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5 Tips for Managing Successful Overseas Assignments

• Andy Molinsky
• Melissa Hahn

Stay in constant touch and have a plan for their return.

Sending talented employees overseas can be a promising way to leverage the benefits of a global economy. But expatriate assignments can be extremely expensive: up to three times the cost of a person’s typical annual salary, according to some statistics. And despite the investment, many organizations lack the know-how for optimizing the potential benefits, leaving them disappointed with the results. The unfortunate reality is that even companies providing well-crafted relocation packages (including the all-important cultural training) may not have the talent management mechanisms in place to truly leverage the valuable skills expatriate employees gain during their assignments.

• Andy Molinsky is a professor of Organizational Behavior and International Management at Brandeis University and the author of Global Dexterity , Reach , and Forging Bonds in a Global Workforce . Connect with him on LinkedIn and download his free e-booklet of 7 myths about working effectively across cultures .
• Melissa Hahn teaches intercultural communication at American University’s School of International Service. Her new book, Forging Bonds in a Global Workforce (McGraw Hill), helps global professionals build effective relationships across cultures.

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Enhancing expatriates’ assignments success: the relationships between cultural intelligence, cross-cultural adaptation and performance

• Open access
• Published: 20 July 2020
• Volume 41 , pages 4291–4311, ( 2022 )

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• Ilaria Setti 1 ,
• Valentina Sommovigo   ORCID: orcid.org/0000-0001-9273-5706 1 &
• Piergiorgio Argentero 1  

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Today’s increasingly global marketplace is resulting in more organizations sending employees to work outside their home countries as expatriates. Consequently, identifying factors influencing expatriates’ cross-cultural adjustment at work and performance has become an increasingly important issue for both researchers and firms. Drawing on Kim et al. ( 2008 ), this study examines the critical elements to expatriate success, which are the relationships between cultural intelligence, cross-cultural adjustment at work, and assignment-specific performance. One-hundred and fifty-one expatriates working within the energy sector, who were mainly located in the Middle East completed questionnaires, investigating: cultural intelligence ( Cultural Intelligence Scale ), cross-cultural adjustment ( Expatriate Adjustment Scale ), performance (Expatriate Contextual/Managerial Performance Skills ), cultural distance (Kogut and Singh’ index), length of staying in the host country and international work experience. Findings indicated that the four cultural intelligence components were directly and indirectly (through cross-cultural adjustment at work) associated with performance. The positive relationship between motivational cultural intelligence and cross-cultural adjustment at work was stronger when cultural distance was low, when expatriates were at the beginning of a new international assignment, and when they had lower experience. Organizations can greatly benefit from hiring cross-culturally intelligent expatriates for international assignments, providing their employees with pre-departure training programs aimed at increasing cultural intelligence, and giving them organizational resources and logistical help to support them.

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Introduction

As globalization of trade encourages multinational corporations (MNCs) to operate in different geographic environments (Sambasivan et al. 2013 ), talent mobility has become one of the key channels through which to develop global organizations’ competitive advantages (Tarique and Schuler 2010 ). This requires the presence of a cross-culturally competent workforce that can manage overseas subsidiaries and liaise with foreign affiliates (Froese and Peltokorpi 2011 ). In this context, expatriates are considered as invaluable assets by MNCs (Wu and Ang 2011 ). Consequently, there have been numerous calls in psychology (e.g., Mol et al. 2005 ) for more research aimed at identifying the psychological factors driving expatriates’ cross-cultural adjustment and performance.

In this context, cultural intelligence (CQ) represents an interesting variable since it is a malleable capability which can be developed through cross-cultural experiences (Chao et al. 2017 ) and specific trainings (Leung et al. 2014 ). CQ is defined as “an individual’s competence to function and manage effectively in culturally diverse settings” (Ang and Van Dyne 2008 , p. 3). CQ is conceptualized as a multidimensional construct which includes four main components: metacognitive CQ (i.e., cultural awareness), cognitive CQ (i.e., cultural knowledge), motivational CQ (i.e., motivation and self-efficacy in functioning in diverse cultural settings), and behavioural CQ (i.e., adoption of appropriate behaviours during cross-cultural interactions). Scholars have called for more research on the CQ dimensions (Ang et al. 2011 ) as the four CQ components have been differently associated with specific intercultural effectiveness outcomes (see Rockstuhl and Van Dyne 2018 for a review).

This study responds to this call by analysing the relationships between specific CQ dimensions, cross-cultural adjustment (CCA; i.e., psychological comfort in a foreign country; Black and Gregersen 1999 ) at work and assignment-specific performance. This latter construct, which refers to the ability to accomplish certain assignment specific tasks (e.g., replacement planning; Caligiuri 1997 ), was chosen in this paper as main dependent variable because successfully executing assignment-specific duties is frequently the main constituent of success, which is evaluated by the home office (Earley and Ang 2003 ). Aside from performance, this study focused on work CCA, namely the extent to which expatriates become psychologically comfortable handling assignment duties and meeting performance expectations (Chen et al. 2010 ; Shaffer et al. 2006 ). Work CCA is one of the three dimensions of CCA, together with general (i.e., general living conditions) and interaction (i.e., interactions with locals) components (Black et al. 1991 ). This paper concentrated on work CCA as it is more predictive of performance than the other CCA dimensions (Chew et al. 2019 ).

The role of overall CQ as a meaningful antecedent of overall CCA (e.g., Chen et al. 2014 ; Rockstuhl and Van Dyne 2018 ) and job performance (e.g., Malek and Budhwar 2013 ; Ramalu et al. 2012 ) has been identified, whereas the literature on the role of the four CQ facets in facilitating work CCA is less consistent (e.g., Ott and Michailova 2018a , 2018b ). The literature on the effect of CQ on performance indicates an intricate association between the variables, the relevance of the specific CQ dimensions, and the role of work CCA in this association (ibidem). Thus, while some researchers found a direct positive CQ-performance association (e.g., Chen et al. 2011 ; Lee et al. 2013 ), there is also evidence that the impact of CQ on performance may be mediated by work CCA (e.g., Jyoti and Kour 2017a , 2017b ; Lee et al. 2013 ).

Additionally, a closer look to the literature on the boundary conditions under which specific CQ dimensions may enhance work CCA and, in turn, assignment-specific performance reveal numerous gaps. To fil this gap, this study aimed to analyse how and when specific CQ facets were more - or less - likely to facilitate assignment-specific performance. To this end, this paper concentrated on cultural distance (CD, i.e., the extent to which the culture of destination differs from expatriates’ home country on various values; Shenkar 2001 ), length of stay in the host country and work international experience. Indeed, although some studies analysed the moderating role of CD in the relationships between various individual features and outcomes in the expatriation area (e.g., Chen et al. 2010 ; Zhang 2013 ), the research on the effect of CD on the association between CQ dimensions and work CCA remains limited. Moreover, even though some studies demonstrated that the length of residence in the local country influenced both CQ (e.g., Li et al. 2013 ) and CCA (e.g., Ramalu et al. 2010 ), no previous research, to the best of our knowledge, has investigated the enhancing effect of length of stay on the association between specific CQ assets and work CCA. Furthermore, though some investigations showed that work experience played a moderating role in the CQ-CCA relationship (e.g., Lee and Sukoco 2010 ; Jyoti and Kour 2017a , 2017b ), no study, to our knowledge, has considered the moderated mediated effect of the four CQ dimensions and work experience - through work CCA - on assignment-specific performance.

Therefore, our research questions are as follows: do the four CQ dimensions directly and indirectly, through work CCA, impact on assignment-specific performance? And what are the effects of CD, length of stay in the host country and previous international experience with regard to this? In answering these questions, this paper drew on Kim et al. ( 2008 ) which presented, for the first time, propositions that delineated the relationships between CQ, CCA and performance analysing them together, so that scholars and practitioners could reach a better understanding of each of these. The authors proposed that overall CQ – conceptualized as the result of its four components – would be directly and indirectly, through each of the three dimensions of CCA, associated with overall performance. Additionally, the authors suggested that the CQ-CCA relationship would be positively moderated by CD, so that such relationship would be stronger when CD would be greater.

The main contribution of the present work is to extend this model by analysing whether specific dimensions of CQ – rather than overall CQ - were related to assignment-specific performance – rather than overall performance. Moreover, this research moves an important step forward in the expatriate literature as it identifies, beyond CD – as proposed by the model - other understudied boundary conditions for CQ effects (i.e., work experience and length of stay in the host country).

In doing so, the study was undertaken on the relatively under-investigated population of expatriates working within the energy sector in the Middle East for several reasons. First, some Middle East countries, such as the United Arab Emirates (UAE), have experienced unprecedented growth over the past years (Bealer and Bhanugopan 2014 ). Second, such nations remain relevant economic hubs in the Middle Eastern region, that attract numerous expatriates from Western countries (ibidem), especially within the energy sector (Finaccord 2018 ). For instance, in 2017 Saudi Arabia hosted the largest number of expatriates, whereas in the UAE expatriates constituted the 87.8% of the total population (ibidem). Nevertheless, only a few studies have concentrated on this population. Third, since most of our research respondents were from Latin America, the subsequent national cultural dissimilarities were likely to result in significant CCA difficulties. Thereby, we contribute to literature surrounding organizational behaviour and psychology as well as international human resource management.

In the next section, we provide theoretical arguments for the reasons why each of the four CQ dimensions might be uniquely posited to contribute to expatriates’ assignment-specific performance and work CCA. We describe each component in more detail, and we give rationale for the mediating role of work CCA. Subsequently, we present conceptual logic for our proposed effects of CD, length of stay in the host country and international work experience in the association between specific CQ components and work CCA. After that, we present the sample investigated and the methodology adopted. Then, we report the results and discuss our findings. Finally, we present theoretical and managerial implications, limitations, and suggestions for future research as well as conclusion.

The Relationship between CQ Dimensions and Expatriates’ Assignment-Specific Performance

The construct of CQ attracted ever-increasing attention since other existing formulations of intelligence, such as emotional intelligence (EQ) or social intelligence (SI), do not provide a comprehensive explanation in culturally diverse situations (Groves and Feyerherm 2011 ). Indeed, both EQ and SI are culture bound, such that although these two forms of intelligence may enable individuals to better understand social situations, this does not turn automatically into successful CCA (Caputo et al. 2018 ). Thus, individuals who have high EQ and SI in one culture may not easily adapt to cross-cultural interactions due to misinterpretations of culture-specific situational cues. Conversely, CQ is culture free and regards a general array of abilities particularly relevant on settings characterized by cultural diversity.

Drawing on Kim et al. ( 2008 ), CQ is related to expatriates’ performance, such that culturally intelligent expatriates may successfully function across cultural settings. We present below conceptual logic for our proposed relationships for each of the CQ dimensions with performance, describing each component in more detail.

Meta-cognitive CQ refers to an individual’s level of conscious cultural awareness of - and control over - cognitions during cross-cultural interactions. Self-awareness and cognitive flexibility can promote expatriates’ performance by facilitating their understanding of culturally appropriate role expectations (Ang et al. 2007 ). Indeed, individuals high in meta-cognitive CQ are better at adjusting their existing knowledge to meet changing environmental demands (ibidem). Thus, they can compensate for cognitive capability when previously acquired knowledge is unreliable, avoiding potential problems. Additionally, in unpredictable situations, their meta-cognitive skills provide them with a means by which supplement the lack of overt cues (Fernandez-Duque et al. 2000 ). This may stimulate the adoption of effective solutions to perform well (Tobias and Everson 2002 ). Meta-cognitive CQ may also facilitate expatriates’ performance by enhancing intercultural creative collaboration (Chua et al. 2012 ), conflict management (Caputo et al. 2018 ), decision-making and task performance (Ang et al. 2007 ) as well as knowledge transfer from headquarters to subsidiaries (Vlajčić et al. 2019 ). Thus, we expected the following:

Hypothesis 1a: meta-cognitive CQ will be positively related to assignment-specific performance.

Cognitive CQ refers to an individual’s general knowledge of norms, practices, and conventions in foreign countries gained from personal experiences and education (Ang et al. 2007 ). Expatriates high in cognitive CQ possess sophisticated mental maps of culture, which allow them to anticipate similarities and differences across cultures (Brislin et al. 2006 ). As a result, they may perform well in foreign workplaces because their in-depth knowledge about diverse cultures enables them to reach a greater understanding of cultural expectations. Additionally, such knowledge leads them to adopt culturally appropriate behaviours by facilitating decision-making, cultural judgment (Ang et al. 2007 ), intercultural negotiation (Groves et al. 2015 ), conflict management (Caputo et al. 2018 ) and knowledge transfer from headquarters to subsidiaries (Vlajčić et al. 2019 ). Thereby, we expected the following:

Hypothesis 1b: cognitive CQ will be positively related to assignment-specific performance.

Motivational CQ refers to individual’s ability to direct attention to understand cultural diversity and maintain energy concentrated on learning about - and operating in - new cultural settings, even when situations are challenging (Ang et al. 2007 ). Expatriates high in motivational CQ are motivated intrinsically and by their efficient beliefs of adaptive capabilities to interact with colleagues from different backgrounds (Templer et al. 2006 ). As a result, they may direct their energy toward learning role expectations, positively coping with problems, and striving to address challenges. Motivational CQ may also facilitate expatriates’ performance by easing intercultural collaboration and negotiation (Chua et al. 2012 ), communication effectiveness (Presbitero and Quita 2017 ), integrative information behaviours (Imai and Gelfand 2010 ), and conflict management (Caputo et al. 2018 ). Therefore, we formulated the following hypothesis:

Hypothesis 1c: motivational CQ will be positively related to assignment-specific performance.

Behavioural CQ reflects the individual’s ability to communicate in a culturally sensitive way and exhibit culturally appropriate (verbal and non-verbal) behaviours when interacting with people from other cultures (Ang et al. 2007 ). This involves having a wide repertoire of overt behavioural responses which fits to a variety of cross-cultural situations, in addition to using culturally appropriate words, body language and conversation style (ibidem). Expatriates high in behavioural CQ can choose appropriate verbal and physical actions when interacting with locals (Ang and Van Dyne 2008 ). This behavioural flexibility may help them to enact culturally appropriate role-related behaviours and meet assignment-specific expectations (ibidem). This may reduce miscommunications and enhance performance (Ng et al. 2012 ; Rose et al. 2010 ). Accordingly, behavioural flexibility was positively related to task performance within intercultural environments (e.g., Chen et al. 2011 ), conflict management (Caputo et al. 2018 ), and intercultural negotiation effectiveness (Groves et al. 2015 ). Then, we hypothesized the following:

Hypothesis 1d: behavioural CQ will be positively related to assignment-specific performance.

The Relationship between CQ Dimensions and Expatriate Adjustment at Work

In line with Kim et al. ( 2008 ), culturally intelligent individuals are better able to adjust to the host country because they are more likely to gain appropriate emotional and informational support through interactions with locals. Then, CQ represents an important factor driving expatriate CCA which may explain individual dissimilarities in adapting to foreign contexts. We provide below theoretical arguments for the reasons why each of the CQ facets might be uniquely positioned to contribute to work CCA.

To date, relatively little research has been conducted to analyse the relationship between meta-cognitive CQ and work CCA, producing mixed results. Indeed, whereas some investigations have found that meta-cognitive CQ exerts a positive influence on work CCA (e.g., Lin et al. 2012 ; Guðmundsdóttir 2015 ), other studies have revealed a nonsignificant effect (e.g., Jyoti and Kour 2015 ; Jyoti et al. 2015 ). Expatriates high in meta-cognitive CQ tend to reflect on cultural dissimilarities before a cross-cultural interaction and develop action plans for how they will interact with locals. This planning prompts cultural learning, problem-solving and interactions with host colleagues, which may reduce uncertainties related to expatriation and, then, facilitate work CCA (Earley and Ang 2003 ; Earley et al. 2006 ). Thus, we proposed the following hypothesis:

Hypothesis 2a: metacognitive CQ will be positively related to work CCA.

Whereas some studies have identified a positive influence of cognitive CQ on work CCA (e.g., Konanahalli et al. 2014 ), other investigations revealed a non-significant association between the two constructs (e.g., Jyoti and Kour 2015 ). Expatriates high in cognitive CQ have a greater understanding of cross-cultural differences (Brislin et al. 2006 ): they are better able to use their cultural knowledge in making decisions and thinking strategically to overcome transition problems. This, in turn, may improve their ability to adjust to the new workplace (Van Dyne et al. 2012 ). Thus, we expected the following:

Hypothesis 2b: cognitive CQ will be positively related to work CCA.

Expatriates high in motivational CQ are more psychologically prepared to adjust to the work demands expected in culturally diverse workplaces (Chen et al. 2010 ). Thus, they have confidence in their capabilities and intrinsic motivation to adjust to new workplaces (Palthe 2004 ) and display newly learn behaviours (Black et al. 1991 ). This may stimulate their involvement in culturally different modes of working and the accomplishment of their assignment objectives (Lin et al. 2012 ). Accordingly, empirical evidence supported that motivational CQ is positively associated with expatriates’ work CCA (Jyoti and Kour 2015 ; Jyoti et al. 2015 ). Thus, we predicted the following:

Hypothesis 2c: motivational CQ will be positively related to work CCA.

Whereas some studies have revealed that behavioural CQ was non-significantly (e.g., Huff et al. 2014 ; Konanahalli et al. 2014 ) or negatively (e.g., Guðmundsdóttir 2015 ; Malek and Budhwar 2013 ) related to work CCA, other investigations have found a positive association between the two constructs (e.g., Ng et al. 2012 ; Ramalu et al. 2011 ). Expatriates with greater behavioural CQ can use culturally appropriate expressions in communication, in addition to flexibly adapting their behaviour to create comfort zones for the other individual(s) involved in cross-cultural encounters (Earley and Peterson 2004 ). The ability to make such adaptations is likely to result in better work CCA because it facilitates communication with host colleagues, reducing the risk of cross-cultural misunderstandings (Ang et al. 2007 ). Therefore, we hypothesized the following:

Hypothesis 2d: behavioural CQ will be positively related to work CCA.

The Relationship between Expatriates’ Work CCA and Assignment-Specific Performance

When expatriates can successfully adjust to the work domain, they are less stressed and, then, have more personal resources to invest in job duties. In this case, they are likely to feel themselves as culturally competent and build closer relationships with local colleagues (Lee and Sukoco 2010 ; Chen et al. 2010 ). As a result, expatriates who are culturally adjusted to their new workplaces are more likely to perform well on their international assignments than those who are unable to adjust well (Lee and Kartika 2014 ; Wu and Ang 2011 ). Therefore, we expected the following:

Hypothesis 3: work CCA will be positively related to assignment-specific performance.

The Mediating Role of Work CCA

Prior research suggested that CCA might mediate the association between CQ and performance (Kim and Slocum 2008 ; Wang and Takeuchi 2007 ). Despite this development, the empirical evidence on the role played by work CCA in mediating the relationship between specific CQ dimensions and assignment-related tasks has been relatively limited in the expatriate literature, requiring further research (e.g., Jyoti and Kour 2015 ; Lee et al. 2014 ). Kim et al. ( 2008 ) proposed that CQ may work through work CCA to affect expatriate performance as the extent to which expatriates are able to successfully adapt to a new work setting may impact on individual work outcomes. They argued that “a smooth transition across work assignments is critical to an expatriate’s success because the work-role that is executed in the host country may be quite unfamiliar, even though the task is the same as it was in their home country, due to different cultural contexts” (ibidem, p. 76). Therefore, expatriates who have greater CQ are more likely to successfully adjust to their new work setting which, in turn, will enable them to reach high levels of performance. Overall, relevant intercultural skills, such as abilities to revise cultural assumptions (meta-cognitive CQ), elaborate sophisticated metal maps about cultures (cognitive CQ), channel one’s own energies toward functioning (motivational CQ) and exhibit appropriate actions (behavioural CQ) in culturally diverse settings, are all factors which are expected to decrease the misunderstandings in role expectations and facilitate interactions with local colleagues (Ramalu et al. 2012 ). As a result, culturally intelligent expatriates, who are better able to cope with stress related to uncertainties (Sambasivan et al. 2017 ), may more easily feel comfortable in any cultural setting they are working in. Then, work CCA holds the potential to be a proximal intercultural effectiveness outcome which may partially mediate the effects of the four CQ dimensions on more distal effectiveness outcomes, such as assignment specific performance. Hence:

Hypothesis 4: work CCA will mediate the relationship between specific dimensions of CQ (Hp4a: meta-cognitive CQ, Hp4b: cognitive CQ, Hp4c: motivational CQ, Hp4d: behavioural CQ) and assignment-specific performance.

The Moderating Role of Cultural Distance

The individual’s capability to successfully adjust abroad is related to the novelty of the foreign culture. A large difference between the country of origin and the destination requires more transitions, which results in more adjustment difficulties than in a country with a similar culture (Bhaskar-Shrinivas et al. 2005 ). Said differently, adjustment is more challenging when the host country is more culturally distant (Wang and Varma 2019 ). In this context, individual differences may become particularly salient. Indeed, prior investigations revealed that CD moderates the relationship between individual characteristics and various outcomes in the expatriation field, such as effectiveness (Chen et al. 2010 ), adjustment (Zhang 2013 ), and intention to work abroad (Remhof et al. 2013 ). Among individual characteristics, CQ seems to be a variable highly likely to interact with CD on work CCA because of its relevance on settings characterized by cultural diversity. In line with Kim et al. ( 2008 ), “as CD increases, it is expected that CQ would become more, rather than less, critical to expatriates’ adjustment and success” (Kim et al. 2008 , p. 78). Accordingly, CD strengthens the CQ-CCA association since the greater cultural challenges inherent in more culturally distant settings demand more cross-cultural competencies. In this context, those with greater CQ may be better equipped to overcome such challenges and, then, better able to adjust and perform well than those with lower CQ. Thus, we expected the following:

Hypothesis 5: CD will strength the relationship between CQ, in all its dimensions (Hp5a: metacognitive CQ, Hp5b: cognitive CQ, Hp5c: motivational CQ, Hp5d: behavioural CQ), and work CCA, such that the positive effect of CQ dimensions through work CCA on assignment-specific performance will be stronger when the home-host CD will be greater.

The Moderating Role of Length of Residence in the Host Country

Previous investigations on CCA have showed that length of residence in the host country influences CCA (e.g., Li et al. 2013 ; Ramalu et al. 2010 ). According to the U-Curve of CCA framework (Black and Mendenhall 1991 ), the first twelve months in a foreign country are characterized by frustration as the newcomer must deal with living in the host country on a daily basis, overcoming the so-called “cultural shock stage”. CQ may become critical to overcome such highly challenging period because culturally intelligent expatriates can more easily use their cultural knowledge and develop action plans to solve transition problems (meta-cognitive and cognitive CQ; Earley et al. 2006 ). In addition, CQ may be salient because it drives expatriates to establish relationships with local colleagues and vicariously learn about appropriate behaviours (motivational CQ; Mendenhall and Oddou 1985 ). This may lead them to make appropriate behavioural adaptations (behavioural CQ). Thereby, expatriates high in CQ are more likely to learn quickly appropriate behaviours, which may decrease the anxiety related to not knowing how to behave in an unfamiliar environment. As a result, the time required to reach the adjustment stage may be shortened. Additionally, the longer the time spent in the host country, the greater the opportunities to build support systems, reach greater cultural knowledge, and become more efficacious in interacting with locals. This suggests that motivational CQ might be more critical in the initial stages of the adjustment process when individuals have to deal with daily challenges. Thus, we expected the following:

Hypothesis 6: the length of residence in the host country will moderate the relationship between CQ, in all its dimensions (Hp6a: metacognitive CQ, Hp6b: cognitive CQ, Hp6c: motivational CQ, Hp6d: behavioural CQ) and work CCA, such that the positive effect of CQ dimensions through work CCA on assignment-specific performance will be stronger when the length of residence will be lower.

The Moderating Role of International Work Experience

Culturally intelligent expatriates having longer experience of working abroad through vicarious learning can more easily make anticipatory adjustments to the new work setting before they ever experience it (Black et al. 1991 ). In this sense, they may benefit from prior international work experience because they can utilize it as an important source of information which facilitates the formation of realistic work expectations and accurate anticipatory work behavioural adaptations (Church 1982 ). Indeed, expatriates with greater CQ will be more likely to acquire more accurate information from their previous experience as, for instance, they will think critically about cultural knowledge and monitor the quality of that knowledge (Ang et al. 2007 ). This may increase attention and retention processes, leading them to make anticipatory adjustments in behaviours, which would turn out to be appropriate in the host workplace. This means that they will learn lessons from their prior experience and form comprehensive cognitive schemata, which will be useful to predict consequences across a variety of future situations (Takeuchi et al. 2005 ). As a result, prior experience will help expatriates with greater CQ to effectively handle future cross-cultural situations (Lee and Sukoco 2010 ; Shannon and Begley 2008 ). This will decrease the uncertainty and, therefore facilitate, the adjustment process (Black et al. 1991 ), leading to a better performance (Jyoti and Kour 2017a , 2017b ). Conversely, expatriates with lower CQ will be less likely to take advantage from their prior experience as the content of the information will be inaccurate and, then, their actual reproduction of the anticipatorily determined behaviours will prove to be inappropriate in the new workplace (Black et al. 1991 ). Furthermore, although some studies showed that prior experience had an enhancing effect on the CQ-CCA relationship (Lee 2010 ; Lee and Sukoco 2010 ; Jyoti and Kour 2017a , 2017b ), the research has not been consistently supportive (Vlajčić et al. 2019 ). Further to this, research analysing whether prior experience might exert an enhancing effect on the association between the four CQ dimensions and specific domains, such as work CCA, is still limited (Kusumoto 2014 ). Thus, we examined whether prior experience would strengthen the CQ- work CCA relationship, expecting the following:

Hypothesis 7: international work experience will moderate the relationship between CQ, in its dimensions (Hp7a: metacognitive, Hp7b: cognitive, Hp7c: motivational, Hp7d: behavioural), and work CCA, such that the culturally intelligent expatriates with greater experience will adapt more easily to the host workplace and, then, perform more effectively than those with lower experience.

As a conceptual framework, Fig.  1 illustrates our proposed model, incorporating our hypothesized relationships.

Proposed model regarding the relationships between the four components of cultural intelligence (CQ) and assignment-specific performance as well as the moderating role of cultural distance (CD), length of stay in the host country (LoS) and previous international work experience (WEX) in the association between CQ components and cross-cultural adaptation at work (work CCA)

Participants and Procedure

Our research sample consists of employees who were working in a company in the oil and gas industry with an extensive portfolio of projects around the world. Expatriates’ contacts details were gathered from organizational databases. Questionnaires were administrated in English (see Appendix 1 ), the official working language in the company, through a Web-based solution (i.e., mails and online questionnaires). Once respondents voluntarily agreed to participate, we obtained informed consent from them and ensured them the anonymity and confidentiality of their responses. Data were collected in the period between March and May 2018. In total, we contacted four hundred ninety-four expatriates. Of them, one hundred sixty-eight employees completed the survey (34% response rate). We excluded eight participants working in their home country and nine participants because they did not complete at least the 60 % of the survey. The descriptive statistics of the remaining participants ( N  = 151) are reported in Table 1 .

Most of research participants were Latin American expatriates assigned to Middle East countries. The Middle East, especially the Muslim and Arab countries of Sud Arabia, Oman and the UAE, represents a hot spot for international assignments (Raghu and Sartawi 2012 ). For instance, according to the data provided by the World Bank, the UAE’s population in 2020 is 9.89 million of whose the 88.52% is constituted by expatriates and immigrants (GMI 2020 ). Arab countries have practices and habits that contrast with those of the Latin American nations. Since the UAE’s culture is masculine in nature, a Latin American expatriate might have difficulties to adjust to a 100% male environment where there is a dress code for men as well (Konanahalli et al. 2012 ). Additionally, during the holy month of Ramadan the Muslim colleagues observe Ramadan fasting rules, which will require Latin Americans to be respectful of such religious observances (ibidem). According to GLOBE Project’s studies on cultural dimensions (House et al. 2004 ), the Middle East cultural cluster is characterized by high scores on collectivism, average scores on assertiveness, human orientation, institutional collectivism, performance orientation and power distance, while for future-orientation, gender egalitarianism and uncertainty avoidance the scores are low (for a detailed description of each cultural dimension see at the following link: https://globeproject.com/study_2004_2007 ). Although similar for some dimensions, the Middle East cluster differs from the Latin American cluster most significantly on the values of institutional collectivism, performance orientation and gender egalitarianism. These differences might translate in striking contrasts in terms of decision making, negotiation, conflict management, leadership styles and so on (e.g., Caputo et al. 2018 ; Caputo et al. 2019 ). In sum, it is likely that Latin American expatriates working in an Arab country will experience significant national cultural dissimilarities, which might lead them to adjustment difficulties.

CQ was assessed by The Cultural Intelligence Scale (Ang et al. 2007 ) which comprises four sub-scales: meta-cognitive CQ (four items, e.g. “I check the accuracy of my cultural knowledge as I interact with people from different cultures”, α =  .81 ) ; cognitive CQ (six items, e.g., “ I know the rules for expressing non-verbal behaviour in other cultures”, α =  .83); motivational CQ (five items, e.g., “ I enjoy interacting with people from different cultures”, α =  .89 ) ; behavioural CQ (five items, e.g., “ I change my verbal behaviour when a cross-cultural interaction requires it”, α =  .84 ) . This robust and reliable scale has been utilized by previous studies (e.g., Gozzoli and Gazzaroli 2018 ), confirming the existence of four specific CQ dimensions. Participants indicated how much they agreed with each statement concerning their cultural abilities on a seven-point Likert-type scale (1 =  strongly disagree 7 =  strongly agree ), where higher scores indicated higher CQ levels.

Work CCA was measured using three items from the Expatriate Adjustment Scale (Black and Stephens 1989 ). Participants rated their adjustment (e.g., “ How adjusted are you to performance standards and expectations in your job? ”, α =  .89) on a seven-point Likert-type scale (1 =  very unadjusted 7 =  very adjusted ), where greater scores indicated greater work CCA. This measure has been consistently validated by previous studies on expatriates (e.g., Bhaskar-Shrinivas et al. 2005 ) confirming its construct validity among culturally different samples.

Assignment-specific performance was evaluated through five items from the Expatriate Contextual/Managerial Performance Skills (Caligiuri 1997 ). Participants were asked to rate their perceived ability in each of the job performance items (e.g., “ Your effectiveness at transferring information across strategic units (e.g., from the host country to headquarters) ”, α =  .73) on a five-point Likert-type scale (1 =  poor 5 =  outstanding ) , where greater scores indicated greater performance.

CD between expatriates’ home country and host country was computed through the index of Kogut and Singh ( 1988 ) in combination with Hofstede’s ( 2001 ) country-specific scores (i.e., power distance, individualism, masculinity, and uncertainty avoidance), consistent with prior studies (e.g., Ng et al. 2019 ).

Length of residence in the host country was measured in months in line with previous researchers (e.g., Chen et al. 2014 ). Participants indicated the period in the current country of destination in months (i.e., How long have you been working in your current country of residence? ).

International work experience was assessed in years, according to previous studies (e.g., Jyoti and Kour 2017a , b ). Respondents indicated how many years they had been working internationally (i.e., How many years had you spent working abroad before this assignment? ).

Control variables . We controlled for marital status (1 = single, 2 = engaged) and education level (1 = high-school, 2 = degree) because previous studies showed that work-family conflict - that is more likely to occur for married expatriates; Kupka and Cathro 2007 - and education level (e.g., Moon et al. 2012 ) may influence CCA; thereby, potentially affecting performance. Furthermore, we controlled for gender (1 = male, 2 = female) and age since prior investigations (e.g., Li et al. 2016 ; Vlajčić et al. 2019 ) have revealed contrasting results about the impact of age and gender on CQ and CCA. Additionally, we recognized that pre-departure cross-cultural training (i.e., Did you have any cross-cultural training before departure? 1 = yes, 2 = no) might be associated with CCA as some studies showed that expatriates who received cross-cultural pre-departure training were more likely to successfully adjust to the host environment (e.g., Evans 2012 ). Since previous studies found that length of stay in the host country and international work experience could affect both CQ (e.g., Wang et al. 2017 ; Moon et al. 2012 ) and CCA (e.g., Ramalu et al. 2010 ; Lee and Kartika 2014 ), we considered the role of these constructs as control variables. Moreover, we acknowledged that CD might impact on CCA, such that the greater the CD, the greater the adjustment difficulties (e.g., Wang and Varma 2019 ). None of the control variables significantly correlated with - or had any significant impact on - the variables of interest within our models, which is why we decided to exclude them from all subsequent analyses and present models without these controls. This is in line with recommended practices (Aguinis and Vandenberg 2014 ).

Descriptive Analyses

We conducted descriptive statistics and correlations among the study variables using SPSS version 20 (Morgan et al. 2012 ). The four CQ dimensions were significantly and positively correlated with each other and with both work CCA and performance (see Table 2 ). The average inter-item correlations between CQ and outcomes was .24, suggesting that items did contain sufficiently unique variance to not be isomorphic with each other (Piedmont 2014 ).

Confirmatory Factor Analyses and Assessment of Common Method Bias

Firstly, using Mplus Version 7 (Muthén and Muthén 1998-2012 ), a confirmatory factor analysis (CFA) with the maximum likelihood method was carried out to examine the factor structure of the study variables. Results from CFA revealed that the six-factor model (i.e., four CQ dimensions, work CCA, performance) outperformed all the alternative models (χ 2 [335] = 782.70, CFI = .78, TLI = .76, RMSEA = .09, SRMR = .10). However, to obtain a satisfactory fit (χ 2 [330] = 221.59, CFI = .90, TLI = .90, RMSEA = .06, SRMR = .07), it was necessary to take into account the high correlation existing among some items (see Table   3 ). The resulting models were built considering the modification indices which were used in this satisfactory model. Moreover, to control for common method bias, an unmeasured latent method factor was added to the hypothesized CFA model and allowed manifest indicators to load on their respective latent constructs as well as on the method factor (Podsakoff et al. 2012 ). Results indicated that the hypothesized six-factor model yielded a better fit to the data after inclusion of the method factor (Δ χ 2 [302] = 480.28, RMSEA = .06, SRMR = .06, CFI = .91, TLI = .90). The method factor explained only 24% of the variance in the items, which is below the average amount of method variance (25%) reported in self-reported research (Podsakoff et al. 2012 ). Accordingly, common method bias does not appear to have a substantial impact on the present study. Finally, a second order CFA was tested, confirming that CQ loaded into its respective four sub-dimensions (χ 2 [327] = 505.460, CFI = .91, TLI = .90, RMSEA = .06, SRMR = .07).

Hypotheses Testing

Given our relatively small sample size, the Partial Least Squares (PLS) method, which is a variance-based structural equation modelling, was considered as particularly appropriate to simultaneously test whether each of the four CQ dimensions were related to performance directly and indirectly, as mediated by work CCA. Partial least squares structural equation modelling (PLS-SEM) represents a multivariate modelling technique suitable for the analysis of multiple dependent and independent latent constructs (Mathwick et al. 2008 ). This technique computes relationships between all variables simultaneously and does not necessitate multivariate normality (Zhou et al. 2012 ). Since CQ includes four components, a hierarchical component model (HCM) was created to assess the mediation model (Lohmoller 1989 ). This allowed us to reduce the number of associations in the model, making the model more parsimonious and resistant to collinearity problems (Hair et al. 2017 ). PLS-SEM methodology, utilizing a HCM, enables to examine each component of CQ independently through a higher-order construct that, by theoretical classification of HCM modelling, is a full mediator (Hair et al. 2017 ) in the process of direct and indirect associations between each component of CQ and performance. Using PLS-SEM, it is possible to evaluate each dimension separately, in addition to providing a diverse theoretical explanation for each dimension (Ott and Michailova 2018a , 2018b ). The repeated indicator approach was utilized in a reflective-formative type of HCM using SmartPLS v. 3.2.6. (Ringle et al. 2017 ) to further confirm the measurement model which was previously tested. This model comprises six reflective constructs and one second-order construct which contains latent variable scores for the four dimensions of CQ (a similar methodological approach was also taken by Vlajčić et al. 2019 ). All the items showed statistically significant and satisfactory loadings values (> 0.7; de Pablo González et al. 2014 ). The composite reliabilities of all seven constructs were acceptable as values were above 0.80 and below 0.95 (Nunnally and Bernstein 1994 ; see Table 2 ). The convergence validity was acceptable as all the average variance extracted (AVE) values were above the recommended value of 0.5 (Hair et al. 2010 ). Discriminant validity of our constructs was further confirmed as correlations between each pair of latent constructs do not exceed the square root of each construct’s AVE (Fornell and Larcker 1981 ), apart from the second-order formative construct (CQ-HCM) and the latent constructs it includes, as anticipated by Hair et al. ( 2017 ). These results further confirmed the discriminant validity of our constructs of interest.

Subsequently, the structural model was evaluated using a bootstrapping procedure (10,000 sub-samples; Hernández-Perlines et al. 2016 ). Structural coefficients presented in the PLS model (see Table 4 ) indicated that the dimensions of meta-cognitive ( β  = .10, t  = 4.13, p  < .001), cognitive ( β  = .12, t  = 3.58, p  < .001), motivational ( β  = .15, t  = 4.12, p  < .001), and behavioural ( β  = .12, t  = 3.68, p  < .001) CQ were directly and positively associated with performance. Thereby, Hypotheses 1a , 1b , 1c and 1d were confirmed. Additionally, the dimensions of meta-cognitive ( β  = .11, t  = 3.39, p  < .001), cognitive ( β  = .13, t  = 4.79, p  < .001), motivational ( β  = .17, t  = 4.30, p  < .001), and behavioural ( β  = .13, t  = 4.18, p  < .001) CQ were directly and positively related to work CCA. Thereby, Hypotheses 2a , 2b , 2c and 2d were confirmed. Work CCA ( β  = .19, t  = 1.96, p  < .05) was positively related to performance (see Fig.  2 ). Thereby, Hypothesis 3 was supported. Results from mediation models indicated that work CCA partially mediated the associations between meta-cognitive ( β  = .02, t  = 1.65, p  < .05), cognitive ( β  = .03, t  = 1.83, p  < .05), motivational ( β  = .03, t  = 1.84, p  < .05), and behavioural ( β  = .02, t  = 1.85, p  < .05) CQ and assignment specific performance. Therefore, Hypotheses 4a , 4b , 4c and 4d were confirmed. Moreover, our analysis of the structural model also includes the R 2 and Q 2 as indexes of model consistency and predictive relevance. The indicators of consistency were appropriate, even if CQ and its dimensions explained a weak amount of variation in the constructs of interest (R 2 (CCA) = .26; R 2 (performance) = .25). The predictive relevance of the indicators (Q 2 (CCA) = .70; Q 2 (performance) = .35) were in the large effect size range (Neter et al. 1990 ).

Results from models analysing the mediating effect of work CCA in the relationships between each of CQ dimension and assignment-specific performance

Further, we tested whether the strength of the relationship between CQ and performance through work CCA was conditional on the value of our expected moderators. To this end, we conducted moderated mediation models for each of the CQ dimensions using Mplus Version 7. CD weakened the relationship between motivational CQ and work CCA (β = −.06, p  < .05), but no significant interaction terms were revealed for the other CQ dimensions. Then, Hypotheses 5a , 5b and 5d were not supported. The moderated mediation effect of the interaction of motivational CQ and CD through work CCA on performance was significant (see Table 5 ). However, contrary to what expected based on Hypothesis 5c , results indicated that CD weakened the positive relationship between motivational CQ and work CCA, such that the relationship was stronger when CD was low and weaker when CD was high (β = .14, p  < .05 for low CD, β = .12, p < .05 for moderate CD, β = .11, p < .05 for high CD).

Length of residence in the host country weakened the positive association between motivational CQ and work CCA (β = −.19, p  < .01). The moderated mediation effect of motivational CQ and time of residence in the host country through work CCA on performance was particularly significant for expatriates who had been working in the host country for a shorter time (β = .44, p  < .05), but, even if it was still significant, the enhancing effect of length of residence in the host region on the motivational CQ-work CCA relationship decreased with the passage of time (β = .37, p < .05 and β = .31, p < .05; for those working in the foreign country for an average and a longer period of time, respectively; see Table 5 ). Thereby, Hypothesis 6c was supported, whereas Hypotheses 6a , 6b and 6d were rejected.

Experience moderated the relationship between motivational CQ and work CCA (β = −.35, p  < .01), but not the associations between the other CQ dimensions. However, contrary to what expected based on Hypothesis 7c , the moderated mediation effect of motivational CQ and experience through work CCA on performance was stronger for expatriates who had lower international work experience (β = .47, p  < .05) than for those who had moderate (β = .36, p < .05) or longer (β = .24, p < .05) experience (see Table 5 ). Therefore, Hypotheses 7a , 7b and 7d were rejected and Hypothesis 7c was not confirmed given that the direction was opposed to what expected.

The validity of the hypothesized models was assessed by comparing each of them (i.e., in terms of BIC and AIC comparative indices) with three competing models, as described in detail in Table 6 . The models with motivational CQ were the better-fitting models compared to those which included other CQ dimensions as antecedents.

Several findings emerged from this research which make a meaningful contribution to the existing literature on expatriates (see Fig.  3 for an overview of the confirmed hypotheses).

Model representing the hypotheses which were confirmed

First, each of the four CQ components were related to assignment-specific performance, both directly and indirectly, as partially mediated by work CCA. Then, culturally intelligent expatriates are likely to minimize cultural blunders and meet role expectations which, in turn, reduces the likelihood of misunderstandings, increasing performance (Moynihan et al. 2006 ). Moreover, they can successfully adjust to the host workplace, which enables them to channel their energies to improve their performance in assignment-specific tasks (Malek and Budhwar 2013 ; Shaffer et al. 2006 ).

Second, contrary to what expected based on Kim et al. ( 2008 ), CD is more likely to attenuate, rather than amplify, the positive effect of motivational CQ on work CCA in less culturally distant settings, such that the culturally intelligent expatriates are more likely to adjust to the host workplace and, then, perform well when CD is low. A plausible explanation is that when expatriates are confronted with more culturally different workplaces, their motivational CQ might not be sufficient to overcome the challenges posed by more complex assignments due to the greater cultural unfamiliarity (Chen et al. 2010 ; Vlajčić et al. 2018 ; Wang and Varma 2019 ).

Third, the length of residence in the host country weakens the positive relationship between motivational CQ and work CCA, such that motivational CQ is particularly salient when expatriates are in the initial stages of the adjustment process. Said differently, the greater the initial level of motivational CQ, the shorter the time required to adjust to the host country. Therefore, even if motivational CQ facilitates work CCA at any time, expatriates who are at the beginning of their assignment are likely to benefit more from motivational CQ than those who are in the host region from a longer time (Firth et al. 2014 ). Even if they were confronted with failures in their attempts of reproducing the new behaviours, cross-culturally motivated expatriates would be likely to persist at trying to imitate such behaviours longer than those with lower motivational CQ (Bandura 2002 ). This will increase the chances of receiving feedbacks, which will result in displaying appropriate behaviours; thereby, facilitating their adjustment to the new workplace and, then, their performance.

Fourth, motivational CQ is more salient for expatriates who are on their first assignment than for those who have longer experience in international assignments. Even if they have limited experience, the cross-culturally motivated expatriates tend to be more self-confident about their ability to interact with culturally diverse colleagues. They are also more willing to learn about unfamiliar cultures and experiment themselves in imitating culturally appropriate behaviours. Said differently, motivational CQ may counterbalance expatriates’ lack of experience, enabling them to adjust to the host workplace and, then, perform well.

Theoretical Implications

This research has several key contributions to expatriate literature. Firstly, this study extends Kim et al. ( 2008 ) by investigating whether specific CQ dimensions were associated with performance directly and indirectly, as mediated by work CCA. Additionally, by identifying, beyond CD, length of stay in the host country and work experience as boundary conditions for CQ effects, this research helps explain the mixed findings obtained in prior investigations on CQ.

Secondly, this study provides further evidence for the differential role of CQ dimensions (e.g., Rockstuhl and Van Dyne 2018 ) by testing mediating and moderating mechanisms which explain how and when each CQ facet is more - or less - likely to facilitate work CCA and performance.

Thirdly, our findings add to a growing body of literature on expatriate adjustment (e.g., Chew et al. 2019 ; Bhaskar-Shrinivas et al. 2005 ) by confirming the key role of work CCA, which represents a primary factor of interest to MNCs as it is crucial for assignment-specific performance.

Fourthly, this study deepens our understanding of boundary conditions for CQ effects by showing that, of the four CQ factors, only motivational CQ was qualified by CD, length of stay and experience. On the one hand, this suggests that cognitive, metacognitive, and behavioural CQ dimensions had a positive influence on work CCA and, then, assignment-specific performance, regardless of CD, length of stay and experience. In the absence of moderation from such factors, we can confirm that, even if expatriates are on their first assignment, at the beginning of their assignment or assigned to a highly culturally diverse country, a prediction of their success can be based on cognitive, metacognitive and behavioural CQ dimensions. Such dimensions can be particularly useful in promoting performance, since the demanding work setting entails high degrees of culture-related cognitive processing, cultural awareness, and behavioural flexibility to enable for efficient problem solving (Stahl et al. 2009 ). On the other hand, this allows to consider the boundary conditions that provide insights into when motivational CQ has a stronger influence on work CCA and, then, assignment-specific performance. Even motivational CQ is a relevant skill for expatriates at any time of their assignment, expatriates benefited more from motivational CQ when they were working in the host country for a shorter period or when they had lower experience. Motivational CQ plays a peculiar role which differentiates this dimension from the others. Indeed, culturally motivated expatriates are driven to prove themselves in a large quantity of intercultural work situations (Ng et al. 2019 ), despite the challenges experienced at the beginning of a novel assignment. Furthermore, motivational CQ may compensate the lack of work experience by strengthening use of skills and resilience in the face of cultural difficulties (Bandura 2002 ). However, the positive effect of motivational CQ on CCA is necessary yet not sufficient for overcoming the challenges posed by more culturally distant workplaces, as such environments demand less familiar task requirements from expatriates. This makes the effort arouse by motivational CQ less relevant (Chen et al. 2010 ). Overall, this study adds substantially to our understanding of how motivation-related processes may contribute uniquely to expatriate effectiveness.

Practical Implications

The current study has practical implications for MNCs and international human resource management. Firstly, the finding that all CQ dimensions are related to expatriates’ performance suggests that recruiters should select and hire culturally intelligent candidates for international assignments. By evaluating applicants’ CQ and by emphasizing CQ as a critical credential that candidates – especially those with lower international experience - should have, HR representatives can select the most suitable candidates, assigning more cross-culturally motivated expatriates to foreign assignments, if possible, in less culturally distant countries.

Secondly, organizations should provide expatriates with pre-departure training programs aimed at increasing their CQ. For instance, training can offer several scenarios for work so that expatriates may be adequately prepared to comprehend and master different situations (e.g., cultural habits) when facing problems in the host country (Lin et al. 2012 ). Since our findings suggest that motivational CQ is particularly relevant to work CCA, training programs could include a module on motivational CQ (Earley and Peterson 2004 ). For example, training based on dramaturgical exercises, including role plays and simulations about intercultural interactions could be useful tools to build efficacy regarding cross-cultural challenges (ibidem). Furthermore, managers should consider fostering expatriates’ motivation prior to their assignments by emphasizing benefits related to international assignments (e.g., opportunity to develop global career competencies or monetary incentives; Hajro et al. 2017 ) and by stimulating their curiosity about diverse cultures.

Thirdly, considering the mediating role of work CCA in the relationship between CQ and performance, interventions should be implemented to enable expatriates – especially those who are on their first assignment or at the beginning of a new assignment – to receive organizational social support (i.e., from both home and host-country managers and peers) and logistical help (e.g., housing, schooling) to facilitate reaching the adjustment stage (Bhaskar-Shrinivas et al. 2005 ). For instance, companies could consider arranging informal gatherings to help workers build strong bonds with local colleagues and assigning newcomers to experienced mentors (Chen et al. 2010 ). Moreover, MNCs should develop appropriate performance management systems for expatriates and expatriate-host country nationals interaction mechanisms to facilitate work CCA (Wang and Varma 2019 ).

Limitations and Suggestions for Future Research

This research suffers from some limitations which may give venues for future research.

Some concerns regard the cross-sectional design of our study and the exclusive use of self-reported measures. To decrease the risk of common method bias, we followed Podsakoff et al.’ ( 2012 ) recommendations regarding questionnaire design. Additionally, we used the unmeasured method factor technique, showing that common method variance was not a major issue. Future studies should focus on non-same-source outcomes, collect data from multiple sources (e.g., interviews, observations of actual behaviours, performance ratings from supervisors), adopt a longitudinal design and analyse CQ at the team level (Ott and Michailova 2018a , 2018b ).

Since most of research participants were men, and gender has been previously found to affect the levels of performance among expatriates (e.g., Ramalu et al. 2012 ), this might have partially influenced our findings. However, the gender distribution in our sample is highly representative of expatriate workforce in the analysed sector. Future studies should control for other variables (e.g., openness to experience, having family accompanying in the host country).

A further limitation is related to the fact that possible selection bias due to the voluntary participation into the research cannot be ruled out. It is possible that those who experienced successful CCA experiences were more motivated to respond and, as such, are overrepresented.

Since majority of respondents were from Latin America, and cultural orientation has been revealed to impact differing coping styles, such as conflict management and negotiation styles (e.g., Caputo et al. 2018 ; Caputo et al. 2019 ), this might have partially affected our results. Therefore, more research on larger sample sizes is needed to investigate how the effect of CQ on expatriate performance might vary as a function of individual’s cultural values.

As the nature of global work assignment is expanding beyond the traditional expatriation (e.g., frequent international business travel; Shaffer et al. 2012 ), future studies should investigate the relationships between specific CQ dimensions, work CCA and performance by comparing expatriates employed in different international work arrangements and by collecting data also on international skilled migrants (Hajro et al. 2019 ).

Since CQ, EQ and SI are distinct but overlapping constructs which have been found to positively interact with each other (Crowne 2013 ), future investigations should analyse associations at the subcomponent level of CQ, EQ and SI to identify how specific dimensions of each may affect expatriate performance when the three forms of intelligence are examined together.

Future studies should also analyse conditions under which higher motivational CQ levels might undermine expatriate effectiveness (e.g., through complacency; Chen et al. 2010 ), including situations characterized by ambiguous tasks (e.g., Schmidt and DeShon 2010 ).

Finally, it would be especially important to detect further contextual variables (e.g., group climate, performance management practices; Chen et al. 2010 ; Wang and Varma 2019 ) that may facilitate expatriate performance, either directly or through interactions with specific CQ dimensions.

Even though the current cross-sectional study relied only on self-report measures, it was conducted on the relatively under-investigated population of expatriates working within the energy sector in the Middle East and it addressed some gaps in the literature by disentangling the complex relationship between CQ, CCA and performance. To this end, we tested mediating and moderating mechanisms which explain how and when specific CQ facets were more - or less - likely to facilitate assignment-specific performance. Each CQ dimension had a differential role in contributing to assignment-specific performance, directly and through work CCA. Conversely, of the four CQ factors, only motivational CQ was qualified by CD, length of stay and international work experience. Our findings indicated that motivational CQ was particularly salient in overcoming work CCA difficulties for expatriates who were at the beginning of their international assignment and who had lower experience. Moreover, motivational CQ related more positively to expatriate work CCA in less culturally distant countries. We conclude with the hope that our theoretical contributions will stimulate additional multilevel and longitudinal research on factors influencing work CCA and performance to gather further knowledge about cross-cultural management.

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Appendix 1: Measurements

Demographic items.

Thank you for participating in this study. Please pay close attention to each question provided and answer each question as honestly as possible by placing a mark in the provided space. Please take care in filling out this form.

1. Gender (Please Check One): [] Male [] Female.

2. Age (in years): ______.

3. Marital status (Please Check One): [] Single [] Married.

4. Education status (Please Check One): [] High school [] Degree.

5. Role (Please Check One):

[] 1. Administrative.

[] 2. Technical.

[] 3. Executive.

[] 4. Other.

6. How many years have you spent working abroad before this assignment: ______.

7. How many months have you been working in your current country of assignment? ______.

8. Did you have any cross-cultural training (any training that prepared you for relocation) before departure? (Please Check One): [] Yes [] No.

9. What is your country of origin? ______.

10. In which country are you currently living? ______

Cultural intelligence

Read each statement and select the response that best describes your capabilities.

Select the answer that BEST describes you AS YOU REALLY ARE .

1: Strongly disagree 2: Disagree 3: Somewhat disagree 4: Neither agree nor disagree 5: Somewhat disagree 6: Agree 7: Strongly Agree.

Cross-cultural adjustment at work

Please indicate how well adjusted (how comfortable) you are with each of the following aspects of living in your current city of residence. Use the following scale:

1: Very unadjusted 2: Unadjusted 3: Somewhat unadjusted 4: Neutral 5: Somewhat adjusted 6: Adjusted 7: Very adjusted.

• Assignment-specific performance

Please rate your level of work performance to the factors listed below using the following scale:

1: Poor 2: Below Average 3: Average 4: Above Average 5: Outstanding.

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Setti, I., Sommovigo, V. & Argentero, P. Enhancing expatriates’ assignments success: the relationships between cultural intelligence, cross-cultural adaptation and performance. Curr Psychol 41 , 4291–4311 (2022). https://doi.org/10.1007/s12144-020-00931-w

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Managing International Assignments: Compensation Approaches

A new international assignment landscape is challenging traditional compensation approaches

For many years, expatriate compensation has been focused on a dilemma: having assignees on expensive home-based expatriate package versus localization - which is about replacing expatriates with locals or at least transition expatriates from an expatriate package to a local salary. Many predicted that the traditional home-based balance sheet approach would gradually disappear. The predictions of the demise of the typical expatriate approach have been greatly exaggerated. We are witnessing the emergence of new compensation challenges instead, due to the complexity of having to manage multiple types of assignments and assignee categories.

The home-based approach still retains its utility for certain kinds of moves (e.g. business-critical assignments or moves to hardship locations). Local strategies are becoming more common but, due to the difficulty of applying them consistently in all transfer destinations, they are used only in some cases (moves between similar countries, developmental moves) and take multiple forms as “purely local” or local-plus approaches. Additional approaches like international compensation structures have emerged to address issues of global nomads.

The challenge for HR managers is, therefore, not so much to find the best approach applicable for all assignments as to deal with individual assignment complexity, envisage greater mobility policy segmentation and, if relevant for the company, map each compensation approach to a particular assignment in a consistent way.

The increasingly complex international assignment landscape: One size does not fit all anymore

Expatriates vs. Locals

One size fits all?

Let's localize assignees as soon as possible!

Expatriates

Rise of the third-country nationals

Need to add a cost efficient category for junior employees/developmental moves?

Traditional expatriates

Global nomads

Permanent transfers

Employee-initiated moves

Local or local plus?

Foreigners hired locally

Commuters (cross-border or regional

Multiple types of short-term/project/rotational assignments

Increasing number of home locations

Reviewing international assignment approaches in three steps:

Step 1: Understand the options available

Approaches linked to the host country (local or local-plus)

While these approaches sound logical and natural (when relocating assignees to a new country, they will be paid according to the local salary structure in that destination country) their practical implementation is often tricky. Few employees accept a salary decrease when moving to a low-paying country. It is often difficult to reintegrate assignees relocated to a high-paying country into their original salary structure due to their inflated base salary.

The host approach was historically not the most common for assignees on long-term assignments. However, we have witnessed a growing interest in recent years in host-based approaches – either a host approach or local-plus approach (host salary plus selected benefits or premiums) – as companies are trying to contain costs and as significant salary increases in many emerging markets make host strategies more attractive.

Approaches linked to the home country ("balance sheets")

Home-based approaches have been traditionally the most commonly used to compensate international assignees. Assignees on a home-based approach retain their home-country salary and receive a suite of allowances and premiums designed to cover the costs linked to expatriation. The equalization logic behind the balance sheet approach (no gain/no loss) encourages mobility by removing obstacles. Retaining the home-country salary facilitates repatriation. The balance sheet approach can, however, be costly. Many companies either look for alternatives or try to reduce the benefits and premiums included for less significant moves.

Other Solutions

Hybrid approaches attempt to combine the advantages of the home and host-based approaches. These often mean running a balance sheet calculation and comparing the results with the host market salary to determine what solution would make sense. A hybrid approach can work well for a small assignee population but it can generate inconsistencies when companies expand globally, and the assignee population grows significantly.

Finally, some companies rely on international compensation structures that do not use the host and the home structures at all. These might utilize the average salary in a selected group of high-paying countries where the companies operate. This approach facilitates mobility for global nomads and highly mobile employees. It is, however, often very expensive and doesn’t solve all assignment-related issues (e.g., currency issues, pension, taxation). It is typically used in specific industry sectors (e.g., energy and engineering) and for a few assignees (top level managers and global nomads.)

Step 2: Assessing assignment patterNs and business objectives

Assignment patterns

Are assignees moving between countries with similar salary levels, which would make the use of local or local plus easier or, on the contrary, are expatriates sent to host countries with different pay and benefits structures (low-paying to high-paying, or high-paying to low-paying country moves)? Are moves for a fixed duration – e.g., assignments lasting one to five years – or will the company rely on permanent transfers with no guarantee of repatriation?

Assignee Population

Are assignees coming mainly from the headquarter countries (typical for early stages of globalization) or is the number of third-country nationals already significant? A growing number of multinational companies report that the number of moves between emerging markets (“lateral moves”) is catching up with or exceeding the number from the headquarters, prompting a review of compensation approaches.

Are some assignees becoming true global nomads who move from country to country without returning home during their career? Employees, and especially the younger generations, are becoming much more mobile, but only a minority would be global nomads. These assignees are usually top-level managers, experts with unique skills, or globally mobile talent sourced from small or emerging countries where the absence of career opportunities perspective would preclude repatriation perspectives.

Company's philosophy and sector

Some industry sectors like services and finances relocate employees between major regional and financial hubs which facilitate the use of local approach, whereas energy and engineering companies transferred employees to hardship locations are a key feature of the business – and requires comprehensive expatriation packages often based on balance sheets and international salary structures.

Step 3: Assess segmentation needs

An increasing number of companies rely on expatriate policy segmentation to reconcile the cost control versus international expansion dilemma – how to have the same number of assignments or more without increasing the budget dedicated to international mobility. Segmentation means reallocating part of the budget to business critical assignees and limits the costs of non-essential moves.

Some of the commonly used assignment categories include strategic moves (business-critical), developmental moves (which benefit both the company and the employee), and self-requested move (requested by the employee but not essential to the business).

A consistent policy segmentation approach allows HR teams to present business cases or assignment options to management and provide a clearer understanding of the cost and business implications of relocation for different assignees.

It could also help manage exceptions into a well-defined framework based on a consistent talent management approach, as opposed to ad hoc deals.

Example of segmented compensation approach: the four-box model

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8 Tips for Preparing Expatriates for Foreign Assignments

Preparing expatriates for foreign assignments is a crucial undertaking for either expansion processes or short-term business travel. The challenge here is to ensure that the employees chosen to go work abroad do so successfully. Much of that effort will be produced by them, but even more important is for the wider company to provide support.

When moving and managing assets - in this case, your talented employees - you want to make sure that all that time and effort isn’t for nothing. You want to make sure the move is compliant and that workflows shared by your team and the expatriate employee are streamlined. 

So what do you need to focus on? Here are eight tips for preparing expatriates for foreign assignments in a successful mobility project. 

• Pre-Move Training
• Sourcing Immigration Support
• Ensure Continued Communication
• Provide Support On The Ground
• Undertake Project Alignment Meetings
• Invest in Knowledge Management
• Provide Home and Host Sponsorship
• Take Into Account Domestic Duties

1. Pre-Move Training

Preparation for expatriation is of utmost importance. This training needs to be well-researched, taking into consideration the potential challenges that employees and mobility teams might face. For example, identify:

Your potential challenges : For example, a specific country could require a specific tax set up for expatriates or business travelers. You’ll have to research the requirements that apply to your expatriation.

Strategies that help you deal with these issues: Some global organizations work with Professional Employer Organizations (PEO) in order to maintain compliance and work in line with cultural requirements. This is one potential solution that you might find appealing.

Areas for cultural training : Cultural expectations can be radically different in one country compared to another - while this may seem like the last thing to focus on, it’s worth spending time looking into cultural differences, just so no accidental faux pas are made.

The overarching goals of the assignment : An expatriation depends on all stakeholders having visibility and an understanding of the reasons for it. 

Local language training : Even if the host country has a good rate of use for your language, it’s worth helping your employee get to grips with the basics.

2. Sourcing Immigration Support

Immigration and the requirements therein are obviously crucial. Border controls, regulatory environments and immigration law are therefore all things to contend with. Now, these can be daunting and confusing, but it’s imperative to fully prepare for them, as they’re some of the first barriers to overcoming when expatriating an employee for foreign assignments. 

You need to make sure that you’re expatriation is in line with national and international immigration policy for both your home and host country. Similarly, visas and short-term or permanent residency applications need to be sent off for. Without these, alongside a considered approach towards global immigration , your overseas assignment won’t be able to continue. 

3. Ensure Continued Communication

Without communication, there’s no expansion. Home and host teams need to be on top of carrying out frequent communications, so that data is acted upon and problems can be solved collaboratively.

Assignees need to be proactive in this and so too do home teams. Communication allows organizations to leverage what’s being learned and respond actively to specific events. On top of that, communication needs to be structured so the learnings and updates shared are easily tracked. Monthly meetings and weekly check-ins are good places to start. 

4. Provide Support On The Ground

Alongside frequent communication, on-ground support also needs to be offered. This is a job for HR teams, who can help expats and their families (if applicable) adapt to their new surroundings. This kind of support covers:

• Finding accommodation.
• Creating bank accounts and setting up payroll in line with host-country regulations ( This is another obligation that a PEO can support you with ).
• Providing health insurance.
• Enrolling children in school (if applicable).
• Preparing accurate taxation processes.

Taxation is one thing to be aware of, as getting the process wrong can result in legal ramifications. Again, this is something a PEO can help support , as they can act as local Employers of Record, managing and deducting taxation at source - making sure your expatriate assignment is compliant in terms of taxation. 

5. Undertake Project Alignment Meetings

Once the critical information regarding the expatriate employee’s assignment, residency, taxation and other requirements has been exchanged with the relevant stakeholders and/or authorities, it’s time for a project alignment meeting.

This meeting should be held between the employee, a host manager or host team and home team. In it, you should identify the potential causes of friction for the assignment and work to strategize mitigation techniques. Similarly, go over mutual expectations held by the home and host team so that visibility and transparency are also captured. 

Overall, you’ll want to firmly pin down issues that may affect:

• Data collection.
• Reporting strategies.

6. Invest in Knowledge Management

Any assignment knowledge generated needs to be properly disseminated to the relevant parties, quickly and efficiently. These lessons are not only worthwhile for future expatriates, but for the wider company itself and how it approaches global marketplaces. 

When we ensure that learning is absorbed and spread across the whole enterprise, we help to reduce mistakes and delays in the future.

7. Provide Home and Host Sponsorship

As we’ve briefly discussed, having home and host teams managing the expatriate are important, but let’s cover that more in-depth. 

Communication via email isn’t the best way to manage a remote employee. To make sure the expat doesn’t feel cut off from home office processes, create teams or ‘sponsors’ that oversee the experience and work of the employee. 

Whether they be points of contact or mentors, these individuals (or wider teams) help to anchor an expat employee to the work in the home country, keeping them updated on any new developments. Both sides help to co-manage and resolve problems when they arise.

Sponsor individuals within the home country are best suited if they too have had experiences with expatriation, because a lot of this management is about empathy - not just looking for hitting the next performance goal. Expatriation is a difficult process, especially if the host country is a radically different place.

8. Take Into Account Domestic Duties

Another tip for preparing expatriates for overseas assignments is to make sure their family is supported.

Some expatriate employees have children and spouses, which sometimes do make an overseas assignment a lot more complex. These difficulties are usually hard to spot, as many employees will be reluctant to share them with employees, due to the size of the project and the personal nature of these difficulties.

It can be the case that the people most likely to be able to help are the last to know, so this is another thing that good communication can help with. From the home country team’s point-of-view, they need to inquire regularly about how the domestic side of the project is going. 

It needs to be made clear that any issues in regards to this need to be made known, but also that no judgment will arise from those issues being aired. Expatriation is a tough process for a family and businesses need to be supportive. This kind of transparency will dramatically help the overseas assignment. 

To discover more about overseas assignments and expansion, we’ve created a fantastic foundational guide that will help you when strategizing your next moves, be they domestic or international. 

The Guide to Global Expansion

There’s a lot of different info out there on the web about taking your business abroad - or even just sending an employee overseas. To help cut through the noise, our detailed guide will help your business’ journey to expansion.

Inside, you’ll discover more on expansion methods, the crucial considerations and further information on PEO. Just click the link below to get your copy.

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Pros and Cons of International Expat Assignment 

Are you trying to work out if a short-term international assignment is for you you may be considering applying for an opportunity or you may have an offer of an overseas role on the table, either way there’s a lot to think about. making the decision to work overseas, even in the short-term, has the potential to have long-term repercussions for your life and career., what is a short-term international assignment [sia].

A short-term international assignment is the deployment of an employee overseas to complete a task usually within a period of three months to a year.

Short-term international assignments became popular early in the millennium as a means of addressing recruitment gaps, talent shortages and focusing on strategic global projects. Their popularity grew during the financial crises as a less expensive form of global mobility.

In the post-Covid world, SIAs are a means of offering increased flexibility to employees who want to gain some international experience without committing to the traditional three to five years overseas.

Like every decision in life, there are positives and potentially some challenges when it comes to moving abroad for work.

What are the pros of a short-term  international assignment?

Opportunity to work overseas, increased experience of global marketplace, leadership potential, improved network.

Working overseas will enable you to broaden your network. While completing a short-term expat assignment you are likely to work with:

·         Global mobility team

·         Human Resources/People Department

·         Senior Management

·         Colleagues at all levels in your new office

·         A new range of stakeholders

·         Customers in a different market

Opportunity to travel 

Opportunity to learn a new language.

Depending on where your short-term assignment is based it may provide an opportunity to learn a new language. You do not necessarily need to be fluent in a language for it to have positive benefits for your career.

Attempting to speak another language allows you to engage with colleagues in your short-term home in a more meaningful and immediate way. It has also been shown to have cognitive benefits too. People who speak more than one language have improved:

·         Critical thinking skills

·         Problem solving skills   

·         Memory

Spouse can retain their career

Children can stay in their current school, what are the cons of a short-term international assignment.

Of course, any kind of change has potential negative side effects to be aware of too. What these are will depend on your circumstances, but some potential downsides may include:

1. Potential for interrupted career progression

Moving overseas may mean you are ‘out of sight, out of mind’. Depending on your company, not being around every day and difference in time zones may mean the good work you are doing is not as visible to centralised management. This isn’t always a difficulty, but it might be something to be aware of depending on your business. 

2. Pressure to deliver 

As a short-term assignee, you are likely to be under pressure to hit the ground running and achieve a lot in a short period of time. You are unlikely to have the luxury of spending the first few months settling in. There may be pressure on you to make changes quickly before you have had a chance to build relationships or get colleagues at a local level on board.

3. Culture shock

The risk of culture shock is even higher with short-term assignees because you may not have the same time to adjust as your long-term counterparts. Comprehensive pre-departure training is important, so you have as much information as possible about life in your temporary home. 

4. Expat loneliness

If you decide leaving family in your home country is the best option then there is a chance you may suffer from expat loneliness while you are away. Building new and maintaining existing relationships while overseas is really important. If you feel lonely , check whether your international health insurance has an expat assistance programme that provides you with access to a trained professional for assistance. 

5. Maintaining relationships at home

Your relationships with friends and family at home are important. Leaving may prove difficult but technology makes it easier than ever to stay in touch. 

6. Relationship issues

If you decide to take the assignment, your partner may have to remain at home for work or family commitments. This can impact your relationship . While you struggle with a new role in a new country, they are left carrying the emotional load at home and often completing all the tasks you used to help with. 

7. Repatriation

Do not underestimate the challenge of returning home once your assignment is complete . Particularly if you settled well and enjoyed the work. Changes may have happened in your home office that mean:

• You are not returning to the same role you left

• Goals and objectives may have changed since

• You may have to readjust your ways of working once again 

Agreeing to an international assignment is a big decision for a range of professional and personal reasons. We hope this will help you to work out what yours are so you can make the right decision for your circumstances. 

If you do decide to accept an assignment, don’t forget you will need international health insurance to access private healthcare should you need it while you are away.

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Resources for International Citizens and Expatriates

• Understanding and Preventing Expat Failure

You will first recruit potential expat candidates, select the best, provide pre-departure training and send them off to their new homes. They will, in time, return to HQ more agile and experienced than before, revealing you for the thoughtful, sage professional you are.

Easy, right?  Except that, as in life, the smooth path of expatriation is littered with unforeseen obstacles. The costs of failure, and the risks, are in fact considerably higher for expat workers than for traditional employees. So much so that the topic of expat failure is arguably the very foundation of expatriate research.

In this article, we examine some of the traditional causes of expatriate failure, as well as a series of recommendations to reduce the risk.

Also Read: 5 Common Problems Faced by Expatriates

Understanding Expat Failure

Early expatriate scholars labeled any early end to an assignment as an expat failure. Yet later studies recognized that assignments might end for a variety of reasons, some of which can be positive. Consider, for instance, that one of your recently assigned expatriates returns home early to accept a promotion. For you and the employee, that represents not a failure but a success.

Alternatively, the expatriate may return home early to accept a position with the competition. For you, this is indeed a bad look. For the employee, however, it’s a sweet victory. If the expat return is due to a change in corporate strategy, this may signal failure to the uprooted expat, but not necessarily for the organization. By contrast, both parties are likely to view the assignment as a failure if the expat is recalled home due to poor performance.

Expat & Employer Expectations

A broader definition, therefore, holds that expat failure occurs when they fail to meet employer expectations. As has been noted, failure may result if the expatriate is recalled for poor performance or departs for a better offer with a competitor. But even those assignments performed to their bitter end may be failures if the employee does not meet organizational objectives or performs below expectations.

Failure can even result after the assignment ends. Companies often anticipate that returning expatriates, with their international know-how, will prove a boon to their home organization. Indeed, many are appointed to international assignments to groom them for future leadership positions. Yet, in a significant loss on investment, studies show that around one-quarter of expatriate employees leave their employers within two years of their return – often for better jobs elsewhere or due to dissatisfaction with their reintegration to the home office.

The High Cost of Expatriate Failure

The exact failure rate is hard to specify given all of these possible causes, and scholars offering estimates have faced criticism from their more data-driven peers. Yet, consider the warning signs reported in one study. The authors found that over two-thirds of expatriates experienced stress relating to their job performance within their first four months on assignment. Another two-thirds reported concerns about their relationship with their new boss. At the 8-month mark, the situation had improved somewhat, but around half were still expressing concerns.

Organizational Consequences of Expat Failure

The consequences to the organization of such failures are notable, including costs estimated at $1.2 million per expatriate. This hefty price tag comes from the boost to salary that is typically needed to incentivize employees to go abroad. There are also relocation fees, cost of living adjustments, pre-departure training and orientation, and more. Organizations pay for the failures of international staff through loss of reputation with clients and customers. Similarly, other employees may hesitate to accept international assignments when observing their expat co-workers’ shortcomings.

Consequences for an Expatriate

Arguably, an expat experiences an even higher cost of failure than the organization, with failure imposing psychological costs as well as professional and financial burdens. Because expatriates are often chosen precisely because they are among the organization’s best domestic performers, these historic high achievers may be particularly unsuited to handle the stress of failure.

A study from 2007 showed that 45% of the expatriates in their study reported feeling “overwhelmed” with overwork.  Also notable is that 51% felt more overworked than at home. Nearly 50% worked 50 or more hours each week. Outside of the academic research sphere, 2022 research by Cigna Global shows similar issues, with 89% of respondents indicating they were “always on” for work and 98% reporting symptoms of burnout.

Other studies suggest that unsuccessful expatriates may experience losses of self-esteem, confidence, professional reputation, motivation, and a reduced appetite for any future international assignments – even when the causes for failure were beyond their control.

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Expat Failure: What it (Usually) Isn’t

So, what are the causes of expat failure? It may be tempting to assume that job skills are the main determinant of expat success and that the lack thereof is the main cause of expat failure. In fact, skills are the primary characteristic that many organizations use to select expats. And ensuring a match between an expatriate’s skills and the needed on-assignment skills is important, as is providing expatriates with the role clarity needed to understand what is expected of them.

Yet studies suggest that failure is rarely a matter of insufficient or mismatching skills. The reason? Expatriates tend to perform tasks abroad that are similar to those they were performing at home.

Expat Failure: What it (Often) Is

Instead, the leading risk of expat failure is difficulty adjusting to the new culture, family stress and simple overload of responsibility. (For more detail on this, read How to Become an Expat – Successfully .) The greater the cultural difference between an expatriate’s home country and the host country, the more significant these challenges are likely to be.

Challenges also arise for many expats and their families when foreign national communities are small or local communities are insular and unwelcoming. These environments can cause difficulty for expatriates in making new friends or feeling a part of the community.

Pre-Departure Training

Extensive pre-departure training provides a ready solution for these issues. But some organizations neglect to provide any pre-departure training. Others fail to realize its full benefits by offering simplistic or outdated seminars. In addition, studies show time and again the importance of well-adjusted spouses and children. This emphasizes the importance of including family members in certain pre-departure training and orientation.

Expatriates may also have the right technical skills to succeed but the wrong social skills or personality traits. For instance, more outgoing, charismatic and ambitious employees tend to adjust better to their host environments. In addition, employees’ patience, curiosity and openness to new experiences are particularly important in the international context. Unsurprisingly, prior international experience also predicts future success. Thus, selecting the right employee is a key step in the expatriate process.

Support from Management

Finally, employees expect heightened support from their organizations when going on international assignments. When expats feel unsupported, they may lose their motivation to perform or seek alternative employment.

Expat expectations include workplace features such as salary hikes and improved benefits, improved professional opportunities and performance management systems adapted to the international assignment. Furthermore, support may be needed to ensure that the expatriate stays well connected to HQ and that opportunities for professional advancement remain or improve once on international assignments.  In addition, however, expected support may include non-work needs, such as helping staff members to find a new home or a spouse find a new job.

From Expatriate Failure to Expatriate Success

The risk of expatriate failure is, consequently, a real risk bearing down on both employer and employee. And yet, the research is clear that expatriates offer significant benefits to their employers, from connecting HQ with distant offices to sharing best practices and equitably distributing top talent. The challenge and opportunity for HR professionals, then, is to leverage such opportunities while minimizing risks.

How to do this? Through careful attention to all stages of the expatriate management process. From employee selection to pre-departure training and preparation to ongoing support throughout the assignment and on return, HR professionals can set expats up for success.

• The 5 Best Countries to Work in For Expats
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About the Author

Dr. Thomas J. Bussen, with a Doctorate of Business Administration, JD, and MBA, is an Assistant Teaching Professor at Miami University’s Farmer School of Business, and a former professor at the African Leadership University and the American University of Central Asia.  He is the author of several books, including Shaping the Global Leader and Compliance Management: A How-to Guide . His latest book, Enlightened Self-Interest: Individualism, Community and the Common Good, makes the case for a more inclusive and equitable professional mindset and is expected for release in 2023 with Georgetown University Press.

Sources and Further Reading

Kraimer, M. L., Shaffer, M. A., & Bolino, M. C. (2009). The influence of expatriate and repatriate experiences on career advancement and repatriate retention.  Human Resource Management: Published in Cooperation with the School of Business Administration, The University of Michigan and in alliance with the Society of Human Resources Management ,  48 (1), 27-47.

Lazarova, M., & Caligiuri, P. (2001). Retaining repatriates: The role of organizational support practices.  Journal of world business ,  36 (4), 389-401.

Mesmer-Magnus, J. R., & Viswesvaran, C. (2007). Expatriate management: A review and directions for research in expatriate selection, training, and repatriation.  Handbook of research in international human resource management , 197-220.

Suutari, V., & Brewster, C. (2001). Expatriate management practices and perceived relevance: Evidence from Finnish expatriates.  Personnel Review .

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How to Avoid Expatriate Failure

Anne morris.

IN THIS SECTION

Deploying an employee to work overseas on assignment or as a relocation is an investment which can help your organisation take advantage of the global economy. Unfortunately, as is the case with any potentially lucrative investment, international assignments carry a high risk of failure. Expatriate failure can be expensive for your company and an unwelcome experience for the assignee, especially if they are forced to return to the UK prematurely and having not completed their assignment or met their objectives.

An awareness of the common causes of expatriate failure can help your HR department plan a water-tight international relocation strategy, to protect your organisation’s commercial objectives and the employee’s wellbeing and support their ability to perform.

This guide discusses practical steps that HR professionals can take to minimise the chances of expatriate failure, but also to derive the maximum benefit from overseas assignment success. In most cases, international assignments afford the expatriate employee the chance to acquire valuable new skills and experiences, which can be put to good use by the company upon their return.

What do we mean by expatriate failure?

Expatriate failure is a term used to describe any unsatisfactory outcome of sending an employee on an international assignment. This encompasses ‘complete’ failures, which would usually result in the employee returning to the UK without completing the assignment; and ‘partial’ failures, which may include poor performance or failure to achieve specific commercial outcomes.

The cost of expatriate failure

Globally, expatriate failure rates are consistently high due to the mental, emotional and physical strain placed on employees who relocate abroad.

Research has shown that expatriate failure rates are higher among employees sent to developing countries and lower among those sent to economically flourishing countries. In some parts of the world, relocating an employee from the UK carries around a 50% chance of failure.

Successful long-term international assignments typically cost an employer as much as three times the employee’s annual salary.

If the assignment is not a success, your organisation may not see the commercial gains needed to balance the investment and could be forced to spend more money bringing the employee home ahead of schedule.

Beyond the financial cost, there is also the impact of the experience on the employee. They may have been selected for their skills and knowledge, and a premature and unsuccessful return to their home country may impact their confidence and their pride, potentially precipitating a fresh start with a new employer.

Reasons for expatriate failure

There are many factors that can contribute to expatriate failure. Often, failings in the expatriate employee’s support system both at home and abroad are to blame.

In other cases, the assignment was doomed to failure from the outset, as the employer choose the wrong person to send on the overseas project.

If your expatriate employee does not possess the personal qualities necessary to thrive in the new environment, no amount of support provided by the organisation can ensure the assignment is a success. When planning any international relocation, keep the following common causes of expatriate failure in mind.

Poor candidate selection

When there is a lot riding on the success of an overseas project, employers often select their best and brightest employee for the international role with little regard for the other qualities they will need to be successful. While you must choose an employee with the skills and experience necessary to complete the project, personal qualities such as adaptability, open-mindedness and a love of different cultures are arguably more important. To avoid expatriate failure, employers should consider their candidate’s personality, lifestyle, interests and previous experience with foreign cultures. Keep in mind that a ‘love of travel’ will not always translate to expatriate success, especially if the employee in question spends a lot of their travel time in English-speaking areas, around other British people (e.g. at holiday resorts) or in foreign places where they can easily access familiar foods and other items from home.

The following attributes may also minimise the likelihood of expatriate failure:

• The ability to speak a foreign language (even if that language is not spoken in the overseas location, interest in foreign languages suggests interest in other cultures, and a willingness to learn new skills)
• Being single or without children (do not rule out people with dependant families altogether but finding a candidate who could relocate by themselves reduces the chances of expatriate failure being caused by domestic issues)
• Excitement about the project itself (it is not enough simply to find an employee with exceptional skills, they must also be genuinely passionate about the organisation’s goals and feel personally invested in the success of the overseas project)

Inadequate support systems

Comprehensive support structures are essential for international assignment success. Expatriate failure is often caused by lack of practical support in the host country and/or disconnection with the home environment. It is crucial that relocation support does not end as soon as the employee has arrived at their new destination. Your expatriate employee should be assigned a personal mentor in their host country, whose role it is to oversee their adjustment to the new environment and be a first point of contact when they require additional support. You should account for both in-work and personal-life issues when assigning a mentor. Consider that the employee may need assistance with:

• Negotiating the new work environment
• Building social connections outside work
• Organising services like having a phone line installed or making an appointment with a doctor

Just as employers must choose the right employee for an overseas assignment, they must choose the mentor for that employee wisely. If possible, select a mentor with expatriate employee experience so that they can empathise with the relocating employee’s struggles.

Lack of expatriate training

Expatriate failure becomes far more likely in situations where the employee has been given insufficient training prior to the move. Expatriate preparation should not be rushed and must include cultural and language training where applicable, in addition to basic training regarding their role and assignment. Your expatriate employee must be prepared with:

• The language skills necessary to communicate with their colleagues, navigate, purchase provisions and services, and make casual conversation
• Knowledge of cultural and societal norms in their host country (especially any differences which could lead to conflict or cause offence when not acknowledged)
• Basic knowledge of the area in which they will be living and working (e.g. public transport, schools, restaurants and other facilities)

Effective planning is the key to avoiding expatriate failure. Employers must ensure that every aspect of the employee’s new work and living situation has been considered, so that measures can be put in place to prevent problems. International relocation training plans vary in content and structure, depending on location and the duration of time the employee will be abroad. In general, it is wise to allow for at least one month of training time prior to the move. Preferably, this training should be conducted within your employee’s normal working hours.

Poor communication

Employers should develop a plan for structured communication with their overseas employee. Part of your support plan should include keeping the expatriate employee ‘in the loop’ with regular communications from the UK office. Consider assigning a point of contact at home and scheduling weekly or fortnightly update calls or emails. ‘Casual’ communication arrangements are not sufficient as the absence of a structured plan often results in dwindling contact, which may leave the employee feeling isolated.

Make sure your expatriate employee knows who to contact if they require additional support beyond scheduled communications. Your training programme should include making the employee aware of potential issues they may experience while settling into the new environment, such as culture shock, social isolation or domestic difficulties (when relocating with a spouse or child). The employee must understand that such difficulties can ultimately lead to expatriate failure and for that reason, they have a responsibility to report problems and seek assistance. Make it clear that you are keen to offer all necessary support but that you can only do so when you are kept informed about problems, as they arise.

Prepare for repatriation 

When planning to avoid expatriate failure, keep in mind that it is not only your employee’s experience abroad that must be considered. Depending on the length of time your employee was overseas, they may need help settling back into the UK work environment. You cannot call the international assignment a success if the employee’s performance or personal wellbeing suffer due to insufficient support when they return home.

Failure to consider the implications of repatriation often results in poor talent management. Consider the fact that the returning employee has likely acquired valuable new skills, knowledge and experience during their time abroad. These are assets to your business that may be wasted by sending the employee back to their previous job role. It may be more appropriate to move the employee to a new role in higher management or an entirely different sector within the company. Ideally, this is something you should consider and discuss with the employee when ironing out your initial plan and the terms of the international relocation. Remember that at every stage of planning, prioritising your employee’s career goals and personal wellbeing is the secret to avoiding costly and disruptive expatriate failure.

Need assistance?

DavidsonMorris’ global mobility specialists work with global employers to support development of high-impact talent mobility strategies and programmes. We understand the challenges pf overseas assignments facing both the employer and the employee and can work with you to provide expertise and insight into effective management of assignments to avoid expatriate failure.

Expatriate failure FAQs

What are the major causes of expatriate failure.

A number of reasons are commonly cited for expatriate failure, including social isolation, culture shock, family pressure and responsibility overload. Ultimately, the employer should develop and follow a robust and extensive candidate selection process and provide ongoing support while the employee is overseas to minimise the risk of assignment failure.

How should you select candidates for overseas assignment?

Beyond technical and organisational knowledge and competencies, assignees should also demonstrate an understanding of what the experience will entail and the ability to cope with the full demands of living overseas such as having a positive mindset, showing adaptability in challenging circumstances, language ability, local cultural knowledge and confirmation of family support for the move.

How can DavidsonMorris help?

DavidsonMorris are experienced global mobility advisers, working with global employers to help improve the impact and return on their global mobility programmes. We can provide guidance and insight into how to select and support overseas assignees to minimise the risk of expatriate failure.

Last updated: 2 May 2023

Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.

She is a recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.

Anne is an active public speaker, immigration commentator , and immigration policy contributor and regularly hosts training sessions for employers and HR professionals

• Anne Morris https://www.davidsonmorris.com/author/anne/ UK Visa Fees 2024
• Anne Morris https://www.davidsonmorris.com/author/anne/ British Citizenship Fees 2024
• Anne Morris https://www.davidsonmorris.com/author/anne/ Guide to Travelling to the UK
• Anne Morris https://www.davidsonmorris.com/author/anne/ Explore Commonwealth Visa Options

About DavidsonMorris

As employer solutions lawyers, DavidsonMorris offers a complete and cost-effective capability to meet employers’ needs across UK immigration and employment law, HR and global mobility .

Led by Anne Morris, one of the UK’s preeminent immigration lawyers, and with rankings in The Legal 500 and Chambers & Partners , we’re a multi-disciplinary team helping organisations to meet their people objectives, while reducing legal risk and nurturing workforce relations.

Legal Disclaimer

The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct at the time of writing, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.

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What is Expatriate?

Expatriate is a term used to describe an employee who is temporarily or permanently assigned to work in a foreign country. Expatriates may be assigned to work in a foreign country by their company, or they may be sent to work in a foreign country by their government. Expatriates may be assigned to work in a foreign country for a variety of reasons, including to gain experience working in a foreign country, to learn a new language, or to gain knowledge about a foreign culture.

What are the benefits of expatriate assignments?

There are many benefits of expatriate assignments for both the employee and the employer. For the employee, expatriate assignments can offer opportunities for growth and development, as well as new and exciting experiences. They can also provide a chance to learn about a new culture and to improve foreign language skills. Additionally, expatriate assignments can offer a higher salary and a variety of benefits, such as tax breaks and allowances.

For the employer, expatriate assignments offer the chance to send employees to new and challenging assignments, which can help to develop their skills and knowledge. Additionally, expatriate assignments can help to build a global network of contacts, which can be beneficial for the company. Additionally, expatriate assignments can be cost effective, as the employee may be able to claim tax breaks and allowances.

Who uses Expatriate?

Expatriate is used by human resources professionals to describe employees who are temporarily assigned to work in a foreign country. These workers may be sent by their company to work in a new office or to support a project in a foreign country. Expatriates may also be transferred to a new position in a foreign country.

How do you build an expatriate program?

There is no one-size-fits-all answer to this question, as the best way to build an expatriate program will vary depending on the company’s needs and goals. However, some tips on how to build an expatriate program include:

• Establish a clear purpose for the program. Before creating an expatriate program, it is important to establish a clear purpose for it. What are the company’s goals for the program? What do they hope to achieve by sending employees abroad?
• Define the target audience. Who will the program be aimed at? Is it for senior executives only, or will it also include lower-level employees? Defining the target audience will help to determine the specific criteria that employees must meet in order to be eligible for the program.
• Establish eligibility criteria. In order to be eligible for an expatriate program, employees must meet certain criteria. Establishing clear eligibility criteria will help to ensure that only the most qualified employees are chosen for the program.
• Design a comprehensive selection process. The selection process for an expatriate program should be comprehensive and rigorous. It should include a review of the candidates’ skills and experience, as well as their personal and professional goals.
• Create a comprehensive training program. Once employees have been selected for an expatriate program, they need to be properly trained for their new role. The training program should include information on the company’s culture and business practices, as well as on the specific country where the employee will be working.
• Develop a support system. An expatriate program is only successful if there is a strong support system in place. This includes a network of mentors and advisors who can help the employee adjust to their new surroundings.

Why do you need an Expatriate program?

The modern workplace is a global one, and businesses need to be able to operate in multiple countries in order to be successful. In order to do this, they need to have employees who are able to work in different cultures and who have the skills to navigate different business environments. An expatriate program is a way to identify and recruit employees who have the necessary skills and cultural understanding to work in a foreign country. It also provides a way for businesses to support their employees as they move to a new country and help them to adjust to their new surroundings.

Where should you post your expatriate jobs?

There are a few different places to post Expatriate jobs. One popular site is Indeed.com. You can also post directly on company websites or job boards. Another option is to use a staffing agency that specializes in finding candidates for international positions.

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International Assignment Management: Expatriate Policy and Procedure

Our philosophy.

[Company Name] is a global company that operates over X offices worldwide. The transfer of employees between the various [Company Name] units, from headquarters to subsidiaries, between subsidiaries and from subsidiaries to headquarters, enables our company to better utilize its human resources, while offering efficient support to its business activity. In addition, it enables our executives and professionals to gain international business experience and opens up wider promotion paths.

The objective of this procedure is to define the processes, terms and conditions for transferring personnel from one [Company Name] unit to another and to provide guidelines for the benefit and relocation package for such employees. While differing laws in various countries may influence some aspects of the policy implementation, the basic guidelines are to be maintained in order to ensure a unified company policy.

The effective date of this policy is [Insert Date].

Definitions

Expatriate (Hereinafter “Ex-pat”) - An employee who is relocated from his/her home country to work at one of the subsidiaries of [Company Name] abroad or at Corporate Headquarters for a period exceeding one year.

Host country/ subsidiary - The receiving or destination country/subsidiary of the Ex-pat.

Home country/subsidiary - Originating country/subsidiary of the Ex-pat.

General Approval process for an Ex-pat assignment

The transfer of an employee from headquarters to a subsidiary, between subsidiaries or from a subsidiary to headquarters, is contingent upon joint discussions held between the divisions and the subsidiaries.

The Ex-pat position must be granted budgetary approval from the division and approved by the Corporate HR Forum. The host country has veto power over the corporate offer for all candidates except those in top management positions. In January of each year, the HR Forum will convene in order to discuss general Ex-pat recruitment needs for the upcoming year.

Contract approval process

Contracts of subsidiary management team are coordinated and approved in advance by the relevant Co-President and Corporate VP of HR. The rest of the Ex-pat’s contract is coordinated and approved in advance by the Corporate VP of HR.

The employment offer, including salary, benefits and job description, is generated on behalf of the subsidiary by the host country HR Manager and/or relevant VP.

When an Ex-pat relocates from one subsidiary to another, the receiving HR Manager will transfer the offer to the HR Manager in the Home Subsidiary and to the Corporate VP of HR.

As a rule, the entire process of transferring employees between the various company units (subsidiaries/headquarters) under Ex-pat terms is coordinated by Corporate VP of HR (as described above).

Standard Assignment Period

Ex-pat status is restricted to a period of up to 5 years. After this period, the employee is no longer employed under Ex-pat terms and conditions, but rather, under local terms. Exceptions are granted under very limited circumstances and require written explanations and approval of the subsidiary president and the Corporate VP of HR. Under no circumstances will the extension of Ex-pat status exceed an additional 3 years.

Transferring from one subsidiary to another is considered a new assignment in this context.

Terms of Assignment Termination

Completion of the Ex-pat assignment requires a ninety (90) day mutual notice period. If the Ex-pat assignment is termi­nated by the company for any reason other than a breach of the employment agreement on the part of the employee, s/he will be relocated to his/her home country in accordance with the company’s then-current relocation policy and will be exempt from repaying the standing relocation loan

Relocation Allowance

In the event that the employee resigns from the company or from the assignment, he is required to repay the relocation allowance on a pro-rata basis as well as take responsibility for household moving arrangement and expenses (excluding countries in which the law requires the Company to cover Ex-pat relocation expenses, even in case of employee resignation).

Budget allocation

All Ex-pat benefits will be allocated to the host country budget.

Commitment to Hiring the Ex-pat When His/Her Assignment is Completed

[Company Name] makes no commitment to re-hire the employee in his/her home country after his/her Ex-pat assignment is completed.

However, should the employee work in his host country during the ninety (90) day notice period (see above), the employee will be granted the right to work for three (3) months at the company in the Home country on local terms as determined by the home country HR manager on a case-by-case basis.

Commitment to return to the company upon assignment completion

The employee makes no commitment to return to the company upon completion of his/her assignment. However, s/he may be eligible for repatriation benefits (see “Repatriation Policy & Benefits”) upon return to his/her home country.

Spouse Status/Domestic Partners

[Company Name] will extend spouse status to domestic partners. Ex-pat terms apply to the employee, his/her spouse or domestic partner and their children.

Salary Review

Salary review takes place in accordance with the host subsidiaries policy as approved by corporate policy.

The Ex-pat is responsible for paying any tax liability incurred from benefits and compensation received in both his/her host and home countries (excluding countries in which the employer is required to deduct the taxes from all paid benefits).

Option Plan

Options are granted, if applicable, in accordance with host country policy.

Retention of Home Country Social Benefits

The company will cease to fund payment to retirement plans for Ex-Pats for the period of employment in one of the Company subsidiaries. Following are details on the implementation of the decision:

Ex-Pats Recruited from within [Company Name]

Upon the termination of employee-employer relations with [Company Name] – prior to his relocation to the subsidiary, the Ex-Pat will sign an employment termination agreement with [Company Name]. The amounts accumulated by the employee in various funds, will be released

Ex-Pats Recruited from outside of the Company

In accordance with the above-mentioned policy, no amounts will be allocated to retirement and national insurance to Ex-pats recruited from outside the company as of January 2004.

Ex-Pats Currently in Office

Employees will be granted the option to choose between the termination of employer-employee relations and between the continued payments of funds, up to a ceiling of 5 years after their departure to the host subsidiary – a time in which, according to the procedure, the employees cease to carry Ex-Pat status.

The termination of employee-employer relations, in this context, is accompanied by the release of accumulated funds only, with no supplement. Any employee decision (continued payment of funds or termination of relations) will be backed by a document signed by the employee.

Health Insurance

The Employee and his immediate family are covered by local or international health insurance as per the host country’s policy.

Performance Appraisal

In accordance with host country policy (as per corporate policy).

Recruitment and Selection of Ex-pats

Ex-pat recruitment is conducted either internally (i.e. within the company) or externally.

Internal Recruitment

The recruitment process must include a professional recommendation from the division/unit/subsidiary and personality assessment of the employee and his/her spouse conducted by the HR manager (in Corporate, HR manager of the relevant Division or by the Recruitment manager) and/or by an external assessment agency.

Once a final decision is made in the home country, the internal candidate will be interviewed at the host country.

Should the host country HR manager decide to hire, s/he will issue a contract to the employee in cooperation with the HR manager in the home country.

The home country HR manager is charged with care of the administrative processes surrounding the relocation of the employee, including the signing of a non-paid-vacation/leave of absence agreement, which identifies preservation of rights benefits but otherwise confirms the lack of a contractual relationship between the home country company and the employee.

External Recruitment at Corporate

In cases where there is no suitable internal candidate the Corporate Recruitment manager in cooperation with the HR Manager of the relevant division, will manage the search.

The external candidate will be interviewed by corporate managers and by the HR department. Assuming the candidate makes a positive impression, an external personality and capabilities assessment process of both the candidate and his/her spouse will be performed by a specialized agency.

Once Corporate makes positive recommendation, the candidate will be interviewed by the host country.

An acceptance by the Subsidiary will result in either:

• The Subsidiary offering the position to the candidate and employing him/her from day one (the preferred option), or:
• The candidate signing a temporary agreement with Corporate until completion of the training period and/or residency visa procedures. In this case, a secondary employment agreement for the assignment will also be signed with the Subsidiary.

Engagement in an Ex-pat employment assignment is contingent on successful attainment of work authorization in the host country. The process for being granted a work visa differs with the country of destination. Company is responsible for supporting the application for a work visa for the employee and a residence visa for the family.

It is the responsibility of the host country HR manager in coordination with the home country HR manager to take care of the process.

Family Visas

[Company Name] is obliged to support the application of a residency visa only for the Ex-pat’s immediate family (for this matter, the term “immediate family” relates to the spouse and children of the Ex-pat).

The employee has the responsibility to monitor the accuracy and expiration dates of visa documentation for himself and his/her family in order to maintain a lawful working status in the host country.

Language studies

The allotment of English/local language lessons will be approved in accordance with each Subsidiary’s existing policy.

Cross-Cultural Orientation

Written material containing informative details relevant to the country of destination will be delivered to the employee by the HR Department. A complementary cross-cultural workshop will be also coordinated for the employee, his/her spouse and their adult children. The workshop will concentrate on the psychological/emotional stages that the employee and his/her family are likely to face during the transition to a foreign country.

The workshop will be coordinated by the HR Department in the home country once the contract is signed.

Preview Trip

The candidate who expresses a sincere intention to accept the Ex-pat assignment and his/her spouse/domestic partner (if they have school age children) are eligible for a preview trip.

The preview trip is approved for up to 5 working days. It is recommended that the preview trip be combined with a business trip.

The company will pay for round trip economy airfares to the host country and per-diem according to the home country’s per-diem travel policy.

The potential candidate should notify the host country’s HR manager re: his/her preview trip schedule so that proper arrangements can be made.

The potential candidate will meet with his/her direct manager and related business VP’s or managers to learn more about the scope of the job as well as the host country milieu.

House hunting should be done during the preview trip. If possible, it is recommended that an apartment be identified so paperwork can be processed and the apartment readied for when the Ex-pat’s arrival to start his/her assignment.

Visits to potential schools should also take place during the preview trip.

Temporary Housing (at home country)

Expats will be allowed to choose between using their 30 days of hotel and rented car right in their Home Country or at the Host Country, as long as they don't exceed the 30 days period limit.

Special Vacation Days for Arrangement

The Ex-pat is eligible for 5 days vacation leave, in addition to the annual leave, before going on the assignment, in order to arrange his personal matters.

Traveling and Settling-in Policy & Benefits

Cargo Shipment

The company pays for a 20-foot container, insured for up to $40K (US).

It is the responsibility of the host country HR manager to coordinate cargo shipment, except in the case of Ex-pats departing or repatriating from and to Corporate. In such cases, the Customer Department of the Operations Division coordinates the shipment.

For Ex-pats moving from one subsidiary to another, on a sequential assignment, the Repatriation Policy and Benefits re: cargo shipment, shall apply.

No payments will be allocated for the storage of freight for longer than the period required to release the container from Customs.

The company will provide the Ex-pat with a Relocation Allowance to assist with miscellaneous transition expenses. The amount of the allowance will be $3K (US) for singles and $4K (US) for couples with or without children.

The payment will be provided in the home country or upon arrival in the host country as per local procedures.

If the Ex-pat resigns before completing two years of his/her assignment, he/she will be required to pay back the Relocation Allowance to the company on a pro-rata basis.

Household Goods Loan- Company Inc.

Upon arrival at Company Inc., the Ex-pat is eligible to apply for an additional no interest loan of up to $2.5K (US) to assist with miscellaneous costs.

The loan is repaid as per subsidiary policy.

Temporary Housing and Rental Car

Upon arrival at the country of destination, the company will pay for car rental and hotel accommodations for a period of up to 30 days. During this time the employee is expected to make longer term automobile and housing arrangements.

Special Vacation Days for initial settling

Upon arrival to new country the Ex-pat is eligible for 5 days vacation leave, in addition to the annual leave, for arranging his personal matters.

At-Post Policy & Benefits

Annual Leave- as per host country policy.

Holidays and Leave - as per host country policy.

Housing- as per host country policy.

Car- as per host country policy.

Ex-pats are eligible for home leave after each year, as long as they have a balance of one-year service commitment in the host country upon return from home leave.

Home Leave Duration

The duration of the home leave will be up to 21 days, as listed below:

5 days – Training and meetings that will be regarded as working days at Corporate headquarters or at the Home Subsidiary headquarters. In case there is no need for the employee to attend any business meetings/training or if his home country is far from subsidiary headquarters, these 5 days, if taken, will be on the account of the employee’s annual vacation days allotment together with the other 10 days mentioned below.

6 days – Weekends

10 days – Annual vacation days

[Company Name] will cover the round-trip coach fare from and to the country of origin for up to a 21-day visit by the employee and his/her family. In the event that the employee’s family extends its visit beyond the 21-day period and in the event that this extension incurs additional costs to the tickets, these costs will be borne by the employee.

Home Leave Expenses

The Ex-pat is eligible for a special (taxable) allowance towards expenses during home leave:

Senior Subsidiary managers (Presidents/Vice Presidents) will be eligible for $2,000 (US). They are also eligible to a car for their use during the working days they are requested to work during their home leave period, up to a 5 days limit. Any other car expenses during the Home Leave period are covered by the $2,000 that Senior Subsidiary Managers are entitled to as Home Leave Expenses.

Other Ex-pats will be eligible for $1,300 (US).

Application for Home Leave

Ex-pats will fill the home leave application form and obtain direct manager’s, relevant VP’S and host country HR manager’s approvals prior to taking the leave. This process should take place 3 months prior to the starting date of the planned home leave.

Children’s Education

[Company Name] pays for children’s education from Kindergarten through Secondary School or High School Grade 12 equivalent or from age 2 to age 18, depending on local practice.

In countries where the local school system is inappropriate or in an unfamiliar language, International/ American/ British/ Canadian School may be an appropriate alternative.

Educational expenses supported by the company include the following:

• School registration fee
• Tuition fee
• School bus transportation fee
• The company does not pay for the following:
• Summer school
• Summer camp
• School field trip

Academic Studies

Ex-pats (who are not subsidiary management members) will have the option to apply for academic studies, with a subsidy of the company, according to the local subsidiary’s terms and procedures.

Ex-pats who are subsidiary management members (VP’s and Branch managers) will have the option to apply for academic studies, with a subsidy of the company (based on the subsidiary terms and procedure). The applications will be submitted with the subsidiary recommendations to Corporate HR VP for final approval

Family Member in Home Country

The company will provide a round trip economy air ticket for the shortest route to the host country as per the home leave policy of frequency of the Ex-pat, for family member/s who continue to reside in the home country. Family member/s in this case includes sons and/or daughters of the Ex-pat until age 18 or completion of mandatory military service.

Death in the Family

In the event there is a death in the Ex-pat’s family or the Ex-pat’s spouse’s family the company will pay for round trip economy air tickets to the Ex-pat’s home country for either the Ex-pat or his/her spouse. The Ex-pat is entitled to 7 working days paid leave under such circumstances. For the matter of this paragraph, “Family” is defined as: father, mother, spouse, son, daughter, brother or sister.

Tax Preparation Assistance

The Ex-pat is eligible for tax consultation reimbursement as per host country policy.

Repatriation Policy & Benefits

The benefits set forth below will be valid for a period of up to three months after the date of assignment completion and only in conjunction with a bona fide move of a permanent nature back to the employee’s country of origin or to a subsequent assignment in another subsidiary.

Upon assignment completion the company will arrange and pay for the Ex-pat’s cargo shipment. An Ex-pat with 3 or more children will be eligible for a 40-foot container insured for up to $40K (US). An Ex-pat with fewer than 3 children is eligible for a 20-foot container, insured for the amount of up to $40K (US).

It is the responsibility of the originating country HR manager to coordinate the shipment, except in the case of Ex-pats repatriating to Corporate. In this case, the Customer Department of the Operations Division coordinates the shipping.

No payments will be allocated for the storage of freight in the host or home country for a period exceeding that required to release the container from Customs.

Special Vacation Days for Arrangement (Host Country).

The Ex-pat is eligible for 5 days vacation leave, in addition to the annual leave for arranging his personal matters, before departing to his/her home country or before going on his/her next Ex-pat assignment.

Temporary Housing and Rental Car (Host Country)

The company will pay for car rental and hotel accommodations for a period of up to 12 days if needed, at the employee’s regular location, prior to the Ex-pat departure from the host country. The host country HR manager is responsible for the coordination of these arrangements.

Benefits for Employees Returning to Work at Company in Home Country

The employee is eligible for 5 days vacation leave, in addition to the annual leave, to assist with his/her settling-in arrangements.

Repatriation Grant

The company will reimburse the employee for up to $1,000 (US), as per receipts, to help with repatriation expenses. “Repatriation Expenses” include such expenses as temporary accommodations, rental cars and tutoring.

Responsibility

This procedure may be changed occasionally. All changes require the approval of the Corporate VP Human Resources.

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What Is an Expatriate?

Understanding expatriates.

• Retiring Abroad

Foreign Earned Income Exclusion

Foreign tax credit, expatriation tax.

• Pros and Cons of an Expatriate

The Bottom Line

• Taxpayer Types

Expatriate (Expat): Definition, With Pros/Cons of Living Abroad

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.

Lea Uradu, J.D. is a Maryland State Registered Tax Preparer, State Certified Notary Public, Certified VITA Tax Preparer, IRS Annual Filing Season Program Participant, and Tax Writer.

Investopedia / Julie Bang

An expatriate, or expat, is an individual living and/or working in a country other than their country of citizenship, often temporarily and for work reasons. An expatriate can also be an individual who has relinquished citizenship in their home country to become a citizen of another.

Key Takeaways

• An expatriate is somebody who has left their country of origin in order to reside in another country.
• Expats may leave home for work reasons and seek more lucrative employment in a different country.
• Expatriates may live for a while overseas or completely renounce their citizenship of one country in favor of another.
• Retiring abroad has become an increasingly popular option.
• The IRS may impose an expatriation tax on individuals who renounce their citizenship, usually based on the value of a taxpayer's property or income in the United States.

An expatriate is a migrant worker who is a professional or skilled worker in their profession. The worker takes a position outside of their home country, either independently or as a work assignment scheduled by the employer, which can be a company, university, government, or non-governmental organization.

If your employer sends you from your job in its Silicon Valley office to work for an extended period in its Toronto office, you would be considered an expatriate or "expat" after you arrive in Toronto.

Expats usually earn more than they would at home, and more than local employees. In addition to salary, businesses sometimes give their expatriate employees benefits such as relocation assistance and housing allowance. The expat will need to open a local bank account that will allow them to function in their new home.

Living as an expatriate can be exciting and present an excellent opportunity for career advancement and global business exposure, but it can also be an emotionally difficult transition that involves separation from friends and family while adjusting to an unfamiliar culture and work environment. Hence, the reason behind the higher compensation offered to these migrant workers.

Special Considerations: Retiring Abroad

Much expatriation occurs during retirement. While most Americans spend their retirement in the U.S., a growing number are opting to retire overseas . People are motivated to relocate abroad at an older age for several reasons , including lower cost of living, better climate, access to beaches, or some combination of those and other reasons. However, it can also be tricky to navigate taxes, long-stay visas, and the language and cultural differences experienced when settling down in other countries.

Popular retirement destinations include countries in Central and South America, the Mediterranean, and parts of Europe.

A common choice presented to a retiree expat is between permanent residency and dual citizenship. Note that neither dual citizenship nor residency gets you out of filing a U.S. tax return every year. It is both surprising and burdensome, but Americans still have to pay income taxes wherever they live, and they owe it no matter where their income was earned.

You may also have to file an income tax return in your country of residence, although most deduct the amount American residents pay to the U.S. via treaties that minimize double taxation.

If you're a retiree or near-retiree who's on the fence, you face a tough decision that will require some soul searching and research—and maybe a trip abroad (or several) to test the waters before you make any decisions.

For Americans working abroad as expatriates, complying with United States income tax regulations is an added challenge and financial burden because the U.S. taxes its citizens on income earned abroad. To avoid double taxation , the U.S. tax code contains provisions that help to reduce tax liability . Taxes paid in a foreign country can be used as a tax credit in the U.S., which when applied against the expat’s tax bill, reduces it.

The Foreign Earned Income Exclusion (FEIE) , for example, allows expats to exclude from their tax returns a certain amount of their foreign income, which is indexed to inflation. For 2023, this amount is $120,000. For 2024, it is $126,500. An expat that earns, say $180,000 in 2023 from their job in a foreign country that is tax-free will only need to pay U.S. federal income tax on $180,000 - $120,00 = $60,000.

The FEIE does not apply to rental income or investment income. Therefore, any income made from interest or capital gains from investments will have to be reported to the IRS. The Foreign Tax Credit (FTC) is a provision that ensures expats are not double-taxed on their capital gains.

For example, assume an expat falls in the 35% income tax bracket in the U.S. This means their long-term capital gain on any investment is taxed at 15%.

Since the FTC provides a dollar-for-dollar credit against taxes paid to a foreign country if the expat paid 10% tax to the country where they work, they'd only have to pay 5% tax to the U.S. Likewise, if they pay no tax to the foreign country, they’ll owe the full 15% tax to the U.S. government.

If the income tax paid to a foreign government far exceeds the amount of the credit (because the foreign tax rate far exceeded the U.S. rate), the expat will forfeit that amount. The credit, however, can be carried into the future.

An individual who has renounced their citizenship in their home country and moves to another is also referred to as an expatriate for tax purposes and is subject to an exit tax known as expatriation tax .

According to the Internal Revenue Service (IRS), the expatriation tax provisions apply to U.S. citizens who have renounced their citizenship and long-term residents who have ended their U.S. residency for tax purposes, if one of the principal purposes of the action is the avoidance of U.S. taxes .

This emigration tax applies to individuals who:

• Have a net worth of at least $2 million on the date of expatriation or termination of residency
• Have an average annual net income tax liability that is more than $190,000 if the expatriation date was in 2023 ($201,000 if the expatriation date is in 2024) over the five years ending before the date of expatriation or termination of residency
• Do not (or cannot) certify five years of U.S. tax compliance for the five years preceding the date of their expatriation or termination of residency

Advantages and Disadvantages of Becoming an Expatriate

Living and working in another country for an extended period of time can have its benefits. These can range from new experiences and adventure to more practical considerations like a lower cost of living or being closer to extended family abroad. Depending on where you settle, you may also get government perks like free healthcare and education and more favorable taxation.

There are also some potential drawbacks. Regarding taxation, unless you fully relinquish your American citizenship, you will still need to file tax returns each year and may need to pay taxes to Uncle Sam, even on income earned in your new country.

You'll also be a long way from home, potentially. This can make seeing friends and family more difficult, and time zone differences can also interfere with finding a good time to link up by phone or video chat. Learning a new language and customs can also be difficult for some, and certain items or products that you like may not be available where you live. And remember that not all countries enjoy the same level of political and economic stability that the U.S. does.

New experiences and maybe a better climate

Potentially lower cost of living

Potential access to affordable healthcare

Potential for double taxation

Long way away from friends and family

Language, cultural, political, and economic barriers

Potential challenges securing the proper visa

What Does It Mean to Become an Expatriate?

An expatriate or "expat" is somebody who leaves their country of origin and settles abroad for an extended period of time, often permanently.

What Is Expat Taxation?

Americans living overseas still have to file U.S. tax returns unless they relinquish their American citizenship. Several international tax treaties exist to help minimize double taxation.

What Is an Expat Community?

When people relocate to a foreign country, they often find comfort in seeking out other foreigners, especially from their home country. Expat communities are enclaves of people from a similar national origin, often with their own school and shopping options. In many countries, English-speaking enclaves are called "Anglo" communities.

Expats typically have to navigate a complex web of tax rules and regulations, which can be challenging to understand and comply with. Though retiring abroad to a lower cost of living, there are retirement considerations to comply with. In addition, expat U.S. Federal taxes are complicated, though they may rely on tax credits and income exclusions to receive favorable U.S. tax treatment.

Bonache, Jaime, and et al. " The Interaction of Expatriate Pay Differential and Expatriate Inputs on Host Country Nationals' Pay Unfairness ." The International Journal of Human Resource Management , vol. 20, no. 10, October 2009, pp. 2137.

The Wall Street Journal. " Americans are Saving Money by Retiring Overseas ," Slide 2.

International Living. " The World’s Best Places to Retire in 2023 ."

World Economic Forum. " The World's Best Retirement Destinations Might Surprise You ."

Internal Revenue Service. " Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad ," Page 3.

Internal Revenue Service. " Tax Treaties ."

Internal Revenue Service. " IRS Provides Tax Inflation Adjustments for Tax Year 2024 ."

Internal Revenue Service. " Foreign Earned Income Exclusion ."

Internal Revenue Service. " Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad ," Page 15-16.

Internal Revenue Service. " Foreign Tax Credit ."

Internal Revenue Service. " Topic No. 409, Capital Gains and Losses ."

Internal Revenue Service. " Foreign Taxes that Qualify for the Foreign Tax Credit ."

Internal Revenue Service. " Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad ," Page 24.

Internal Revenue Service. " Publication 519, U.S. Tax Guide for Aliens ," Pages 23-24.

Internal Revenue Service. " Expatriation Tax ."

Internal Revenue Service. " 26 CFR 601.602: Tax Forms and Instructions; Rev. Proc. 2023-34 ," Page 21.

Internal Revenue Service. " 26 CFR 601.602: Tax Forms and Instructions: Rev. Proc. 2022-38 ," Page 19.

Internal Revenue Service. " Publication 519, U.S. Tax Guide for Aliens ," Page 24.

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The 5 biggest reasons for expatriate failure

International assignments are exciting for the individual, and can be hugely beneficial for the organization. But they are risky too: according to INSEAD, the  proportion of expat assignment failures  can be as high as 50%.

There are a number of reasons – some down to the individual, some to the organization – but any single one of them can result in an early flight home and a huge disappointment for company and assignee alike.

1. You chose the wrong person in the first place

This is the fundamental decision – and one that many companies get wrong. The problem is that, unless there is a precedent (ie you choose an individual with a track record of successful assignments in different countries),  it’s very difficult to isolate the qualities that successful expats need .

Sometimes, an assignee will thrive because they are adaptable; they are both sensitive to their new environment and able to shape their behaviors and lifestyle to fit in with it. However, sometimes the opposite is true. It is equally often noted that a successful expat is one with  a clearly defined set of values  that enables them to perform consistently, professionally and effectively regardless of their social milieu. Clearly, both characteristics are desirable, and ‘compromise’ candidates may be the ones most likely to succeed.

2. Lack of local support

It is not all about the individual. The host country has a crucial role to play, and the most important individual is the host sponsor. Their role is to provide the support in helping the assignee fit in, whether on a social, professional or domestic level –  without their support assignments can go wrong very quickly . Don’t forget that busy work schedules will quickly dominate and leave little time for the assignee to manage their own affairs – and also distract the hosts from their obligation to support the assignee. But if one individual has a clearly defined role to support them, they will not it slip down their list of priorities.

3. Disconnection from home country

It is important to keep in touch with colleagues and work life back home too. The more isolated an assignee is, the more likely they are to reject it – whereas our experience suggests that it is helpful to stay in contact. For this reason, companies are wise to assign a contact who is responsible for  keeping the assignee ‘in the loop’  about developments at home. They not only have a more balanced view of their role within the global organization, but are also better prepared for repatriation once their assignment is over.

4. Domestic difficulties

While children and spouses are frequent factors in early repatriation cases, it is extremely hard to spot because  most assignees are reluctant to share domestic or social difficulties  with the company. They usually believe that any problems will suggest to the company that they are “not up to the job” and therefore paper over the cracks rather than asking for support. Ironically, therefore, the people who could help most are the last to know. To avoid this, frequent and open communication is essential. The company needs to know that the assignee’s family is coping, and it should explain the need for open communication up-front – before they even leave the country. 

5. Failure to plan

In a perfect world, every overseas assignment would be strategically planned and carefully implemented. The truth of modern business is that organizational resource needs can change overnight – so there is sometimes little or no warning. The individual needs  time to prepare practically and mentally  for the assignment, and the organization needs time to put the right infrastructure in place: as mentioned in the last three points, it takes time to choose the right candidate, and to put in place the people required to support them. Sometimes they get away with it; sometimes, it’s no surprise that they’re on one of the first planes home. 

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Study explores effects of overseas business activity through experiences of expatriates

by Kyoto University

In international business, companies frequently dispatch their employees overseas as expatriates. They are crucial for linking the headquarters with foreign branches and their subsidiaries and bridging cultural, language, and business practice gaps.

Traditionally, the focus has been on these positive effects of expatriates engaging in boundary-spanning activities. These include formal and informal communication, coordination across diverse cultures and organizational practices, and building business networks and trust within and outside the companies. However, the risk of excessive workload and stress, for example, has often been ignored.

Now, a study by Kyoto University and Hunan University, analyzing data from expatriates and local employees at Chinese multinational subsidiaries, has revealed that expatriates' boundary-spanning activities could also have adverse effects. The work is published in the Journal of International Business Studies .

"Our findings suggest that while boundary-spanning is beneficial to the company for building valuable social capital, such as fostering trust and a sense of belonging and loyalty among expatriates and local employees, it can also lead to role stress," says leading author Ting Liu of KyotoU's Graduate School of Management.

This stress may cause emotional exhaustion for expatriates, leading to local employees viewing them as outsiders. The study highlights the risks of boundary-spanning and calls to action the need for careful management.

This research included three datasets collected in 2022, with the initial two datasets used to develop a scale to measure expatriates' boundary-spanning activities. The third dataset—the main focus—consisted of 177 pairs of expatriates and local coworkers from the energy engineering sector in various Asian countries.

"Our study sparks an essential dialogue about the trade-offs between the gains for organizations and the costs borne by individuals," adds co-author Tomoki Sekiguchi, also of KyotoU's Graduate School of Management.

It highlights the contrast between the benefits organizations receive from expatriates, such as creating international networks, and the personal toll these roles take, including stress and exhaustion.

"Therefore, it is crucial for multinational companies and global managers overseeing overseas subsidiaries to grasp not only the positive outcomes but also the potential drawbacks of expatriate boundary-spanning activities," says co-author Jiayin Qin of KyotoU's Graduate School of Economics.

"By understanding these dynamics, the companies can strive to amplify the benefits while mitigating the negative impacts , ensuring a healthier balance for all involved," concludes co-author Yaxi Shen of Hunan University's School of Business.

Provided by Kyoto University

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