By Kati Rasetti, Mercer
This is a continuation of our recent article on GM transformation: the journey towards optimization, automation, and business partnering. Click here to access the article.
As part of Mercer’s June 2020 GM Transformation webinar series, three organizations from different industries presented their transformation journeys, highlighting the business context, key structural changes, outcomes, and learnings from their respective transformation processes.
Company Case Study 1 — Consumer goods sector
Offshoring of activities to shared services center, digitalization and change of the department’s purpose in the direction of business advisory
Changing stakeholder expectations and the need to align to new GM trends are driving the GM transformation project at this large organization overseeing a complex mobility program.
Status quo and departure point
There are three mobility policies:
- Long-term assignments — characterized by significant growth (from 200 in 2004 to 750 today); home-based approach
- Short-term assignments — 120 employees
- Project expatriations — a type of short-term assignment
The GM business operates as a delivery function via a centralized team in Switzerland, looking after the whole spectrum of mobility activities, including administrative tasks.
Business case and reason for change
A change in top management altered mobility concepts and stakeholder expectations in 2017. Questions arose: What is the value of sending people on an international assignment? Is it the right decision for everyone? How does the company ensure it selects the right employee for the task?
To find answers to these questions, the company conducted a survey addressing People & Culture Team representatives (in the area of HR) and assignees. The survey asked what elements of the assignment program worked well and what challenges the program faced.
The survey identified the following challenges:
- Lack of clear roles and responsibilities defined between HR and GM teams and other stakeholders
- Cost allocation and budgeting issues
- Slow and cumbersome relocation and immigration process; lack of onboarding processes in host country making integration difficult for assignees
After analyzing the challenges, the company concluded that there were opportunities for improvement in several areas and decided on the following priorities:
- Increase mobility team market knowledge.
- Standardize onboarding processes.
- Establish an efficient mobility platform for internal end users.
- Simplify processes for assignees, reduce their contact points throughout the IA lifecycle and increase flexibility.
Action points and project destination
The company has started its journey toward transformation and plans to take a number of actions, which are still underway.
Strategically align with the business and talent management:
- Develop GM role from a back office service into a strategic function with an advisory role to the business.
- Centralize process ownership.
- Integrate mobility with the talent agenda, and support talent management with the mobility program.
Establish competitive and robust programs and solutions:
- Provide better career-planning opportunity for assignees. Enable expatriates to maintain regular relationships with home-country line management during assignments so they’re able to understand and plan the next career steps together.
- Redesign the programs and scope.
- Review balance sheet approach and compensation methodology.
- Increase assignment segmentation.
Create systems and processes that deliver a positive assignee experience:
- Implement cutting-edge technology to track exceptions, enable cost and return-on-investment measurement of assignments, and attain cost savings.
- Optimize process: Create workflows to enhance stakeholder experience (assignees, HR, vendors).
- Embrace and exceed market trends.
- Recognize diversity and compliance across the board, and consider internal audit to measure the outcome.
- Reduce the number of stakeholders participating in the assignment life cycle, and create lean, simplified procedures.
- Offshore some of the administrative tasks to the new shared services center as of January 1, 2021.
Company Case Study 2 — Life sciences sector
Change in delivery model to outsource and offshore some mobility tasks
The GM transformation journey originated with the company-wide strategy to utilize a shared service center (SSC), but it was initially limited to pure administration. The transformation journey was accelerated about two years ago and is planned to reach its destination within the next two years.
Status quo and departure point
The company’s mobility function is based in three countries, with a central team managing assignments from Switzerland (HQ) and a smaller team in the US. A shared services center was also established in an Eastern European location in 2012.
The company operates three assignment programs, including a long-term program, a short-term program and a rotational assignment plan, covering approximately 650 assignees.
Swiss- and US-based teams handled both advisory and administrative mobility tasks in the past. This changed when the shared service center was established and took a back office role. The model developed further again in 2018 when the SSC integrated package creation and payroll report activities into its portfolio. This operation model and distribution of tasks between HQ and SSC was a pilot case in transforming the company’s entire HR function.
Business case and reason for change
The company has operated via a decentralized system in the past, with central mobility teams having both global governance and delivery responsibility and local HR teams looking after local vendors (such as immigration, housing and destination services providers). This model faced challenges in 2016 and 2017 when the company was going through a change, and the number of assignment country combinations increased significantly. Lack of transparency, consistency and reliable data across different locations was observed. This set the scene for having to implement an action plan to re-optimize function operations.
Action points and project destination
- To enhance transparency, provide better control for the GM team and establish consistent treatment of assignees, the company implemented a global relocation vendor in 2018.
- The company will centralize payroll management in the near future and plans to implement global payroll for assignments.
- Future changes to the program portfolio may place extended business trips and permanent transfers under the GM umbrella.
- The company plans to select and implement an advanced technology platform to increase efficiency, speed, costs and IA tracking.
- Offshoring of advisory roles is being considered.
Company Case Study 3 — Manufacturing sector
Partial centralization and technology enhancement
The initiative to revise the GM function to achieve “best-in-class” mobility is a journey integrating assignment management technology, involvement of centralized vendors, policy and process review, and cost efficiency.
Status quo and departure point
The company has seen a recent decrease in the number of international assignments, with approximately 100 expatriates currently assigned across 32 countries. The majority of expatriates are on the organization’s long-term mobility program. The company undertakes 35-40 moves annually.
The partially centralized GM team is based in Switzerland and sits under the corporate C&B team. This team has responsibility for creating assignment packages and issuing contracts, coordinating the assignment lifecycle, closing out stakeholder questions, and managing tax and health insurance vendors. Local HR departments manage local relocation and destination service providers in each country.
Business case and reason for change
Transforming the mobility setup had an internal driver. A changing C&B leadership team in 2016 resulted in a vision to achieve a best-in-class, modernized function, which also included reshaping delivery and administrative GM functions. As a first step to put the vision in practice, the company hired an external mobility head with considerable market experience across industries on an international scale.
Action points and project destination
The change began with mapping the organization, company culture and HR to establish an approach for improving the mobility function. Working closely with GM team members, the leadership team reviewed four topics:
- Compliance
- Policies
- Processes
- Vendor setup
A roadmap had been prepared by the whole GM Team which was followed by stakeholder buy-in efforts. Activities have begun to be implemented, all centered around contributing to achieving the “best in class” mobility target:
- Upskilling the GM team by having them participate in projects, widening their knowledge and providing them with professional opportunities.
- Hiring a global tax provider to achieve full compliance.
- Reviewing current policies and designing a framework for international transfer and localization scenarios.
- Developing a strong and rational exception process to reach a decrease in number of exceptions with the purpose of cost saving and consistency / internal equity.
- Launching an internal mobility webpage for the global HR community including all processes to share knowledge in the company on the GM program.
- Assignment management digitalization and further technology enhancement with partial headcount to be replaced with automation of the end-to-end assignment process.
Conclusion
The winds of change have been sweeping the GM landscape for some time, but this change has accelerated greatly in the last three to five years. And more may be yet to come — potentially in the context of a looming economic downturn driven by the current health crisis.
According to Mercer’s 2019 Global Mobility Transformation Survey, GM managers across different companies have already identified some of the toughest challenges they will face in the future. Among them is the need to reorganize the function to make it more efficient and strategic to the business. The lack of integration with talent management is a primary concern, but integration is also needed with other parts of the business, such as finance and compliance.
The realities presented above and in our case studies are accelerating the need for GM to keep up with changing business strategies and embrace a continuous transformation attitude today and in the future.