MNEs and migrants: a story awaiting a happy end

Introduction 

Access to jobs and career progression matter for individuals across generations. On the other hand, access to valuable resources is key for multinational enterprises (MNEs) to ensure smooth operations and competitive advantage (Hitt et al., 2001). In a changing world, labor markets are becoming more and more dynamic and diverse. In response to this, MNEs have had to revisit their hiring practices to ensure diversity and equal access to opportunities across genders and other employees’ demographics. 

A long love affair: MNEs and expatriation

For decades now, MNEs have been engaging in expatriation (i.e. internal transfer of employees across different locations and countries). Between 52 and 89% of firms use mobility programs, depending on the industry (Mercer report, 2019). MNEs use expatriation as a tool for a variety of reasons such as maintaining control in new locations by ensuring the presence of trusted employees, training purposes, and in order to build knowledge about foreign markets. In the early decades of this practice, especially in Western MNEs, mostly senior males were sent on long-term assignments, frequently accompanied by their spouses and family (Caliguiri & Bonache, 2016). The character of expatriation changed in recent decades and the profile of expats is becoming more varied, including mid-career individuals and females (idem). Nonetheless, there are indications of a persisting lack of diversity in the expat profiles: in some cases, MNEs transfer their own nationals (Nowinska et al, 2023) and by so doing forego possible opportunities to enhance diversity and equality of the workforce across locations. 

New horizons for diverse hiring: self-initiated expats and migrants.

The landscape of hiring and labor pools changes worldwide. Migration is an important mega trend rising across and within countries (World Migration Report, 2023). This trend is important for MNEs as the labor pools grow more diverse. Research consistently showed that migrants and self-initiated ex-pats (Tharenou, 2013) struggle to get jobs matching their skills in the host countries (Usanova et al., 2023 and Colakoglu et al 2023) or struggle to get into just any jobs (Villadsen and Wulff, 2018), even when having relevant professional experience (Nowinska and Solheim, 2023). This is a complex phenomenon that has roots in both discriminatory practices of firms, and also as a result of some characteristics of the foreign job applicants who do not “aim as high” as they could or shy away from pursuing some opportunities (in economic terms, both demand and supply side factors can be attributed to this phenomena). Raising awareness of discrimination and potential concerns of foreign applicants, MNEs could revise their hiring strategies accordingly. 

Local hiring and expatriation across MNEs locations

Local hiring is the easiest way for MNEs to access diverse resources readily. While recent arrivals in a country may lack the local knowledge and networks, they may still hold other generic skills that MNEs could readily use. A more flexible hiring approach from MNEs would greatly help ensure a smooth integration of migrants into the labor force and help them make careers more linear. MNEs can envision and implement more long-term strategies with such human capital, such as embedding them in the firm, learning products and processes, and utilizing their unique background for assignments abroad. Such “returnees” (McNulty and Vance, 2017) are valuable as they marry both worlds: the firm experience and the host-country experience. 

Even if not deployed strategically abroad, migrant or self-initiated expat hires grow the diversity of the MNEs workforce potentially contributing to innovation and performance gains (Marino et al, 2021, Hernandez and Kulchina, 2018). 

Conclusion 

Recent research emphasizes that mobility does not necessarily entail physical moves and can involve for instance being part of virtual teams (Shaffer et al, 2012) and COVID-19 enhanced this trend with the flexible work-from-home or even work-from-anywhere models (Choudhury et al, 2021). As migration numbers worldwide increase, MNEs can find a growing and untapped potential to use migrants’ and self-initiated expats’ unique skills and backgrounds. Whether hired into a firm or internally transferred, migrants are a depository of diverse experiences that can help MNEs in increasing their innovation, and performance, be it in the internationalization process.

illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.