Saturday, August 25, 2012

sundays in turkmenistan: continuing from tuesday

I wanted to get this done on Wednesday and call it something clever like "wednesdays in the world: global business" but will settle for this knock-off "Sundays in Turkmenistan" which is barely acceptable to read and not at all alliterative. Plus, these thoughts were all tumbling around then and were somehow fresher and made more sense. Now, time has either confused me or at least weakened the apparent newness of the ideas in my own mind. Regardless, we shall continue.

We wrapped up very quickly on Tuesday with an idea about training local staff. It came on the heels of the idea of where qualified people come from and how the industry is very specialized. The basic idea is that sometimes we need to bring in expatriates to certain locations when specific experience and skill sets are needed that are not locally available. Generally speaking, any foreign worker needs to be justified to the government (immigration ministry) and explain why the position cannot be filled with a local resident. The general explanations are lack of education, training, experience, etc. Of course, some companies could continuously make this claim, especially if they never give local staff opportunities to get experience and training. The response in some countries is that many expats are given a hard cap on how long they can be in the country. I have been told be colleagues who have worked in Angola that there is a three year limit for most expat workers there. The reasoning is supposedly that you should be able to train a local replacement to do your job during that time. This type of policy can produce some unintended consequences, the most prominent of which according to colleagues is the generally poor quality and unmotivated nature of much of the local staff because they know they cannot be easily released. (Angola, specifically in Luanda, also has a reputation as the most universally disliked location amongst people who have spent time there.) Their policies regarding time limits may not even be necessary. Companies have a few compelling reasons to train and develop local staff:

1. Mobility. Local staff are generally more mobile within the country. Things like border passes, permissions, registration are largely unnecessary because in most countries, local people can move freely within their own country. (I should note that at least for border passes, this is not true in Turkmenistan. Anyone going offshore, local or expat, requires a border pass document.) The flip side to this internal mobility is that for some countries, there is a problem with external mobility. Generally speaking, smaller and poorer countries have fewer visa-free agreements with other countries. For example, the number of countries that Turkmens can visit without getting a visa in advance can be counted on one hand. Another example is that in post-war Iraq, as the industry was going back for oil and gas work, it was very difficult to get visas for local Iraqis to go to training centers in other countries.
2. Money. Perhaps this should be listed first to emphasize its importance. Maybe I will simply list it twice. Local staff in less developed nations are paid at local rates. This is generally much less than what expatriate workers are paid as those employees are paid at international rates which are comparable to the rates in the more developed countries. It is in the employer's interest to have qualified local staff instead of more expensive expats. The flip side of this goes back to this being a global business. Once many locals in places like Turkmenistan gain training and experience, they want to work internationally themselves. It can become a challenge to retain and motivate some local staff members since they can take their skills to a competitor or client who might offer a more attractive deal or an international assignment. This becomes a management problem in terms of knowing your people, understanding their goals and having a plan with them.
3. Money. There, I listed it twice. Locals are cheaper and this is a business after all.
4. Business climate. You could call this a couple different things, but in terms of community relations, government dealings, and procedural matters, being able to have and present a strong local work force matters. This is a very international industry, but it is important to have local employees familiar with the less well published business practices of the region. This is particularly true in countries that have largely nationalized their natural resources so working with state companies is very important.

The general philosophy about local and expat workers here is that the company should try to employ as many people from a country as there are positions within that country. Let's say we have 100 people working in country ABC. Ideally, that would mean we have 100 ABC citizens working for the company, the vast majority of which will be working as home-country employees with a few working internationally. Perhaps 90 would be at home and 10 would work overseas. This would imply 10 expat workers inside country ABC. This being the ideal case also means it is not the reality in most of the world. In practical terms, a perfect balance would be almost impossible. More broadly though, some countries, usually better-educated ones, are over-represented worldwide when it comes to the numbers of positions the company has back in their home country. (Also, some people are from countries with no current operations so of course they are over-represented by this metric.) This imbalance will likely exist for a long time. We can take steps to minimize the imbalance through scholarships and internships and developing local staff. However, we cannot fundamentally change the quality of education available in local high schools and universities nor meaningfully redistribute the wealth of the world. We will settle for more training and go from there.

An unrelated note:
When I first started this entry on Wednesday, I had added notes at the bottom of my draft about internet quotes. I have no idea what prompted it four days ago since it is unrelated to the topic at hand, but I will leave you with this:
"The problem with quotes from the internet is it is hard to verify their authenticity."
-Abraham Lincoln

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