By Olivier Meier, Mercer
The article was first published on Brink News on February 24, 2022.
Is your international HR ready to go soul-searching?
The pandemic has shaken the fundamentals of international talent management. Many wonder if global mobility of talent is stalling and globalization going in reverse. Others announce a new age of “working from anywhere.” Unrefined concepts, buzzwords and conflicting expectations from employers and employees add to the confusion.
The form, purpose and drivers of international assignments are evolving, and international HR teams need to adapt to this new reality and revisit their practices. This requires new ways of managing mobility, including a new mobility mindset that integrates the concept of remote culture and makes sense of hybrid mobility management solutions.
The end of expatriates?
The pandemic has created a temporary drop in the number of international assignments, but the long-term trend is one of changing mobility patterns rather than an end of global mobility. The growth of traditional long-term expatriate assignments supported by expensive packages is slowing down but the overall mobility of employees is increasing further through diverse forms of assignments.
Global mobility is more than just traditional long-term assignments. Organizations are now relying increasingly on various types of international talent mobility, including shorter assignments (less than one year), commuters, “permanent moves” on local terms and conditions and a growing reliance on foreigners hired locally. These types of talent mobility are growing faster than traditional long-term assignments.
The pandemic has also seen the emergence of international remote working and virtual assignments for employees who could not relocate abroad or wanted to work across borders for personal reasons. And indeed, many companies plan to continue to offer some form of international remote working when possible after the pandemic.
Employee-driven mobility is overtaking company-sponsored relocation
While companies have been driving a large share of international assignments for many years, individuals are increasingly willing to market themselves globally or move for personal lifestyle reasons. Organizations used to facilitate self-requested moves only in selected cases and with limited budget, but the balance is tilting further in the favor of employees.
Low unemployment, the “Great Resignation” and the war for skilled talent are fueling a renewed focus on attraction and retention, and companies are more actively supporting these requests for retention purposes. The whole discussion about “working from anywhere” is driven more by employees requesting international remote working rather than virtual assignments driven by companies.
The pressure from management to leverage mobility to source and retain talent is also leading to a shift in assignment purposes.
Shifting international assignment purposes
The purpose of international assignments is shifting from “fix and control” to hiring and upskill: In other words, while traditional assignees were fixing business issues and helping spread the company culture abroad, new assignments are increasingly used for development purposes or to expand and retain talent pools.
The lack of suitable local talent has prevented companies from totally replacing mobile talent by local employees. In fast growing emerging markets, talent pools have been expanding rapidly, but the local needs for highly skilled talent has been expanding at an even faster pace, and multinational companies face talent shortages in a number of fields as well as increasing competition from local companies in terms of local recruitment. Hiring globally is becoming a priority for companies trying to replenish and expand their talent pool.
Upskilling local workforce and developing international managers with global skills is difficult without international mobility. This has led to an increase of moves from and between emerging markets/regional hubs as opposed to moves from HQ. These moves serve both a leadership development purpose and an incentive to attract and retain top talent.
From relocation management to integrated talent mobility
Global talent sourcing needs requires international HR professionals to participate in a wider talent brokering exercise to match talent with business needs across geographies and function. The question is not so much if mobility management teams will simply reach out to talent management colleagues to understand the requirements of the business. It will be about integrating them in cross-functional teams and leveraging their relocation expertise for international sourcing or retention issues.
"Mobility is no longer about managing in isolation an expatriate relocation but about integrating different types of mobility into a consistent model and managing a distributed workforce."
This vision of fully integrated mobility may not immediately be applicable for all companies in all industries. But in some sectors like high tech, managing a distributed workforce is already becoming a reality, and the concept of international assignment is diluting into a wider range of forms of cross-border working. Mobility activities are managed by agile cross-functional teams rather than by a fixed global mobility function.
The emergence of a remote culture
While top management and employees believe in the prospect of “work from anywhere culture,” HR teams have been reticent about the international remote working question. Cross-border remote working adds a new layer of compliance complexity to the already difficult remote working question.
However, if compliance is one of the first and biggest barriers, international remote working raises other questions about company culture and inclusion. Increased flexibility might benefit some employees but not others. Some organizations have cultures where remote working is already part of the work setup. Others with a strong office culture, communication and management processes need to be adapted to the realities of remote working.
Aligning the company’s culture with the work setup will become increasingly relevant and require a new mindset from managers. Forty-two percent of respondents to Mercer’s Talent Trends survey consider that “how we build culture” is the aspect of the employee experience that has evolved the most due to the pandemic. It is perceived as a crucial element when implementing flexible work setup on a larger scale by 74% of respondents.
Unresolved dilemmas lead to hybrid solutions
In 2022, a majority of workers will not go back full time to the office. Neither will they work permanently from home. Instead, companies will be offering a “hybrid approach”: a few days of home working and the remaining days in the office.
From a talent management perspective, the global war for talent is exacerbated by the fact that many organizations are looking for “hybrid talent” who master skill sets from different functions.
When we talk about compensation, we often hear that companies try to introduce more host-based compensation approaches for their international assignees but often still rely on home based approaches because they facilitate mobility from country to country. In effect, they sometimes end up combining compensation approaches to build a kind of “hybrid compensation approach.”
More often than not, hybrid is a buzzword that does not refer to well-defined solutions. But talking about hybrid approaches reveals the contradiction and the unresolved dilemmas that many companies are facing. It shows the compromises that HR has to make and the growing need for flexibility. There is no simple solution to the work-setup, talent sourcing and international compensation challenges. International HR teams are embarking on a new journey of reorganization and soul-searching.