Trends & Impact of Expatriation on International Business

Trends & Impact of Expatriation on International Business
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  • 0:03 Definitions of Expatriates
  • 0:53 Expats on Assignment
  • 1:52 Trends of Expatriation
  • 2:49 How to Be an Expatriate
  • 4:14 Lesson Summary
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Lesson Transcript
Instructor: Beth Loy

Dr. Loy has a Ph.D. in Resource Economics; master's degrees in economics, human resources, and safety; and has taught masters and doctorate level courses in statistics, research methods, economics, and management.

In this lesson we address trends impacting expatriates, those who reside and work in a foreign country. We look at the effects on individuals and companies and highlight the different categories of expatriates, including traditional, shot-term, commuter, and appointee.

Definition of Expatriates

Imagine you are interested in traveling to other countries. Your background is in information security. You sign on with a company called Intelliq that provides services related to intelligence security. Intelliq has contracts with companies in Dubai, Peru, and Geneva. It's time for you to pack your bags because you are ready for your expatriation assignment in Dubai. How long will you be gone? How do you prepare? What will you return to? Let's dive in to see what it's like to be an expatriate.

Being an expatriate is one of the more unique jobs in our labor force. An expatriate (or expat) is someone who works in a foreign country, one where the person doesn't have citizenship. Expatriate assignments are a result of globalization, which is the interaction of businesses operating in multiple countries.

Expats on Assignment

Assignments are either short-term, long-term, or a combination of both. Long-term assignments usually last 1-5 years in the host country. They are classified as traditional assignments. Short-term assignments range from 3-12 months. There are also expatriates who are given assignments from local companies in foreign countries rather than being brought in by a foreign company. We call these appointees.

Now, we even have commuter assignments, which tend to be easier on the expatriate and cheaper for the company. With long-term assignments, the expatriate's entire family is relocated. Due to the demands of aging parents, childcare, children's education, and the spouse's career, commuter assignments are more likely accepted. The commuter expatriate moves in to address a specific need, usually just across the border, and then returns home. These assignments have a higher probability of success. Failure comes into play when the assignment isn't finished, usually because the expatriate returns home.

Trends of Expatriation

Some expatriate trends have changed over time. The assignments can be stressful and involve very long hours. Regardless of the risks, expatriate assignments have increased due to globalization. Improvements in communication and transportation make it easier for employees to be more mobile. Like Intelliq, most assignments are for technology experts. Each assignment requires that the expatriate become fully immersed in the culture. This is because trustworthiness and teamwork have always been vital to an expatriate's success.

In the past, expatriates were recruited and assigned to labor jobs, like those needed for the oil and construction industries. This has shifted to a demand for information technology, medical services, and communication specialists. Most expatriates originate from a Western country, and it's not uncommon for assignments to take them to third-world countries. Of all the expatriate destinations, Africa, Brazil, Mexico, and Asia are some of the most common.

How to Be an Expatriate

Typically, expatriates must have a visa and work permit. The expat must have cultural and language training and have not only technical skills but soft skills. When assignments fail it's not because of money. It's usually because of an expatriate's work/life/family imbalance. To account for this, companies just like Intelliq are now investing in the well-being of their workforce, rather than just compensation. Many companies now provide:

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