An expatriate (often shortened to expat) is a person temporarily or permanently residing, as an immigrant, in a country other than that of their citizenship. The word comes from the Latin terms ex ("out of") and patria ("country, fatherland").
Expatriation may also mean exile or denaturalization or renunciation of allegiance. The U.S. Expatriation Act of 1868 said in its preamble, 'the right of expatriation is a natural and inherent right of all people, indispensable to the enjoyment of the rights of life, liberty and the pursuit of happiness.' Early Nazi Germany deprived many opponents of their citizenship, such as Albert Einstein, Oskar Maria Graf, Willy Brandt and Thomas Mann, often expatriating entire families.
Trends in expatriation
In the 19th and early 20th centuries, many Americans, numbering perhaps in the thousands, were drawn to European cultural centers, especially Munich and Paris. The author Henry James, for instance, adopted England as his home, while Ernest Hemingway lived in Paris.
Global markets at the end of the 20th century created a different type of expatriate where commuter and short-term assignments are becoming more common and often used by organizations to supplement traditional expatriation.
Where the initiative for expatriation does not come from employers but originates from individuals, management researchers describe this as self-initiated expatriation (SIE). There is also the different phenomenon of expatriate executives who are appointed by local companies in distant countries rather than being posted there by foreign multinational corporations. Some local companies in emerging markets, for example, have recently hired a number of Western managers.
The continuing shift in expatriates has often been difficult to measure and available figures often include economic migrants. According to UN statistics, more than 232 million people, that is 3.2% of the world population, live outside of their home country in 2013.
In terms of influx of expatriates, among the most popular expatriate destinations are for several years Germany, Belgium, France, Spain and Russia in Europe, Canada and the USA in North America, the UAE, Kuwait and Oman, Singapore and Hong Kong in Asia, Australia and New Zealand, as well as South Africa which is the most popular expat destination in Africa.
In Dubai the population is predominantly composed of foreign passport holders, primarily expatriates from countries such as India, Pakistan, Bangladesh, Philippines and from the Western world, with only 20% of the population made up of citizens. Singapore has a large number of expatriates as well, and almost 40% of the inhabitants of this metropolitan city are foreign-born workers, professionals or students.
Expatriates generally qualify for and enjoy access to a wide range of financial advantages, ranging from a wide variety of financial products, investing offshore or tax benefits either in their home country or the place of residence.
Controversy sometimes arises over why some people, particularly Westerners, are called "expatriates" while others are termed "immigrants".
Human resource management of expatriate employees
The increase in global mobility requires additional attention from human resource departments. The salary of internationally assigned personnel often consists of standard salary and monetary benefits such as cost of living and/or hardship/Quality-of-Living allowances supported by non-monetary incentives such as health care, education expenses, and housing. Some companies will completely cover the cost of expatriate children's education, even at relatively expensive international schools, while other, usually smaller companies, encourage families to find local schooling options. There are three approaches used by organizations to decide what benefits to give their expat. These approaches are destination based, balance sheet approach, or the international headquarters approach.
Given that one of the primary reasons for early repatriation is attributed to a spouse or other family member's inability to adjust, international corporations often have a company-wide policy and coaching system that includes spouses at an earlier stage in the decision-making process.
Research has shown that while the maladjustment of an expatriate spouse can have negative consequences for the expatriate the spouse can also function as a positive resource supporting the expatriate (Lauring & Selmer, 2010).
Advantages of using expatriate employees
There are several advantages of using expatriate employees to staff international company subsidiaries. Advantages include permitting closer control and coordination of international subsidiaries and providing a broader global perspective. Employers may also want to exercise greater corporate control upon the management and daily functions of subsidiary employees, so expatriates provide the extra supervision. Furthermore, expatriates may provide better expertise in other foreign markets of existing subsidiaries. Expats have increased understanding of the companies global operations and can help the local employees identify and meet company objectives. Expatriates also play a critical role in the training and development of new management. Essentially, expatriates serve as the means through which strategic control of the subsidiary is accomplished.
Disadvantages of using expatriate employees
Disadvantages of employing an expatriate include high transfer costs, the possibility of encountering local government restrictions, and possibly creating a problem of adaptability to foreign environments. Additionally, other problems associated with using expatriates include the inability to make the international adjustment, and the sheer cost of relocating an employee and his entire family abroad. The cost of training, compensating, and relocating an expatriate along with the expat's family is very high. In addition to increased salary, the cost of living and education for the expat's children in pricy international schools is also covered.
Perhaps the greatest disadvantage of using expatriates is the possibility of expatriate failure. Expatriate failure occurs when an expatriate returns to their home country prior to finishing their international assignment, or if the expatriate resigns from their job before completing the assignment. Despite adjustment training, there is no guarantee how well an expatriate will adapt and socialize in the new country. In fact, one study found that 69% of multinational corporation executives indicated an expatriate failure rate of 20 to 40%.
Predictors of Adjustment
The strongest predictor of expatriate adjustment is the partner's ability to adjust. If the partner is not working, he or she often needs more time to adjust to a new environment since their social network mainly remains in the parent country. The partner may have given up their career in order to support the expatriate's move, which may cause problems around their self-worth and identity. Children may lose friends which leads them feel insecure in the new environment and get stressed. After moving, expatriates often face the challenge of a new job and longer working hours. According to the 2012 Global Relocation Trends Survey Report, 88% of spouses or partners resist to relocate. What's more, the most common reasons for assignment refusal are family concerns and the partner's career. One potential family concern may be 'getting out of the loop' with one's family and missing key milestones and events back home.
During the process of selecting and training appropriate expatriates, numerous individual factors related to adjustment have been studied. Personal skills, previously international experience, and family situation are the three most important factors influencing the expatriates' adjustment.
Job and Organizational Factors
An overseas assignment involves getting a new job or role in the organization when the employee moves to a foreign location. One important organizational factor about adjustment is the level of the individual in the organization. It affects the method that expatriate deal with the effect of having a new job. Another organizational factor is the organizational supports the expatriate receives. Furthermore, the assistance from the company is related to job satisfaction levels as well.
Alternative forms of expatriation
In recent years, much effort has been directed at understanding the growing group of self-initiated expatriates - often referred to as SIEs. Being a SIE in general refers to expatriates who are hired individually on a contractual basis and are thus not transferred overseas by a parent organization (Andresen, Bergdolt, & Margenfeld, 2012). In other words, SIEs take jobs in a foreign country, often with no planned time period, and with the legal employment decision made by a new work contract partner (Inkson & Myers, 2003). Hence, SIEs independently cross both country and organizational boundaries to seek work in a new organization which recruits them directly. Selmer and Lauring (2010) define SIEs with regard to three specific characteristics, namely that they had acquired their current job independently (self-initiated), that their current job was a steady position (regular job) and that their nationality was different than that of the host country (expatriate). A corporate interest is driven by SIEs being accessible from the host country and being relatively inexpensive not requiring an expatriate compensation package. Moreover, the pool of headquarter nationals willing to expatriate has been argued to be shrinking mostly due to dual career issues (Tharenou, 2013).
The definition of short-term assignments can vary depending on the job or the industry. However, a typical short term assignment can last anywhere from three months up to a year. These short-term assignments usually do not require the expatriate family to move. These short- term assignments include tasks such as project work, skill/ technology transfer, or problem solving tasks. Short-term assignments also tend to be temporary employment for these expatiates. The parent company also tends to take care of the employee's salary, pension, and aspects of social security as oppose to the subsidiaries.
These types of assignments tend to involve employees that live in one country, but travel to another country for work. These type of workers on average travel between the host and the home country on a weekly or biweekly bases. Theses assignments typical require a worker to spend a majority of the work week in the country of work. Once the work week is finished, these workers tend to return to their home country on the weekend.
International Business Travelers
International business travelers are employees who tend to take a plethora of short international business trips to a variety of locations around the globe. These types of assignments tend to be much more structured then other types of expatirate assignments. However, there is no regular rhythm to international business travel and as a result can place excess stress on the expatriate family. Some common reasons that businesses use international business travelers are for knowledge transfer, negotiations, meetings, conferences, etc. An average international business traveler's trip can vary depending on the company, but they usually last around three weeks.
Flexpatriates and Other Arrangements
Flexpatriate is a term used to describe employees who work at a domestically- based job for a parent company, but who also travel and work at alternative locations. These workers could spend an extended amount of time working at the parent company and then be required to work at a subsidiary.
Virtual work is when a worker engages in company activities with workers in subsidiaries. Virtual work also includes any domestic job with substantial international responsibilities and these assignments do not require an employee to relocate. These jobs do not require excessive travel and allow for employees to work from an office or at home.
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