The Expat Kaleidoscope
Expat demographics is important for any global HRM strategy, yet few firms understand this space and put this knowledge to action.
There are a lot of adjacent, expat related posts - expat experience, assignment failures, dual career couples, adjustment curves, repatriation issues, cost of living, poaching, double taxation to name a few - but that aside, how should we even talk about expats?
Below we'll combine a summary of the literature, big firm advice, and our own insights.
From an strategic HRM perspective, an expat is a skilled professional living in a country other than that of their citizenship, moving or staying primarily for career reasons. Short term business travelers, commuters, migrants, tourists, sojourners, retirees, while there may be some edge case overlap with "expats" as defined here, they will not be under consideration for our purposes.
Traditional MNC Expats
Traditionally expats within an MNC context are called Assigned Expats (AEs) or sometimes International Assignees (IA). The assignment can last any duration beyond short term business travel. The main three categories of AEs are PCNs, HCNs, and TCNs.
PCN - Parent Country Nationals. Someone from headquarters sent abroad for typical mobility reasons, e.g. expansion, project requirements, client support, new subsidiary, leadership rotation, talent sponsorhip reasons, and hiring purposes.
HCN - Host Country Nationals. Sometimes called ECHO (Expat of Host Country Origin). In certain MNC strategies these roles are critical liasons between an international market and the HQ or regional HQ. They are often strategically brought to HQ or RHQ as "Inpatriates" or "Inpats" for training and development before returning to the host country.
TCN - Third Country Nationals. Nationals of a country different from but often culturally related to the host market. Related in concept to an MNC expat type called FELOs (Foreign Executives in Local Organizations) who are experienced exectuvies brought in typically to spearhead an operation and manage HCNs in the host country.
There is wide range and long history of strategic uses of PCNs, HCN, and TCNs at MNCs, which is subject matter for another post.
There are a few other common MNC expat types that help make up the expat kaleidoscope found in, say, big OECD markets:
LOPAT - Localized expatriates. Whether due to assignment end, poaching (one of the top reasons for assignment failure), absorption by client, or personal or family decisions, this is an expat who decides to stay in the host country after an assignment. They are related to self-initiated expats, discussed below.
PTs - Permanent Transferees. These are movers for an indefinitely long duration without repatriation agreements.
Flexpats / Virtual Expat / Global Domestics - These are "intermittent" expats who are involved in host country activity but work remotely or visit sporadically. This type of expat is the subject of another blog post given the amount of conflict and Seagull management often involved, not to mention opportunity cost of sometimes better global HRM strategies, yet this category is likely to be more leveraged post COVID-19.
Self-Initiated Expats
SIEs are a critical class of talent for strategic HRM that's often overlooked in global talent management. By some estimates in 2020, SIEs make up around half of all expats, or just as many AEs as noted above. These are talented professionals and researchers who have decided to live and work abroad, where their career is a primary motivating factor.
SIEs are known for being well-educated, independent, and strong self-learners. They usually moved by chance and opportunism rather than long term planning, e.g. assignment transitions, new professional contacts, experience studying abroad, draw of social network. They are also more integrated into the host country culture, having developed social ties and professional networks, unlike a typical MNC AE arriving at start of an assignment. For these reasons, and often if they are the same nationality as the MNC home country, SIEs can be a strategic, lower cost and lower risk alternative to many of the traditional MNC expat categories.
SIEs, like AEs come in shapes and sizes:
Localized Professionals - Overlapping with LOPATs above, they remain after an assignment ends for the same possible reasons as LOPATs, yet they have a greater attachment or longer term commitment to the particular country they are in, as opposed to the next category.
Global Professionals - Also overlapping with LOPATs, these are globally minded professionals who have performed many international assignments, who thus have strong international experience and usually less resistance to moving to new markets for an employer.
Job Seekers - This class of SIEs are skilled professional or researchers who have moved to a country to seek, typically, a job in the skills shortage occupations maintained by the country's immigration authorities. They are more experienced than the new graduate job seekers mentioned below.
Expatpreneurs - With the launch of entrepreneur friendly startup visas in most OECD countries, as well as with the rise of many global accelerator and incubator programs, there is a growing class of SIE entrepreneurial talent moving to countries to launch startups, or moving their early stage companies from one country to another.
Partner in Dual Career Couple - The partners of AEs or other SIEs are often career-driven professionals as well, choosing to move with their partner to a new country and thus available as SIEs on the job market.
Moreso than AEs who have less say over their destination, SIEs are highly motivated by the attractiveness, quality of life, culture, reputation, and opportunities of the host country. The work of policy makers, institutions, IR groups, FDI, NGOs, and others in a given country can make a big difference in attracting and retaining SIE talent.
Finally, most SIEs return home or move countries eventually. Like AEs, they are important drivers of brain circulation, the type of global mobility that benefits all, and are typically the main target of a country's diaspora management efforts.
Overseas Experience Expats
Rounding out our expat segments, these are young opportunists early in their career, who may have recently completed studies internationally, have strong language skills, and are interested in gaining international work experience, more motivated to gain experience than compensation. Most OECD nations have visa types supporting this demographic such as recent graduate visas for job searches or working holiday visas. They are mentioned here as a potential source of high quality entry level talent.
This concludes a 360 twist of the expat kaleidoscope. Understanding expats is important for firms in designing an effective global HRM strategy, both MNCs and those exploring and hiring in international markets. Worldly is your solution and partner for implementing these global HRM strategies. We hope this post has also made it clear that expat demographics are key drivers in global mobility, brain circulation, and policy setting at national and international levels. With the concept of boundaryless careeers and new generational interest in international careers, highly skilled expats will be creating our future.
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