This paper examines the issue of localisation or the the replacement of expatriates with host country staff following a period of staff development in a developing country, namely Papua New Guinea (PNG). Whilst the use of expatriates appears to be increasing in the PNG private sector, ineffective employer localisation programmes remain in PNG. This situation demands operational interventions. The aim of this study was to determine obstacles to localisation in private sector organisations in PNG. A total of 114 PNG senior managers responded to to a survey designed to determine the factors that were perceived to hinder localisation practices. Results suggest that a significant number of managers identify the prevalence of said obstacles, which were categorised into (i) socio-economic circumstances; (ii) recruitment and selection; (iii) local staff performance; (iv) lack of training and development; and (v) compensation. A diagnostic model of localisation has also been proposed. The model provides a detailed process of redesigning a localisation programme for a developing country. Policy recommendations are also offered for implementation of a more strategic localisation programme.