V Managing People in Emerging-Market Firms
Repatriates' Organizational Commitment in the Indian Information Technology (IT) Environment
Krishnaveni Muthiah and B.R. Santosh
Introduction
Expatriation is the process of sending employees to another country, for example, managers who are posted overseas to lead a subsidiary of a multinational enterprise (MNE). Companies spend huge amounts of money on their expatriates. For example, Stelmer (2001) estimated that most companies spend between US $300,000 and US $1,000,000, annually, on each individual on foreign assignment. On completion of the international assignment (or multiple such assignments), the expatriates return home, and then the process of repatriation begins. However, companies often underestimate the extent and importance of the repatriation
K. Muthiah (h)
PSG College ofTechnology, Coimbatore, India e-mail: This email address is being protected from spam bots, you need Javascript enabled to view it
B. R. Santosh
Al Musanna College ofTechnology, Muscat, Oman e-mail: This email address is being protected from spam bots, you need Javascript enabled to view it
© The Author(s) 2017
S. Raghunath, E.L. Rose (eds.), International Business Strategy, DOI 10.1057/978-1-137-54468-1_15
process, on the basis that the employees are just “coming back home” and thus will have no difficulties in adjusting to their own environment (Stroh et al., 1998; Adler, 1981; Tung, 1998). Such underestimation of the repatriation process is viewed as a contribution factor for the high turnover among repatriates. There is strong evidence that employees who have been sent to work abroad are more likely to seek new job opportunities than those who have remained in the home country (Stroh, 1995).
According to Brookfield Global Relocation Trends Report (2011), of the 118 companies participating in the Trends Report, 28 % of repatriates quit their organization within one year of returning from their assignments, and the 15-year historical average indicates 22 % of repatriates quit their organization within one year of returning from their assignment compared with an average annual employee turnover rate of 8 % in these same 118 companies. Furthermore, the cost of replacing an employee who leaves the company is on the order of 29 % (for non-management staff) and 46 % (for management staff) of the person’s annual salary (Bernthal & Wellins, 2001).
There are different reasons for employees’ resignations. Some suggest that the repatriates do not perceive that there remain appealing career opportunities in the companies for which they have been working (e.g., Paik, Segaud & Malinowski, 2002). Others argue that a key reason is the lack of a repatriation program (e.g., Hurn, 1999). Repatriates tend to report lower turnover intentions if, upon return, they gain access to a suitable position within the MNE and experience minimal cross-cultural readjustment difficulties (Leiba O’Sullivan, 2002). In addition, employees who have low commitment to the organization are more likely to resign, whereas repatriates who feel committed to the company are more willing to share the knowledge that they have gained abroad (Oddou, Osland & Blakeney, 2009).
The major factors leading to consideration of turnover are generally viewed as adjustment difficulties, career prospects, external job offers, salary level, organizational status, lack of clarity about the position in the parent company, unsatisfactory repatriation treatment, and decreased organizational commitment (Vdal, Valle, & Aragon, 2007). The objective of this study is to consider repatriates’ turnover intention from a psychological perspective. We investigate this by examining the relationship between the organizational commitment and turnover intention of repatriates, in the context of Indian information technology (IT) firms.
