Expatriation

WHAT IS EXPATRIATION?
Some sources define this word as the citizenship renunciation of one country for another. Almost everyone has heard even once the term “expat”, which is shortfor expatriate, and has never considered someone, “who refused his nativeresidence in favor of foreign land” as it is defined traditionally.[i]

To have a full understanding of the topic, first it has to be noted that the word expatriation comes from the Latin terms ex ("out of") and patria ("country, fatherland").

Second, main well-known facts have to be emphasized: Expatriation is a temporal (rarely permanent) residing in another country, different from origins of the expatriate.

Expatriates are highly professional, skilled and experienced workers, sent by their company to a foreign country.

Commonly, expatriates are sent to another country either to control existing businesses or to organize launching headquarter’s business strategies and innovations into the company’s environment of a foreign country. There are also so-called serial expatriates, who move on a series of international assignments. However, nowadays not all expatriates are employees, some people move abroad to work as freelancers or open up a business in a foreign country and get the status of an expatriate.

Although the individual situation of each expatriate can’t be compared, there are some common characteristics among all of them. They are usually highly educated, have higher than average income and receive lucrative expatriate compensation, which covers relocation costs, plane tickets, tuition fees for their children’s education at international schools, etc.

In the beginning of 15thcentury the first Europeans were sent to America to develop the land and bring profit for their mother country. According to the modern definition of expatriation, we might say that they were the first expatriates. Later on in 1868, an Expatriation Act regarding the right to renounce one's citizenship was issued in the US. It stated that "the right of expatriation is a natural and inherent right of all people"[ii].

Curiously enough, in the end of 19th century a lot of Americans move backward to Europe (Germany, France and UK).

Nowadays, more and more people between the age of 20 and 40 years choose or agree for an expatriate position, moving to a foreign country. 52,9% of expatriates are female. 31,4% in age of 31 – 40, 24,2% over 52 yo, 22,9% from 41 to 50 yo, 21,6% expats younger than 30[iii].

Because of globalization, developing markets of different countries and possible career achievements employees agree to go abroad. According to the research most of the expatriates are from USSR former countries, India, Philippines and China. Almost three million expatriates have either one higher education degree or several.Main sectors spreaded among workers: 14,4 % work in Banking sector, 13,7% medicine, 11,8% in chemical industry and 10,5% in telecommunications 3.

THEORETICAL FRAMEWORK AND OVERVIEW
Despite the fact that the first expatriates had already appeared in the beginning of the 15thcentury or even earlier, the phenomena of expatriation as a research area started to develop intensively only in the second half of the 20thcentury. The cultural adaptation process issues, which still remain one of the key topics for the serious discussions, attracted attention of many researchers. The numerous theories and approaches developed in the above-mentioned area were systemized in three adaptation type frameworks by Colleen Ward:[iv] stress and coping, cultural learning, social identification.

Stress and coping
This framework assumes that adaptation is supposed to be a result of the new culture coping process (cultural values, norms, behaviors, etc.) accompanied by acculturation stress and cultural shock. Giving a more detailed explanation, it should be said that the mechanism of acculturation relies on creating identity between an expatriate and local citizens, but every step connected with coping of a new culture can lead to facing a stressful situation. That can be caused by language barriers or misunderstanding of country’s traditions and norms. However,experiencing difficulties and shocks a person should learn from his/her failures and finally integrate into the new environment.

U- and W-curve models of cultural adaptation
The U-curve model suggested by Kalvero Oberg in 1960 considers how the expatriate’s emotional level changes during the adaptation period. The model includes four stages: honeymoon, crisis (cultural shock), recovery and adjustment.

The honeymoon stage is a period when the expatriate watches everything through so-called ‘rose-tinted glasses’[v]. He/She, like a tourist, feels excited about the new culture and environment. This period refers to the first weeks after arrival in a host country. However, the crisis stage comes after that. An expatriate starts facing everyday-life problems and challenges dealing with foreign people and their culture. That leads to the cultural shock characterized by feelings such as frustration, misunderstanding of surrounding people and home sickness. The next step is the recovery stage. After reaching the bottom of negative emotions, the expatriate starts to adjust to the culture of the host country. Perception of local environment becomes gradually positive. Finally, the expat reaches mastery with the host country, feeling comfortable in the before-unknown environment.

The U-curve model still remains one of the most influential concepts in the area of the expatriation process research[vi]. Nevertheless, many researchers tried to modify and extend it. The W-curve model can be referred to these trials. This extension includes a doubling of the classic U-curve model revealing that an expatriate can experience the same emotional changes cycle after returning home as during settling down in a new country.

Cultural learning
This framework takes into account the behavioral development including acquiring knowledge about a host country and learning its culture as a main reason for prosperity in the new environment. It means that an expatriate will completely adjust a new culture only after reaching an excellence in its essential parts such as language fluency, social etiquette, etc. Step by step, during improving his/her knowledge he/she will broaden his/her mind and will become more open-minded for adapting a foreign culture.

Developmental model of intercultural sensitivity
The developmental model of intercultural sensitivity introduced by Milton Bennett reflects the cultural adaptation process through behavior and attitudes of a person toward a cultural difference between its own and foreign cultures which changes with improving knowledge about the last one..

According to the model, on the first steps after arrival in a new country the sojourner’s attitude to that cultural difference can be described as ‘ethnocentric’. This term means that a person tends to appraise another culture in the light of his/her own culture[vii]. Ethnocentric stages include: denial, defense and minimization. During the denial stage the expatriate’s behavior is characterized by trials to isolate himself/herself from new environment. Typically, he/she searches for representatives of his/her culture and communicates only with them. On the next step, ignorance changes by defense. A person begins assessing a foreign culture and comparing it to its own. The results often admit that foreign people act wrongly. Cultural difference is explained as a fault of a foreign culture. After that a sojourner reaches the minimization stage where his/her mind can be tricked with an idea that all people are generally the same. A person finally accepts another culture but minimizes cultural differences pointing out common features of all people.

Acquiring more knowledge about a new culture, an expatriate starts to use ‘ethno relative’ approach instead of ‘ethnocentric’ one. A new term indicates that now a person considers its own culture in the context of a foreign culture. It also includes three stages: acceptance, adaptation, and integration. The acceptance stage can be defined as a stage where an expatriate with his/her knowledge can already identify and accept the existence of cultural difference between his/her and foreign countries. Nevertheless, he/she is not ready to adapt to that difference and integrate into a new society. The progress in this area appears only after additional learning when a sojourner experiences the adaptation stage. Now he/she can change his/her mind and adapt a new culture due to ability to analyze his/her behavior from the perspective of that culture. Finally, a sojourner reaches a peak of the ethno relative perception where he/she can wear different ‘culture masks’ depending on a situation and easily switch from one cultural worldview to another.

Social identification
This framework deals with the expatriates’ changing perception of cultural and social identities concerning the aspects of how the self-reflection can provoke reconsideration of views on their own and foreign cultures.In other words, the model demonstrates that the acculturation process is unavoidably connected with switching of an expatriate between cultures, which, in turn, can be a result of analyzing his/her position in society from the cultural perspective.

Transitional experience model
The transitional experience model offered by Peter S. Adler demonstrates how the expatriate’s identity can be changed during a period of cultural adjustment.

The first step implies an initial contact with a new culture.Typically, this step is associated with positive emotions of an expatriate. The underlying reason for that is the sojourner’s attempt to find similarities between himself and foreign people during social identification process. However this experience moves an expatriate to the disintegration stage where a person becomes disorientated with his/her intermediate position between a home and foreign country cultureThis phenomenon can be explained by a fact that cultural distinctions become gradually more and more obvious for a sojourner. Later then, consciousness of these differences can lead to reintegration, or a rejection of the host cultureThe cultural adjustment starts as a result of social and cultural identity changes. An expatriate is promoted to the autonomy stage characterized by the growth of personal flexibility and by development of appropriate coping skills for a host culture. Finally, in the independence step, the expatriate seems to be cosmopolitan regarding the cultural differences and its similarities.

DEFINING EXPATRIATES: CHARACTERISTICS AND SKILLS
An expatriate by definition is a qualified person, which is send by his/her international company to a foreign subsidiary for a certain period – in practice often two to five years.[viii] According to recent studies, expatriates need these five characteristics or skills to perform well, in business and privately, in their unknown and new environment and help him to assimilate:

·      Adventurousness – that’s the expatriates desire to have a new and exciting experiences in private and professional life

·      Cultural sensitivity – this describes the expatriate’s ability to understand the culture he/she is living and working in and the capability to integrate or fit with it

·      Curiosity – a significant interest and will to learn about the new culture, new job and the entire new environment expatriates are in

·      Flexibility – this describes the willingness to try new ways of acting and thinking

·     Open mindedness – this shows the expatriates capability to look at their new environment with passion and desire to learn about and understand it, and the interests in regarding things in different ways

Moreover, the researcher also set a ranking of these five characteristics and skills. “Flexibility“ and “Open mindedness“ were ranked most highly. Organizations should carefully assess their candidates for flexibility and open mindedness.

Thus, these characteristics and skills should be available to a person who wants to act as an expatriate and companies sending expatriates to the world should take an eye on recruiting these kind of candidates.[ix][x]

PROCESS AND PREPARATION OF EXPATRIATION
The Human Resource departments (HR) of international organizations are facing new challenges and tasks because of globalization. The follow-up and effects of sending staff abroad are intense for the company and the employees. So it is important to know all the process steps in order to run through and to be optimally prepared.

A typical process of sending staff abroad is divided into four main topics: Selection, Preparation, Assistance during the expatriation time and the Reintegration.[xi]

The Selection-Phase
To select the right person to be sent abroad is a quite complex issue for the HR department of an organization. Besides the professional ability, social and intercultural competences and skills play an important role. To measure these skills on candidates, companies often use Assessment Centres, which are customized by intercultural issues or so called Intercultural Readiness Checks (IRC).[xii]

In general, this check evaluates four core intercultural competences of one person. These are the cultural sensitivity, the ability to communicate intercultural, the ability to build up commitment and the ambiguity tolerance. Often the findings are also used to optimally customize a personal training for the future expatriates.[xiii]

The Preparation-Phase
In the so-called preparation phase, the candidates are trained in special fields like the basics of the future local language and face cultural challenges. The future expatriates have to pass an intercultural training to successfully act towards cultural differences.

Another important factor in the preparation phase is to integrate the fellow travellers to the process, like the family members of the future expatriate. Thus, all family members should participate in the intercultural trainings so the family integration into the future new environment runs successfully.[xiv] Besides the support of social skill trainings, organizations provide the services of a relocation agency. These agencies’ goal is to find a new home abroad, organize all authority affairs, solve school and kindergarten concerns and so on.[xv]

The Phase of Assistance during the stay abroad
The first weeks and months of living and working in another country are characterized by fascination and new impressions. But this often covers normal adaption problems. After approximately three months, the hard changes in professional and private life sometimes stick out. This adaption process is often stressful. Culture shocks occur where expectations do not fit with the real conditions. To minimize the negative influences of this adaption process to the companies work and to support the expatriate to manage the integration phase, companies sometimes get use of an “intercultural coach”.[xvi] Moreover, it is helpful to build up a company intern network of mentors to simplify the contact between the expatriate and the foreign subsidiary company.

Phase of Reintegration
This phase is often unattended by the organizations but is also very important. The employee feels difficulties in acting in the structures of his homeland and the domestic company. Referring to a study of the University of Lüneburg[xvii], the employee fluctuation rate of former expatriates is about 10% in every fifth company. Often, the position of the former expatriates has been replaced by others and no suitable position is offered or even the acquired new skills were not used by the company.

The main factors of success in reintegration are to clearly fix job perspectives in advance and agreements according the fields of activity. Moreover a specific knowledge-management is necessary in order to effectively use the acquired valuable know-how and a structured support of the expatriate and his family. [xviii]

Positive aspects
Expatriates spread the home company culture among other subsidiaries, share ideas to improve the business performance in the new working place and take the best of the subsidiary to implement it in the home company. The exchange of ideas between the expatriate and the subsidiary’s employees leads to a better understanding of the host company’s needs and helps to strengthen relationships between host company and subsidiary.[xix]

Getting to know the company’s business as a whole becomes crucial when aligning the strategy and identifying core competences. Also, control and coordination becomes easier among subsidiaries and therefore lead to well-defined goals and objectives.

Advantages do not only come from the business perspective but also from the personal one. Being an expatriate guarantees the experience of sharing cultures, development of intercultural competences and maybe gaining a career opportunity. [xx] In some cases it becomes necessary to learn or improve a language and later on, this can turn into a competitive advantage.

Negative aspects
The lack of experience in the new country, during managing and working with the host company staff, can lead to many disadvantages. Although the company’s vision applies for every subsidiary, decision making or business approaches may not be the same. In addition, the language command can become difficult for the expatriate leading to communication difficulties.

Adaptability as well plays an important role when it comes to expatriation. If the person presents adaptability resistance, the expatriation experience may turn out hard and problematic.

Another fact to consider is that the training and rewarding of an expatriate can be highly expensive and therefore adding extra costs to the company.

CHALLENGES AND PITFALLS
There are hundreds of challenges and pitfalls when it comes to expatriation. Although the idea might sound opportunistic and adventurous, it also brings many experiences that can be shocking and sometimes be very harsh in the working and personal environment.[xxi]

Dealing with a different culture is the toughest of all. Every culture has its own beliefs, traditions, practices and even religion that may vary a lot compared to the expatriate’s. Being open-minded and embracing various points of view is a must in order to survive as an expatriate. Learning from the host culture is the key to start the re-adjustment process and avoid frustration.[xxii] Facing the language barrier is also very common when entering to a new environment but with a little help of a language course and a constant communication with locals, the problem can be smoothed easily.

When it comes to safety and security, expatriates may also find some trouble. Since they are dealing with a new place and are not well aware of the surroundings, accidents and incidents such as robbery and scamming commonly appear. The solution is to be double careful and take in consideration extra safety measures. Also, having a full international health insurance can be crucial.

Making friends is not always a simple process but becomes necessary to avoid loneliness and depression. Getting to know locals and spending time with new working colleagues can help expatriates to feel more welcome in the host country. Nevertheless, staying in touch with family and relatives is also always recommended to keep contact back home and to smooth the return process.

EXPATRIATES RETURNING HOME, WHAT’S NEXT?
The process of an expatriate coming back to his country of origin is called ‘Repatriation’ and it comes with a lot of challenges. Cultural shock, high expectations of home-coming and administrative matters such as shipping of belongings appear commonly in the repatriation.[xxiii] Effects of repatriation are not always fully known but it is important to consider already from an early stage the areas where the potential issues may arise.

Everyday life
Going back home is not always as easy as it seems. It is a fact that after time away things do not often remain as they were. Repatriates often struggle to readjust to the environment they once left and start to deal with unexpected situations and confusion due to new cultural differences and important changes in the life they used to have.

How to deal with it:

·       Active approach to repatriation; this is to research about the topic, consult sources and be prepared

·       Keep contact with friends and family back home

·       Develop a self-plan for arrival

·       Contact other repatriates for support, opinions and advice

Family and friends
Repatriates are not the only ones who may suffer from cultural shock, family and friends are also involved in this process. Disbelief, confusion and resentment may appear from both sides. During the first weeks phrases like ‘you were out for a long time’ or ‘you have missed so much’ may not be a surprise for the repatriate but can also cause a negative effect in the repatriation process.

How to deal with it:

·       Communication is the key; expressing feelings helps a lot

·       Ask and show support when needed

·       Spend extra time with relatives and friends

·       Consult an expert

Professional life
For some returning expatriates, the professional part is the area in which most of the expectations lay on. Promises and short-term/ long-term plans may have been discussed before the repatriation beginning and surely, opportunities are a non-stop popping up. Of course, readjustment to the new working environment also takes place and the need to fit in comes along.

How to deal with it:

·      Communicate expectations to the company

·      Agree upon a new proposal with a direct boss and HR manager beforehand

·      Assist to company’s workshops, trainings and forums to get a better knowledge about it

·      Become an insider

EXPATRIATION AND CULTURE
Having experience of working in a foreign company is also very valuable on the job market. A huge amount of employers is searching for those, who have faced not only local business but have a clear understanding of how it functions in different branches abroad. Popularity of different destinations for expatriates always depends on the sector.

For finance these are London, New York, Hong Kong, Singapore and Tokyo. Buenos Aires, for example, is less attractive.

For engineering the most attractive area is the Middle East and South and Central America.

“Engineers will always be interested in countries where governmental programs and investments are supporting development of infrastructure”, states Peter Leyci, managing director of strategic development in Asia-Pacific region of consulting company Accenture[xxiv].

Nowadays, the global recruitment market faces the problem that employees often reject job offers because they are scared of an unknown culture. For them, it is more convenient to work in Australia or the US, as the environment is more similar, so they can work and live in a congenial atmosphere[xxv].

In order to understand better the mix between expatriation and culture, the areas mentioned above are described as follows:

Latin America
20 years ago expatriation in Latin America was not even considered by companies. Nowadays, prices have grown up, salaries became higher and services provided have raised the quality of living. Mexico, Brazil, Panama and Colombia now keep their attractiveness as one of the best countries to live in.

Pros:

·      Open and friendly people

·      Wonderful regional dishes, generosity and hospitality

·      People always have time to meet privately

·      More laid-back lifestyle

·      A lot cheaper in comparison to EU or US

·      People aren’t generally focused on what you have, but on who you are. So expatriates don’t feel judged because not keeping up with the latest cars, clothes and gadgets that everyone else has

Cons:

·      The standard of living is quite low in some areas

·      Increased crime

·      Lack of organization and cleanliness

·      Traffic congestions are normal

·      Indifferent attitude to work

·      Hard to organize people if you are not leading

·      No direct governmental support

Russia
From 2000 to 2008 the trend that every company should have an expatriate appeared. After the crises of 2008-2009 costs were recalculated and most of the positions were cut off.

Nowadays, Russian businesses face the problem that somehow expatriates are less costly than local employees. Certainly, it also depends on experience, country of origin, nationality and education.

Russia is listed as the 4thhardest countries for foreigners to live in, on one level with Saudi Arabia and India, but at the same time on five top-countries with the highest salaries on one level with Switzerland, Egypt, Singapore and again Saudi Arabia. Most ofthe businesses are based on a specific network. If an expatriate wants to develop a business he has to spread his acquaintance net as much as possible[xxvi].

Pros:

·      High salaries

·      Growing market

·      Permanent support for family and all relocation costs

·      Hard-working people, easy with over-timing

Cons:

·      Weather, cold environment

·      Hard to implement any other business models because of the business style, practically imposed in Russia

·      Bribing and bureaucracy

·      Hard to achieve a high level of trust

·      Crime level is relatively high

Saudi Arabia
Saudi Arabia doesn’t seem to be the most attractive place for Western expatriates: cultural differences are too high and females can’t attend any occupation there. However, salaries remain stably high and the government organizes special familiy support programs for expatriates: schools for children, clubs for women, relocation and free Arabic language lessons.[xxvii]

Pros:

·      Country provides only working, educational and family visas, so level of illegal immigration is sufficiently low

·      20% of citizens in SA are foreigners, 5% are expatriates

·      Most popular occupations: pilots, engineers, oil specialists

·      Full medical insurance for the family and car supplied by the government

·      Crime level is low

Cons:

·      If the expatriate has an Israel visa – he will not be able to pass the SA border

·      Working week is 6 days, Friday is day-off

·      New politics of replacing expatriates for highly educated local citizens

·      Religious differences

AN APPLICATION TO REAL LIFE: Two examples of the Hapag-Lloyd AG (based on interviews)
The Hapag-Lloyd AG is a multinational enterprise in the container shipping business headquartered in Hamburg, Germany. In 112 countries it has offices with all in all around 7.000 employees.

German going to Singapore
The 25 year-old German Sarah did a bachelor degree in business administration in Hamburg, Germany, while working simultaneously in the company Hapag-Lloyd AG and stayed after graduation for another two years as a full time employee.

She first started thinking about going abroad after graduation but there was no suitable vacancy and she didn’t quite feel ready at the time. Two years later she found an interesting job posting for Singapore, which matched her profile very well. Due to the fact that she had been there as a tourist before, she also knew that she could imagine to live there and the cultural shock which can occur wouldn’t be too intense. She applied for the position, which was limited to two years.

Sarah received a lot of support from the Corporate Human Resource Department. They put her into contact with other expatriates, helped her with all information needed on housing, relocation, visa and tax questions. The company also rented a short-term flat in Singapore for Sarah to cover for the time she needed to find an own flat. There, the company also helped a lot and employed a broker, who was dealing with the flat hunt for Sarah. But Sarah did not only receive a lot of support in Asia, also when dealing in Germany with her old flat and moving of furniture, the company covered the expenses and helped her, in order to transfer her as quickly as possible to Singapore.

Sarah decided to apply for that position even though it wasn’t a career advancement in terms of position.What mattered more for her were the intercultural experiences she was sure to experience during her stay and the intercultural abilities she would gain there. Additionally, she thought that it would be an advantage for future applications to have worked in a foreign country.

In her opinion, it is very important to inform oneself in the best way possible before deciding for an immense change like going abroad to work. People tend to think that it is mostly fun but frequently forget, that one also has to work there and often it can include more work than in the home country due to different laws or standards. One should also consider that some places are rather far away from the home country, where maybe the family and friends stay. It might not be possible to travel home often and also communication can be difficult due to the different time zones.[xxviii]

Chilean going to Germany
The 28 year-old Chilean Diego did a two-year apprenticeship as a Shipping Clerk at Hapag-Lloyd Chile AG Mar. Ltda in Santiago de Chile, Chile. Afterwards he worked for another three years in the company.

He always considered travelling to be part of his life due to his father’s job, which didn’t allow the family to live for more than 4-5 years in one country. After having stayed for quite an amount of time in Chile again, he took the opportunity which presented itself in the form of a vacancy in Hamburg fitting very well to his profile. Diego had lived in Berlin as a child, therefore he had basic knowledge of the German language and also culture and knew that he could think of living there.

Diego didn’t only take the job because he wanted to move places again but also because it was a career advancement for him. He didn’t only earn more but also acted as a supervisor for other employees. This, he thought, would come in very handy when applying for the next job.

The company supported Diego with relocation costs, finding a new apartment in Hamburg and also with a sum of money to buy new furniture and other necessary things in Hamburg because shipping the items from Chile to Hamburg would be rather costly.

He would’ve liked to know beforehand that the flat hunt is very time consuming and also that the cost of living is higher than in his home country. Nevertheless, he thinks you should find and enjoy the things that stand out positively against the background of your home country. He recommends trying to establish a routine with things known to you like sports or cooking, so it will be easier to maintain an open-mined attitude and it will be easier to accept the new culture.

Now, Diego has already worked for two years in Hamburg and is again searching for new opportunities. He targets a position in Asia now.[xxix]