By Olivier Meier, Mercer
Is your team discussing how to manage millennials on lateral moves in a VUCA environment? Are you exploring ways to develop a flexible cafeteria model and local plus approaches?
The field of international talent mobility is buzzing with new concepts and obscure acronyms. Some of these trendy buzzwords are awkward neologisms that may never find their way into the dictionary, while others belong to the traditional HR terminology but have become more relevant in the current environment.
In any case, these buzzwords tell us something about mobility developments and how companies perceive and address new challenges. It is worth doing a quick foray into the jargon jungle to understand current mobility trends.
This concept reflects two different realities:
- From a pure mobility perspective, lateral moves are about moving employees between subsidiaries rather than from the headquarters of the company to a subsidiary. It also means that moves between emerging markets are growing faster than moves from developed countries to emerging markets. The rise of lateral moves is a feature of globalization and a sign that global mobility is become more mature as well as an indication of the ever greater participation from employees from emerging markets in the expatriate workforce.
- From a career management perspective, lateral moves are about moving between types of jobs as opposed to being promoted with the same job family (vertical moves). It is a precondition for talent retention as the number of senior manager positions available in a given company is limited and not all employees can make it to the top. Lateral career moves can be important for repatriated expats. Companies struggle to guarantee them a job upon repatriation, and facilitating lateral moves instead of trying to implement straightforward promotions following an assignment could be part of the solution. Lateral moves are also a way to build up talent within the company by exposing high potential employees to the realities of different departments.
Talentism
In the opening address of the 2012 World Economic Forum in Davos, forum founder Klaus Schwab discussed the growing evidence that we are entering the “age of Talentism” – an age when human talent displaces capital as the decisive competitive factor. This concept puts the spotlights on the value of highly skilled talent in the context of the global war for talent. Most countries fail to cope with the fast growing need for highly educated talent with suitable international experience and digital skills. Just as circulation of capital is vital for capitalism, international talent mobility is essential in the age of Talentism. Global mobility allows companies to tap into new sources of talent. The Talentism concept underpins the strategic value of global mobility and elevates it from a pure administrative tactical function to a key component of global business success.
On-demand talent
The capacity to access talent on demand is the motto of the gig economy. This new development is also impacting global mobility. Accessing talent in multiple geographies is no longer enough: the capacity to tap into international talent – on-demand expatriates – when needed and as needed is a differentiator for companies. Engineers employed as freelancers and rotators have been among the first expatriate gig workers, but this trend is now reaching more jobs and industries. Locally hired foreigners, skilled expats willing to take their career in their own hands and market themselves globally, could be the first winners of this new expatriate gig economy.
Locally hired foreigners
How to solve a problem like mobility? Maybe by not having to move people in the first place. Locally hired foreigners are here to remind us that mobility is no longer about simply moving employees from country A to country B but could also be about hiring expatriates already living in country B or even living in a third country C (“third country assignment”) This highlights the fact that mobility is increasingly being driven by individuals rather than by companies.
Third country assignment
This type of assignment refers to employees being based in or moving to a country which is neither the home country nor the original destination where the work was supposed to be performed. This can be the result of hiring a foreigner locally or the consequences of personal choices made by the employee and accepted by the company.
Having the flexibility to have this type of third country assignment is a way to unlock new talent and to solve a range of mobility issues from dual career problems (the spouse cannot find a job in the destination country) to hardship locations that are not suitable for families. The advent of the millennial generation is accelerating this trend.
While Millennials are capturing the headlines, there are conflicting views about their real impact on mobility. Some people have idyllic visions of highly mobile millennials Phileas Fogging their way around the world and making mobility easier and cheaper for companies. At the same time, trends indicate that personal preferences of millennials (desired destinations and lifestyle) are not aligned with most companies’ requirements.
Another possible view might be to argue that while we all retain some characteristics of our own generation, we are all becoming millennials in our work habits to some degree.
Understanding millennials matters not so much because millennials are a distinct alien group living among us but because there are early adopters of trends that are impacting all employees. The rule of the Millennials might prove to be short – at least of their domination in headlines – as the next wave of Generation Z will soon enter the workforce. Generation Z will probably be the topic of the 2020 HR events and articles.
In any case, managing different generations and multiple types of assignments requirement better policy integration.
Over the past 15 years rigid, one-size-fits-all policies have given way to segmented approaches to mobility management. The multiplicity of new types of assignments and assignee categories has validated this segmentation approach. However, there is a limit to policy segmentation: the existence of multiple policies that are not always fully coordinated or with blurred boundaries between them, makes mobility management difficult.
The challenge is now to bring the pieces of the puzzle together – not to return to a unique policy but to develop a more integrated and manageable set of policies. This will require more agile approaches to mobility management and relying on different compensation approaches including local plus.
The popularity of this concept that has been agitating the mobility industry for the past ten years is equaled only by the difficulty to define and use it. Local plus is an attempt to find a compromise between the costly home-based balance sheet approach and pure local approaches that are often difficult to implement.
Local plus is usually about going as local as possible (trying whenever possible to align the base salary with the local salary structure) while recognizing that additional benefits or payments might be required to facilitate the move (the “plus”). Expatriate packages resulting from this approach can vary widely in terms of content and value.
The concept of local plus is a good illustration that companies are progressively trying to bridge the gap between traditional expatriate packages and local compensation but without ignoring the specific requirements of internationally mobile employees. Local plus can also be used to introduce more flexibility in compensation approaches and establish a kind of cafeteria model.
Cafeteria model
The cafeteria model is designed to provide flexibility to expatriate employees and management in the way assignment packages are set up. This is similar to the approach of cafeteria dining, where different options are available. Whether or not this this type of cafeteria model will eventually win the Michelin star of mobility or become the fast food of talent management is still unclear. In any case companies are exploring ways to offer the choice between different types of expatriate benefits or replace benefits in kind by lump sums.
Lump sums
Once vilipended as inefficient from tax and expatriate motivation perspectives (the money tends to disappear in the pocket of the expats and its purpose is quickly forgotten), lump sums are now more commonly used as part of flexible compensation models and to deal with the complexity of current assignment patterns. Companies struggle to address all the issues resulting from family, personal, generational, and country-specific situations. Having a flexible lump sum approach that could be used to address all these possible issues is viewed as a solution. Yet, unlimited use of flexible approaches and lump sums could lead to a breach of duty of care.
In the strict sense, duty of care is about taking all possible steps to ensure the safety, health, and wellbeing of employees. This is a legal requirement that companies cannot ignore. The question of duty of care is coming back in force due to the increased use of flexible approaches and the rapid development of short-term assignments, business travels, commuter assignments, and other forms of assignments taking place under the radar. Duty of care is a broad concept that encompasses the strict legal requirements and risk management as well as questions about fairness and companies’ reputation. If expatriates are given a lot of flexibility and make wrong choices, companies might not always be held responsible but their reputation might suffer nevertheless. Companies rely more and more on technology and the digitalization of HR activities to improve compliance, tracking, and addressing duty of care issues.
Digitalization
While HR keep their eyes on the distant digital horizon, the impact of technology is already being felt in day to day operations. Employees expect online self-service tool and 24/7 services. Examples of digitalization includes compliance tracking device (replacing the need for mobile employees to manually report how much time they spend in a given location for immigration, risk management or tax purposes), and chatbots answering most common mobility questions. These technological developments go hand in hand with real time mobility data reporting and the increasing use of detailed mobility metrics.
It is tempting to (mis)use a famous quote, allegedly from Benjamin Disraeli, and rant against “lies, damn lies, and metrics.” Falling in the trap of seeing correlations between unrelated events and make false assumptions is indeed always a danger when using metrics. However, metrics are useful to identify real issues and debunk mobility myths – a common one being that expatriation is always good for employee’ careers, while detailed metrics can show that former expats sometimes fail to be promoted faster or even as fast their peers. Mobility cost, one of the main concerns of companies and a driver of policy changes, is too often measured in simple terms whereas more detailed metrics showing cost in the context of value and talent development provide a better picture of the benefit of global mobility for the company.
If nothing else, metrics help provide a common language and bridge the gap between departments (e.g. HR and finance.) Metrics can also help with assignee diversity: a few cruel figures showing how certain employee groups are underrepresented in the expatriate workforce can jolt organizations more effectively than a thousand words (recent figures on participation of women in workforce provide a good example).
VUCA
An acronym coming from military vocabulary and meaning “Volatility, Uncertainty, Complexity, and Ambiguity.” The current VUCA environment is a stark reminder that expatriation can be challenging for employees and that companies can sometimes inadvertently put employees and their families in harm’s way. Some types of international moves are becoming easier but there is still a need for experienced traditional expats who can thrive in a difficult hardship environment and who can expect to be rewarded for their adaptability and willingness to decrease their quality of living. This is one of the reasons why the long-heralded demise of the traditional expatriate and of comprehensive expatriate packages has never materialized.
At a semantic level, excessive use of the VUCA concept could be a symptom of EUUA (Excessive Use of Unnecessary Acronyms), which is a mild corporate disease that can lead to misunderstandings in a cross-cultural management context.
Words used to describe management practices are not innocent and reflect the preoccupations and challenges of our time. New terminology and concepts can confuse people and make a great addition to the great corporate jargon competition or on the contrary help understand some of the current issues that we are facing. They should be used wisely but we should in any case learn from them.
Contact the author: Olivier Meier
More on these topics: