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Expats or natives?
When it comes to hiring, many question whether it is more advantageous to hire locals over expats or vice versa. There appears to be a growing trend towards localisation across the globe, and determining the benefits between HCNs, PCNs and TCNs can be a difficult task for many international corporations. Here at Santa Fe Relocation, we’re taking a closer look at whether businesses should hire locals over expats.
When it comes to hiring locals for your international business, one of the major advantages is that those who already live, and have lived in the applicable country their entire life, will already have a good understanding of the culture and various business practices there. While expats will come to terms with these new practices, hiring locals over expats can generate greater productivity.
On the other hand, depending on the vacant role, businesses may find it challenging to find a local pool of individuals with the required skillset to complete the required role effectively. While there are numerous training opportunities which exist to further the knowledge of local individuals, for specific projects which are based over a short period of time, hiring an expat can prove to be far more beneficial, saving the business both time and money.
When hiring a local, particularly for a higher up position, a business can benefit from the ingrained language skills and cultural understanding which that individual possesses. This is particularly important when it comes to office locations where the culture differs drastically when compared to the business’ country to origin.
However, hiring an expat to maintain key management positions within a company’s subsidiary in a new country, the business can ensure that the new operation conforms to the standards of the home market. This is particularly important when it comes to compliance with regulations in the domestic office, which a local may not be able to fully understand.
It is suggested that hiring an expat can cost up to 2-3 times more than what it would cost a business to hire a local. This is due to all of the addition costs that come with an expatriate package, aside from the individual salary. Hardship, relocation and tax fees also apply, as does housing and transportation allowances where relevant. Some businesses may also offer paid-for trips home on an annual or even more regular basis. Traditional expat packages will also include funds to support the families of the expat – with international schooling fees being a particularly prominent part of this. Language and cultural training may also be required in some countries, in order to reduce the level of culture shock and to help with the family’s integration.
While hiring on a more local scale can help diversify the workforce, there’s no right or wrong when it comes to deciding whether to hire a local or expatriate for international business. Hiring either individual can provide international businesses with the opportunity to further expand, grow and develop. By taking the future plans of the business into consideration, business owners and HR directors can better plan for what’s to come.
Hiring locals over expats or hiring expats over local is a decision that cannot be made lightly. With a number of aspects of the recruitment process to consider, it is crucial that businesses carefully weigh up the positive and negative aspects of hiring locals and hiring expatriates.
If you are considering relocating and you would like to receive advice throughout the relocation process, get in touch with a member of our expert team on 020 8963 2513, today.