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The hiring of local nationals for international business is predicted to grow post pandemic.
It’s no secret that Covid-19 has changed not only how we work, but where we work.
Expatriates became few and far between while global lockdowns were in place, with many companies repatriating around one third of their staff either temporarily or permanently.
Other companies reduced assignment numbers and the volume of business travel.
It is now widely accepted the way we work has changed forever, with technological advancements, a rise in digital nomads, and a global shift to remote and hybrid working making that possible.
Over the past year we’ve also witnessed The Great Resignation, which impacted organisations around the world.
In the United States alone, where this was reportedly felt the most, a record-breaking 3.98 million workers quit their job every month in 2021.
In the past, employers dealt with hurdles and leveraged some new business opportunities by relocating people to fill these gaps. However, it’s likely that now they’ll need to start moving jobs to people.
The emergence of glocal talent
Many organisations continue to implement measures to recover from the losses brought about by the Covid-19 pandemic.
These may include reducing the number of expats they employ and cutting travel budgets, as greater dependence is placed on using technology to facilitate virtual meetings and collaboration.
Along with recruitment challenges facing companies’ post-pandemic, many countries in the Middle East have also implemented quotas on the hiring of local talent.
For example, from January 2023 private sector companies located in the UAE will be subject to heavy fines for every Emirati national not employed in accordance with the relevant Emiratisation regime.
The aim of these quotas is to increase the number of Emiratis in the UAE job market. Quotas vary for each sector with the figure being 5% for insurance companies of more than 50 employees.
The benefits of a glocal workforce
There are definite benefits to hiring local talent for international businesses.
Aside from having a deep knowledge of local culture and business practices as well as fluency in the local language, it also encourages diversity among workforces.
It also costs much less to hire local talent than expat talent.
In fact, hiring an expat can cost up to two or three times more than hiring a local candidate, due to relocation costs, higher salary expectations and language and cultural training.
There is also the risk that that investment may not come to fruition if the expat or their family does not adjust well and settle in the new environment.
However, the pool of people with the necessary job skills and experience could be limited when trying to hire locally.
That does not mean a company cannot hire locally and then train the new workforce. It just means more money and time needs to be spent bringing the local workforce up to the appropriate skill level.
Moreover, locals will not be as familiar with the company’s values or common practice.
Depending on where a particular company was founded, often it derives its core values and common practices from its country of origin. Transplanting those to another country and another culture can be difficult.
The impact on international private medical insurance
Following the drop in the number of expatriate assignments, we have noticed that many corporate clients are reviewing their long-term approach to expatriations and there is definitely growth in the hiring of glocal talent.
In light of these trends, insurance providers are now offering new solutions to companies, so they can insure to their glocal talent.
For example, at Allianz Partners, we’ve developed an international, medical, concierge-led health insurance product for 12 critical illnesses and four childhood diseases.
This provides a lower cost solution with access to high quality care for specific illnesses and diseases, rather than paying for full international medical insurance.
Our preferred partnership deal with Aetna International, looking after their health insurance portfolio outside the Americas, Thailand, and India has also expanded our global footprint, allowing us to offer more localised offerings than ever before, particularly in Asia and the Middle East.
This will deliver real benefits to companies opting to hire more ‘glocal’ talent than expats in the years ahead.
Every company around the world has been impacted by Covid-19, whether negatively, positively, or both.
Staff shortages, technological advancements and the tightening of corporate budgets are helping to drive the trend towards creating a glocal workforce, which was an emerging trend even before the pandemic.