By Olivier Meier, Mercer
A better alignment between global mobility and companies’ global talent agenda is a precondition for making mobility truly strategic and help companies achieve a significant return on investment with their international assignments. Looking at the top talent trends and HR priorities, it is interesting to see the potential synergies and mismatches between the talent agenda and the realities of global mobility:
Figure 1: Top 10 priorities for HR in 2017
Source: Mercer’s 2017 Global Talent Trends Study
Attracting talent and fulfilling the skill development promise
There should be a natural fit between global mobility and talent attraction. Mobility can foster attraction and retention by offering new opportunities for employees to develop their careers internationally. More importantly, mobility should address the limitations of local talent workforces and allow companies to tap into global talent pools. Traditionally, this could be achieved by relocating talent between countries. New mobility developments and the rise of alternative forms of assignments are opening up new possibilities: directly hiring foreigners locally, using talent based in a third country (virtual assignments, commuters) or even relying on expatriate gig workers.
Global mobility has implications for another HR priority: building skills across the workforce. While transferring skills and know-how is one of the objectives of international assignments, mobility does not always fulfil its promise. The original intention of companies relying on expatriate assignments was to replace expatriates with local employees at some point in time. This intention never fully materialized – partly because the volume of talent and types of skills needed keep growing while the capacity to train locals cannot follow and also because the transfer of skills from expatriates to locals is not always perfectly executed. All too often, the skill transfer happens at the last minute, at the end of the assignment. The expatriates sometimes ended being localized instead of being replaced.
Between the traditional expatriate model that doesn’t disappear in spite of rumor of its demise and local employees who cannot fully replace all expatriates, we are witnessing the rapid rise of a third category: locally hired foreigners. Global mobility is increasingly not just about managing international moves but about managing employees who are already internationally mobile. Company sponsored mobility is being challenged by self-managed mobility which is both an opportunity for companies (more mobile talent available) and a limit to the degree of control that these companies can have on the choices made by their highly mobile employees.
Rethinking expatriate employee engagement and performance management
Fostering expatriate employee engagement is a tricky exercise. Not least because expatriate satisfaction is driven by more external factors than for local employees – this includes the capacity to overcome practical relocation issues and cultural barriers, the well-being of the family in the host location, the overall lifestyle and quality of living as well as real or perceived assignee purchasing power fluctuations.
The arrival of new generations in the international workforce – the Millennials – is also influencing employees’ engagement drivers. The more mobile millennials have lifestyle expectations and a desired career pace (fast!) that are not always aligned with companies’ goals. The benefits in terms of mobility for companies of the arrival of the millennials are therefore uncertain as discussed in the article about mobile millennials.
This is an on-going debate about the relevance of performance management indicators and tools for local employees. The challenge for international assignments is to add new KPIs and tools to measure the performance linked to the assignment itself and the way assignments are managed by HR. Companies are introducing new metrics to refine their analyses (the example of Johnson & Johnson is particularly interesting) but this requires increasing statistical literacy among HR teams (see the article about essential skills for mobility managers.)
Reward competitiveness: the gray areas between expat and local pay
Ensuring expatriate pay competitiveness is becoming a difficult topic as markets for internationally mobile employees tend to be increasingly segmented. Expatriate compensation is no longer limited to one approach – the traditional home-based balanced approach is increasingly completed by various form of local plus packages. At the same time, industry and global pay trends are influencing local pay practices for a growing number of highly skilled positions – in other words, there is a global pay market for these positions. The distinction between local and expat pay is being dissolved into a myriad of market segments: traditional expat pay, expats on a local plus approach, foreigner on various local salary structures (truly local salary structures or inflated ones) and local employees paid at different levels depending on their international experience. The level of granularity required to precisely assess what can be considered as a competitive reward package for a given international assignee category is significantly increasing.
Figure 2: Aspects employees believe will improve their work situation
Source: Mercer’s 2017 Global Talent Trends Study
Is mobility really an opportunity for employees?
In the 2017 talent survey, opportunity to work abroad is at the bottom of the list of employment aspects that employees perceive as ways to improve their work situation. This is partly explained by the fact that mobility for less qualified workers is viewed as constrained mobility – i.e. the risk of being the victim of job delocalization as opposed to being offered new opportunities abroad. The mobility gap between international high flyers and the rest of employees who can be victims of job mobility or are not been considered for international assignments is widening. This gap has an impact on career progression and might slow down workforce diversity progress (that’s the case with gender parity as discussed in the article about women on assignment.)
The second explanation is that mobility is not always leading to faster promotion in companies despite the hype and declarations of intention (developing leadership is one of HR’s priority and should in theory be supported by global mobility.) On the contrary, mobility can impact negatively career perspectives by cutting high performers from their peers at the company’s HQ and from their business network or by creating a skill mismatch (skills developed during the assignment might no longer be relevant when back in the home country.) Furthermore, the absence of global career management coordination could mean that managers might not be even aware of the past achievements of their employees abroad.
Tracking the career evolution of international mobile employees provide useful insights on the real value of international mobility to boost an employee’s career. Are former expatriates promoted faster (mobility is clearly an accelerator)? Are they promoted at the same pace as their local peers? Or slower (mobility is a danger for the employee’s career)? A disconnection between the official company message about expatriation (expatriation is good for you) and the realities of mobility (I am being passed over for promotion) could lead to attraction and retention issues.
Recognizing the value of lateral moves
Lateral moves (moving between job types as opposed to being promoted in the same type of job) are not viewed positively: only 14% of employees respond that it could improve their work situation. Yet, the development of lateral moves – and their acceptation by employees – is critical for retention purposes and to improve skills in fast changing environment. The number of jobs at managerial level is limited and not all highly skilled and talented employees can make it to the top.
For a mobility perspective, the impact of this limit is even greater and partly explains repatriation problems. Companies cannot offer a guarantee to expatriates after their repatriation. There are objectively not enough jobs of a certain level available in every single country. International assignments tend to increase the skillset of international employees and in some case accelerate promotion – but that leads to increased expectations and ultimately to a retention crisis when employees reach the bottle neck in the managerial path.
Lateral moves are important because they can ease the pressure by increasing the number of possible job options for employees. In a context of fast workplace changes and digitalization, they are a way to develop new skills and maintain employability. The future of work is about changing jobs and even career paths frequently as opposed to having a linear career progression. But this kind of flexible career path can only work if there is a greater degree of recognition and acceptance of lateral moves by both employees and management. From that perspective, finding ways to strategically moving talent within the company is rightly listed as a top HR priority.
Contact the author: Olivier Meier
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