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One of the critical factors of having a large, successful international operation is having “feet on the street” in the country where multinational companies do business. Recently, an article from ChinaDaily.com featured some staggering statistics about expatriates and the duration of their stay in the country. Although business demands often dictate relocation by executives and their families, is this the most efficient use of resources?
According to the article, between 30 and 50 percent of expatriates who relocate to China go home before their anticipated departure date. Not only is this fact alarming, it brings to light the importance of understanding how culture impacts things beyond just product design and marketing. Some might argue that this is just a natural attrition rate for executives who are placed in a new environment, and often, have new responsibilities. Others might argue that the executive who took the position is responsible for understanding these changes before taking the job.
Regardless of which side of the argument you place yourself, this phenomena must be addressed and understood by multinational companies. What is driving the early departure? What are the most important challenges that need to be addressed by the multinational to improve international relocations? Why do executives feel compelled to take on the challenge, but later feel comfortable reneging on their commitment?
To me, it is the responsibility of the multinational to take on the problem. Although there are always going to be alterations to the original plan, the fact that some of the most valuable employees are unable to hold their original commitment demonstrates an underlying problem with the Human Resources Department. Not only is it not efficient for employees to change locations and jobs more quickly than planned, it forces the company to backfill their role and continue the cycle. Key constituents of these multinationals, namely the investors, should view operations such as this as insight into a potential shortcoming of core business functions.
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