Measuring expatriate return on investment: empirical evidence from global firms

Obtaining a return on investment (ROI) from expatriates is viewed as important in many global firms, as evidenced by the considerable efforts of firms to reduce the costs of their mobility programs. This research examines how expatriate ROI is measured for long-term assignments in 50 global firms, representing a total population of 56,000 expatriates (including 37,000 long-term assignees), across 18 industries, and with headquarters in North America, UK, Europe, Africa, Asia Pacific and Australia. Our findings suggest that firms do not have formal procedures in place to measure expatriate ROI and instead rely heavily on informal practices that are predominantly used in spite of a global strategy, not because of it. We found that measuring expatriate ROI is a challenging and complex process that managers are not equipped to address. We offer recommendations for practice and suggest that managers in global firms seeking to obtain higher rates of return from their expatriates must improve the planning and management of their international assignment programs.