Analysing the challenges in global mobility
For a host of reasons that have dominated the news agenda over the first half of the year, 2016 is certainly starting to look like one of the most extraordinary years in recent history. However, on a slightly more prosaic level, what are the major issues dominating the global mobility (GN) agenda?
The RES Forum, which is an independent network and community of over 1000 GM professionals around the world, set out to identify some of those major issues by canvassing opinion from its membership in a series of surveys.
The most significant were identified at being those pertaining to gender, the role of OD and talent management, programme management and compliance, reward package design and the effect of VUCA issues on global mobility
The gender effect
The voyage of discovery that is often the rationale behind employees taking an international assignment is highly likely to benefit the organisation and the individual.
However, amongst international assignees, women are severely underrepresented. The evidence from many studies indicates that there are many women who would want to work abroad and that companies would be well advised to encourage a better gender balance in GM.
We looked at what multinationals should do to help increase gender diversity amongst assignees and key was the need to establish a host of flexible HR policies and practices, including GM approaches that take the special situation of women and families into account.
Amongst international assignees, women are severely underrepresented.
However, finding suitable female expatriation candidates and motivating them to accept working abroad is more difficult than finding and motivating male assignees - even though they tend to be treated equally.
A key way to implant diversity into the DNA of GM and the wider organisation is to integrate these topics into talent management activities
It was agreed that the short and long-term effects of working abroad for women are highly positive.
They are promoted faster, achieve higher performance ratings and better reward developments compared to non-expatriated peers. However, male repatriates benefit substantially more from their work abroad.
A key way to implant diversity into the DNA of GM and the wider organisation is to integrate these topics into talent management activities and into the fabric of thinking and decision-making of individuals in all areas of the company.
On that note, it's acknowledged that global talent management is critically important for the success of individuals and organisations.
However, about 80% of organisations experience a high degree of independence between their talent management and GM departments.
Given that most organisations believe that their competition is worldwide, the stronger integration of GM and talent management is likely to be beneficial.
About 80% of organisations experience a high degree of independence between their talent management and GM departments.
Furthermore, around 20% of organisations have less than 40% of their required candidates for international assignments although about a third of respondents indicated that the careers of repatriates unfolded better than their non-expatriated peers.
Another talent management advantage was the indication that GM assignees normally perform better than their non-expatriated peers which indicates strong behavioural and cognitive learning.
Programme management and compliance issues have always been at the heart of service and value delivery in GM and, as our world changes by the minute, compliance especially has to be designed to manage risks carefully and to be able to flexibly react to highly dynamic developments.
Our 2016 findings reveal that programme management and compliance is still highly centralised within organisations and more than 80% of companies either have one global centre of expertise or regional GM centres that cover several countries.
Assignment compliance is an area in which many companies outsource a sizeable amount of the work to third parties.
This helps them reduce their own risks and/or to manage them more effectively.
Employee compliance issues, however, are most frequently outsourced as external specialists often have the benefits of scale and scope due to working with a range of companies.
On the other hand, corporate tax and payroll compliance is more frequently done in-house or in close collaboration with service providers due to the perceived importance for the organisation and the availability of in-house expertise.
Programme management and compliance is still highly centralised within organisations.
Assignee tracking solutions have become more accurate and sophisticated with fewer companies relying on spread sheets and more sourcing their software externally. However, there are still substantial efficiencies to be realised through technology.
More than a third of companies do not track regular international business travel which leaves them exposed to a range of compliance risks and is seen by GM professionals as one of their core challenges.
Other key assignment compliance challenges include the accuracy of data gathered, the non-integration or non-availability of high quality GM information systems, the lack of internal awareness and the lack of collaboration or lack of prioritisation of GM issues.
GM experts argue that the company culture needs to be changed to stress the importance and the risk of GM work and that the awareness of key GM bottlenecks and challenges needs to be raised.
Reward package design
The function has experienced, over time, increasingly complex and varied GM approaches. The underlying drivers that shape the design of these policies and practices are effectiveness, business needs and individualisation considerations.
More than a third of companies do not track regular international business travel which leaves them exposed to a range of compliance risks.
The RES Forum data highlighted several interesting findings.
Firstly, that a number organisations decrease their reward packages in response to such factors as individuals initiating moves or assignments being developmental.
They seem to be most generous for business-needs/strategic assignments although, interestingly, less than a quarter of organisations link assignment compensation to performance.
Amongst the key VUCA challenges are disruptive change and new, emergent business models.
Almost all short and long-term assignment packages used the home-based balance sheet approach. However, some short-term assignees stay on their home payroll while gaining a per diem.
Unsurprisingly, perhaps, companies are most generous to their long term international assignees although, even for those on short term assignments, three quarters pay housing costs and a majority pay home leave allowance.
There are large variations of company policies in the event that the expatriate resigns during the assignment or asks for an early repatriation. Claw backs are often determined on a case-by-case basis.
The VUCA effect
One of the most significant findings was the growing impact of VUCA issues (Volatile, Uncertain, Complex and Ambiguous). An interesting subject that might even represent the last frontier for the ‘legacy’ world of international assignments.
Political unrest, terrorism or armed conflict – not to mention environmental issues such as tsunamis or insufficient harvest yields/famines - dominate not just the news but are also key factors to contemplate when designing and executing GM programmes.
For instance, amongst the key VUCA challenges are disruptive change and new, emergent business models.
The increased agility and aggressive business strategies of competitors often need a substantial investment into new technologies or new markets.
Co-opetition becomes more popular but needs new HR and employee capabilities.
While there is a range of other activities, there are six major ways to deal with VUCA threats and opportunities for GM. Important actions are to:
- Avoid the (hostile) operating environment by withdrawing/not operating in the country.
- Prepare international assignees better for hostile environments.
- Plan and practice emergency responses to crises.
- Develop all managers in order that they can analyse VUCA factors and integrate these into decision-making.
- Design flexible, yet more specific GM strategies, policies and practices for sub-groups that allow a better and the more cost-effective management of assignees.
- Minimise the engagement of international assignees in hostile contexts through the use of virtual teams.
Demographic changes continue to have a growing influence and global organisations are devising new ways to attract, recruit and manage their staff.
They aim for greater diversity within their operations and encourage global careers.
Rewards and recognition approaches are being re-thought and we may see further development towards individualisation in terms of reward, assignment compensation and the elements of the assignment package.
These VUCA topics are likely to strongly shape the GM practices of the future.
Above all, good information is needed to be able to successfully respond and proactively plan to design an effective GM programme in a VUCA world.
The above are just some of the key findings from The RES Forum 2016 Annual Report. It reflects the cutting edge practices of major multinationals but also the challenges these organisations face in managing their GM programmes and ensuring practices are keeping up with broader trends in data and measuring ROI. You can request a copy of the full Report here.