate executives and helping accommodate their families in unfamiliar surroundings can require as much as three to four times their salary. As an investment in talent development, that expenditure is utterly wasted if the executive leaves almost immediately upon returning. The company loses the future value that a supremely talented executive, with experience in critical international markets, could have created – in effect restricting the return on investment to whatever gains the executive made during the assignment. The personal and professional cost to an executive who has been sidelined or derailed can also be high. While many companies have reduced the amount of extensive lower-level staffing they do abroad, they continue to fill many top-level posts with expatriates, especially in emerging markets. Further, they can expect to do so more over the next several years, as Western domestic markets remain stagnant and emerging markets become more critical for growth. The competition for already scarce local senior-level talent will intensify, leaving many companies with little choice but to send an expatriate. That competition has driven up the price for local talent, making the considerable investment in an expat well worth it. Further, the longstanding reasons for sending expatriates won’t change: problems that only someone from home can solve, unexpected vacancies in key positions, and the need to develop executives who can meet the challenges of global commerce. Given the perennial need for expatriates and the war for talent in increasingly important emerging markets, companies will have more reason than ever to get repatriation right. Based on our experience assisting leading companies in all aspects of talent management and a series of recent interviews with
  3. 3. Heidrick & Struggles 9 repatriated executives and senior human resources leaders, getting it right requires that the organization: • Understand the root cause of failure • Establish best practices in managing expatriate talent • Engage the executive in all phases of the process By taking this approach, your company can capitalize on the full value a successfully repatriated leader offers, create a win-win situation for the company and the executive, and make sure that you do not lose ground in the intense competition for genuinely global talent. Where Repatriation Goes Wrong While each executive’s experience of repatriation may involve nuances and individual differences, in cases where it goes badly we see the same root causes over and over again. Sometimes found in isolation and sometimes in combination, they include: • Mismatch of expectations. Far away from headquarters, in fast developing and fluid market situations, expatriate executives often enjoy great autonomy in decision-making and wide latitude in pursuing the objectives of the business. Already considered top performers before they leave, they feel themselves growing in leadership stature during the expatriate assignment, gain confidence in their skills, and expect to be rewarded with a challenging role when they return. Often those expectations are not met. They find themselves in a role they believe they have outgrown, or the company simply does not have the right stretch opportunity for them. To the returning executive, the new role feels like a demotion – and disenchantment and dissatisfaction soon follow. • Reverse culture shock. Executives who absorb the experience of another country may be personally transformed by the experience – with widened cultural horizons and a greater appreciation for alternative ways of approaching business challenges. As a result, they can find themselves somewhat alienated when they return home. They may have acquired new skills that are not fully appreciated or cannot be applied. They may have developed somewhat different values and motivations, and their colleagues may not be interested in their experiences. The shock of re-entry can also involve practical matters, like the abrupt change from the comfort of expatriate life or the logistical issues of housing and schooling – all of which the executive and the company may have wrongly assumed will not be problematic. • Organizational change. With ever shorter cycles of innovation and disruption in many industries, companies can change dramatically during an expatriate’s time away. Seemingly overnight, new leaders, new organizational structures, new strategies or even a new company following an acquisition or divestiture can arise. Expatriate executives may be lost in the shuffle – or even feel entirely forgotten. When they return, they find that their internal network has been dispersed and they may feel that the company’s abrupt change of direction has left them with little future in the organization. Any of these common pitfalls can turn the initial excitement of returning home into frustration for the individual and create disruption in your organization. Yet with some forethought and some structure, you can minimize the risk of their occurring and maximize return on the investment in the executive. Rethinking Repatriation If your repatriation program kicks into gear only when an expatriate is about to return, then it is likely too little too late. Many of the problems that plague repatriation take root before the executive departs for the new assignment and can continue to grow throughout the foreign tour. You can avoid these missteps by creating a comprehensive program and end-to-end process that begins before a candidate is selected and continues well after he or she has returned. It includes these best practices:
  4. 4. 10 Reintegrating Exceptional Expatriate Talent Before making an expatriate appointment • Identify the right people. One of the best ways to avoid mutual disappointment in expatriate assignments is to make sure you are sending the right person in the first place. Through rigorous assessment you can identify candidates who have the potential, agility, commitment and culture fit to navigate the move and the return. • Manage expectations up front. From the outset, you should have candid discussions with the executive about opportunities after repatriation. Be realistic. Says Helen Maye, Chief Human Resources Officer at Smith & Nephew: “It is very important to manage career expectations and have pre-assignment conversations. Tell them how it is going to be when they return, because most executives do not think about life after their expat assignment.” Make it clear that it is unlikely that a role will have been pre-planned for their return. And if, on returning, the executive must temporarily settle for what feels like a lateral rather than an upward move, it does not mean failure, especially since having completed the expat assignment will allow him or her to progress much faster subsequently and get in the succession for a senior position. • Ensure commitment from key stakeholders in advance. In setting up the reintegration program, HR should secure buy-in from leaders for a re-entry process that is much like onboarding and includes coaching, mentoring, ongoing support, and progress reviews. Says Elisabeth Capmarty, HR Director Emerging Markets at Janssen, “Before sending an executive abroad, we try to get commitment from senior leadership. We ask them whether they would be ready to reintegrate the executive with their teams. If the answer is no, we seriously reconsider sending the executive abroad, because we know that reintegration is going to be difficult to manage.” While the executive is away • Communicate. Maintain regular contact with expatriate executives. Check their progress in adjusting to the new environment. Encourage them to talk frankly about any problems they are encountering, and find out what additional support they or their families might need. Update them on any changes in personnel, structure, or strategy at home. In short, do everything possible to make them feel valued and in touch. Wolf Kupatt, President Latin America at Baxter, who has experienced several assignments in emerging markets, knows first-hand about expatriate communication challenges. Today, as a leader sending people abroad, he observes: “Most companies do not pay enough attention to the executive once the person and family are out of sight. They know little about what is going on in the environment and the challenges the manager faces apart from business. Each time I go into a country where there is an expatriate, I take time to talk to the family or at least catch up on the latest from the home front. Now, for example, with the massive strikes and protests creating a very uncomfortable security situation in Brazil, I stay very close to our ex-pat managers there. This might seem like overdoing it, but the fact that someone is interested is very important to them.” • Plan ahead. Initiate discussion of the move back home a year in advance with the executive. Begin preparing the executive, the family and the home environment to reduce the shock of re-entry for all involved. Include in those discussions not only the relevant HR personnel and outside advisors but also the leader and the team to which the colleague will be returning.
  5. 5. Heidrick & Struggles 11 When the executive returns • Undertake career planning. Expatriate assignments can be both personally and professionally transformative, requiring a fresh look at the development and career plans of returnees. Explore with them any changes in motivation and career objectives they may have undergone. Identify the leadership and business skills they have acquired. Reassess their potential and determine what support they will need to implement their development plan and realize that potential – and be clear about where they stand in the succession pipeline. • Address the issue of an appropriate role. Ideally, you will have set realistic expectations with executives before they depart. But, as we have noted, conditions change, and sufficiently challenging roles may be in short supply when an expatriate returns. Conversely, as a result of the expatriate experience, a returning executive may be ready for a much bigger role than initially anticipated – a readiness that the exercise in career planning and development should uncover. If the organization and the executive have remained in close contact and the executive has effectively networked while away, they should be able to identify or even co-create a suitable role. Further, other highly desirable international assignments will inevitably open up in the future, with much greater scope and responsibility – roles that are likely to be entrusted only to people who have proven international experience. • Offer support. Have dedicated professional teams ready to help the repatriate and the family relocate, readjust, and navigate often cumbersome administrative systems inside and outside the company. Identify a mentor or coach to advise the returnee, making sure to match the right people and create a rich network on which the returnee can draw. Be sure, also, to track the impact of the program at every stage. Through surveys, debriefings, and ongoing dialogue with the executives, find out what is working and not working and continuously improve the process. In addition, measure the return on investment in the program by tracking retention rates, conducting satisfaction surveys, and assessing promotion readiness. Increasingly positive results will not only help ensure leadership buy-in but also assure executives that they can accept expatriate assignments with confidence. Keeping the Expatriate Engaged Expatriate executives, too, bear a large part of the responsibility for making repatriation work smoothly. You should therefore encourage them to: • Maintain personal and professional networks. In a wired world with ubiquitous social media as well as the humble telephone, maintaining such networks has never been easier. Expatriate executives can not only remain engaged with their networks back home, but expand them during and after expatriation. This will enable them to keep abreast of trends, maintain industry and market knowledge, and cultivate the all-important personal relationships that are essential in any career. • Communicate with internal stakeholders. In addition to maintaining informal networks, the executive should establish regular contact with the boss, peers, and HR – sharing knowledge and experience, communicating results, and pinpointing achievements. During and after expatriation, such communication can help build the individual’s brand and maximize his or her value to the organization. Says Nico Reynders, Vice-President Human Resources, Asia-Pacific region at UCB Pharma, “I would advise expatriates to communicate their results regularly while they are abroad, and to spend 10 to 15 percent of their time maintaining their internal networks.” • Share lessons learned. The returning executive should review with the organization what each party could have done better to make the assignment more successful and capture that knowledge so others can learn from it. Repatriated executives should also share the new perspectives they have gained and look for ways to use that knowledge to improve business performance. • Proactively pursue development plans. Having revisited career planning upon returning, repatriated executives should genuinely own their action plans. They should regularly review their progress with HR and their superiors to ensure support for their goals and, most importantly, they should actively seek development opportunities that will accelerate that progress.
  6. 6. 12 Reintegrating Exceptional Expatriate Talent Heidrick & Struggles is the premier provider of senior- level Executive Search, Culture Shaping and Leadership Consulting services. For 60 years, we have focused on quality service and built strong leadership teams through our relationships with clients and individuals worldwide. Today, Heidrick & Struggles’ leadership experts operate from principal business centers globally. Carole Deffez Marie Flament Vicki Hickson Niren Thanky Caroline Vanovermeire Copyright ©2013 Heidrick & Struggles International, Inc. All rights reserved. Reproduction without permission is prohibited. Trademarks and logos are copyrights of their respective owners. 3070514 Conclusion It is relatively easy to quantify the value of achieving specific business goals during an expatriate assignment – increasing market share, establishing new production facilities, gaining a foothold in new markets, and the like. The value and benefits of consistent successful repatriation, although more difficult to calculate, are nonetheless real and substantial. They include: • Engaged and motivated repatriates • Reduced turnover of highly skilled executives • Executives who embrace expatriate assignments • Improved international connectivity and knowledge transfer • An employer brand known for exceptional professional development Moreover, in our work assisting leading companies with all of the elements of a comprehensive program, we repeatedly encounter the same refrain: with growth in emerging markets making executive mobility a strategic necessity, successful repatriation is no longer a nice-to-have; it is an essential. Those companies that get it right will not only better execute that strategy, but also develop and retain a deep bench of genuinely global talent prepared for the next twists and turns in the ongoing story of globalization. n