An Exploratory Research On The Effect of Demographic Variables

rd
3 International Conference on
Managing Human Resources at the Workplace, December 5-6, 2014
An Exploratory Research on the Effect of Demographic Variables on

Expatriate Tenure in India with Specific Reference to Bangalore
Warrier Uma
Chief counselor& Associate professor,Jain University,Bangalore
warrier.uma@gmail.com
Srinidhi .V.R
Assistant Professor,Jain University – CMS,Bangalore
Sounidhi@gmail.com
Abstract
Internationalization of business through various modes of entry like off shoring, joint ventures,
strategic alliances etc has increased the flow of human resources across the borders. There is
definite requirement for globally competent work force and the MNC’s have realized that cost
of expatriate assignment largely depends on expatriate adjustment which is responsible for
successful completion of expatriate assignments. An understanding on expat tenure in India
with respect to demographic factors will help the multinational companies from USA, UK and
China to reduce the direct and indirect cost of failure of expatriate assignment. The issues and
challenges faced by the expatriates in India are discussed in the research. The research results
are intended to help the managers of parent country choose the right candidates for expatriate
assignments in India. The research aims to help organizations take proactive measures by
training the expats to improve their ability to adjust to the new work environment well in
advance.
Keywords: Parent country national, expatriate, demographic variables, Bangalore, India, USA,
UK, China.
Introduction
International assignments can provide competitive advantage for the employee, employer and even to
the host country when looked from a macro level perspective. Employee gets better career prospects
and pay package, while the employer develops competitive advantage due to successful expatriation.
Nation has multiple advantages in terms of increased FDI, increased employment for local people,
improved standard of living etc.
India is one of the fast paced growing countries, which has progressively adapted globalization since
1991 and this resulted in international business firms expanding their business to India. The sectors
which grew substantially in India are banking sector, financial services, IT sector and telecommunication
sector. The major cities in India where many multinationals set up their units are New Delhi, Mumbai
and Bangalore (Bajpai and Dasgupta, 2004). These are the cities where greater concentrations of
expatriates are found. Bangalore, touted as the IT capital of India, has seen a surge of expatriates over
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past 15 years (Indian Express). As per the Worldwide Quality of Living survey 2010 by Mercer among
221 cities, Bangalore was rated as the best place among Indian cities (India Tribune). Besides,
Bangalore is the 3 rd largest city in India when it comes to expatriate population. Hence, an exploratory
study to understand the demographic factors that affect the length of stay of expatriates was
considered for research.
Who is an expatriate?
Expatriates are employees who live outside their home country on professional assignment by the
company for employment in another country where the company has its subsidiary. The word comes
from the Latin terms ex "out of" and patria"country, fatherland". “An expatriate is a highly skilled
worker with unique expertise who is sent to work in another unit of the same company located in a
foreign country, generally on a temporary basis” (Romero, 2002). Expatriates are assigned foreign
locations of work by public as well as private sector for playing varied functional roles. Expatriates in the
public sector are the diplomats of foreign embassies or consultants of government agencies. In private
sector, expatriate assignments are mostly for manning the business operations. This study limits its
scope to expatriate assignment by private sector.
Why expatriation?
Expatriate assignments are considered by the head quarters of a company to other nations for
leveraging financial advantage. The business goal for such assignment could be for varied reasons like
technology transfer, propagating the value system and management philosophy of head quarters, for
managing a prestigious project, for fire-fighting the issues in the host country etc. Deploying expatriate
employees in the international company subsidiaries has several advantages like closer control and
coordination of international subsidiaries, leveraging technical advancement of parent country and it
also provides a broader global perspective. According to research conducted by (Boyacigiller, 1991),
expatriate assignments facilitate better communication and coordination between subsidiaries. This
research was supported by Rosenzweig (1994). Boyacigiller (1991) also argues that expatriation can
improve the competitiveness of the firm by having linkages with other nation’s government and other
interest groups.
At the same time, use of expatriate assignment should be done judiciously. The cost of expatriation is
almost 3 to 5 time the cost of hiring a native employee of the host country. Further, there are
possibilities of encountering local government restrictions like immigration laws in certain nations. This
makes expatriation as one of the most expensive hiring strategy for multinationals.
International firms follow different staffing philosophies. One of the expensive, but effective approach
is ethnocentrism, where the expatriate chosen for the international assignment is a native of the parent
country of the company, where it is headquartered. Other philosophies like polycentric approach are
also often used where the company assigns host country nationals for the assignment in the local
subsidiary and Egocentrism makes use of the potential of a third country national for expatriation. All
the three staffing philosophies have its own pros and cons. The expatriates assigned using ethnocentric
staffing policy are known as parent country nations (PCNs). This research is restricted to ethnocentric
staffing policy of international companies.
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Statement of problem
The upsurge of international firms investing in India saw a lot of expatriates working from Indian
campuses of MNCs. This also led to the body of research in the area of expatriation. Though many
published researches came up with interesting findings about expatriation, there is definite want of
more research in the field of expatriates staying in India. Moreover, majority of the research on
expatriates focused more on expatriate’s experience in different nations based on psychological ,
organizational or the host country specific variables, leaving scope for research on demographic
variables impacting tenure of stay . This exploratory research investigates the influence of demographic
variables on the length of stay of expatriates. The demographic variable under consideration for this
study are gender, age, nationality of the expatriate, number of countries worked previously and number
of languages known. This study includes expatriates who are working in Bangalore for different
companies and are natives of USA, UK and China.
Literature Review
The body of research in the field of expatriate assignment to India is limited. Study conducted by Oddou
and Mendenhall (1991) concluded that 90 % of the expatriates who were sent on assignments to other
nations reported increased global perspective and 80 % have reported to have understood business
trends in a better way. This is an indication that expatriates are benefitted by the assignments in the
form of conceptual knowledge. Oberge (1960) studied the factors that create a culture shock for the
expatriates. He listed difference in political, economical and fiscal systems, difference in languages,
difference in workplace standards and behaviours as factors an expatrate has to adjust in the new
country. When an expatriate is not able to adjust to the challenges of host country, it leads to
expatriate failure. Expatriate failure is the premature return of an expatriate before completion of the
assigned work in the foreign country subsidiary, a study conducted in the year 2007 revealed that 57 %
of expatriates cited that inability to adjust to new work environment is the reason for the failure of their
expatriate assignment (GMAC, 2007). Expatriate failure incurs direct and indirect cost to the company.
The cost of failed expatriation is in the form of selecting another suitable candidate, training and
relocating him/ her, lowered staff morale, loss of customers and market share, apart from the cost
incurred on expenditure on failed expatriate.
Since inability to adjust in the host nation was found to be one of the major reasons for expatriate
maladjustment, literature focusing on this area is considered for review. According to Tung (1998), who
conducted a survey on expatriates (n= 1998) Americans are more cosmopolitan and has greater
knowledge of other languages and culture. This research does not conclusively attach nationality of the
expatriates as the reason for better cultural adjustment. Her research throws light on the improved rigor
on preparation and training of expatriates rather than the expatriate’s nationality.
Research studies on gender of expatriates shows that only 20 % of expatriate positions are filled by
female expatriates (GMAC, 2007). Though the expatriate assignments are skewed more towards male
employees, Adler (2002) argues that female expatriates are considered no less than their male
counterparts even in highly masculine cultures. According to Adler, female expatriates are viewed as
expatriates who happen to be females and not a woman who happens to be a foreigner.
Age of expatriates and cultural adjustments has shown inconclusive research. In a study conducted by
Selmer (2001), expatriates ability to adjust in Hong Kong was positively correlated to age. Another study
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conducted at Ireland by Morley and Flynn (2003) contested the previous research finding, concluding
that age of expatriate does not contribute to expatriate adjustment.
From scanty literature review, research question is formed to understand the influence of demographic
variable on length of stay of expatriates in India
Research Design
Quantitative research method was used in this study. This research focuses on the effect of
independent variables like gender, age, nationality of the expatriate, number of countries worked
previously and number of languages known on the performance of dependent variable, namely the
length of stay of expatriate in India. A proposed model of research is given below to impart better
conceptual clarity.
Figure 1: Proposed research model
Research Question
Does the set of demographic variable considered for this study, namely gender, age, nationality of the
expatriate, number of countries worked previously and number of languages known, affect the length of
stay in India, of expatriates from USA, UK and China?
Respondent’s Profile
The participants of the study are the expatriates form different nations working for different companies
in Bangalore. 50 expatriates from 3 different nations viz USA,UK and China, whose stay in India ranges
from 4 months to 8 years, comprised the sample of the study. Out of the total respondents, 34 male
expatriates and 17 female expatriates took part in the research. Expatriates were aged between 22
years to 57 years. From the sample, it is evident that larger proportion of expats who took the survey is
of the age 20- 29 years. 20 of them were of American origin, 20 from UK and 10 were from China. From
the sample, 30% of the expats lived here for 1- 2 years, which is the majority, closely followed by a 22%
of less than a year tenure people. When it comes to the number of countries previously worked for, a
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majority (48%) of the expats have worked in two different countries. A meagre6% of them have worked
in 5 or more different countries. They are generally the ones who hop from one country to another on
contract based assignments. From the gathered data, it could be inferred that 40% of the expats know
just one language, i.e., English which is used universally. More than half they are familiar with at least 2
or 3 different languages which make it easier for the expats to survive in a new place. Though, very few
of the expats know 4 or more languages which could be due to their experience in many different
countries.
Gender Age
M F
50 and above 20%
32% 40-49 18%
68% 30-39 22%
20-29 40%
Figure 2 : Demographic data of respondents
Home country No. of years of stay in

India
20%
40% 40% 30%
30% 22% 18% 16%
40% 20% 8% 6%
10%
0%
0-1 1-2 2-3 3-4 4-5 5 years
year years years years years and
above
No. of countries No. of different

lived in languages known
40%
2 3 4 5 and above 34%
6% 20%
26% 6%
48%
20% 1 2 3 4
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Hypotheses
Hypotheses were set keeping in mind the research question to be answered. To understand the
influence of demographic variables on tenure of expatriate stay in India, 5 hypotheses were set.
H1: Gender of expatriates does not significantly affect the length of stay in India
H2: Age of the expatriates does not significantly affect the length of stay in India
H3: Nationality of the expatriates does not significantly affect the length of stay in India
H 4: Number of countries worked previously by the expatriates does not significantly affect the length of
stay in India
H5: Number of languages known the expatriates does not significantly affect the length of stay in India
Tools for data collection:

The data was collected using structured questionnaire. Interview with expatriates was also used as
primary data collection technique.
Sampling Technique
Target population of this study is the expatriate employees from different nations staying in Bangalore
and working for different companies. To collect the sample for research, expat community networks
were approached. Snowball sampling technique was used to collect a sample of 50 respondents, where
the members of the population are difficult to find and existing study subjects give reference of future
respondents for the research.
Data Preparation:
The data was analysed using SPSS 20 for windows. MS Excel was also used for data processing and
analysis.
Statistical Tools Employed:

ANOVA was used for understanding the impact of gender, age and nationality of expatriates. To
understand the most significant group, Tukey post hoc test, Tukey HSD etc. were used. Chi-square test
was employed to know whether previous experience in other nations as well as number of languages
known affect the tenure of expat stay in India. Hypotheses were tested at a 0.05 level of significance.
Hypotheses testing and results:

ANOVA test was conducted to ascertain the influence of gender on expatriate stay in India. Test results
show that gender does not affect tenure of stay of expatriates (p= .616). Hence null hypothesis H1,
saying that gender of expatriates does not significantly affect the length of stay in India, is retained
Descriptive
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Stay in India
N Mean Std. Std. 95% Confidence Interval for Minimum Maximum
Deviation Error Mean
Lower Bound Upper Bound
Male 34 2.9147 2.51506 .43133 2.0372 3.7923 .50 8.00
Female 16 3.2500 1.18322 .29580 2.6195 3.8805 2.00 5.00
Total 50 3.0220 2.17108 .30704 2.4050 3.6390 .50 8.00
Anova
Stay in India
Sum of Squares Df Mean Square F Sig.
Between Groups 1.223 1 1.223 .256 .616
Within Groups 229.743 48 4.786
Total 230.966 49
Though gender does not significantly impact the expatriate stay in India, since mean value for female
expatriates (3.25) is more than male expatriates, chances of female expatriates to stay back in India is
relatively higher.
To test H2, which states that age of the expatriates does not affect the tenure of expatriate stay in India,
ANOVA test was conducted. Significantly high p value (p<.000) confirmed the rejection of null
hypothesis. Since age was found to impact the stay of expatriates in India, Tukey post hoc test was used
to ascertain the most significant age group, which affects the length of stay. According to Tukey post hoc
test results, age group of 31 to 40 years had maximum significance in impacting the tenure of
expatriates in India ( p<.000).
Descriptives
Stay in India
N Mean Std. Deviation Std. Error 95% Confidence Interval for Minimum Maximum
Mean
21.00 - 30.00 20 1.7250 .89553 .20025 1.3059 2.1441 .50 3.00
31.00 - 40.00 11 6.2727 1.84883 .55744 5.0307 7.5148 4.00 8.00
41.00 - 50.00 9 2.3333 .50000 .16667 1.9490 2.7177 2.00 3.00
51.00 - 60.00 10 2.6600 1.63585 .51730 1.4898 3.8302 1.40 5.00
Total 50 3.0220 2.17108 .30704 2.4050 3.6390 .50 8.00
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Anova
Stay in India
Sum of Df Mean Square F Sig.
Squares
Between Groups 155.462 3 51.821 31.572 .000
Total 230.966 49
Multiple Comparisons
Dependent Variable: stay in India
Tukey HSD
(I) Age (Binned) (J) Age (Binned) Mean Std. Error Sig. 95% Confidence Interval
Difference (I-J) Lower Bound Upper Bound
31.00 - 40.00 -4.54773* .48092 .000 -5.8296 -3.2658
21.00 - 30.00 41.00 - 50.00 -.60833 .51424 .641 -1.9790 .7624
51.00 - 60.00 -.93500 .49619 .249 -2.2576 .3876
21.00 - 30.00 4.54773* .48092 .000 3.2658 5.8296
31.00 - 40.00 41.00 - 50.00 3.93939* .57584 .000 2.4045 5.4743
51.00 - 60.00 3.61273* .55978 .000 2.1206 5.1048
21.00 - 30.00 .60833 .51424 .641 -.7624 1.9790
41.00 - 50.00 31.00 - 40.00 -3.93939* .57584 .000 -5.4743 -2.4045
51.00 - 60.00 -.32667 .58865 .945 -1.8957 1.2424
21.00 - 30.00 .93500 .49619 .249 -.3876 2.2576
51.00 - 60.00 31.00 - 40.00 -3.61273* .55978 .000 -5.1048 -2.1206
41.00 - 50.00 .32667 .58865 .945 -1.2424 1.8957
* The mean difference is significant at the 0.05 level.
To test whether nationality of the expatriates affect the length of stay in India, ANOVA test was used. P
value was found significant (p<.000), confirming the alternate hypothesis that nationality of the
expatriates significantly affects the length of stay in India. To understand expatriates of which
nationality stays back longer in India, Tukey HSD test was conducted. Test results show that Tukey HSD
mean difference for China is significant (p <.000); indicating that Chinese expatriates tend to stay longer
in India, as compared to expatriates from USA and UK.
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Descriptives
Stay in India
N Mean Std. Deviation Std. Error 95% Confidence Interval for Mean Minimum Maximum
1.00 20 2.2000 1.00525 .22478 1.7295 2.6705 1.00 4.00
2.00 20 2.4050 1.46736 .32811 1.7183 3.0917 .50 5.00
3.00 10 5.9000 2.72641 .86217 3.9496 7.8504 2.00 8.00
Total 50 3.0220 2.17108 .30704 2.4050 3.6390 .50 8.00
Anova
Stay in India
Sum of Df Mean Square F Sig.
Squares
Between Groups 103.956 2 51.978 19.235 .000
Total 230.966 49
Multiple Comparisons
Dependent Variable: Stay in India Method : Tukey HSD
(I) homecountry (J) homecountry Mean Difference (I-J) Std. Error Sig.
2.00 -.20500 .51984 .918

USA
3.00 -3.70000* .63667 .000
1.00 .20500 .51984 .918
UK
3.00 -3.49500* .63667 .000
1.00 3.70000* .63667 .000
China
2.00 3.49500* .63667 .000
* The mean difference is significant at the 0.05 level.
To test H4,which states that number of countries worked previously by the expatriates does not
significantly affect the length of stay in India, Pearson Chi square test was used. Highly significant test
value (p<.000) confirms the rejection of null hypothesis.
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Chi-Square Tests
Value df Asymp. Sig. (2-
sided)
Pearson Chi-Square 107.760a 27 .000
Likelihood Ratio 79.358 27 .000
Linear-by-Linear
.412 1 .521
Association
N of Valid Cases 50
Final hypothesis H 5 was tested usingPearson Chi square test to ascertain whether the number of
languages known to the expatriates affect the length of stay in India.Pearson’s Chi square test shows
significant p-value as it is less than 5% (p= .000), which means that number of languages known by
expatriates affects the tenure in India, there by accepting the alternate hypothesis.
Chi-Square Tests
Value df Asymp. Sig. (2-
sided)
Pearson Chi-Square 110.757a 27 .000
Likelihood Ratio 89.394 27 .000
Linear-by-Linear
.311 1 .577
Association
N of Valid Cases 50
Summary of the results & Discussion

The tools used for finding an answer for the research question gave conclusive results. The independent
variables of the study viz a viz age (p= .000**), nationality (p= .000**), previous expatriate experience
(p= .000**) and number of languages known (p= .000**) were found to have significant impact on
tenure of expatriate stay in India. Gender of expatriate (p= .616) does not seem to have significant
impact on length of stay of expatriates.
The study confirms that age of expatriates influence the tenure of stay in India.Expatriates belonging to
the age group of 31-40 years were found to stay back in India more than the other age groups. This was
supported by an article in Wall street journal, which talks about an Indian expat survey conducted
consisted of more than 50 % expatriates belonging to the age group of 35 to 54 years.( WSJ October
2014). The article also talks about the research survey conducted by HSBC in 34 countries with a sample
of 9000 expatriates to understand the most preferred expatriate destination. According to the survey,
the cost of good quality education for children of expatriates is most economic in India, making India
number two in ranking based on the criteria of expat children’s education. The survey findings are
perfectly in line with the spurt in number of international schools in Bangalore. This is an interesting
interpretation from the research study, which supports the fact that expatriates of higher age group
stays longer in India.
Considering the influence of nationality of expatriate on length of stay of expatriates in India,

expatriates from China seem to have longer stay in India. Chinese expatriates tend to stay longer in India
as compared to expatriates of US and UK origin. This could be due to the similarity in Hofstede’s cultural
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dimensions between India and China. Both India and China are high on Collectivism, Power distance,
Long term orientation and Uncertainty avoidance. This similarity in culture in these dimensions would
have made the expatriation of Chinese employees much smoother and longer.
With regard to number of countries worked previously, it was found to have significant positive impact
on length of stay in India, if they have worked in more countries.Number of countries previously worked
gives a natural advantage to an expatriate. An already expatriated employee, who would have
undergone cultural shock in a country will be better equipped to handle further culture shocks in other
nations.
According to this research, the more the number of languages known, longer is the tenure of expatriates
in India.More number of languages spoken by expatriates is a definite advantage and this helps them to
communicate better to host country nationals. Ability to communicate in local language is a very strong
advantage for an expatriate, which will contribute to the success of expatriation and there by length of
stay in host country. According to this research, gender of expatriates does not significantly affect stay in
India.
Assumptions and limitations

This study includes the respondents from only three nations. Bangalore has expatriates from Germany,
Italy, France, Australia and Canada. This research has its limitations of not being a complete
representation of all expatriates fro different nations in Bangalore. The study has the limitation of small
sample size, which does not permit generalization of the findings for the expatriates working in
Bangalore.
Implications
The study throws light on the influence of demographic variables on the length of stay of expatriates in
India. India is one of the fastest growing nations interms of foreign direct investments and many nations
are eyeing India as a destination of international operation. With a supportive government policy which
promotes FDI, conducive climate, English speaking host country nationals and good talent pool are some
of the high rating points for considering India as the destination of global operations. For improving
success of expatriation, the research provides findings that can be incorporated while considering
expatriate assignments to India. Inputs from the interview with expatriates reveal that there is a scope
for improvement in pre departure training about specific cultural aspects of Indian work setup to make
smooth landing of expatriate employees. Considering the Hofstede’s cultural dimensions while choosing
a destination for expatriation would be another take away from this research.
This research has nationwide implication too. Considering the tested fact that middle aged expatriate
prefer to stay in India for longer time due to internationally comparable educational facilities and
relatively economic cost of education at schools in India , especially Bangalore gives impetus to
consideration of having more international schools in India
Since language proficiency was proven to have positive impact on tenure of expatriation, it opens out
avenues for expatriate consultancy firms in Bangalore to help expatriate learn local language and help
them with other assistance needed in settling in the host country.
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Conclusion
Selection of an employee for expatriate assignment is almost always competency based. This research
provides evidence to suggest that companies which propose to send expatriates to different nations
should consider the importance of demographic variables also, apart from the other competency based
selection criteria, to increase the success percentage of expatriation.
References:
1. Bajpai, N., Dasgupta, N. (2004), ‘Multinational companies and Foreign Direct Investment in India
and China,’ CGSD Working paper No.2.
2. Romero, E., J., (2002), “The Effect of Expatriate Training on Expatriate Effectiveness”, Journal of
Management Research, Volume 2, Number 2, pp: 73-77.
3. “ What expats really think of India “ , The Wall Street Journal – India, October 2014,
http://blogs.wsj.com/indiarealtime/2014/10/27/what-expats-really-think-of-india/
4. “Bangalore Turns kingdom of UK expatriates”, Indian express, 3rd November 2012,
http://www.newindianexpress.com/cities/bangalore/article1325409.ece
5. “Bangalore is the best Indian city for expatriates”, India tribune,
http://www.indiatribune.com/index.php?option=com_content&view=article&id=2578:bangalor
e-is-best-indian-city-for-expats&catid=125:general-news&Itemid=400
6. Oddou, G. and Mendenhall, M. (1991), “Succession planning for the 21st century: how well are
we grooming our future business leaders?”, Business Horizons, Vol. 34, pp. 26-34.
7. Oberg, K. (1960), “Culture shock: adjustment to new cultural environment”, Practical
Anthropologist, Vol. 7, pp. 177-82.
8. GMAC. (2007, April). Global relocation trends: 2006 survey report. Woodridge, IL: GMAC Global
Relocation Services and National Foreign Trade Council
9. Tung, R. L. (1998). American expatriates abroad: From neophytes to cosmopolitans. Journal of
World Business, 33(2), 125–140.
10. Adler, N. J. (2002). International dimensions of organizational behavior (4th ed.). Cincinnati:
South-Western.
11. Morley, M. J., & Flynn, M. (2003). Personal characteristics and competencies as correlates of
intercultural transitional adjustment among US and Canadian sojourners in Ireland.
Management International, 7(2), 31–46.
12. Selmer, J. (2001). Expatriate selection: Back to basics? International Journal of Human Resource
Management, 12(8), 219–1233
13. Boyacigiller, N. (1991), International Human Resource Management, PWS-Kent, Boston, MA.
14. Rosenzweig, P.M. (1994), “The new American challenge: foreign multinationals in the United
States”, California Management Review, Vol. Spring, pp. 107-23.
ISBN: 978-93-83302-01-7 12

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An Exploratory Research on the Effect of Demographic Variables on

Figure 1: Proposed research model

32% 40-49 18%

68% 30-39 22%

Figure 2 : Demographic data of respondents

Home country No. of years of stay in

No. of countries No. of different

Tools for data collection:

Statistical Tools Employed:

Hypotheses testing and results:

2.00 -.20500 .51984 .918

Summary of the results & Discussion

Considering the influence of nationality of expatriate on length of stay of expatriates in India,

Assumptions and limitations

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