Posted: March 24th, 2023
For facilities to operate efficiently, frequent maintenance is vital to ensure that all mechanical components run smoothly. Hence, to achieve this, building environments require a competent operation and maintenance team. Hiring the right people for work is vital because the process saves organizations extra costs associated with seeking new and additional workforce during the life of a project. Amidst globalization, where goods and services can freely move from one nation to another, ventures can either choose to hire locals or expats. While hiring expats enables a firm to access a pool of knowledgeable individuals who can efficiently meet the set goals, the practice is costly because of the high compensation packages involved, high rate of employee turnover that necessitates frequent hiring, rotational leave cycles, and an expatriation process that requires funding by the employer.
Hiring expats for an operations and maintenance team can be very expensive due to the existence of high compensation packages. Studies show that the expatriate compensation packages have been escalating over the years, deeming it necessary for organizations to establish robust payment approaches (Al-Kaseem 113). Firms that hire expatriates incur huge costs associated with ensuring that employees fit into the new environment. For instance, a company’s human resource that recruits expats may be obligated to offer multiple allowances and employment benefits to ensure that employees’ welfare is considered. Besides, the failure of corporations to provide the compensation benefits can adversely affect the workforce by lowering their morale, and hence, affect productivity in the long run. Apart from the compensation packages, multinational companies that deal with expatriates may incur additional costs associated with transportation, visa applications, and housing. Unlike expats, the cost of recruiting locals is relatively lower because few compensation benefits and transportation costs are involved. Therefore, compared to hiring locals, the cost of recruiting expatriates can be high due to the compensation and employment benefits incurred.
In addition to the high compensation benefits, hiring expats can be costly due to high rates of burnout among employees, which leads to an increased rate of employee turnover, forcing companies to incur an additional expenditure of hiring new workforce. Scholars argue that the most costly and common problem that multinationals face today is expatriates’ high level of failure (Araci 994). In fact, previous studies show that approximately 20% to 40% of expatriates return to their domestic countries before completing their tasks due to burnouts and low capacity of performance (Qureshi et al. 322). Unlike local workers, expatriates face multiple challenges in foreign nations, including the language barrier, varying values, and cultural differences, which can adversely affect their performance. Rocke also adds that variances in work norms, homesickness, and other costs of living can result in stress for employees, affecting their career and the foreign assignment (453). Employees exhibiting burnout and low job performance may often be repatriated to create room for an energetic workforce. Given that the above issues affect most expats, multinational companies may incur higher costs in hiring expats than the local workforce.
Compared with local workers, the cost of the expat workforce can also be high due to rotational leave cycles. The majority of companies that employ expatriates in their offshore branches integrate work and leave schedules in their policy. For instance, previous studies show that the work and leave schedules has traditionally been “equal-time,” whereby employees spend an equal number of weeks offshore and onshore breaks (“Offshore Working Time” 1). While the above policy enables companies to retain their workforce by creating a balance between employees’ work and social life, financing recurring transportation costs for the rotational leave cycles can be expensive, making expat workforce more costly than local workers.
The cost of hiring expats is also relatively higher compared with local workers due to the additional expenses incurred in the expatriation process. As noted by Rocke, the process involves four stages: recruitment, pre-departure preparation, foreign assignment, and repatriation (452). Before assigning duties to expats in the operations and maintenance department, a company may undertake the above tasks to prepare employees for their roles in the new environment. For instance, in the pre-departure preparation, ventures may offer language training to equip workers with the language skills required to tackle their foreign assignments efficiently. In addition, some company policies require management to pay for exploratory trips to help workers familiarize themselves with the new environment. The employer bears all the costs incurred in the expatriation process, thus subjecting a company to incur extra expenditure, which may not have been incurred in hiring local workers.
Overall, the cost of the workforce is relatively high in expatriates compared to local workers. Unlike the latter, firms that invest in expats incur additional costs associated with high compensation packages. In addition, hiring expats can be expensive due to high employee turnover, which leads to incurrence of extra expenses required for frequent recruitment. Rotational leave cycles also subject firms to high operational costs required to maintain a workforce of expats. Furthermore, the expatriation process involved in dealing with expatriates requires considerable financing by employers. Therefore, in implementing an operations and maintenance workforce, facilities should consider the cost of hiring local workers and expats.
“Offshore Working Time in Relation to Performance, Health and Safety”. Health and Safety Executive, www.hse.gov.uk/research/rrpdf/rr772.pdf. Accessed 7 November 2019.
Al-Kassem, Amer. “Contextual Factors of Compensation and Benefits Management to Expatriate Workforce.” International Journal of Academic Research in Progressive Education and Development, vol.4, no.4, 2015, pp. 110-123.
Araci, Mehtap. “The Barriers to Increasing the Productivity in Expatriate Management: Examples in the World and Turkey.” Procedia-Social and Behavioral Sciences, vol.195, no.1, 2015, pp. 993-1002.
Qureshi, Muhammad et al. “Towards an Understanding of Expatriate Job Performance: A Conceptual Paper.” International Journal of Academic Research in Business and Social Sciences, vol.7, no.9, 2017, pp. 320-332.
Rocke, Dovile. “Expatriation: Challenges and Success Factors of an International Career.” Rural Environment, Education, Personality, vol.1, no.1, 2017, pp. 451-456.
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