Companies Consider Replacing Expats with Local Talent

October 27, 2009 ( - As the failing economy put more pressure on companies' bottom lines, multinationals are increasingly looking to replace expatriates with local talent, according to Sibson Consulting's Expatriate Talent Market Trends Survey.

Just under half (47%) of the 99 companies that responded to the survey said they are not making any change to the size of their expatriate workforce, while more than one-third (35%) reported they are decreasing theirs. Only 18% of respondents said they are increasing the number of expatriates.

Respondents who reported they are keeping the same or increasing the size of their expatriate workforce ranked the importance of expatriates to their business strategy as the number one reason for this decision. Those who are decreasing their number of expatriates cited high compensation costs and the overall economic environment.

However, survey respondents chose replacing expatriates with local talent as the top method they use to cut expatriate costs, followed by shortening assignments. Just over half (51%) of respondents reported they plan to increase their use of local talent.

Most companies (67%) said they are keeping their expatriates’ compensation the same, but over a quarter (26%) said they are decreasing it. Among those respondents that are decreasing expatriate compensation or planning to do so, 76% indicated they are planning to increase their investment of local talent.

The Sibson survey findings are at .