Monday, August 21, 2017

Expat workers find their niche

The growth of international businesses interested in setting up shop has been paralleled by growth in foreign workers at least temporarily calling Myanmar home.

Foreigners enjoy after-work drinks at The Lab. Photo: StaffForeigners enjoy after-work drinks at The Lab. Photo: Staff

Whereas a year and a half ago there were not many foreign expatriate workers, or expats, around, now “they are just about everywhere,” said Ko Lin Kyaw Tun, director of Yangon-based Career Development Consultancy.

“That is definitely an indicator that something is changing in the business world,” he said.

Expats from numerous countries are coming to Yangon, driven by the demand their expertise from foreign and – increasingly – local companies alike.

“Even the local companies are starting to bring in expats,” said Ko Lin Kyaw Tun. “They are forming joint ventures with foreign companies, so they need this international standard … to connect with other international companies.”

Business leaders said that foreign expats often have a range of experience they can bring to bear in local markets.

Andrew Rickards, CEO of Yoma Strategic Holdings, said the firm is fortunate to have employees from diverse backgrounds, including foreigners and locals.

The majority of its employees are Myanmar people who never left the country, though he said the firm also employs expatriates and returned Myanmar people.

While repatriates often bring both local and international experience, expatriates often have experience garnered in different markets. In Mr Rickards’ case he has worked in a number of Asian countries

including India, Vietnam and


“I think there’s a lot of relevance because a lot of what I’m seeing here today I might have seen 10, 15, 20 years ago in some of these other markets,” he said.

Mr Rickards credited a strong management team with assisting Yoma Strategic’s performance in recent years.

Yet for many companies – particularly local companies – there are significant cost hurdles for hiring foreigners.

Expats are generally not cheap. A 2014 Salary Survey report by Myanmar Survey Research (MSR) said the median salary is US$4000 for an expat, with ranges between $2000 and $9000 a month most common. And this estimate does not include additional perks for some, like housing, schooling and transportation allowances.

Salaries for Myanmar people tend to be lower. Although all salaries range widely based on factors like industry, experience and qualifications, MSR’s survey shows a middle-manager earns about $1000 a month when paid in US dollars and $417 a month when paid in Myanmar kyat in the private sector. Similar middle management at INGOs earn $830, at embassies about $1030 and government $179, the data shows.

MSR associate director U Ye Nyunt said that differences are not necessarily a matter of preferences for foreigner or local, but rather that it depends on ability.

“Sometimes a local employee can do a much better job than a foreigner, so it depends on the skill,” he said.

Foreigners are educated abroad, often at quality institutions, while Myanmar people are not always able to attend top-end universities.

Expats also have the benefit of international experience, which is lacking in Myanmar given its years of isolation.

“Skills, and international experience and learning – these areas are very important to determining salaries,” said MSR research program director U Maung Maung Than.

MSR’s research also shows that expats are claiming expenses are on the rise in Yangon.

In the 2013 fiscal year expats claimed to spend $2500 a month supporting their lifestyle, including $300 on food, $900 on accommodation and $1300 on other expenses, though the figure has grown this year to $2900 a month, with $400 going to food, $1100 on accommodation and $1400 on other expenses.

PJ Bernardo, principal foreign consulting attorney at Kelvin Chia Yangon, said that unlike some countries there is no strict quota on the number of foreigner and local employs, unless it is stated in an investment permit from Myanmar Investment Commission.

As local manpower capacity is currently not too strong in several sectors, foreigners often fill the gap, though as capacity grows, firms will gradually hire more locals, he said.

Kelvin Chia foreign consulting attorney John Lichtefeld said the MIC has a requirement to train local staff, with the idea being to continuously hire more and more Myanmar for skilled positions and proactively train them up, though its policies are also somewhat flexible.

Expats are also usually confined to technical and managerial positions.

Mr Bernardo said international managers play a role in bridging local and international practice, while running the business at the day-to-day level is usually in the hands of Myanmar people.

“The role of the foreign manager is precisely to bridge that connection between local practice and foreign practice,” he said.

“I think it’s fair to say that the legal and the commercial structures are undeveloped. I think the best way to develop those structures is to get it from people who have experience elsewhere.”

Ko Lin Kyaw Tun said that while on the whole it is a good thing expats are arriving, there are disadvantages to making extensive use of employees coming from a foreign country.

“Of course there are issues. Expats need to know more about the local context, how we do business, learning the market. This is all important information that expats need to know,” he said.

“We’ve seen some expats … not understanding these factors well enough, so what can happen is there is conflict between expats and locals. There are those problems.”