Why You Should Hire More Locals than Expats

There is a growing trend that we should start consuming local food in order to cut cost and fight climate change. However, can this trend expand and be applied to recruitment process?

Hiring new employees is the foremost thing newly-built and developed company should do. As important as it is, bringing in new hires could be a daunting task as you have to put several things into consideration. For example, Jed DeVaro, professor and department chair at California State University East Bay, mentioned in his study that when choosing new workers, managers need to consider the company’s organisational environment as some environments might favour one method over the other. This environment includes nature of jobs, firm’ characteristics, interaction of internal and external hiring policies, and other practices in the company’s human resources management system.

In order to increase business competitiveness, managers should adopt ‘smart-hire’. Some decide to hire more expats to work in their organisations, with a reason that they are more high-profile and well-educated. According to DeVaro, external recruitment might bring fresh ideas to organisation. “Outsiders are not enmeshed in organisational politics, making them less susceptible to unproductive influences by peers and subordinates,” he said. Not to mention, expats are more likely to have strong upside potential making them worth the risk.

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“Between 10 percent and 20 percent of all managers sent abroad returned early because of job dissatisfaction or difficulties in adjusting to foreign country. This result has doubled turnover rate of those manager who did not go abroad.” - J. Stewart Back and Hal Gregersen in HBR

Commenting on the statement above, DeVaro stated that external hiring might prevent workers from becoming complacent. Hiring migrant workers would also requires greater effort in managing and making them stay. Therefore, in organisations where workers are less personally connected, managers should reduce the risk by bringing in more locals and reducing external hirings.

Chuck Leddy in Spark commented that lower cost of hiring locals is among major advantages. Other benefits are: they can start job as soon as possible without issuing relocation and immigration or visa status. Additionally, local talents’ value can go far beyond daily duties of their role with the right training provided by industry. Local hires are typically more motivated and their knowledge are more critical than external hires.

Moreover, according to Lottie Watters, if you start hiring more locals, you will discover:

• longer term assistance – having local people work together for longer time will build strong relationship and bond between staffs.
• local expertise – local professionals have contextual and cultural knowledge of region and are able to speak local language which are key assets for development work.
• collaboration with local governments – when you employ locals, they will bring greater opportunity for collaboration with governments. This is crucial for sustainability and longevity of your company programs.
• local that become implementers – once programs have been successfully implemented within local communities, you will see more skilled people within your company. Consequently, they can become new trainers to expand and advance impact of programs in your company.
• more talent retention – large problem in developing countries is that educated and skilled people end up migrating and leaving as they see more value in themselves. By hiring local people, you will see less turnover. However, Watters suggests that you should pay local staff fair and decent.

In the end, hiring should depend on your organisation’s goals and needs. If you find local people are lack expertise you need, you might consider to hire more expats. “There is no definitive one-size-fits-all solutions to complicated issue of global staffing. If you understand your organization’s goals and pros and cons for each hiring option, you will be in position to make the best choice,” Leddy added.

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