Returning Home For Reduced Remuneration: The Repatriation Dilemma

By Angelica Jopson 

Demand for diaspora in Africa is growing but moving back can involve a pay cut.

Fifty-three percent of companies surveyed in a recent report by Ernst & Young said they expected to hire less expatriate labour in Africa over the next 12 months in favour of local talent and members of the diaspora. But when it comes to moving a Nigerian senior level manager from a high rise in London to the hustle of Lagos there’s a conundrum to be solved. How do firms offer packages attractive enough to entice the talent while still making them more affordable than importing it? And how do internationally experienced workers swallow the idea of being paid less than their expatriate counterparts especially when, after years abroad, their home countries can seem like foreign territory?

After six years in the US, Ugandan-born Ham Namakajjo moved back to Kampala to head up Google Uganda. In Los Angeles he worked with Bain and Company before exploring options in the film industry and eventually deciding that his dream to build up African cinema could only be achieved on home soil. But first he’d need a job to set himself up. Even with the weighty Google name and his senior job title, the pay packet on offer was substantially less than what he was used to. “I always knew I was going to take a pay cut, a very huge pay cut,” he says, “but the benefits of being on the continent with a big brand like Google and the type of things they were trying to do in the market outweighed the actual compensation.”

Approximately a third of expatriates in executive positions can earn a premium three times that of their local counterparts, according to the EY report entitled Realising Potential, and for every company employing a high number of expatriates the price tags add up. Drinks giant Diageo, for example, currently imports 70 percent of talent in their Africa-based operations.

According to Clare Reilly, talent director for Diageo Africa, hiring locally is the way forward. “Ultimately we feel that our local businesses are best run by local leaders and we make every effort to attract and develop great local African talent from the diaspora and from the local markets,” she says.

But where does local stop and international begin? Workers that tick both boxes are hot property for big corporations especially if they can recruit within their ranks and get the added benefit of an individual that knows their company as well as the landscape.

Adam Hunt, head of coverage for private clients at Standard Bank, recalls taking a newly appointed executive from the diaspora to an event in Nairobi to introduce her to local colleagues. “I think she knew more of the people at the function that I did,” he says, “because she went to school with a lot of them.”

Professor Ken Kamoche from the Africa Research Group says individuals like this don’t fit neatly into one category. “I think they fall somewhere in between the locals and the expatriates,” he explains. “There has to be an understanding from these multinationals that they are actually hiring a resource which is going to help them achieve even more than they would achieve if they hired an expatriate who is going to take ages to acclimatise to standard culture, to the standard ways of doing business. These people are actually in a much better position to help them achieve their organisational objectives”. At the same time, Mr Kamoche says, “they are not really local because they have not started their careers in an African context.”

The right price

At Diageo members of the diaspora are viewed as locals, but may also be offered financial assistance in the resettlement period when moving back to their country of origin. “We invest in these people as future leaders of the business,” Ms Reilly says, “so it has to be fair, equitable and make sense for our economic markets, as we view this talent as part of the local leadership pipeline.”

But while individual companies are reluctant to divulge their specific HR policies it is well known that diaspora returning to local markets are by and large offered less. That can be problematic.

“If someone has become used to a certain lifestyle it wouldn’t make sense to reduce their pay just because they are going back to work in what is considered a familiar environment,” Mr Kamoche says. “In fact, for many of them it isn’t considered familiar because if they are second generation Africans who have been living in the West then they are going to face the same challenges that expatriates claim they experience.”

Rapid change in certain countries means that even those that have been away for only a few years could find themselves with a lot to adjust to. At the same time many African countries are no longer the challenging environments they used to be and they’re attracting a lot of competition especially from Indian and Asian workers, according to Standard Bank’s Mr Hunt.

So does this cause tension at the negotiating table? It can, Mr Kamoche says, but it doesn’t have to. “Let’s not only look at this in terms of monetary reward”, he argues. “There are other things that organisations can do to help individuals adjust. There are other allowances, such as as healthcare and insurance.”

Angel Jones, founder of Homecoming Revolution, a company dedicated to getting African skills back on African soil, goes one step further than that. She says that those haggling over 5 percent might not be ready to come back at all. For her, moving home has to be about more than the paycheck, it has to be about long-term commitment and embracing new opportunities. “All those relatively esoteric things can actually carry such a huge value,” she says.

Stuart Mansfield is the chief audit executive at Investec in Johannesburg. He moved back to South Africa after eight years in the UK and like many others took a pay cut for the privilege. But according to him, it’s the non-monetary rewards that have been the greatest. “A lot of it is driven around the opportunities that I’ve got coming back here. I don’t know if I would’ve had the same opportunities if I’d stayed in the UK from a career progression perspective,” he says. “People who put their hands up and show an interest in doing things in South Africa get the opportunity whereas in the UK you need the experience, the qualification and a few years behind you before you get to do quite a lot of things.”

Mr Namakajjo would agree that the bottom line is just the start. He left Google East Africa after two years and set up his own companies. “I think what people need to start thinking about is being more entrepreneurial in their move back”, he says. “There are tons of opportunities in a market like this where everything is open.”

Homecoming Revolution’s Ms Jones confirms that this is a trend seen in the recruitment sector. “Often people come back into corporate for maybe three years and then they move into entrepreneurial ventures,” she says. “With the right entrepreneurial flair you can really bring huge benefits to the community and your pocket.”   

For those that can see past the immediate pinch of a pay cut in favour of possible opportunity in the likes of Lagos, Nairobi or Accra will be in good company as many make the move. For the others that firms fail to entice, the high rises of London may continue to be home.