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Local expatriates in demand

Published on Friday, 01 Oct 2010
Illustration: Bay Leung
Companies have increased, or are planning to increase, the number of expatriates hired locally.
Photo: Dickson Lee

Amid a surge in expatriate postings, the international labour market is seeing shorter overseas assignments, more junior expatriate staff, and changes in compensation packages as companies seek to cut costs.

Filippo Sarti, CEO for Asia-Pacific at Regus, says that while expatriate packages for senior positions remain attractive - 56 per cent are given regular trips home and 39 per cent of companies offer free private schooling - different remuneration structures have been put in place for more junior postings to reflect a significant demand among workers for overseas assignments.

"The days when expatriates took up exclusively senior roles for three to five years has passed," says Sarti, referring to the results of the latest research by the Economist Intelligence Unit and sponsored by Regus, which surveyed 418 senior executives working in 77 countries.

"Today's international labour market is far more diverse, and we have seen evidence of this in demand from our customers for more flexible ways of working," he says. "Workers are taking up shorter overseas assignments, and companies are more likely to send junior staff overseas to gain experience."

He adds that 45 per cent of those surveyed say a significant proportion of expatriates in their company hail from the mainland, India and other Asian countries, signifying an internationalisation of work, as expatriates move from and to developing markets. Sarti's views echo the findings of Mercer's International Assignments Survey 2010, which found that 50 per cent of the 220 multinational firms interviewed have increased, or planned to increase, the number of expatriates hired locally to save relocation costs. Firms have identified cost (60 per cent) and difficulty of finding suitable candidates (58 per cent) as the main obstacles of international assignments.

Sarti says demand from young workers for experience abroad means there is downward pressure on the global remuneration trend for junior level employees, which makes it possible for more local firms to hire expatriates.

But Lam Kwok-hung, president of the Hong Kong Small and Medium Enterprise Development Association, says most small- and medium-sized firms in Hong Kong are not ready to incorporate expatriate workers into the office. "It is not only a matter of skills, but also management culture and cost," Lam says. "If we do look for someone with an overseas background, we prefer local people who have returned from abroad."

Christopher Hammerbeck, executive director at the British Chamber of Commerce in Hong Kong, says top-level employment of expatriates remains active, and the hiring of expatriates is particularly active in construction engineering, aviation, professional services, such as accounting and law, and international logistics companies.

"It makes sense for international companies to engage local employees," he says. "However, it is the case not only in Hong Kong but Singapore and elsewhere in the region that, with increased market entry, local employees with the right skill sets simply are not available."

Fact box

  • International assignments were up 4 per cent over the past two years
  • 50 per cent of companies reported a rise in short-term assignments
  • Close to 50 per cent of companies have increased, or planned to increase, the number of expatriates hired locally 

Source: International Assignments Survey 2010 by Mercer

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