So when discovered that the Economist Intelligence Unit released a special report on expatriation, I had to check it out. Here is the executive summary of this excellent report:

If globalisation is seen as inexorable then companies, to a greater or lesser extent, will need a globally mobile workforce tasked with administering their far-flung but rapidly growing operations. With demand stagnating in Western markets, the pressure to expand abroad in the search for revenue growth is intensifying, especially in emerging markets where the operating environment can be particularly challenging.

But getting the right people in the right place for the right length of time to execute that international strategy is no simple matter. It involves an array of considerations, such as the type of assignment and its remuneration; investment in staffing and places to work; and numerous professional, cultural and family pressures that can overwhelm the hardiest executives.

The expatriate experience provides a valuable insight into globalisation’s big trends, while touching many of the business operational dilemmas that companies encounter when investing abroad. Some of the key findings of this report are as follows:

Recession holds back international assignments. The recession years have created tension in the pursuit of companies’ global objectives. Although emerging markets continue to be seen as the engine for future corporate growth, and therefore meriting substantial investment, short-term financial imperatives have necessitated postponing the transfer of expensive expertise to these regions. Thus, although our survey indicates that 39% of companies plan to increase their expatriate staff over the next five years, only 13% have done so over the last two years.

Asia is the most likely emerging market destination for expatriates. Companies are far more likely to send expatriate staff to China, India and other Asian countries than to any other emerging market region. The Middle East, Russia and Eastern Europe combined are the next most common destinations. However, companies are also increasingly selecting managers from emerging markets to run other regions.

The traditional expat model is alive and well… The movement of expatriates from North America and Western Europe to the emerging markets remains strong. Many are sent as country or regional managers to launch a local operation and to train staff until they are sufficiently proficient to take over the reins themselves. More than one-half of such senior expatriate personnel are sent to a particular destination for a period of between two and five years. However, a significant proportion of expatriates are more junior, sent to fill skills gaps, particularly in emerging markets. There is also a perceived rise in short-term and “commuter” assignments.

…but the full expat package is offered less often. High demand to acquire career-propelling overseas experience has meant that companies feel empowered to offer local salaries plus allowances, rather than the full expat package, to more junior assignees. In other words, the need to attract potential expatriates with extremely attractive financial arrangements has diminished.

A spell in a major emerging market boosts careers. Although most multinational companies will not explicitly state that foreign assignments are a necessary step up the career ladder, employees believe this to be the case. However, it is only experience in “major” markets that is seen to make a difference. Whereas only about one-third believe that an assignment in a “minor” market aids career progression, 80% believe that an assignment in a “major emerging” market does so. The heightened career expectations of returning expatriates present a management dilemma, particularly in a depressed economic environment where fewer senior opportunities might be available.

Cultural and family pressures present the greatest difficulties. An inability to understand local culture and cultural or national conflicts among staff is seen as one of the greatest difficulties for expatriate managers. Cultural sensitivity is thus regarded by some margin as the most important attribute for an individual being sent abroad, and companies admit that it is not easy to find the right type of person in their ranks. More than one-half of expatriates do not relish the prospect of learning another language, suggesting a possible lack of commitment to their role.

The spouse’s needs have become more important than ever. Perhaps the greatest obstacle to the success of an expatriate placement lies with the expat’s spouse or children, who may resent the sudden separation from their own career, social life, schooling and routine. The resulting strain on family relationships can often bring assignments to a premature end.

There is major tension between corporate HQ and local expatriate management. Around three in five expatriates believe that their corporate HQ does not sufficiently grasp the nature of the local business environment. One in three complains of excessive interference, and a similar proportion maintains that the corporate centre has excessive revenue expectations from the local market.

Yet demand for an expatriate posting is as strong as ever. The overwhelming majority of surveyed executives would still welcome an expatriate posting. However, given the stresses of expatriate life – cultural conflicts and misunderstandings, and insufficient empathy from bosses back home – those who already have experience abroad are less interested in a new assignment than those yet to have a foreign posting on their résumé.

While this executive summary already shed a good light on the present status and challenges facing expatriation, I strongly advise you to download, and read the 20 page original: Up or Out: Next moves for the modern expatriate.

It is succinct, clear, and cover most if not all the latest expatriation trends out there. A must read for all expats and wanna-be expats IMHO.

Internationalisation has attacked even this bastion of privileges, and it now is difficult outline what defines being an expatriates clearly; Most consider a foreign national working in an exotic country to be an expatriate; the reality is more complex. Expatriates now are splintered across different group or coterie, each quite different from the previous one. After sitting down with many expats, I classed them in the following groups:

• Old school expatriates, who are posted in a country for three to five years with their family. They have two contracts, the main one with the headquarters, a second one locally for work permit purposes; their main contract usually comprise a return clause, even though most will be posted to a new country instead of coming back “home”;
• High potentials sent abroad to develop their talent and leadership. They usually have a return clause in their contract, and do come home after a few years;
• Young graduates who move to the country they wish to start their career in – their contracts are local, but they usually are quite generous by local standard to represent their skills and international background;
• Technical experts without manager responsibilities who are sent on emergency mission; they usually work on critical projects and/or locations, and are very well compensated for their skills and flexibility;
• Permanent Residents, who decided to stay put in their new country. They usually switch to a local contract after a few years, and end up setting up their own company or consultancy so as to stay where their heart belong;
• Project consultant who are single or seniors with grown up kids and are sent abroad on mission of a few months;
• Commuters who are based in a country, and travel regionally on a regular basis;
• Miles virtuoso who travel the world all year round and rarely stay put more than two weeks;

This segmentation is of course non-exhaustive and is a work in progress.

I’d love to hear your feed-backs and personal coterie-related-thoughts !