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Overseas jobs can lead to employee turnover, study says
A service of A.M. Costa Rica

Overseas jobs can lead
to employee turnover, study says

By the University of Iowa news service

Workers for big multinational companies who spend time on a foreign assignment have a higher than normal turnover rate when they come back home, and a new study suggests that’s because they don’t feel fully appreciated for their global experience.

“Home may not have changed, but it is not the same place because repatriates themselves have changed after having been expatriates,” says Maria Kraimer, a professor of management and organizations in the University of Iowa’s Tippie College of Business who headed the research team. “Those who take international assignments often feel fundamentally different after returning, yet they may not see their development reflected in their treatment by their firms.”

That tension goes beyond what could be called culture shock, Ms. Kraimer says, and leads repatriates to leave at a higher rate. She notes one recent study that shows 38 percent of repatriated employees voluntarily quit their firm within the first year of returning to their home country. The overall turnover rate is only 13 percent, and this difference considerably increases a firm’s costs for recruiting and training the kind of mid- and high-level employees who are most likely to receive international assignments.

For the study, Ms. Kraimer and her team of researchers collected data from 112 repatriated employees through surveys that were emailed to them shortly after their return home, and then from a follow-up survey sent one year later. The employees worked for medium to large multinational corporations based in the United States, United Kingdom, Germany, and Australia, and were involved in such sectors as manufacturing, accounting, technology, finance, and consumer food and beverage.

Of the 90 subjects who responded to both surveys, 17 of them had left their former employer for a new job, for a 19 percent turnover rate.
    The researchers found that living and working overseas in a new and different culture changes employees in fundamental ways, to the point where many of them create whole new identities for themselves. This new identity has a significant international component and incorporates new meaning and aspirations in terms of how they approach their careers, they said.

Ms. Kraimer says repatriates believe this new identity makes them a more valuable employee than they were before they went overseas.

However, the repatriates don’t often feel their firms recognize that value, especially when they compare themselves to their co-workers with no international experience.

“When a repatriate perceives her job has less responsibility, respect, pay, or opportunities than the jobs of colleagues without global experience, the repatriate may believe that the organization does not view her international experience and employee identity in the same way that she does,” Ms. Kraimer says. That perceived lack of respect often leads them to find new jobs.

Ms. Kraimer says firms can take steps to reduce repatriate turnover. For instance, firms can use repatriates to help train other employees about to go on their first international assignment, or involve them more heavily to develop international strategy, both of which draw on the employee’s global experience and shows the organization values that experience. Firms could also more closely manage expatriates while they’re on international assignments, linking them with other divisions and maintaining close communications to reinforce their identity with the organization.

Ms. Kraimer’s paper, “No place like home? An identity strain perspective on repatriate turnover,” was published in the Academy of Management Journal. It was co-authored by Margaret Shaffer and Hong Ren of the University of Wisconsin-Milwaukee and David Harrison of the University of Texas.

—Aug. 3, 2012

Coast Rica improves global competitiveness rank

For Costa Rica Business

The most recent Global Competitiveness Report ranks Costa Rica number 57 out of 144 countries.

This position places the country second in Central America after Panamá which ranked 40.  Guatemala followed at 83, Honduras at 90, El Salvador at 101 and finally Nicaragua at 108.

Costa Rica rose four places from last year.  The report cites a lower budget deficit, a decrease in government debt, well-functioning public institutions and an increase in information and communication technology as reasons for the better position.

However, according to the World Economic Forum, the government spends wastefully, politicians are untrustworthy, infrastructure is poor, business startup procedures are too lengthy and there is little availability of business financing.

Jaime Molina, the Unión Costarricense de Cámaras y Asociaciones del Sector Empresarial Privado president, notes that the country has improved worldwide from position 66 to 57 in the index, but called for a law of contingency power that would allow more private  renewable energy and would avoid the use of the backup heat for discussion and adoption.

The union of chambers has pointed out that it is urgent to work and provide long-term solutions to promote the development of energy, infrastructure, security and reduce excessive formalities.

Also, the group is working with public officials to eliminate unnecessary procedures and shorten the time taken to analyze the procedures for the approval of credits.

In regards to gaining the population's respect, the union pointed out that it is imperative to define rules and establish clear and concise controls, in order to promote a favorable climate for investment and employment generation.

Molina praised the work of entrepreneurs who are working to develop the country.  Their success is proven by the several indicators measured by the economic forum that show progress, notably those relating to innovation and the use of new technologies, he said.

The United States fell two positions to seventh.  The decline was linked to what the report called unaddressed weaknesses such as a distrust in politicians, lack of confidence in the governments ability to not interfere in private sectors, and wasteful spending by the government.  Also, the United States macroeconomy is unstable, according to the index.

On the other hand, U.S. companies are still considered to be highly sophisticated and innovative, labor markets are flexible and the scale opportunities afforded by the size of the domestic economy which is the largest in the world make the country still competitive, the report said. 

Switzerland continues to hold first place scoring hight marks in all categories due to the countries strengths in innovation, efficiency in the labor market, and the sophistication of its business section. Switzerland’s scientific research institutions are also regarded as among the world’s best.

It is followed by Singapore, Finland, Sweden and the Netherlands to finish the top five.

Despite the many positives of each country, the overall world economy is weak. Global growth remains historically low for the second year in a row and is expected to slow even more in the upcoming year. Still, emerging and developing countries continue to grow faster than advanced economies, steadily closing the income gap, said the World Economic Forum.

—Sept. 10, 2012

Copyrighted by Consultantes Río Colorado S.A. 2010, a Costa Rican publishing company.
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