January 09 2017
Expat 2.0 – New generation of expats from the East
They are flexible, boast a very good educational background and have experience from dynamically developing companies. Managers from Central and Eastern Europe are taking more and more jobs abroad.
The middle management is local, whereas the top managers are foreigners. This was common for managements of foreign-owned (i.e. Western-owned) companies in Central and Eastern Europe in the 1990s. Having acquired a former state-owned enterprise or founded a subsidiary, the parent company automatically placed its own people in managerial positions; they passed on the corporate philosophy and provided the lacking know-how to the local employees and, what is most important, their parent company trusted them.
Today, 20 years later, the managerial positions in foreign companies’ branches are mostly occupied by local managers. The managers in charge of the region of Central and Eastern Europe more and more often come from these countries. Between 2000 and 2005 the number of foreign managers dropped but has remained stable in recent years. There are several reasons for that.
Central and Eastern Europe is still attractive for new investors even though not as many of them are flowing in now as 10 years ago. As a rule, initially each investor brings its own management to the country. The trend of seconding managers abroad, however, is linked to the global trend of “continuous internationalisation of the economy”, says David Buchberger, the President of Glasford International, one of the leading global executive search firms. Buchberger explains it: “Especially well-established industrial countries in Western Europe and the US must ensure their future growth by winning over new markets.”
Among the crucial factors for the rising importance of expats, globally, are the different reasons for seconding them abroad. The first reason is still setting up a branch abroad, closely followed by targeted engagement of managers abroad, which is vital in their career-planning and skill development.
This trend currently works both ways – from the West eastwards and vice versa. You can see more and more managers coming from Central and Eastern Europe working in corporate management in Paris, London or Zurich. “It is a common part of our HR development policy, the purpose of which is to acquire special experience abroad for future managerial jobs on the local market. Or, the reason may be another step in career development, if the managerial post is in regional or global headquarters,” says Erich Weinhandl, HR manager of Mondelez Europe Services (former Kraft). The number of expats from Central and Eastern Europe working for this global FMCG group has constantly been growing.
Having expats from the Central and Eastern Europe is a benefit for companies in the West. “They usually have a good education, good foreign language skills and their own experience from dynamically developing companies,” says Oliver Schmitt, Managing Partner of Teamconsult and CEE coordinator in Glasford International. Thanks to their expertise and skills they are especially suitable for rapid construction of corporate structure in new markets, Schmitt adds. “Compared to expats from the West, the managers from Central and Eastern Europe are more flexible and willing to work abroad,” says Christian Stieglitz, HR manager in EGIT International. According to Erich Weinhandl, a considerable advantage is that the costs incurred on managers from Central and Eastern Europe are, as a rule, lower than those incurred on overseas managers. “Besides that, together with their families they are more willing to integrate in the new host country,” adds Weinhandl of Mondelez. Moreover, expats from Central and Eastern Europe are more willing to commute between work place and the family’s home.
Many local managers showed their readiness to commute already during their training period. This was the case with Miloslav Langer who grew up near the border between the Czech Republic and Austria, went to an Austrian school and while studying in Prague, he decided to study one semester in Vienna. Having worked in Prague and Munich, now, aged 38, he is in charge of an international team made up of Austrians, Croats and Hungarians at BMW Austria Bank in Salzburg.
What is more, managers from Central and Eastern Europe find the possibility to earn more money at Western companies’ headquarters attractive. “This was crucial especially ten years ago when the differences in incomes earned in the Czech Republic and those at the global market were even bigger,” explains Jan Mikšovský who was a finance manager at Procter & Gamble in Brussels and Geneva for ten years. Rather than the financial benefits he appreciated the chance to compete with the best experts in the industry and, as a result become more qualified for his future career.
His main motivation was and still is improving his career opportunities. “For me, it was a great chance for a promotion,” says a Polish manager, 43, who worked as a CFO at Novartis OTC in Switzerland for two years. “On returning home, my stay abroad was considered a clear advantage,” he adds. At the moment he is gone again, this time as a member of the Board of Directors in charge of the financial matters at an international pharmaceutical group in Singapore. He also considers his compatriots suitable for a work abroad and, based on his experience, he says that the “the Poles overseas have a very positive image. Employers appreciate our language skills, good education and the ability to cope with tough challenges.”
The positive image can help managers abroad get quickly used to the new environment, says another Polish manager, who has worked for two years as a Marketing Manager for Northern Europe at L’Oreal in Paris. Since he was the first expat from Central and Eastern Europe at L’Oreal, his colleagues showed great interest in him. “They wanted to know a lot about me and my homeland,” he says.
On the other hand, it is not possible to succumb to illusions. When a manager from the West goes to the East, he is untouchable and well-protected by his parent company. However, when a manager from the East goes to the West, he must show he is better than the local managers in order to be able to establish himself there in the long term.
Expats especially from Central Europe are valued for another of their assets, Oliver Schmitt, a head-hunter at Glasford International, says: “Especially when managers are seconded to more eastward countries, they can make good use of the advantage of a similar mentality, common experience from the economic transition and the command of a Slavic language.” This is a great advantage compared to their colleagues from the West, which expats themselves are aware of. “The experience that we share from the socialist era and the Slavic languages were a major asset to me. The Russian top management speaks only little English.” reminisces Jan Grünwald , who worked four years in Moscow, first for Jungheinrich and later for Linde Gas.
The advantages ensuing from the similar mentality and the language can be priceless. Studies revealed that the period during which expats get used to their new environment may last up to ten months. “Without the knowledge of Russian, it would take much more, maybe forever,” estimates Grünwald, who needed only six months for his assimilation. This 42-year old member of the Board of Directors in charge of financial matters at Phönix Zepellin in the Czech Republic, Slovakia, Poland and Ukraine points to another aspect typical for Russia: “Not all foreigners from Central and Eastern Europe are treated the same by the Russians. The Poles are not as popular due to historic conflicts between the two countries. There are almost no Hungarians in Russia, probably due to language barriers. On the contrary, Czechs are treated neutrally in Russia because they have more pro-Western orientation while still being Slavs.”
Similarly, companies have come to understand the importance of regions with cultural similarities. At EGIT, the IT services provider owned by the Austrian Erste Group, managers from Central and Eastern Europe rotate throughout the whole region that the company operates in: the Czech Republic, Slovakia, Hungary, Romania, Serbia and Croatia. Kerstin Schuster, the Group Learning & Development Manager at Austrian packaging company Constantia Flexibles, also considers expats as her first choice when a special expertise is needed abroad.
When being asked, managers from Central and Eastern Europe would not hesitate to go work abroad again. Most of them have worked there several times and some of them have decided to stay there forever.