Expatriate Assignments and Overseas Experience: What is the difference?

The expatriate assignments (EA) and the overseas experience (OE) are a topic that has been growing more important in a globalized world. These two experiences are an excellent way of acquiring international expertise and knowledge, but are they the same?
At first I want to say that despite the confusions originated in the similarity of the operations that these two terms suggest they are different. So in order to make a clear point initially I will state in what aspects they are similar and finally, to explain the differences, I will resort to the document written by Inkson et al (Inkson et al. 1999) titled "Expatriate assignments and overseas experience – contrasting models of international human resource development"

The origin of the confusion with these two terms is that they both involve an individual going abroad to live a prolonged period of time in a foreign country. Usually the objective is to gain some experience from the people, environment and culture of the other country. In general terms these two terms share that they are a common source for improving someones capability to face the new international challenges.

I want to present the following chart from the document quoted above in order to set the difference between the two concepts.

Chart taken from: Inkson et. al . 1999. Modified to fit the purpose of this post

 Let's analyze each component. The initiation of a EA is caused by a company who wants an employee to travel abroad to learn/teach in a foreign subsidiary, meanwhile the OE is a personal decision. This means that the goals are inherently different.

In the first case is the company that establishes the goals, and they are set in a specific way to fit the company's perspective to send someone abroad and to make sure that the resources they are investing aren't a waste of money. In the OE since the individual is the one that initiates the travel he sets its own goals; meaning goals like "see the world," "try something different" (Inkson et al. 1999). These objectives are not specific, they are diffuse since a lot of things can happen in order to accomplish them.

As to the funding of an OE, it is undertaken by the one who is making the travel overseas, as opposed to the EA, in which the company is the one that pays for all the expenses of the ex-pat. This gives much more flexibility to the OE since you are the one who controls your expenses, and can find a temporary job to gain more funding.

Finally the career. In a OE the career is what the author calls "Boundaryless" meaning that this experience  generates in the individual the skills of a general market, instead of the promotion and status improvements looked for in the EA.

The question for this post is: Explain one of the causes for expatriate assignment failure and provide 3 recommendations to address it.

At first it is important to sate that when an expatriate assignment fails it generates big costs for the company because it involves as said before specific business objectives that are related to profit on one hand, and in the other the costs of sending someone abroad are very large and this are lost when the assignment fails.

So what causes the failure of an expatriate assignment? There are several causes but here I will address only one and of course will recommend some solutions. The most common cause is of expatriate failure is the inability to adjust to the new environment, which has its origins in many aspects but I am going to analyze two of them;  the family and the payment received in the other country.

The family is one of the origins of the adjustment problems because the company very often applies tests, preparation and checks the capacities of the employee to go and live abroad and face the cultural challenges, but do not consider that the family of the employee can have problems adjusting and make the expatriate return home. This is as if the company never trained that expatriate, since they had an adjustment problem, the one they were trying to avoid with the preparation given.

This problem can be solved by extending the evaluations and preparation to the family that is going abroad with the employee in order to reduce this risk at minimum, it might be more expensive than training a single person, but the costs of failure are by far greater.

Another origin of the adjustment problem is the paycheck. The reason is quite logical; if a person goes abroad to take more responsibilities he/she expects to have at least the same quality of life they had in their home country. This quality of live is achievable only  by matching the paycheck in the home currency with the amount that will be required in foreign currency to have the same standard of living, which is very often not only the exchange rate.

In order to avoid this problem there are two possible solutions; the first is to consider the Purchasing Power Parity, which means that the exchange rate is the equivalent to the price of two matching baskets of goods, this will allow to determine an increase in the paycheck if it is needed.

The second solution refers to the case in which the living standards of the expatriate can't be match in the host country, be it for structural difficulties or lack of services. The solution is to explain how harsh the conditions in the host country are without embellishing the situation. A premium for enduring those conditions may be in place, along with a career promise. This is possible because most of the ex-pats according to Inkson et al. follow their adventurer spirit and wish to work in another country, not a professional goal or to be a good corporate citizen.

For further readings check:

Inkson, Kerr et al. 1999. Expatriate assignments and overseas experience – contrasting models of international human resource development. Journal of World Business. 34: 351-368.