FILTH No More: Expats 'Endangered' in Asia

"Bye-bye, laowai!" (foreign devil) I kept hearing last year while playing the ultra-violent video game Deus Ex: Human Revolution which partly occurs in the fictional Chinese megacity of Hengsha. Set in the not-so-distant future where China has overtaken the United States as the world's dominant economy, I guess it is prescient in more than one respect. For, instead of Chinese gangbangers trying to get rid of the American video game protagonist in DX:HR, we have a similar real-life situation going on in terms of MNCs being reluctant to bring Yanks and Brits to work in Asia.

I have previously discussed the FILTH phenomenon of British office slaves (usually bankers) decamping to Hong Kong: Failed In London, Try Hongkong. I even coined my own term for the selfsame folks thinking they can make it big in the PRC: Failed In London, CHina Bound (FILCH). However, the heyday of FILTH is ebbing, while that of FILCH may never even reach a golden age--or at least says a recent feature from Global Connections.

Forget expats. Western companies doing business in Asia are now looking to locals to fill the most important jobs in the region. Behind the switch, experts say, are several factors, including a leveled playing field in which Western companies must approach newly empowered Asian companies and consumers as equals and clients—not just manufacturing partners.

Companies now want executives who can secure deals with local businesses and governments without the aid of a translator, and who understand that sitting through a three-hour dinner banquet is often a key part of the negotiating process in Asia, experts say. In fact, three out of four senior executives hired in Asia by multinationals were Asian natives already living in the region, according to a Spencer Stuart analysis of 1,500 placements made from 2005 to 2010. Just 6% were noncitizens from outside of Asia. 

The new pecking order is headed by Asians with a Western education who are fluent in the local language--like me! They are increasingly the elite of Asian business since they are familiar not only with the management styles of Western MNCs but also the vagaries of doing business in Asian countries where connections matter more and unspoken codes of conduct predominate:

To help companies fill Asia-based executive roles, at least two search firms—Spencer Stuart and Korn/Ferry International—say they have begun classifying executives in four broad categories: Asia natives steeped in local culture but educated in the U.S. or Europe; the foreigner who has lived or worked in Asia for a long time; a person of Asian descent who was born or raised in a Western country but has had little exposure to Asia; and the local Asian executive who has no Western experience. For companies seeking local expertise, both firms said the first category is by far the most sought-after. But Mr. Johnston said those candidates are difficult to find and retain, and they can command salaries of $750,000 to $1 million—on par with, and sometimes more than, their expat counterparts.

Meanwhile, the expat with no Asia experience does not impress even with a CV full of accomplishments from other parts of the world. Gone are the days when the white sahib would come and lord it over us coloureds:

Foreigners with no Asia experience, on the other hand, need not apply, recruiters said. Spencer Stuart's Mr. Johnston said he occasionally receives inquiries from Western middle managers, proclaiming that they are finally ready to make a career move to the region. He advises them that "there is nothing about their experience that is interesting or relevant to Asia." In hubs like Singapore and Hong Kong, expats receive as much as $200,000 a year in subsidies for housing, transportation and private schooling, Mr. Johnston said. Payments to offset taxes for these benefits add up to another $100,000. Altogether, a bad match can cost a company as much as $1 million, after figuring in relocation costs, he said.

Monster Worldwide Inc. Chief Executive Sal Iannuzzi said the company has been hiring locally for several years, in part because he found deploying expatriates cost too much. "It takes them six months to figure out how to take a ferry, they're there for 12 months, and then they spend the next six months figuring out how to get home," he said. Like some other companies, Monster now tracks its own workers to ensure a pipeline of talent. 

As the darned video game said, bye-bye, laowai!