Measuring expatriate return on investment in global firms: industry report for participating firms

McNulty, Yvonne (2007) Measuring expatriate return on investment in global firms: industry report for participating firms. Report. Monash University, Melbourne, VIC, Australia.

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Getting the right people with the right skills into the right location has always been a cornerstone of good business performance. The mobility of employees, both domestically and internationally, is increasing to meet these critical needs. Having expatriates is thus becoming increasingly important for many firms, given the recent rise in the internationalization of markets, competition and technology. In one sense, having expatriates is often simply a cost of doing business if firms wish to compete globally, yet expatriation represents the single most expensive per-person investment a firm can make in its people.

Yet despite the increasing costs of expatriates, and reports that firms are attempting to reduce international assignment expenses, many continue to use long-term assignments even when cost-effective alternatives are available. Indeed, a recent report by GMAC (2005) indicates that firms are substantially increasing the size of their expatriate population. However, managers in global firms still have difficulty determining what constitutes an acceptable return on investment (ROI) from expatriates given the substantial investment required. The challenge appears to be in linking the purpose of an international assignment to a firm’s overall global strategy: managers must know the intent in order to track the costs and benefits, but to do so they must fundamentally change how they plan and manage their mobility programs. The study upon which this report is based examines expatriate ROI practices in 50 global firms across 18 industries, with headquarters in six world regions. This industry report provides, possibly for the first time, statistical data to explain the challenges associated with defining and measuring expatriate ROI in global firms. The findings focus on the long-term, strategic intentions for using expatriates, and the variables that impact rates of return. The report also provides evidence to explain why the ability to measure expatriate ROI is so difficult for global firms, and identifies the changes that must be made before managers can implement practices that will help them measure expatriate ROI more effectively.

The report commences with a brief overview of the methodology, including a profile of the participating firms and data analysis techniques. The findings are then presented, concluding with a discussion of best practices. A summary of the major findings, references, and notes about the researcher conclude the report.

Item ID: 14951
Item Type: Report (Report)
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January 2007 report

Date Deposited: 23 Dec 2010 04:42
FoR Codes: 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1503 Business and Management > 150308 International Business @ 100%
SEO Codes: 97 EXPANDING KNOWLEDGE > 970115 Expanding Knowledge in Commerce, Management, Tourism and Services @ 100%
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