Issue Date: July 25, 2011
Expats in China
Not that long ago, chemists on expatriate assignments to China could expect to stay for three to five years, helping their company establish a plant or a research facility there and training the local talent to assume leadership roles. These expats often received generous compensation packages including salary increases, housing subsidies, and private education for their children.
The Great Recession, which lasted from December 2007 until June 2009, forced companies to scale back on these assignments and rethink their expat staffing strategies. Now, as the economy struggles out of its slump, companies are resuming their global expansion plans, and international assignments to China and other parts of Asia are cropping up once again. But they are coming back with far fewer perks.
Expat assignments are “becoming less glamorous, less exclusive, and more routine,” says Scott Sullivan, executive vice president of Brookfield Global Relocation Services, which provides relocation and assignment services to domestic and international companies. “The biggest challenge facing companies is finding suitable candidates to fill the positions they have around the world in a cost-effective manner. Companies are still struggling to figure that out.”
According to Brookfield’s 2011 Global Relocation Trends Survey, 75% of companies reported having reduced assignment expenses in response to the economic downturn. “People really need to get comfortable with the fact that they’re going to have to take a lower salary, and companies are not buying homes anymore, and they’re not covering closing costs with the relocation,” says Marc Miller, senior director of Pennsylvania-based recruiting firm Klein Hersh International.
These cost-cutting measures are enabling companies to send more of their employees abroad. The Brookfield survey revealed that 61% of companies expected the number of their international assignees to increase in 2011. “International assignments are going to grow, but I think the cost per capita will come down,” Sullivan says. “The days of three- to five-year-long expat assignments with the whole family continue to be a smaller piece of the overall pie.”
Christy Pambianchi, senior vice president of human resources for Corning, says the company is experiencing a resurgence in international assignments. “We had a tapering in 2009 with the global recession. We brought many of our expats home,” she says. “Now we’re back above our peak expat levels due to the activity we have going on in China, Taiwan, and Japan” related to several expansion projects that Corning has undertaken in Asia.
Dow Chemical’s expat assignments are also growing as a result of its global expansion efforts. Ingolf Thom, human resources leader in Asia for Dow, says expat assignments slightly decreased after a spike in 2008. Dow’s acquisition of Rohm and Haas in 2009 helped accelerate its expansion in Asia. But because of intense efforts to develop local leadership, the company’s expat staffing has not returned to 2008 levels. “To support new growth for Dow in several Asian countries, we continue to bring in additional expertise from around the world while also growing our local talent,” Thom says.
Companies are increasingly sending employees abroad for professional development purposes, and these assignments tend to be shorter, lasting several months rather than the several years needed to set up operations and develop the local talent. “Assignments are being utilized much more to develop a global management skill set,” Brookfield’s Sullivan says. “What companies are trying to do is ensure that their senior leadership, their senior executives, and their upper management have an understanding of the global markets and the global employees that make up part of a company today.”
Dow has been using assignments in Asia to serve just this purpose, Thom says. “We deploy high-potential employees into different geographies over the course of their career to help them develop a global perspective,” he says. “Many international assignments at Dow are closely linked to global leadership development.”
Firms are also becoming more strategic in their international staffing plans. Some of the problems with expatriate assignments in the 1990s and early 2000s arose because companies were sending employees abroad “without clear reasons for why they were getting that assignment or who their sponsor was in the home organization,” Pambianchi says. “When their work was done abroad, it was not always clear what they were coming back to. Having someone go on an expat assignment is, in general, three to four times the cost of having them work in their home location,” she adds. “So if you’re going to make that kind of an investment, you should be really thoughtful about what you’re getting in return.”
One strategy that companies are using to capitalize on the experiences of expats is to move them from country to country within a region such as Asia. “We have seen an increase in intra-Asia assignments in the last few years,” says Cheryl Crammer, who helps administer the expat program at Air Products & Chemicals.
Mark M. Kijak spent two-and-a-half years in Taipei, Taiwan, as an engineering general manager for Air Products & Chemicals, but when his assignment concluded, instead of coming home, he was asked to serve as a project director for Air Products’ Shanghai office. “There were a number of local factors that created this immediate need for an expat manager,” he says, noting that as business was slowing in Taiwan, growth in China was accelerating. “I was asked by the senior engineering leadership to take the assignment.” His wife, Michele, accompanied him through an Air Products program to keep expat spouses together. She worked as a business development manager in Taipei and then as a supply chain process and productivity manager in Shanghai.
Kijak says that a year before he was to return to the U.S., Air Products helped him explore various opportunities within the company that fit his interests and experience. He returned to the U.S. this past May to assume the position of global procurement manager. He is responsible for managing the procurement of capital equipment in the U.S., U.K., and Asia. Michele has also found a new position as a microbulk project manager at Air Products.
Opportunities for expats in China continue to look bright, especially in the drug industry (C&EN, Feb. 14, page 47). Paul Tempest, who moved to China in 2009 and is now executive director of integrated services for Chinese contract research organization ShangPharma, says many opportunities exist for midcareer medicinal chemists with strong leadership skills. “We’ve had a couple of openings here, and we’ve tried to hire some people, but in some situations it can be pretty difficult to convince people to come here,” he says, noting that family obligations remain a common barrier. “The ideal candidate is somebody that has maybe 10 to 15 years of experience in the U.S., has a sense of adventure, and is okay living outside their comfort zone.”
Because medicinal chemistry is relatively new in China, Tempest says, few local people are experienced enough for leadership positions. “What’s still missing and probably won’t be here for a while is the experience and the leadership,” he adds. “If you have experience leading projects and helping bench scientists get their work done, then that’s something that’s valuable here.”
As companies become more global, business travel between countries has become a way of life. “There are a tremendous number of opportunities,” Klein Hersh’s Miller says, but people need to focus on the professional development benefits of these assignments, rather than the perks.
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