Managing Impatriate Adjustment as a Core Human Resource Management Challenge

Article excerpt

Although expatriation issues are at the core of international human resource management (HRM) practice and discourse, impatriation (hiring foreign nationals for fixed-term temporary employment) is as yet underresearched. This is true even though several economies, many of them in the Middle East, rely heavily on impatriates to develop and sustain their economies. This article presents the case of the Kingdom of Saudi Arabia (KSA) as an example of such an economy, and proposes a model of impatriate adjustment, followed by a case study and with specific reference to HRM implications.

Globalisation, and the impact that globalisation has had on the practice and theory of management and of the management of people, has attracted increasing interest among scholars and practitioners alike (Sparrow, et al., 2004; Global Relocation Services, 2004; Frenkel, 2006). Within international HRM scholarship, limited research has evaluated HRM systems and practices within Middle Eastern economies (for an exception see Ali, 1995; 1999). This is a major oversight for a region that is at the core of the world economy, offers unparalleled growth opportunities for foreign investment (Rice, 2004), and contributes significantly to world trade (World Bank, 2003; Wilson, 2001; Kavossi, 2000).

In their quest for rapid and sustainable economic development, many of the region's countries have come to rely heavily on temporary migrant workers: the Gulf economies in particular (Bahrain, Kuwait, Oman, UAE, Saudi Arabia, and Qatar) as well as Libya. This phenomenon is not new. Many Western developed countries have relied for a long time on temporary migrant workers in times of skill shortage or to carry out lowly, menial, and undesired jobs; however, the extent of their deployment in the Middle East is considerably higher. The presence of impatriates in this region has in fact outgrown the indigenous workforce, and typically represents a majority. In most of the Gulf countries, over 60 percent of the working population is foreign (Ruppert, 1998; World Bank, 2003), with the largest number of impatriates in the Kingdom of Saudi Arabia.

By presenting the case of the Kingdom of Saudi-Arabia we draw attention to an important feature of the labour markets in the Middle East. We first outline the characteristics of the labour market in the KSA that have necessitated a national level response to human resource management and labour market reform. We then propose a development model for managing the adjustment of impatriates in heavily dependent economies at the national and corporate level. This, to the best of our knowledge, is the first such proposed model. The research literature often addresses adjustment issues of expatriates (typically, the individual middle-to-senior executive from a developed economy posted to another developed economy as well as to developing or transitional economies for a limited period). This article explores the role of impatriates: foreign employees recruited by local companies at all organisational and skill levels, typically for a particular position, usually over a fixed-term period. We highlight in particular implications for the HR function in organisations in which the majority of employees are temporary migrant workers. We suggest that HR has an important and overlooked role with respect to facilitating the successful cultural and work adjustment of impatriates, including enhancing their productivity and well being. We end with a case study to help us reflect the model against prevalent practice.

Demographics of the Labour Market in the Kingdom of Saudi Arabia

The Saudi Ministry of Labour estimated there were approximately seven million foreign workers in Saudi Arabia in 2003, making up almost one-third of Saudi Arabia's total population of about 23 million. Expatriate labour across all occupations and skill levels constituted around two-thirds of the total workforce in 2003 (Pakkiasamy, 2004). …