Mobility policy design & update

Why does it matter?

Sending the right people, to the right place, for the right cost constitutes more than ever a skillful balancing act and leads companies to use flexible and innovative solutions.

Given the urgent need for a global talent, why do so many global mobility programs fail to achieve both business and assignee objectives? How can companies ensure that their programs are hitting the right notes while remaining cost-effective? How can they support broader HR strategies and maximize global talent? One way is by establishing a good expatriate policy.

Behind every successful global mobility program is a well-thought-out policy that addresses business objectives, assignee expectations and market opportunities. But formalizing a global mobility policy takes time and careful analysis. The best policies read like a roadmap, connecting objectives with actions and actions with outcomes. They integrate best practices into an organization’s overall culture to keep programs competitive and market responsive, linking mobility with talent management and reward strategies.

While many companies have developed global policies, albeit in an ad hoc fashion, they often haven’t road tested them in a while to see whether they are achieving business objectives

Assessing the Need for Change

Companies need to perform a periodic diagnostic health check on their policies to determine whether compensation and benefits are consistently aligned with the company’s business needs, the recruitment and retention strategy, and career development objectives.

Typical issues behind the need for change:

Cost

A general perception still exists that expatriates are too costly and that local management face challenges in understanding expatriate salaries. Also, because costs and business objectives aren’t always transparent, companies should think in terms of value received as opposed to focusing solely on cost.

Compensation & Benefits

Some assignees view their packages as not competitive or aligned with market opportunities. Given the growing demand for qualified global workers, it’s a given that expatriates will compare their compensation packages with those of their peers. Gaps in compensation and benefits can be due to an out-of-date policy or assignees’ lack of understanding of their packages’ true value.

Consistency

Without a cohesive, consistent mobility policy, employees may think they can negotiate whatever terms they want. This perception could reflect unclear policies or a misunderstanding by the potential assignee of the expatriate offer, or it could signal a lack of central control or governance.

Recruitment, Retention & Careers

A prime reason for establishing a global mobility program is to allow companies to access the best talent, so mobility packages must be competitive in order to retain workers for an assignment’s duration. Many companies experience a high turnover among assignees in the long term, making it difficult to find suitable candidates who will remain in a program and achieve business objectives.

Sometimes there is a discrepancy between what assignees perceive the program to be versus the reality. For example, assignees may be reluctant to accept assignments because they think that working abroad may put their careers at risk – when management may in fact perceive foreign assignments as career-building. Or they may perceive that expatriate management is disconnected from talent management and career development.

How Can Mercer Assist You?

Building Policies: Identifying Business Needs

Whenever possible, policies should reflect existing categories within the company (defined by talent management) as opposed to artificially creating new categories.

In building a policy, Mercer will first help you determine how many policies are needed, establishing criteria for each. In today’s complex global environment, it’s difficult to create one policy that accommodates all situations. Not only are developing and emerging countries hosting assignees from developed economies, but they are also deploying their own assignees to other countries. This movement has led to a proliferation of short-term, project-based assignments and to the hiring of more locals.

One way companies are optimizing budgets is through segmentation. This involves establishing the duration, assignee profile and assignment type in order to distribute budgets according to jobs and individuals that deliver the greatest value. When using segmentation, Mercer will help you navigate the following options and categories:

Duration

Permanent transfers

Long term

Short term

Commuter

Extended business trips

Frequent flyers

Assignee Profile

Foreigners hired locally

Returnees

Employee-initiated moves

Assignment Type

Strategic

Traditional expatriates

Developmental

Regional

Global nomads

(Note that these categories simply represent some of the options available. Not every employer will need policies for each category.)

Creating New Policies: A Process

Creating a global mobility policy is a process involving a structured set of activities designed to transform inputs into outputs – and many companies underestimate how long it can take to implement a policy fully.

Like any business process, developing a global mobility policy begins with a mission objective and includes defined responsibilities, controls and work standards to produce compliance, consistency and performance, and measurable success.

Mercer will guide you through a structured process and assist you with all or some of the following tasks:

Expatriate Populations and Current Provisions

· Hold workshops with stakeholders to establish requirements.

· Analyze current practices and processes.

· Evaluate current tools.

· List current providers.

· Assess current costs.

Define Approach by Type of Mobility

· Conduct brainstorming workshops and a review of approaches.

· Simulate costs using different assumptions.

· Draft initial policy framework and guiding principles.

· Access market benchmarking.

· Assess new tools.

Draft Assignment Policy

· Have stakeholders approve the policy framework.

· Design detailed policy for each assignment type.

· Draft assignment management structure.

· Define provider co-sourcing model.

Implement Policy

· Have stakeholders approve formal policy.

· Finalize policy documents.

· Finalize assignment coordination structure and team training.

· Issue RFP to providers.

· Develop a communication plan.

Flexibility in Mobility Policy As mobility programs grow and new situations arise, companies may need to be flexible on their approach to compensation. Our  whitepaper outlines the considerations, benefits, and drawbacks involved.

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