Mitigating Human Capital Risks and Talent Mobility By Olivier Meier, Mercer Discussions about risk and talent mobility often revolve around security or compliance issues and assignee attrition. Many organizations take for granted that expatriate turnover is higher than for locals. Shocking figures circulate about typical expatriate attrition, but the validity of these figures is difficult to gauge due to the absence of common definition and lack of contextual information. In any case, losing highly qualified mobile talent or can become a significant burden for the company. However, human capital risks go beyond employee attrition. Among the top concerns of managers are a host of other issues, ranging from the inability to close gaps in skills and talent, to low employee engagement and productivity. All these issues influence or are affected by talent mobility practices. Top Human Capital Risks 52% Excessive time to fill positions 43% Low or declining employee engagement 40% Inadequate diversity 38% Thin leadership pipeline 35% Ineffective hiring decisions 31% Lagging productivity 30% Slow decision making Source: Mercer’s Global Talent Trends 2019 study Excessive Time to Fill Position, Ineffective Hiring Decisions, and Slow Decision Making Excessive time to fill a position has a cost for companies, and talent mobility has a role to play to address this issue – an issue sometimes linked to the limitations of local talent pool as well as unrealistic expectations from the recruiters looking for perfect candidates – sometimes derisively called “purple squirrels”. Talent mobility is at the heart of a multinational company’s talent sourcing efforts, and in an ideal world mobility managers should be involved in international talent supply chain management. In a context of intense talent competition, talent mobility is a way to expand an existing talent pool or tap into new talent pools: this can happen through internal moves between functions and traditional international moves (permanent moves as well as long-term and short-term assignments) but also increasingly through structured efforts to find new talent globally: hiring foreigners locally, returnees interested in going back to their home country, or freelancers/gig workers. Talent mobility is not a panacea though, and mobility-specific issues can also delay recruitment. Mobility comes with its own set of issues. Family and dual career issues, excessive costs due to the salary and tax structures in the host locations, and a lack of integration of HR and talent management teams globally could further increase time to fill a position and offset the benefits of tapping into larger international talent pools. These challenges highlight the needs for companies to plan carefully their staffing needs and talent pipeline, identify potential candidates for assignments, and when necessary conduct initial assessments well in advance of the actual moves. This also implies creating awareness around the opportunities and challenges of talent mobility internally to engage stakeholders (top management, line management, and HR teams across geographies) and reflect on how to integrate talent mobility into the overall employer branding. Low or Declining Employee Engagement and Lagging Productivity Mobility is commonly perceived as an opportunity to boost career, learn new skills, find a desired lifestyle, and as way to increase engagement. In practice, this might be true if a comprehensive mobility program is consistently implemented and employees really benefit from assignments and perceive their value. However, many obstacles might get in the way of successful assignments and influence engagement and productivity of relocated employees: Personal and family issues that are not under the control of the company are among the greatest barriers to mobility and potential issues while on assignment. Companies cannot intrude into private issues but should encourage employees to open up about issues that impact the assignment and discuss how the support provided as part of the mobility policy can help mitigate them. Some of the most successful companies require the spouse to attend pre-assignment briefings, stress the importance of pre-assignment trip to the host locations, and provide spouse support programs. Lack of support from HR and line management during the initial move or in the host location could demotivate assignees. The issue could be about inappropriate basic support (dissatisfaction about the relocation and settling-in process) or more generally lack of integration in the host business due to culture issues or lack of awareness about expatriation issues among local management and HR teams. Some companies have comprehensive policies but they are not properly communicated – many employees are not aware of the support available in their companies or see a lack of role models. Broken promises in terms of career management is a major concern for mobile employees. Experience shows that one of the greatest risks is declining engagement post repatriation: companies struggle to guarantee jobs upon repatriation and more importantly to leverage the newly acquired skills of returning expatriates. The disconnection between the official message (mobility is good for your career) and the reality (I learnt a lot but my achievements are not recognized) could lead not only to higher attrition but also to disengaged employees who still remain with the company but don’t contribute to the business as much as they should. Inadequate Diversity and Thin Leadership Pipeline Talent mobility is both an opportunity and a risk for diversity. If mobility is a way to boost a career and reach top management, the lack of diversity of the mobile workforce will eventually be reflected in top management. We have deplored for years the small proportion of women in the internationally mobile workforce – the problem is not to have more expatriate female as such but rather the consequence of this lack of diversity for the leadership development pipeline. Allowing more women and minorities to have international experience can help them break the glass ceiling. Talent is part of the problem and of the solution to the diversity challenge. Many organizations report a consensus among management to foster gender parity and increase diversity but the efforts are slowed by the lack of available candidates with the relevant experience for management level positions. Leadership development is a significant driver of mobility. Lateral moves between functions and international assignments help avoiding a common talent management issue: the decreasing number of opportunities for high performers reaching mid-management level – there are not enough senior positions available for all candidates in a given location or within a given function. From a global perspective, international assignments play a key role in building up a strong international leadership pipeline through moves from affiliates to the HQ of the company but also increasingly between emerging markets. Recruitment and many talent management tasks don’t fall under the traditional purview of the mobility function. It’s difficult to change perceptions and position mobility managers as strategic partners or at least internal consultants of choice for a wider range of international talent issues. This positioning shift is even more urgent now that companies require integrated people strategy to address the main human capital risks.