Expats not necessarily first to go in recession

When companies in Asia initiate retrenchment exercises, they consider salaries and skills first and not whether an employee is a foreign worker, say HR experts.
Written by Sol E. Solomon, Contributor

When companies in Asia are forced to reduce headcount, whether an affected employee is local or expatriate has little relevance in deciding which one should be retrenched, according to human resource executives.

William L. Ayers Jr., vice president and business unit leader of career management firm The Ayers Group, said it is the nature of their employment that makes many expatriates in Asia at greater risk of losing their jobs.

"The fact that expatriate jobs are contract driven makes them more vulnerable to review before [the] renewal of their contracts," Ayers told ZDNet Asia in an e-mail. "Not all IT expatriates are on an expatriate package; some may be local hires and on local contract terms."

Peter Ferries, executive manager of IT recruitment and HR services company Randstad, added that IT expatriates in Singapore are not necessarily the first to be let go in the current recession.

"What I have found is that when IT expatriate jobs have gone, this has generally been as part of an overall staffing strategy as opposed to expatriate jobs being specifically targeted for cuts," Ferries told ZDNet Asia in an e-mail interview.

Peter Fischbach, president of Bangkok-based ISM Technology Recruitment, said Thailand's restrictive labor and immigration rules limit the hiring of foreigners so there are fewer expatriate professionals in the country compared to other nations in the region.

IT expatriates working in Thailand are either employed or contracted by foreign vendors that are running projects in the country, Fischbach told ZDNet Asia in an e-mail. These overseas workers were typically hired because their skills were not readily available in the Thai labor market, he explained.

"The extent to which they are being let go is, therefore, more a factor of whether the projects they are working on have been discontinued or put on hold, and not so much related to their being foreign or Thai," he said.

In Singapore, too, said Ferris, expatriates fill crucial roles in the local IT sector and tech professionals have specific skills that are not widely available locally.

And when skills availability is not the primary consideration, Fischbach said, or where a company's reduced business activity results in downsizing of IT staff, employees with higher salaries are the ones to be axed.

"As foreigners [in Thailand] generally tend to get paid more than local staff, their jobs are often among those cut," he said.

Ayers said the decision to lay off any staff--local or expatriate--takes into consideration the cost of retaining the employee versus work delivered. If an expatriate staff enjoys a higher pay package, an employer may be inclined to measure that against local employees capable of producing the same work outcome, he added.

Expatriate or not, Ferris said companies in Singapore do try hard to save the jobs of both camps.

"This is certainly the case when it's part of the organization's overall staffing strategy or when expatriates are in key roles. Expatriates play a significant part in business life in Singapore and are very well-integrated into the business community. The IT sector is integral to this," he said.

"[Singapore] believes in making it easy for companies to do business, so I think there is less of a distinction between expatriate and local jobs than there might be elsewhere in the world," he added.

Local expertise counts
Ayers said the skill level among Asians has made it easier for IT jobs to be filled by locals in the region.

"The countries that have better technology advancement and more skilled local IT talent pool...will see this [job] replacement happening much faster," he said. "In addition, the longevity of a local [to stay in a company] is always better than that of an expatriate."

In Thailand, Fischbach said salaries for new hires have been kept low, to an extent it limits the inclusion of expatriates in the pool of potential candidates for consideration. As such, expatriates would be more disadvantaged than Thais in finding new jobs during the current recession.

"We are, therefore, advising foreigners who seriously want to remain in, or relocate to, Thailand that they need to approach that goal with a realistic expectation of the salaries available here," he said.

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