At the end of last year, Ernst & Young – one of the global players among professional services firms – published the latest edition of their annual “Global Mobility Effectiveness Survey”. 520 multinational companies, mostly headquartered in North America or Europe, participated. The enterprises in question are active across all industries, especially in consumer products, finance, and technology.
Regardless of sector and business activities, these answers and their analysis provide some interesting findings with regard to the importance of talent management, as well as emerging markets. For obvious reasons, the report focuses on the company perspective rather than the expats’ point of view, on career tracks instead of personal insights. But if you have been a foreign assignee yourself, or are a considering an assignment abroad, there are still some key points to catch your interest.
Understaffed and Overworked?
First of all, the global mobility teams surveyed by Ernst & Young implied they were often understaffed and overworked. This shortage of human resources leads to an increased focus on short-term tasks dealing with practical, administrative, and legal issues. These usually include:
• tax compliance
• immigration laws and similar bureaucratic hurdles
• negotiating remuneration and drawing up benefits packages
• helping with the immediate needs of relocation, like housing and schooling
Of course, all these aspects are essential for a successful international assignment. Ernst & Young also emphasizes that some points, such as the cross-border handling of company payrolls, international social security compliance, or cost control, deserve even greater attention.
“Today” vs. “Tomorrow”
Despite the undeniable importance of the issues mentioned above, the study points out that there is a deplorable lack of integration of global mobility with larger strategic goals, particularly talent management. All too often, the global mobility team is too busy focusing on the “today”:
• How soon can we fill an upcoming overseas vacancy?
• Does the assignee have the right visa?
• Can we provide temporary accommodation? …
On the other hand, the “tomorrow” that is pivotal to talent management within a large company suffers from undue neglect. Therefore the vision of global mobility best practices stays exactly that: a vision. It cannot be ensured that an international assignee is indeed “the right person, at the right time, in the right place, for the right cost.”
Failed Assignments: Costs and Consequences
The main consequences are failed foreign assignments, or the former assignees leaving the company within less than two years of their repatriation. For instance, 20% of the participating businesses had an attrition rate of over 5% among their expat staff. Moreover, over 10% of returning expatriates gave notice soon after repatriating.
At first glance, these figures may not look like that much. But considering that the cost of an international assignment can be six times as high as keeping the same employee at home, they literally add up. The lack of a long-term outlook on expat careers does harm companies where it hurts most: financially.
Wanted: a Strategic Approach to Global Mobility
Among the solutions that the survey implies, a two-fold or tripartite function of global mobility could be the most obvious one. The decision-makers in multinational businesses need to ask themselves how their GM teams are supposed to work:
• Do they want them to carry out mostly admin functions, like handling payroll and tax issues?
• Should the global mobility staff also ramp up their immediate support for expats and their families, before and during the assignment?
• Or should global mobility be involved in long-term decisions concerning international assignments, too?
A more strategic approach to global mobility practices might involve some of the following measures:
• An analysis of performance and return on investment of expats vs. local talent can help cut the number of unnecessary assignments and general costs.
• Global mobility ought to take part in assignee selection and preparation to make sure that expatriates have a suitable personality and the necessary knowledge to cope with culture shock and unfamiliar locations.
• Extended support for family members reduces the #1 reason for assignment failures.
• Nurturing future and former assignees on long-term career paths within the company avoids losing experienced employees.
The New Role of Growth Markets
The right selection and support are particularly significant since more and more foreign assignments are located in the world’s emerging markets, i.e. the so-called BRIC countries (Brazil, Russia, India, China) and various African nations. Strategic assignments of senior executives have even overtaken short-term, project-based work in these locations.
Furthermore, respondents to the survey rightly demand more flexible global mobility policies. It sounds like a truism that it’s very different to send an employee to the UK, to Kenya, or to India – but this only highlights that a “one size fits all approach” does not work. Mobility policies need to take local peculiarities into account, if they truly want to help HR and expats alike.
What Do You Think?
Do you maybe work in human resources or global mobility? Or have you ever been a foreign assignee yourself? If so, do you agree with Ernst & Young’s assessments? Where do you see room for improvement?
(Source: Ernst & Young, Global Mobility Effectiveness Survey 2012)
(Photocredits: 1) Ernst & Young Sign, Barbados by Wikimedia Commons user CaribDigita 2) Indian Visa by Wikimedia Commons users Passportguy and Jon Rawlinson 3) Sparschwin HASPA 02 by Wikimedia Commons user GeorgHH 4) Map Africa Regions by Wikimedia Commons users Nick Roux, Peter Fitzgerald et al.)