Who needs expats?

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The case for shuffling staff around was looking stretched even before the pandemic

 


IF CHIEF EXECUTIVES are the monarchs of the corporate world, the cadre of well-paid staff they deploy from head office to oversee operations across the planet are their ambassadors. In the golden era of globalisation, sending an expatriate Western executive to a distant emerging market signalled the place was being taken seriously. That model was starting to feel out of date before covid-19 made foreign travel a misery. As Zoom and remote work have become the norm, is shuffling emissaries across the world even worth it anymore?

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Some 280m people live in a country other than their own, often because of their job. Many toil on building sites in the Gulf or mind brats in Manhattan. High-flying expats are the most cosseted of these migrants. Their exalted status, should it need to be pinned down, is secured by snagging a housing allowance, school fees for the brood, annual flights home and a healthy salary bump. Some business folk have turned into perennial business wanderlusters, making a career out of flitting from Mumbai to Abu Dhabi to Lagos.

The business case for expats had started to look stretched in recent years. Moving staff to the ends of the Earth made sense when it was tricky to find globally minded (and English-speaking) employees over there. But globalisation has worked its magic. If an American investment bank in Shanghai wants a bright number-cruncher with a top-tier MBA, it has plenty of local candidates to choose from. They will cost a fraction of what it would take to move a transplant—and already speak the language.

Getting head-office staff to up sticks for Jakarta has been getting harder, too. In decades past a compliant “trailing spouse” took on the responsibility of keeping a household running in far-flung places. Now she (as is still more often the case) is likelier to quibble about the impact on her own career. A survey carried out by the Boston Consulting Group found 57% of workers globally were willing to move to a foreign country for work in 2018, down from 64% four years earlier.

The figure fell even further, to 50%, once the pandemic hit. Many expat haunts, such as Hong Kong, Singapore and Dubai, went through looser lockdowns than America or Europe. But that often meant throttling foreign travel or imposing weeks-long quarantines for returnees. The prospect of a trip to see family for Christmas, or of a weekend getaway to Bali, is part of what makes living in Singapore attractive. Once that goes the trade-off between career and personal life starts looking uncomfortably different.

Many foreigners who had once been given royal treatment felt treated like second-class citizens. Some hesitated to leave their country of assignment for fear of not being able to get back in. Others had to wait longer than locals for vaccines. Clubby communities no longer made space for outsiders. As Hong Kong, once the spiritual home of expatdom, has fallen into China’s ambit, Western imports have started to look like a vestige of the colonial past.

This speaks to a broader economic shift that has dented the need for expats. Once upon a time they used to be the ones able to facilitate access to foreign capital and know-how, often from Western sources. Now money is abundant and the most exciting business opportunities are emerging markets doing business with other emerging markets, particularly in Asia. You don’t need a Westerner to show you how to do that. The world they understand is no longer as relevant.

Expats are not just expensive perk-baggers (as this stand-in Bartleby, a foreign correspondent in his day job, can attest). Companies have cultures and processes which are forged at headquarters, and which envoys can disseminate. They in turn will imbibe new ways of doing things that can be transferred back to other bits of the business. Having an outsider somewhere in the organisational chart of a distant subsidiary can provide reassurance no funny business is taking place there. However, penny-pinching bosses might now consider whether regular Zoom calls will not achieve much the same thing for a fraction of the cost—not least if employees the world over are going to be working from home at times anyway.

The surest way to signal commitment to a market these days is not by importing top talent but by nurturing it locally. Many companies that proudly deployed expats now boast of appointing local bosses to head up each country. That isn’t a reversal of globalisation so much as an affirmation of it.

This article appeared in the Business section of the print edition under the headline “End of the travelling circus”

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