Expat lifestyles are in the past as costs soar

Younger staff are eager to work abroad, but most do not want to live in developing countries, as Hannah Prevett discovers

At the age of 31, Robert Care was posted to Papua New Guinea by engineering group Arup to manage three offices with 45 members of staff. It clearly did his career no harm: he’s now a director and chairman of the company in Europe, the Middle East and Africa.

But today’s young executives seem far less inclined to take exotic postings. Research carried out by PricewaterhouseCoopers (PwC), the professional services firm, found that while 71 per cent of recent graduates were keen to work abroad, they were less comfortable with emerging markets: only 11 per cent were willing to work in India and just 2 per cent were happy to move to China.

That’s unfortunate since these emerging markets often represent the best opportunities for companies looking to grow, says Carol Stubbings, head of the international assignment services practice at PwC.

“Lots of Millennials [born between the early-1980s and early-2000s] will desperately crave overseas experience, but they want to work in Sydney or New York, whereas actually these organisations need them in places like China, Indonesia or India. That’s where the rub is starting to come,” she says.

Certainly, the number of organisations wanting to deploy people to developing economies is at an all-time high. Research by Ernst & Young found 48 per cent of companies had increased the number of people sent to growth markets and that number was set to rise to 60 per cent in the next three years. But organisations are still struggling to fill these spots: 45 per cent of those surveyed said global mobility functions were understaffed.

The number of organisations wanting to deploy people to developing economies is at an all-time high

Another challenge is the cost of expats, says Andy Piacentini, co-founder of the RES Forum, which helps companies handle overseas deployments. “The old-school expat packages will typically cost an organisation about four times somebody’s main salary because you’ve got schooling, shipping, housing and you usually deliver it all tax free, so it just racks up the costs,” he says.

This explains why expat packages tend to be enjoyed by only the most senior of employees or those deployed to the most remote destinations, he says. “If you’re in the UK and they want to send you to Italy, why would they send you as an expat? They’ll help you relocate, but then you’re just like a local hire.”

Yet if organisations are no longer able to tempt people with offerings of generous expat packages, how else do they persuade them to take the less appealing overseas jobs? Guarantee them a better role when they come back, says Arup’s Mr Care.

Australian-born, he has now had four long-term assignments with the company, as well as one short-term and one transfer. “The transfer came about after I was approached by senior leadership asking me to do a job in Papua New Guinea. I wasn’t the first person they’d approached – a number of people had already declined. Subsequently, those people who’d all said no ended up working for me,” he says.

Indeed, companies must get better at plotting the careers of their high-flyers, otherwise they run the risk of losing them, says Mr Piacentini. “The organisations that are the most effective at overseas deployments are already thinking ahead to the next few appointments of that individual. If you strip out the mobility aspect, it really comes down to good talent management and thinking ahead.”

Mr Care agrees that forward planning is key to selling overseas posts to sceptical employees. “Don’t wait until the end of the gig to think about the next stage of their development. They need to be able to see two things now: how they fit into the big picture in terms of what you’re trying to achieve as an organisation; and secondly, what it means for them in terms of their career going forward. Be prepared to give them answers now.”