For decades, expatriate ROI (eROI) has been the "holy grail" of the mobility industry, and it's not hard to see why: tens of billions of dollars are spent annually by organizations that move expatriates around the world and despite the substantial costs involved, expatriation frequently results in an unsatisfactory ROI, with little or no knowledge as to how to improve it. Why?
The problem lies in the poor delivery of effective expatriate management, which is frequently handicapped by:
- a lack of understanding of international careers and the forces that drive competition in the "global war for talent"
- an increasingly short-term profit-driven focus
- a failure to adopt the rational strategic approach that organizations automatically apply to other areas of their business
So how can companies talk about eROI for so long and still make so little progress?
The reality is that many organizations struggle to define what international assignment success really means and have made few improvements to eROI in practice. What is needed is to position eROI as a basic yardstick and starting point for those serious about getting better results from their mobility program. How can this be done?
The key to eROI is to understand that it is more than simply determining corporate benefits—or cROI. A large part of the overall eROI equation is also tied up in the costs and benefits that accrue to individual expatriates—iROI.
After all, expatriates are the very people that companies rely on to deliver the value they seek—the "e" in eROI—so it is important to understand why they go abroad, the remuneration challenges they face, their longer-term career aspirations, and the complications that arise in terms of their families.
Additionally, expatriation needs to undergo a dramatic sea change from how it began - from piecemeal and operational to integrated and strategic. Indeed, the global mobility function cannot continue to be largely transactional, providing administrative services and offering advice, but not adding value.
In short, global mobility practice needs to shift to a new operational paradigm: to expatriate ROI.