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Expatriates
Expatriates are employees who go overseas to accomplish a job-related goal. To remain competitive in the world marketplace or to obtain new marketing opportunities, multinational companies (MNCs) are sending increasing numbers of expatriates on international assignments. In fact, recent research estimates that more than 250,000 Americans currently are serving as expatriates on international assignments. This number is expected to continue to increase with further economic globalization.
There exist several characteristics shared by expatriates. Foremost, expatriates are expected to accomplish assignments in a different country or culture. This change typically introduces expatriates and their families to new living and working environments. A second characteristic of expatriates is that their international assignments are usually complex in nature. For example, many MNCs expect the expatriates to open a new market, transfer skills, and build good public relations with local organizations and medias. Because of the complexity of these assignments, most expatriates tend to be senior mangers whose jobs involve a high degree of responsibility. In fact, expatriates' performances can directly affect the success of their respective MNCs' competitive standing in the global marketplace. A third characteristic of expatriates is that they are usually expected to complete their assignments in a predesignated time period (usually ranging from 6 months to 5 years). After this time period, expatriates are sent back to their home country and assigned to a new position, a process termed repatriation.
Benefits for Expatriates
To compensate for the disadvantages expatriates and their families may face while on international assignment, most MNCs' compensation policies are quite generous. The typical compensation package offered to expatriates includes one or more of the following: overseas premiums, cost-of-living allowances, housing allowances, children's education allowances, hardship allowances, car allowances, and home leave allowances. Further, performance-based bonuses, as well as seniority bonuses, are common, and exchange risk and taxation differences are usually taken into consideration. The total compensation package offered to expatriates could be equal to several times the salary package in the home country for the same position. This shows the considerable costs associated with expatriate assignments. Although the average onetime cost for relocating an expatriate overseas is $60,000, supporting an expatriate working on an international assignment may cost more than $220,000 annually.
Being well compensated is not the only benefit for expatriates. Gaining international experience can enhance one's career. Numerous researchers have noted that many successful expatriates are subsequently promoted during repatriation. Further, more and more MNCs are sending their high-potential candidates for senior leadership positions on international assignments as part of their career development. Success in the expatriate assignment often then becomes part of the selection process into higher-level positions. This process seems to be well understood by expatriates, and researchers have documented that expatriates expect to be promoted on successful completion of their assignments.
Criteria of Expatriate Success
An expatriate's job performance on international assignments and whether the expatriate returns to his or her home country before the assignment contract expires (i.e., premature return) are two criteria often used to evaluate expatriate success. These two criteria clearly reflect the fact that expatriate success means effective and timely completion of the international assignment.
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