How to get the most out of global mobility
Rob Gray, January 21, 2014
With international assignments tipped to rocket, mobility strategy will be a growing concern for HR teams
Employees in India talk on Skype with their UK counterparts. A US-based executive works on a presentation simultaneously with his colleague in China. Thanks to advances in technology, the 2014 business is truly global. Time zones? Borders? They are practically irrelevant.
But however good technology is, it doesn’t change the fact that sometimes you need someone on the ground. The global nature of business today and the growing importance of emerging markets have created a significant shift in mobility patterns. In its recent report Talent Mobility: 2020 and Beyond, PwC notes that assignee levels have increased by 25% over the past decade and predicts a further 50% growth in mobile employees by 2020.
“That’s a big leap,” says Carol Stubbings, PwC partner and international assignment services leader. “Organisations are really struggling both to increase their mobility and to get a handle on who the people are, where they are travelling to and what they are doing. Also, big companies can have more than 1,000 expats and, as they can cost seven times what a local employee costs, it is often a significant investment.”
Overall, the trend is a move away from the old-style three- or four-year relocation followed by a return home. New forms of global mobility have developed in response to business demands and employee preferences, often involving shorter-duration assignments, frequently with more of a project focus.
The upshot of this is that mobility strategies need to be agile and constantly evolving in order to meet the needs of the business, together with the expectations of five generations of employees. For multinational corporations, there is no holiday to be had from the relentless, round-the-clock activity of the global economy. Organisations need to be methodical in their preparations concerning international assignments.
Before you get members of staff packing their bags, here’s everything you need to get right to ensure your mobility strategy is a successful one.
Move people for the right reasons
First off, you need to be clear on the reasons for the assignment and ensure that the person selected is entirely suitable. “There are a number of reasons for sending someone on assignment,” says Liz Cox, head of global mobility at design and engineering group Atkins. “It could be about career development, or about sharing expertise with other markets. If somewhere is going to be challenging, especially for someone with a family, we look at the structure of the package – perhaps building in more trips home.”
Moreover, with the economy now in better shape, new opportunities are being created – but these come with a cost to the business. If overseas assignments are likely to grow (and costs with them) it is sensible to benchmark assignment policies and practices against market norms to prevent costs spiralling out of control.
Get people excited about emerging economies
Are employees keen to go to the US or Australia, but less wild about China or Africa? In such cases you need to think creatively. A PwC client that made an acquisition in Ghana was finding it hard to find the right people to send there in order to meet its growth targets. Pay alone was not proving an attractive carrot.
However, when PwC introduced the concept of allowing managers on assignment in Ghana to take time off to work in the community, for example helping to build schools and hospitals, the problem was solved immediately – uptake rose to the point where the opportunities were oversubscribed. The chance to give something back to society proved extremely motivating. Stubbings says she expects to see more companies taking an approach like this as a way of encouraging people to sign up to roles in locations that might otherwise be unappealing.
Oil giant BP is growing in countries as varied as India, Indonesia, Angola, Australia, Trinidad and Tobago, Canada, the US, Brazil, Namibia, Uruguay, Norway, Oman, the UK, China and those in North Africa. That’s quite a mix, including some countries that do not, on the face of it, appear to be the most attractive places to live.
“People want to work in these places because that’s where the innovation is, the challenges, the geology and the ground-breaking work to be done,” says BP’s international mobility client relationship director Rosemary Barber.
“The movement of people is generated by our need to have subject-matter experts in a country and to take with them the necessary transferable skills. This extends to the majority of our drilling, wells, pipelines, engineers, geologists and scientists, specialists whose skills are in high demand both at BP and our competitors. We also select individuals to move for personal leadership development and for transfer of knowledge to the host country, or to gain knowledge from the host country and their peers.”
In other words, the nature of the role and the opportunities for career development and professional satisfaction it may bring can, for many, outweigh perceived issues regarding the desirability of a place to live – for a limited period, at least. But, of course, the more demanding a location, the more effort is required in terms of assisting assignees with the move and supporting them throughout their time in that country.
Help people settle in
“Overcoming language barriers continues to remain a key area that we are looking to refine,” says Jackie Bornor, global head of HR at financial derivatives trading firm IG. “Language barriers can and do occur, particularly for international assignments in Japan. That said, we encourage and fund language lessons in both English and Japanese. For example, when we opened our office in Tokyo, we organised Japanese lessons for the several employees who knew they were going, four months before they flew off.”
She adds the company has seconded several employees to Japan, for periods lasting from three months to two years. “We had a very senior employee seconded there with his wife and young family and we employed a ‘resettlement agent’,” she says. “The agent drove them around the key housing areas, helped them look for nursery and primary schools, and organised the shipping of personal goods. One of our unaccompanied secondees actually found a home in Japan and has settled there with a wife, and now two children.”
Use of resettlement agents, or destination services providers as they are otherwise known, is common among corporations looking to smooth the transition to a new location, with housing and (where relevant) schooling at the top of the priority list.
Barber says BP provides full support for staff moving location either within their home country or internationally. The level of support varies depending on local conditions and assignments are managed in-house by an international mobility team. Practically speaking, she says, BP also provides the individual and their family, whether accompanying them or not, with assistance in shipping their personal items and sorting out local housing and, if needed, schools (often international). It also provides cultural training, language lessons, host country transport and orientation sessions. Allowances are provided to ensure that employees are able to manage the cost of living differential between their home and host country, and to provide for the hardship they can endure on location.
With shorter-term assignments rising more rapidly than traditional longer-term ones, it makes sense to look long and hard at when and if whole families should join the employee. Communications technology solutions such as Skype make it far easier for temporarily separated families to keep in touch than it ever was before.
Understand cultural differences
HR undoubtedly has a role in making sure the employee is aware of the new culture. This is especially true in more emerging markets and may raise some thorny questions that require delicate handling. For example: if an employee is gay, is it wise to send them to Saudi Arabia?
“A lot of countries will allow a spouse but not a partner,” says Atkins’ Cox. “If a potential issue arises, it’s important to talk about it. It might be that we collectively decide that it’s just not the right assignment for a particular person, or that they go but their partner doesn’t and we build more flights home into the package.”
This is an area, more so than most, where common sense is a necessity.
Get pay and benefits right
“Home leave is a real hobby-horse of mine,” says Mercer principal consultant Roger Herod, an expert in international assignment policies. “I’m constantly amazed at the number of companies that will pay for an employee’s entire family to fly home business class – these are leisure trips.”
Herod makes the additional point that in the past foreign postings were often seen as a hardship, with some obvious exceptions this is less often the case today. Indeed, gaining international experience is increasingly a prerequisite for career success among managers at multinational companies.
In terms of the nitty-gritty, it is vital to get advice from tax specialists on pay and benefits – even extending to which currency the assignee’s salary is paid in. In most cases, tax returns will be filled in with the assistance of international tax experts. This will almost certainly cost more than using a local firm, so it is important to get host office buy-in for this. Keeping a ‘notional home salary’ on record for assignees to go back to when they return also makes good sense.
Watch out for hurdles
“You have to be watchful that expat assignments don’t generate a lot of unforeseen extra costs,” says Jim Devine, group HR director at defence company Chemring. “For example, if you send someone out to be an international MD, there is the danger that, if they are not quite sure of things, they will start racking up substantial costs through over-reliance on local lawyers and other local knowledge providers. If you are not careful, you could find you have to pay bills for hundreds of thousands of pounds from a major law firm.”
While multinationals typically have around 1% of their workforce on international assignment at any one time, for design, engineering and professional services company Arup, the figure is 5%. When director of international mobility Paul Robinson joined the company eight years ago, he discovered there were between 20 and 30 people who had been on assignment for 10 years or more – in one case 30 years – often on very favourable terms.
“We needed to put a stop to that,” says Robinson. “We’ve made it clear that after three years you either localise or come home.”
Clarity on legal issues is another potential stumbling block. Robinson says he has recently been dealing with “some issues around maternity cover”. This can get complicated for employers if home and host country policies are not aligned.
Support them home
“For repatriation to be effective, it has got to be part of a career path,” says Devine. “I’ve seen it where people have gone to far-flung places for three to five years and the whole culture of the organisation they return to has changed. Their sponsors have gone, the whole company has changed, there are lots of new faces and when the person comes back they say: ‘Who’s this guy?’”
This “reverse culture shock”, says Cox, can extend to home life too. Neighbours may have moved while the assignee was away so there may be a sense of alienation on returning. It is also, she adds, vital to ensure the role they are returning to feels like progress. “If they come into a role that recognises the skills they have gained while
they were away, that’s good. But if it’s a similar role to the one they were doing three years ago, obviously that’s not so good.”