Local Talent Crunch? The Expatriate Solution
There is an opportunity for the HR community to lobby to simplify immigration processes and make movement of people into India more seamless
Paul O'Malley, Regional Leader IPS for Asia Pacific, Mercer talks to People Matters on globalization of talent pools and its opportunities for growing Indian businesses
What challenges face Indian companies when looking at global expansion?
Most challenges are common to all companies regardless of their country of origin, and most significant are those related to cultural differences that become evident when expanding operations outside the home country. These cultural differences are related to the way things get done, how people are managed and how problems are solved.
Talent pool is global today. How do you see the movement of people into India for work opportunities?
India has many exciting opportunities to offer to foreign talent pool. You have a growing economy that is facing a talent crunch and offers exciting growth and learning, and there is still a slowdown situation in majority of countries in the West. So, there is obviously a great opportunity to utilize talent from the West in India. The challenge is that of cultural and people integration. For example, for an American to work and succeed in the Indian environment is much tougher than, say, for a Mexican or a South European, and the reason is that similarities or differences in their culture which plays a very important role in adapting and succeeding in a given country. The Indian IT industry is a great example of how employees across the globe can be utilized in the form of a collective global talent pool. The administrative challenges involved in bringing expatriates to India are still high. There is an opportunity for the HR community to lobby to simplify immigration processes and make people movement into India more seamless.
What are the trends in Indian companies bringing in expatriates?
What I have seen in the last few years is that sophisticated expatriate packages are being used on a more selective basis. The reason is a change in the demand-supply equation. India today has access to people in other countries who cannot find job opportunities in their home country and hence available to work globally. These ‘global nomads’
are open to global movement following career opportunities.
From the demand side, companies are segmenting expatriates between business critical groups and general expatriate hiring. It all drills down to why you are bringing the person or group onboard as expatriates and what will be the return on investment to your business. Employees with scarce and sought after skills will have a customized expatriate package based on individual situation and needs so that it is attractive for the expatriate to accept the offer. Employers in India need to research where the talent pools are and source talent from those locations. For example IT companies eyeing opportunities to currently recruit from Europe at the graduate level, is likely adopt a more localized approach where people are paid at local salary levels and then provided with a few benefits like flight tickets with a defined regularity, accommodation for the first few weeks and some allowances on top of the local salary.
What are the issues that expatriate face? How can companies maximize the success of bringing in expatriates?
One of the main reasons why expatriate assignments fail is the lack of integration of the families to the new country. The children may face problems in accessing schooling and adapting to new education systems and the spouse might feel alienated if he or she does not get social and employment support.
Another issue is healthcare, and companies need to be sensitive and provide extended healthcare for expatriate and families. There are also smaller benefits like providing transportation, driver, domestic help etc. that can make life more comfortable. Finally, support on taxation implications of the expatriate assignment is also very important as it can affect the take home pay of the employee. Normally countries have a generic approach to taxation wherein people only pay taxes in a given country if he or she has lived in that country for, say, more than 180 days in a financial year. This is not true in the US where citizens are taxed in the US on their global income regardless of where they live.