Ensuring Return on Expat Investment

By Jennifer Hamm
Published Mar 30 2007

International human resource managers have long struggled to articulate the return on investment for expatriate costs.

Smart HR managers will be sure to highlight the findings of a recent study by Dr. Michael Dickmann in their next presentation on expat ROI. (Companies spend an average of $311,000 a year on each expatriate.)

An academic authority on expatriate management, Dickmann runs the Centre for Research into the Management of Expatriation (CReME) at the Cranfield School of Business in England.

His study, conducted in conjunction with PricewaterhouseCoopers, found that productivity jumps while the employee is on assignment, stabilizes when he or she returns and then increases again.

But the key to ensuring ROI during and after assignment, the study finds, is articulating specific goals and purpose. Though this may seem obvious, the study - “Measuring the Value of International Assignments” - found that many fail to do so.

As well, the study notes that evaluating expatriates “tends to be handled by the host country only, despite suggested best practice and most organizations’ stated goal of involving both the home and host locations.”

Perhaps the study’s most compelling result is that 15 percent of assignees leave their organization within a year of repatriation. “Companies are at risk of losing their expatriate staff because they fail to devise a career path for them when they return from overseas,” said Dickmann in a newsletter published by the school.

When coming off international assignment, new repats can get lost in the corporate shuffle. Though expats may be well managed while on assignment, they are likely to experience what the report describes as “career wobble.”

This is due to a couple of factors. The study found a correlation between losing personnel and failing to articulate career goals. There is also a tendency for both line and HR managers to think that once the expat has returned home, they’ll be fine. Not so.

“Much more time and effort must be put into preparing for an employee’s return - they need security, a meaningful role on their return and to see a clear path for their future career development with the organization,” Dickmann says.  

Without such a path, an employee may give the return on investment to another organization.

Copyright of My Global Career. The original article can be found at: www.myglobalcareer.com . Reposted with permission.