Why Some Workers Prefer Foreign Employers
In many developing countries, foreign companies have a hiring edge that has nothing to do with salary. Workers simply want to work for them more. New research from José I. Rojas-Méndez helps explain why and gives HR professionals a tool to measure and respond to it.
The phenomenon, known as employee xenocentrism, refers to a preference for working for foreign-based employers over a domestic ones, driven by the perception that foreign companies are superior. José, together with his colleagues Vilma Coutino-Hill (Carleton University) and Gary Davies (The University of Manchester, U.K.), developed and validated the first scale to measure this construct. Building on Jose’s earlier, well-recognized work on consumer xenocentrism, the study draws on data from in China, Colombia, and Nigeria, to identify three dimensions that drive employee xenocentrism.
The first is professional development. Foreign companies have been seen as more transparent, less bureaucratic, and better at offering new experiences and skills. The second is prestige. Working for a foreign firm, particularly one from a wealthier country, carries social status. The third is the working environment. Foreign firms are perceived as offering better work-life balance, more ethical practices, and more support for creativity.
The scale was tested with hundreds of workers in China, a country with more than one million registered foreign companies. Workers who scored higher were more likely to want to work for companies from economically stronger and admired countries. Specifically, the prestige and working environment dimensions predicted a lower likelihood of wanting to work for a domestic company. The draw toward foreign firms and the pull away from local ones don’t come from the same source.
Among workers with experience at a foreign company, higher scores on professional development and prestige were associated with stronger organizational engagement. Job satisfaction is more nuanced. Workers at domestic companies who placed a high value on the prestige of foreign firms reported lower job satisfaction with their current employer. Whether xenocentrism helps or hurts satisfaction depends heavily on where someone is actually working.
So what does this mean for employers? Foreign companies operating in developing markets can lean into their origins. Emphasizing where they’re from, alongside the development opportunities and working conditions they offer, tends to resonate with workers who already see foreign employers as a step up. Domestic companies face a harder path.
This study didn’t identify attributes that local employers could easily use to counter employee xenocentrism. But the data points to better working conditions, stronger investment in employee development, and an employer brand that signals global-minded values.
The scale itself provides researchers and HR professionals with a reliable, validated means to study employee preferences and understand their drivers. As multinationals continue expanding into developing economies, knowing what draws workers to foreign firms and what that means for engagement and satisfaction will only become more useful.