By Olivier Meier, Mercer
Better alignment between global mobility and companies’ global talent agenda is a precondition for making mobility truly strategic and helping 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.
Attracting and retaining talent
There should be a natural fit between global mobility and talent attraction. However, as the Mercer’s 2019 Global Talent Trends Study notes, “Being intentional about careers is nearly impossible without an underlying career framework to structure the guidance and capture new insights. Effective talent mobility requires identifying the experiences necessary for destination roles, challenging existing notions of who owns talent, cataloging related learning, and holding roles explicitly for development purposes.”
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 and commuters), or even relying on expatriate gig workers.
Talent Mobility must also combine geographic mobility with internal job mobility to be truly effective.
The value of lateral moves and internal gigs
Lateral moves (moving between job types as opposed to being promoted in the same type of job) and working across functionalities are becoming more popular: 51% of employees are willing to take on an internal gig to gain experience. Nevertheless, there is still room for improvement as just over half of employees report that their company makes it easy to sign up for short-term projects (55%) or explore career moves outside of their function or business (57%).
The development of lateral moves – and their acceptation by both companies and employees – is critical for retention purposes and to improve skills in fast-changing environments. The number of jobs at managerial level is limited, and not all highly skilled and talented employees can make it to the top.
From 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 bottleneck 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.
Fulfilling the skill development promise
Global mobility has implications for another HR priority: building skills across the workforce. Upskilling and reskilling have moved up the executive agenda, and the focus is on employee-directed and hands-on learning as well as more formal reskilling programs.
Using mobility programs for development
(Source: Mercer’s 2019 Global Talent Trends Study)
While transferring skills and know-how is one of the objectives of international assignments, mobility does not always fulfill its promise. The original intention of companies relying on expatriate assignments was to replace expatriates with local employees at some point. This has never fully materialized – partly because the volume of talent and types of skills needed keep growing while the capacity to train locals has not, 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 become localized instead of replaced.
Rethinking expatriate employee engagement
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.
Between the traditional expatriate model that hasn’t disappeared despite reports 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.
The arrival of new generations in the international workforce is also influencing employees’ engagement drivers. The new generations 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 these new generations are therefore uncertain, as discussed in our article “Managing Different Generations in the Workforce.”
The rise of new generations should not obscure the fact that the international workforce is aging fast. Older workers are a potential source of mobile talent but they also tend to be concentrated in jobs where at least 50% of the tasks can be automated. As the Mercer study concludes: “with five generations working side-by-side, it has never been more important for businesses and society to think creatively about how to leverage experienced workers.”
The question of engagement will also be influenced by the rise of gig workers. These question of engagement need to be applied to a dual workforce composed of employees and mobile freelancers. Companies need to avoid having a fragmented workforce with employees on one side and the gig workers on the other side. How does one motivate a gig worker to go the extra mile, convey the official messages, and uphold the values of the company? Gig worker engagement is important because a company’s reputation influences its attractiveness to top gig worker talent.
Contingent/freelance workers will substantially replace full-time employment (% agree)
(Source: Mercer’s 2019 Global Talent Trends Study)
Performance management reassessed
Redefining performance metrics and rewards is a critical part of aligning work to future value. There is an ongoing 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 but this requires increasing statistical literacy among HR teams.
The question of performance goes beyond compensation and links the purpose of assignments, companies’ business goals, and the career progression of employees.
Just like local employees must understand the implications of their performance on their career progression, international mobile assignees need to be clear about the impact of their assignment performance on rewards and opportunities within the company.
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 superseded 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.
Mobility managers have traditionally relied on policy segmentation to address the growing diversity of international moves. Policy segmentation remains highly relevant but companies needs to go one step further and define specific assignee value proposition based for different expatriate groups or personas (e.g. millennials, silver assignees, single parents, large families, minorities, global nomads, and one-time movers.) Offering more diverse rewards and compensation for both local and mobile employees is the top rewards priority identified in this year's Mercer study.
The critical question: is mobility really an opportunity for all employees?
Employees don’t always perceive mobility as a way 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 (as is the case with gender parity).
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 (being passed over for promotion) could lead to attraction and retention issues.
Ultimately, the debate about the value of mobility lead to the question of transparency and the need to have an open dialogue with employees on career, skills, performance, and the future of work in the organization. Transparency is the foundation to develop a better and more personalized work experience and strengthen the employer’s brand of the organization for local and mobile employees as well as international gig workers.