The failure rate for expats on international assignments has doubled over the past four years, according to industry experts.
Last year, 7.2% of assignments ended early, compared to 4.9% in 2012.
The main reason for failure was cultural issues where the assignee or their family struggled to adapt to life in their new home, says expat benefit firm ECA International.
Other common problems are feeling isolated, language challenges, concerns over security and welfare, or difficulties with accommodation or schooling for children.
In 48% of cases, expats complained the role did not match their expectations, while 57% of employers reported the expat’s performance did not meet their expectations.
High failure rates
The failure rate is highest among companies with 10,000 or more employees, where one in 12 assignments are terminated early.
“Considering how much time, effort and expense is invested in each assignment and the disruption such failures cause, this is a disturbing trend,” says the firm.
“The main issue seems to be a mismatch between expectations and reality.”
Besides early termination, companies have a problem retaining talent.
One in eight expats leave their employer after two years – and with them go skills and experience that are costly to replace.
“Some regions fare worse than others in this area; European headquartered companies, for example, reported losing three employees for every 20 returning from assignment within two years and Australian and American companies reported higher attrition rates still,” says the ECA report.
Adjusting to an expat lifestyle
“These sobering figures may even be underestimates, given that only three companies in five track post-assignment retention and career outcomes.”
Many expats returning home also face problems with adjusting after an assignment overseas.
The research revealed living overseas changes expats and their relationships with family and friends back home.
“Time does not stand still in the country left behind; hence the relocating assignee might find that their former workplace and colleagues, their social circles, and even the cultural and societal norms all feel unfamiliar,” the report.
“Difficulties with settling into a new role or career upon return to the home location is certainly a commonly reported problem; 70% of companies find this is either sometimes or often behind an employee’s decision to leave. If assignees are ill-prepared for the potential hitches that can occur when returning to the home entity, they may be susceptible to overly high expectations.”