Cost-effective mobility and migration policies have become a priority in a world where work isn't limited to one place. While some firms already have solid practices in place, others are starting from scratch and lack strategic business input. Aditi Sharma Kalra talks to HR leaders about their best expatriation practices.
In recent years, more people than ever have started living and working outside their home country – almost 3% of the world’s population.
The United Nations estimates that migrants will total about 300 million people in the next 15 years, and is now debating whether migration should be included as one of its Millennium development goals to improve the quality of the migration process.
Similarly, a global mobility practices study conducted by Cartus in 2014 found half of the 172 participating mobility managers expected to see mobility volume increase overall for the upcoming two-year period.
At the ground level, all you need to do is take a look around you. Chances are you meet an expatriate daily, be it at work, the nearest coffee shop or on the commute home. Join the pieces, and we find that efficient and cost-effective mobility and migration policies for employees have become a priority for HR leaders globally.
While some companies already have solid mobility practices in place, others are starting from scratch and are lacking strategic business input – instead, simply focusing on the practicalities of keeping staff mobile.
In companies such as Jabil, CEVA Logistics, and NXP Semiconductors, expatriation has a straightforward link to the business strategy.
“The mobility policy is designed first and foremost to support business needs,” says Thomas Farmer, director of Asia rewards at NXP Semiconductors.
He takes a recent example where the company required certain expertise in the Philippines, and it found the best person for the job was in Europe.
“So we brought him, and his wife and children over for a three-month assignment.” He admits while three months is a short time to be bringing over the entire family, the employee’s family did have special needs.
Accordingly, the company structured an “accompanied” short-term assignment with no home leave, since the family all came over. “We are very accommodating when it is the initiative of the business to move someone to meet a business need.”
John Lackey, director of global mobility at Jabil, agrees the mobility team’s fit within the broad framework depends on the company’s strategy and culture and what works best within those parameters.
“There is no right or wrong answer – the question becomes one of what the company’s vision for employee mobility is, and the purpose they view it as serving,” Lackey says.
“There are some companies that view it purely as an administrative function; moving employees from point A to B. There are others that view it more as an integral part of their overall reward and talent strategy.”
There is no right or wrong answer – the question becomes one of what the company’s vision for employee mobility is, and the purpose they view it as serving.
- John Lackey, director of global mobility, Jabil
Piecing together the policy
An awareness of the business need for employee mobility is just the first step of devising a policy around it. Equally important is the need to identify the types of assignments, based on the talent requirements.
Paula Caligiuri, author of Cultural Agility: Building a Pipeline of Successful Global Professionals, put these into four categories in a 2006 paper.
The first, technical assignments, are best suited for individual contributors, such as engineers or IT professionals, given a specific requirement to complete a job and return home. The second, functional assignments, require some level of intercultural competence, directed at mid-level functional managers, such as in sales or marketing.
She listed the third category as developmental assignments, where mid-level or junior managers are tasked with acquiring a stated set of competencies; and the fourth as strategic assignments, targeted at senior management, which are aimed at filling critical, international positions. Thus, intercultural competence is strongly required.
However, across the various types of assignments, the basics remain the same.
“Pre-departure, relocation and destination services are an integral part of any expatriate programme,” says Greg Grimes, executive vice-president of human resources for Asia Pacific at CEVA Logistics.
“These are the key areas in which we support our employees to ensure they successfully and seamlessly move from one location to the other, and both employee and the company fully benefit from the move.”
NXP Semiconductors takes a parallel view, but a different approach. Having spun off from Philips Electronics, NXP Semiconductors has historically been a decentralised company, says Farmer.
The company now seeks to maintain appropriate local empowerment within an evolving global framework. “We are taking a core-flex approach,” he explains.
However, the foundation remains similar in terms of the big-ticket items that feature on the mobility policy. The first, he points out, is the purpose and duration of the assignment to ensure they select the right type of contract and employee.
Next up is a study of the cost exposure to the employee, taking care to avoid any significant hardship. Finally, housing and schooling feature high on the basic priorities, given they are the two most “family sensitive” benefits.
Numerous studies point to a growing demand for families to be accommodated as part of the relocation for the employee. Brookfield’s 2014 Global Mobility Trends Survey found that most international assignees are male (80%), married and between the ages of 30 to 40. Further, 78% of assignees with spouses or partners had them accompany them for the assignment.
Factoring in the family
In 1991, research by professors Stewart Black and Hal Gregersen showed the most often quoted reason for the premature return of an expatriate was the spouse’s inability to adjust to the foreign environment. This is one of those statistics which has not changed much over time.
In fact, a 2014 Cartus study reinforced the importance of family, given that 76% of respondents rated family or personal circumstances as the number one reason why employees turn down assignments. No surprises then that companies are striving to work backwards to involve the family or partner of the would-be expatriate as early as the decision-making process.
Mobility experts need to know compensation and even some talent management, because relocation and related destination services are easily outsourced to high-quality service providers.
- Thomas Farmer, director of Asia rewards, NXP Semiconductors
Lackey, in one of his past assignments, used to provide pre-assignment counselling sessions, where he walked the employee through the requirements of the assignment, the employment letter, and the benefits on offer – in the presence of the employee’s spouse or partner. In cases where he or his team have lived in the region, they would also talk about their experience there and what to expect.
“Ideally, companies will put the individual and their family through cross-cultural and language training. They may also offer a look-see trip just for the assignee to get a feel for the assignment. Spousal support systems are good, especially if the spouse is giving up a career,” he says.
The worst-case scenario would be companies which spend neither time nor money on this, and simply dispatch the employee and the assignment letter off.
In addition to family support systems, Grimes opines it is just as important to prepare the assignee specifically for the requirements of the assignment. Given the fact that expatriation stems from a business need, there has to be clarity in terms of the results expected – both personally and professionally.
“Business managers articulate the specific benefits that they expect each assignment to deliver to the company as well as the specific learning and development objectives the assignee will pursue during the assignment.”
This reflects in the numbers as well. A study conducted by BCG and The Network in 2014, with a sample size of more than 200,000, found the majority of employees (65%) would consider a foreign work assignment either to broaden their personal experience or to acquire work experience. The ability to unlock better career opportunities and improve salary prospects stood at 59% and 56% respectively.
Clearly, companies will do well to communicate how an expatriate assignment will not only help assignees better fulfil their key performance indicators at the workplace, but also their personal career goals and aspirations.
A measure of mobility
The inevitable question – what’s in it for the company? How can it track return on its expatriation investment? As it turns out, many companies don’t.
A 2013 Ernst & Young study found 78% of global mobility teams admitted they do not measure the ROI of sending an employee on a foreign assignment, while a further 18% were unsure if this was even considered.
Another Cartus survey held earlier this year found 61% of organisations said they did not track the percentage of assignees that leave the organisation within two years of concluding their assignment. This was the case, despite 75% of respondents citing cost control as the top challenge for their mobility policy.
Present literature certainly does not cite many ways of tracking ROI; although a favourite method of tracking failure rates is the premature return of an employee from the assignment.
Even so, the companies spoken to for this article prefer to take an indirect approach to tracking ROI – either by monitoring the assignee’s performance against the targets post the assignment, or through relevant HR metrics that help to predict the impact of the assignment.
Both paths, interestingly, are focused on the longer term rather than ROI solely from the duration of the assignment.
The team at CEVA takes the former view, using two primary indicators to gauge success of the expatriate assignment. The first is quite straightforward, and that is, looking at how well the employee performs in the new role. The second is a measure of how well the employee does when they return to their home country.
In a similar vein, the team at Jabil assesses key talent as well as performance metrics in an effort to link them back to the expatriation.
“What is the candidate’s promotability rate within two to three years of having returned from the assignment? Are we seeing more retention as a result?” These are some of the questions the team strives to answer, Lackey says.
Respondents to the Cartus survey rank their top three priorities for improvement within the mobility policy as assignment planning, cost containment, and candidate assessment and selection.
The same study also cited 31% of respondents saying there was a close relationship between the global mobility function and their organisation’s other HR and talent functions. Although this was an improvement of 10 percentage points over 2012, it is not nearly enough.
“Mobility experts need to know compensation and even some talent management, because relocation and related destination services are easily outsourced to high-quality service providers,” Farmer says.
“The talent management and compensation aspects are driving the localisation trends we have seen in recent years, and governments – like Singapore – are doing more to ensure local talent is the first choice, foreign talent second.”
In research conducted by Farmer with 40 responses from mobility managers, 83% listed the better alignment of global mobility with talent management as a key task. This, he says, will involve the gamut of processes around career management, workforce planning, performance management, leadership development and selection.
Lackey and Grimes echo these thoughts. In addition, they also suggest elements of flexibility as well as regionalisation, as we find in the case studies featured in the next few pages.
Organisations cannot claim to take mobility seriously without having linked it to the broader business picture. Mobility needs to be a strategic imperative, rather than being left solely in the hands of the administration and payroll teams.
They are, as Lackey calls them, “the usual suspects”, but for expatriation to really add value, it needs to move up the ladder for wider buy-in.
CASE STUDY: Jabil
CASE STUDY: CEVA Logistics