Four mobility challenges and steps to overcome them.
By Kevin Cornelius and Leslie Fiorentino
The mobility of an employee is motivated by many different factors: the nature of the business and its aspirations, needs, and resources. All assignments have their own set of specific intended outcomes and aspects to consider. Some leading organizations have begun to recognize the potential of mobility as a tool to enhance and develop the talent pool— not simply an easy way to fill a vacancy without any strategic forethought.
It stands to reason then that the mobility team should be integrated with the talent management team, combining their specialist skill sets to improve the retention and development of top talent and potential future leadership. However, as EY’s Global Mobility Effectiveness survey reveals, many companies are still struggling to link mobility to talent. Many organizations continue to debate whether mobility is purely an operational and administrative function, or whether it has a more strategic role in the management of its talent. Furthermore, trying to balance business objectives with the needs of the employee remains an ongoing challenge.
In 2013, 58 percent of survey respondents reported that they now have global talent management agendas, up from 51 percent last year. While that trend is positive, it still leaves substantial room for improvement.
An overwhelming majority (83 percent) of survey respondents believe that mobility had a positive impact on an individual’s career progression. However, it is difficult to quantify such a claim, and anecdotally there are always cases where the opposite is true. To find out why, we must consider how performance is really monitored and assessed for an assignee.
Surprisingly, only 39 percent of survey respondents indicate that the host location team was required to provide formal feedback for the assignee, with 21 percent admitting that feedback was not properly documented and tracked either during or after assignment. Furthermore, the report finds minimal resources dedicated to facilitating repatriation at the end of assignments, which puts the retention of talent at risk.
Encouragingly, we have seen that a number of organizations are actively working to integrate mobility more closely within their overall talent management plans. According
to Adele Yeargan, director of global mobility for AIG, “Our leadership has pushed to expand and leverage mobility. That’s important for us because we are a global company and an interesting place to have a global career. As mobility leaders, we are on a journey so that we can be more strategic about how we align talent strategy with business strategy.”
Mobility Challenge: Assignee and Family Issues
Family and spouse issues continue to be the biggest challenges that threaten the success of international assignments. Sixty-five percent of the respondents cite personal issues such as a lack of adequate schools, insufficient housing, or inadequate work opportunities for a spouse as reasons for failed assignments and early repatriation.
Taking those factors into consideration can make a huge difference when creating successful assignments. Ellen Shipley, head of global mobility and immigration at BT,
says, “You do have to look at everything. You can have all the advance planning in place and it could be a great employee—all the homework done on accommodations and schools—and it could still be the wrong person for the job if the family isn’t happy. The employee sent on international assignment has some stability; he’s still going to work every day, and his day is not all that different from before. It’s a tremendous change for the spouse. They may not have a job, they don’t speak the language, and they can’t find their favorite brand of peanut butter in the grocery store. We have to continually remind our business leaders not to forget the family.”
Alternative assignments. Some organizations are moving to alternative types of assignments, such as rotational moves or short-term assignments in which the assignee’s family does not move with them. By offering more choice, some organizations may be attempting to make the
assignee feel more empowered. However, the fact remains that assignments need to work for the company and the employee — and many alternative assignment options are in practice cost-driven.
Generational play. The report also finds a trend of organizations sending more junior employees on assignments. This early exposure to the global environment can lead to strong developmental opportunities. Equally, in the right location this offers companies the potential of lower cost and risk. Lower–level assignees may also have less complex personal situations that otherwise can be a barrier or an additional cost to an assignment.
Mobility challenge: Diversity and Inclusiveness
With the globalization of markets comes the need to have talent that understands, relates to, and can compete in these diverse markets. Equally, the challenge for top talent in many markets is becoming more difficult be it due to demographics, labor law, improving labor markets, or an emerging economy with talent gaps. As such, companies are increasingly seeking to find broader pools of talent that will help them win in the marketplace.
When asked whether there was an active effort to encourage members of minority groups to go on assignment, only 6 percent of respondents said yes with another 33 percent unsure. This sparks an interesting and controversial debate. Do programs designed to “level the playing field” create a richer pool of talent from which to find good assignees, or do they have the opposite effect — potentially singling out those who were selected to fulfill a company goal, rather than on their own merit? Either way, it seems that in 2013, the majority of organizations have not actively promoted the assignment of minorities within their mobility programs.
Overcome risks. Organizations also need to have a clear knowledge and understanding of any costs and risks of sending selected employees. Key markets such as China, India, and Brazil still have security concerns ranking highly as challenges for mobility teams. Look toward the areas of current or former conflict, and those concerns are greater.
Outline best practices. Mobility teams must navigate this minefield carefully and strive to develop policies and guidelines based on best practice. While organizations can always strive to treat their people fairly, some external barriers remain that cannot be overcome. Interestingly, the survey shows that men continue to receive the overwhelmingly largest proportion of assignments, showing that diversity and inclusiveness continues to be an area for improvement. On the other hand, within mobility teams themselves, women are clearly in the majority.
Mobility Challenge: Compliance Risks
Mobility professionals are well aware of the significant and growing risks posed by the potential failure to comply with tax, payroll, and immigration rules. This is a particularly complex issue to address in emerging markets and other jurisdictions where laws are constantly in flux.
Many organizations report that they do not have adequate procedures in place to track those risks. Nearly 40 percent of respondents reported that they did not have a formal
risk control framework to monitor payroll tax and social security compliance, with 64 percent reporting they incurred avoidable penalties for non-compliance in 2012. Another 31 percent of the respondents reported that they have had to engage outside consultants or firms (lawyers or accountants) to address those violations, while only half of companies are tracking trailing liabilities.
Even more than tax, many mobility teams encountered significant challenges keeping up with immigration laws, particularly in rapid-growth countries where mobility’s knowledge regarding laws and processes may be more limited than in more established countries. In addition, these laws change frequently, once again raising the risk of non- compliance.
In discussions with mobility leaders, we have heard widespread frustration with the fact that many businesses did not want to address the task of minimizing and pre- empting risk. Too often, there is a tendency to wait or be aware of a tangible negative consequence before deciding to act. Educating the business units outside of mobility to recognize the risks is a key first step, but it remains an enormous challenge.
The unanticipated risks created by “business travelers” are also a growing cause for concern. Few global mobility teams monitor business travelers, with 73 percent saying that business travelers were not part of the global mobility team’s responsibility. Those not on formal assignment are flying under the radar and—often unknowingly— generating huge problems for their employers.
Technology. Newer tech solutions can vastly improve the situation and drastically decrease these risks. However, we see that 73 percent of respondents are not using technology (e.g., GPS/ mobile applications) to track their people’s activities and, more worryingly, only 30 percent had a system in place for tracking business travelers who were not on a formal assignment. This area is likely to become an even greater challenge going forward as we see more flexible working arrangements, increased travel outside of traditional expatriate assignments and the increasing recognition of cross-border telecommuters.
Mobility Challenge: Measuring ROI
Global organizations are increasingly demanding more data and transparency from their internal teams, looking within to identify how to improve and make sure that resources are directed correctly in order to achieve business goals. Monitoring and assessing return on investment (ROI) can be key to ensuring sucess. But how do mobility programs measure ROI, and what does it mean?
And even though the concept is becoming more popular, the fact remains that the vast majority of companies surveyed are not currently measuring ROI in terms of the mobility function: 78 percent of respondents reported that their mobility function did not measure ROI, and a further 18 percent were unsure if this was considered.
Zeroing in on cost. Mobility professionals are well aware
of the substantial costs involved to keep talent moving. It
is increasingly true that the wider business questions why the costs of mobility are so high in its focus on the “bottom line.” Therefore, to determine ROI, companies need to know what they’re intending to achieve through facilitating mobility.
In some cases, this can be fairly straightforward: The business decides to send an employee to location X for Y months in order to increase sales there by Z percent. The mobility function is responsible for explaining to the business how much this assignment will cost and actually facilitating the practical aspects. Both the “investment” and the “return” are apparent.
Like the mobility teams at many global companies, Qantas faces tremendous pressure to keep the costs of its program under control. Over the past year, the company conducted a major review of all mobility policies and is now limiting international assignments on full expatriate conditions to what it terms strategic moves: senior executives, general managers and senior engineers who need to be stationed overseas for a period of two to three years. The company relies on local talent to fill in immediate needs, will localize people where necessary or will take advantage of its transportation network to fly in people to work on short- term projects.
Given this new emphasis on strategic assignments, Qantas has begun to use international assignments as a way to develop its people for future roles. “In the past, the emphasis was on just making sure the person had the rightskills for the job,” explains John Papapostolou, manager, remuneration and recognition, Qantas Airways Limited. “As part of developing these policies, we’ve begun to base these decisions on what type of development experience it would provide that the person could bring back to the organization.”
Keep an eye on post repatriation. Most organizations also come up short in tracking what happens after an assignment ends, such as employee retention, performance rating and career progression. The survey finds that, on average, 16 percent of assignees left the company within the first two years after repatriation, with a further 41 percent simply returning to their pre-assignment position. For those questioning the value of investing company resources in mobility, this is a disconcerting statistic that needs to be addressed. Some raise the more fundamental question as to whether delivering adequate ROI should rest with the mobility team. Perhaps a more important indicator of an effective function would be to assess whether the mobility team gave the business a realistic expectation as to the costs and challenges of a particular assignment. However, the survey revealed that a mere 20 percent of companies currently perform a reconciliation of projected cost versus actual.
“Mobility as a function—in alignment with HR and overall business objectives—needs to focus on creating metrics from the existing data points that we have
and make them useful in order to improve outcome of assignments or mobility events,” says AIG’s Yeargan. “Organizations should focus less on volume and spend, and focus more on planning assignments ahead of time. That way, the organization can be more productive and effective in moving people for international assignments, and integrate metrics on how the employee performed on the assignment. More targeted metrics will enable a mobility function to generate effective organizational change — and more thoughtful assignment — that will have a greater impact on business objectives.”
Kevin Cornelius is partner of human capital for EY AG (Switzerland). Leslie Fiorentino is human capital partner and is the Americas head of mobility for EY’s human capital practice. The above was excerpted from EY’s Global Mobility Effectiveness Survey for 2013.