Although the growth in expatriate assignments slowed significantly during 2007 and 2008, economic growth in newly industrialised countries picked up in 2009. With increasing GDP-figures a growing number of expatriates are sought to fill managerial positions in developing economies. Despite the increased demand for expatriate employment, expatriate failure rates remain high and costly. Overall, financial costs of failed expatriate assignments have been estimated between USD 2 and 2.5 billion in recent research.

Personal effects include reduced self-esteem, ego and reputation, which may affect careers. It has also been observed that employees who fail in an overseas assignment have more difficulty in adjusting to corporate structures when back at home.

Not surprisingly, expatriate selection practices have been critically reviewed during the last few decades. Where leadership skills, technical competence and domestic track record were viewed as the prime selection criteria until the 1990s, senior executives in 2005 considered the ability to control emotions as more important than technical skills.

Traditional selection criteria are now considered additional to softer selection criteria. The observation that technical training and current cross-cultural training programmes do not seem to address expatriate failure only complicates matters. During the 1980s and 1990s it became obvious that expatriate maladjustment was a main cause of ineffective expatriate performance and premature returns.  Which begs the question, what additional skills and competencies make expatriation a success?

Family matters
Firstly, several selection criteria are not related to individual skills but are of utmost relevance. Family suitability, opportunities for spouse employment, possible disruptions of the children’s education, for instance, will affect expatriate job satisfaction and the intent to complete the assignment. The Global Relocation Trends 2005 survey report revealed that, for 67 percent of respondents, family concerns were the dominant cause of premature return and that spouse/partner dissatisfaction was the number one reason for assignment failure.

Adjusting to a new culture
Secondly, soft skills such as relation skills affect expatriate success significantly.  In a recent study, being agreeable or non-judgemental were considered to be an important predictor of both adjustment and performance. Further, cross-cultural communication skills and personal characteristics in dealing with host country nationals have been found key variables. 

The ability of expatriates to relate to host country nationals has been found to support both interaction among expatriate and host country nationals and expatriate effectiveness. Relation skills are also important when adjusting to new cultures. A meta-analytic study of 8,474 expatriates in 66 studies concluded that cultural adjustment is “perhaps the strongest determinant of disengagement and withdrawal decisions (Bhaskar-Shrinivas et al., 2005, p.273).” A clear relationship between levels of adjustment and overall performance was established.

The benefits of cross-cultural training
Lastly, group processes on the work floor play a role that was previously unaccounted for. Individuals recognise that memberships of various groups get incorporated into the concept of self. Therefore, these social identifications have important consequences for behaviour. Group categorisation was found to be negatively related to the provision of social support by host country nationals in recent research. Interaction between groups has a positive effect on group and work effectiveness, however, expatriates’ ethnocentric beliefs have been found to emphasise group differences resulting in various negative consequences. These negative consequences are related to intergroup behaviour and fall back on social identity and categorisation processes.

Therefore, appropriate expatriate selection processes should emphasise non-ethnocentric traits and soft skills in expatriates next to additional harder selection criteria. A ‘misfit’ likely will affect the expatriate’s adjustment process as well as the psychological wellbeing of the expatriate.

Cross-cultural training could provide potential expatriates access to the evaluations of their strengths and weaknesses in acculturation-related skills in order to focus training on skills that need development. However, not all skills and traits are ‘trainable.’  Appropriate expatriate selection procedures focusing on the right balance of soft/hard skills and non–ethnocentric traits may prevent future expatriate failure. The potential valuable input in cross-cultural training of the host country employees in identifying specific work interaction demands could assist expatriates in making the required transition. Expatriates do not act in a vacuum; the interaction in a social web strongly impacts on their adjustment and wellbeing. Appropriate attention to strategies that enhance positive interaction at the workplace therefore seems desirable.

Dr. B.J.L. van den Anker received his PhD in Business and Management from the International Graduate School of Business of the University of South Australia. Dr. van den Anker hails from the Netherlands and has extensive experience living and working in SE Asia. His (I)HRM and cross-cultural consultancy assignments focus primarily on western-Asian contexts. He can be contacted at ben@vdanker.com.