HIRING EXPATRIATES OR LOCALS?
Expatriates or local candidates?
Which one is better?
That’s a main point while expanding a company globally. It is very important to decide either hiring a local or assigning an employee for an oversea project or work. While that is a contextual decision, my recommendation is to hire both to help run each of the new facilities opening because they both provide benefits to a company expanding globally. Companies can work with the combination of expats and locals due to the advantages of both sides.
Hiring expatriates and assigning them to work abroad for a determined period is the first option. Expatriate employees can train and guide local employees on business practices and work culture. Companies can encounter the difficulty of finding the best and most appropriate employees for oversea positions. Therefore, hiring expatriates makes it easier to hire qualified employees from the home country in the beginning of the global expansion. The assigned expatriates (from home) may improve themselves on international operations which is an important contribution to the human capital of a company. While practicing work standards of domestic stores, expatriates can lead and educate local employees. Eventually, globally expanding companies can have enough time to find the best and most appropriate locals to work in oversea operations.
On the other side, hiring locals can provide companies to recognize new cultural environments, market structures, actual and potential difficulties in the host countries. A local knows the locals and the local environment better than an expat. Local employees speak the local language and can build strong connections and bonds with customers, competitors, and third parties. Hiring locals is less costly than hiring expatriates and locals can create a positive impact on clients.
Advantages of hiring expatriates;
- Well-suited employees,
- Training/guiding locals,
- Transferring practices and organizational culture,
- Highly motivated and dedicated employees.
Advantages of hiring locals;
- Local language,
- Less costly,
- Networking,
- Knowing business environment,
- Positive impacts on clients and third parties.
Hiring expatriates requires to complete legal and compliance issues for immigration and work authorization. While expatriates are more motivated than locals, they may experience the risk of culture shock, burn out, early repatriation, and family-based problems. Allowances can be paid in order to encourage employees to take international assignments and to keep them relative to home standards such as cost of living, housing, relocation, and education.
Pre-expatriation training program should be conducted for preparing expatriates efficiently to the new place. Without a well-designed preparation program, it is risky to assign employees to work in an abroad operation for a determined period. Disadvantages of hiring expatriates in a host country can be defined with “3C” which refers to difficulties on culture, employment cost, and communication. While culture refers to the possibility of culture shock in the new place, costs are the financial difficulty of expatriation for the company. Third, communication points out the language barrier in the host country.
Disadvantages of hiring expatriates;
- More costly than hiring locals,
- Visa, immigration, and work authorization works,
- The risk of culture shock, burn out, and family-based problems,
- The risk of early repatriation.
