This article is the first of the seven dilemmas series that discusses some of the most important questions that global mobility managers will have to address in the coming years. These seven dilemmas are not entirely new; however, demographic, technological, and business practice changes will give them a particular importance going forward. The discussion about the dilemmas is an invitation to move away from oversimplified visions of global mobility and understand that the complexity of the issues discussed also offers an opportunity for mobility and HR teams to become more strategic and expand their horizon. This article series is available as a PDF download.
Dilemma 1: Mobile Millennials – Beware the Expectation Mismatch
By Olivier Meier, Mercer
Mobile Millennials: Understanding the Dilemma
The millennials represent an ever growing part of the workforce. The conventional wisdom is that the new generation of assignees will foster greater global mobility and will allow companies to relocate employees more easily and at a lower cost than in the old days of the expensive and demanding traditional expatriates. The most common adjectives to describe the millennials are mobile, tech-savvy, and flexible. This seems to herald a new golden age of global mobility that would reconcile the aspirations of employees and the business imperatives of companies. Alas, the reality is more complex and the disconnection between HR practices and the millennials’ expectations can be significant at several levels.
Source: Mercer’s spot survey on millennials, June 2017
Lifestyle and Destination Mismatch
The good news is that millennials are potentially more mobile than the previous generations, and some companies hope that this increased willingness to move will remove the need for high incentives. The bad news is that the locations favored by the millennials are not necessarily the same as the ones where the companies need assignees. The first consequence of the priority given by millennials to lifestyle means they favor moves to locations that are perceived as trendy or can foster their personal development and career. These destinations are more likely to be London, Singapore, Dubai, or Shanghai than the more remote or hardship destinations where companies need to relocate their operations to save costs. While millennials might decline moves to destinations that are viewed as less attractive, their lifestyle preferences may lead to a rise in self-requested moves and commuter assignments that are not fully aligned with their company’s business objectives.
While some organizations are still struggling with the question of integrating career considerations and global mobility, the pace of career management is accelerating. Older generations of employees may be considering a career move every three or four years, whereas the horizon of the millennials is one or two years. They expect frequent new career steps – in this context a career step is not necessarily a formal promotion but a sense of progressing and accessing new responsibilities and knowledge.
Changing employers frequently is not a new trend, but many Millennials go beyond that and view their career as portable and fluid. They market themselves globally and are entrepreneur of their own career. The model of long assignments with limited feedback and unclear perspective is not appealing to them.
The acceleration of the career process is reinforcing the trend to reduce the duration of assignments (e.g. having long-terms assignments lasting two years instead of five and recognizing that the boundary between short-term and extended business trips is becoming blurred.)
Remuneration Package Mismatch
There is sometimes a misunderstanding when talking about pay for millennials: assuming that because pay is not the number one mobility driver for millennials that remuneration is not important. The millennials are a generation plagued by debts and facing high costs. Whether we are talking about young Americans needing to repay their education loan, Europeans worrying about not being able to afford to buy their own accommodation, or assignees from emerging markets trying to achieve an international living standard, millennials have a common goal: achieving financial independence and financing their lifestyle – and this implies making choices in terms of benefits and allowances to focus on what’s really relevant to maintain their specific lifestyle.
While millennials are known to be tech-savvy, they are not necessarily financially savvy when it comes to retirement, insurance, cost of living, or investment issues. This may lead to problems: offering a standardized, rigid expatriate package might not be appealing to millennials, while totally flexible cash approaches risk assignees making wrong choices and blaming the company for it.
Can digitalization of HR keep pace with the millennials’ expectations? For a disconnected global HR team trying to meet the needs of a connected generation, the gap might be technological as well as organizational.
Reactive communication pushed via email will no longer meet the needs of a generation used to instant 24/7 access to information via smartphone, chat-bots, and self-service solutions. Furthermore, new types of assignments will necessitate better tracking and better regional integration. Faster moving, more complex global mobility goes hand in hand with increased compliance risks.
Tips to Resolve the Dilemma
Re-assess Your Policies and the Types of Assignments Used
It is important to identify gaps in your mobility programs and implement solutions for types of assignments that will play a greater role in the coming years.
- Benefit from the rise of locally hired foreigners, a category that used to refer to a small group of highly mobile and experienced expatriates. With the rise of the mobile millennials willing to market themselves abroad directly, it will become progressively more important compared to the traditional home-host relocation. Companies need policies that cater to this type of move, which is not about the move from or the link to the home country, but rather about addressing the specific needs of foreigners in the host countries and helping them stay mobile.
- Surf the next millennial returnee waves, employees who have lived and studied abroad and come back to their home country. Different from both locals and expatriates, the returnees bring a unique expertise but may require specific approaches. The first waves of returnees to China and India started 15 to 20 years ago and the remuneration premium that these returnees were commanding compared to their local peers might now be more limited, but new waves of millennials returnees who studied in the US and Europe are coming back to witness and support the development of their country of origin. This is happening in countries such as Rwanda, Cote D’Ivoire, Ethiopia, Vietnam, Philippines, Colombia, and Mexico – just to name a few. These new waves could be an opportunity for companies to attract and retain highly skilled millennials if the right mobility approaches are in place.
- Self-requested moves, the ones from employees traditionally considered as lower priority and receiving minimum support. In a context of talent retention, it is important to better integrate them in the mobility strategy without necessarily throwing more money at them. Knowing that this option is available makes a difference for highly mobile employees.
- Expand the mobility team’s activities into new areas including frequent business travelers, commuters, and extended business trips. These types of moves are difficult to track and often managed at local or regional levels but in the new assignment type continuum and in the mind of millennials, the barrier between extended business trips and short-term and between a short term and a long term assignment is tenuous.
- Move jobs to people. Whether or not to move jobs to people and how to do it is an entire dilemma in itself and will be covered in the second part of this series. This is something that needs to be considered as part of the decision process when an assignment is planned. The equivalent of working from home for globally mobile millennials is allowing assignees to work from a third country that might not be home country or host location. Are the companies prepared to consider and accommodate this type of solution?
Reflect on Mobility Packages and Benefits
- Set the right degree of flexibility. The full flexible cafeteria model might not work and raise questions about duty of care (the fifth dilemma in this series), but offering a greater degree of flexibility based on the distinction between core, non-negotiable items, and benefits that can adapted to local circumstances might resist the stress of millennials’ demands better than rigid monolithic policies.
- Emphasize “portable” solutions. We have known for a long time that the days when many of the employees would stay within the same company for decades are long gone. Yet, many benefit models still reflect more of the old model of long employment within the same company and in the same country, than the new gig economy and the reality with the highly mobile workforce.
- Foster financial, tax, and emigration education. More flexibility has to go hand in hand with a better understanding of the choices – for the assignees and for line management. Providing the right tools and advice so that the choices made by assignees are informed ones will be critical.
Review Mobile Employees Career Paths
- Redefine career steps and better integrate them in the assignment process. Consider implementing mid-assignment or annual reviews and dividing job grades into sub-grades to give employees and their manager a better sense of the career progression (e.g. dividing grade A into grade A1, A2, and A3 each with specific requirements and learning goals – a practice that is already in place in fast emerging countries where career pace is fast and turnover high.)
- Highlight and monitor learning point for developmental moves. A detailed learning plan needs to be in place with clear learning tasks and milestones. More generally, developmental assignment could be shorter to make the learning experience more intensive and limit costs.
- Encourage lateral moves: the desire for faster advancement conflicts with the trend to flatten organizations. In this context facilitating lateral moves between business unit and types of jobs is important. The global talent gap and the flexibility of millennials mean that they are morel likely to switch industry and job type than their predecessors. Replicating this flexibility internally and fostering moves between business units and job types to avoid siloed careers can boost retention rates.
Reassess Processes and Communication
- Digitalization of HR is progressing at a fast pace. Without overdoing it, there are minimum requirements that companies need to consider. The first step to assess is to what information and services should be available 24/7 and can be delivered via solutions like mobile apps, self-service application, and chat-bots to free the HR teams to focus on the most complex assignee cases, essential compliance activities, and on providing the personal touch where needed. Robust reporting tools and dashboards are important to flag any risk or compliance issues and allow HR to react more rapidly than in the past.
- Selling the assignment destination will remain more important than ever. This implies relying on the art of storytelling to sell the experience and produce more meaningful communication focused not just on the purpose of the assignment and career steps but on the specifics of the host locations, the interaction with locals, and the learning experience.
The appeal of an assignment destination can stem from various factors: direct career opportunities and learning opportunities, business networking (e.g. being at the heart of operations and involvement in critical projects – an indirect boost for the career and a way to accelerate learning), financial benefits (e.g. pay, tax and saving opportunities), quality of living, the possibility to integrate into local life and contribute to the society, lifestyle, and personal family considerations.
Doing an objective assessment of all the assignment destinations of the company to take into account at least some these factors is useful to predict difficulties and reluctance to move.
Conclusion: Beyond the Buzz, Practical Issues Need to be Addressed to Attract and Retain Millennial Talent
Millennials will not make mobility easier and they won’t necessarily make it harder, but they will make it different. The millennials are both the agents of change and a reflection of bigger changes in the society and in business practices that will force management and HR teams to evolve. It is time for mobility management to move from paternalistic mobility approaches to assignee empowerment – which is not an invitation to laissez faire and unlimited flexibility but rather an encouragement to understand and leverage the strengths of millennial talent.
Contact the author: Olivier Meier
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