EuRA CERC Research Project 2017
Global mobility is evolving. As a newer phenomenon in the corporate world, the nature of the globally mobile workforce has been changing since it appeared in the 1950’s and 1960’s. For our industry, trying to identify patterns in mobility programmes is key to delivering the services the clients need as well as to staying successful.
With the goal of helping our industry to adapt and thrive, EuRA and the Canadian Employee Relocation Council (CERC) commissioned a broad ranging study to research the research. The aim was to identify the trends that will drive our industry over the next decade and beyond. Based on 57 reports published between 2011 and the end of 2015, the study encompassed meta data taken from more than 25,000 respondents in over 40 countries. The reports were taken from those published by mobility think tanks, governments, financial institutions, associations and relocation management companies.
One of the first steps by the research team, was to identify the markers of change for our industry and four issues were highlighted;
- Globalisation
- Demographic changes
- Transfer to a knowledge based economy
- Technology and the digital age
At the recent EuRA Conference in Malta, we took time to examine the new philosophy of Conscious Capitalism which is causing profound change across industry, particularly the service sector and retail. How will the mobility industry be shaped by these issues and the move towards businesses becoming ever more “Conscious”?
Conscious companies are ten times more profitable than traditional businesses operating in the same market place (Tony Schwarz, Harvard Business Review). Forbes magazine recently ran an article titled, “Only Conscious Capitalists Will Survive”, strong words indeed from the bible of high capitalism. Author Jeff King, CEO of advertising agency Barkley writes; “Is conscious capitalism profitable? In a simple answer, yes. We have seen it happen more often over the past several decades—the success of companies that truly commit to the greater good. Yet, we would say that not only can conscious capitalism be profitable, it will be one of the defining mechanisms of profit in the future.” So when the bottom line success of companies is linked with the values of conscious capitalism, profits are actually higher. Basically Conscious Capitalism is about businesses recognizing their responsibility to wider society. To their employees, to their supply chains and partners, to the society in which they operate. It is more than a robust corporate social responsibility policy. Conscious Capitalism is about recognizing that there are many important stakeholders in any business, not just the shareholders.
So, changing the way we work to incorporate social values, combined with the four issues highlighted in the meta research, and we start to see how mobility patterns and our industry will change.
Globalisation is undergoing a power shift, with economic growth moving from west to east. The rise of the Millennials coupled with expertise in the mobile workforce moving towards retirement mean big demographic shifts to mobility. The inexorable move towards knowledge based economies and the ability of technology to democratize free access to information also points towards huge changes in how we do business and what makes a profit.
So given all of this change and the breadth of data we researched, is there any consensus in the literature? In short, yes there is; the volume of mobile workers is expected to keep climbing. Sebastian Reiche from the University of Nevada; “Without much clarity on whether globalization will accelerate even further, or rather slow down (which is subject to discussion), it seems quite certain to predict that global mobility will remain critical.” (Global Mobility in 2014 – Looking Ahead to the New Year.)
According to the “Moving People with Purpose” study from PWC, 89% of organisations indicated they plan to increase their mobile populations in the next two years. But the drivers behind mobility are changing. Steve Cryne, President and CEO of CERC “Global talent mobility used to be driven by early globalisation of markets and technology, a newfound access to developing markets and decreased mobility costs. Today market integration has reached heightened levels of complexity. Technological advancements facilitate instantaneous communications and rapid speed to market of new product lines and services. The balance between emerging and developed markets is shifting due to market maturation, changing demographics and the rise of government labour regulation.”
There are four main reasons identified in the study driving employers to expand their mobility programmes. Firstly, to manage complex talent gaps. The “Moving people to Work” study identified 34% of employers having trouble filling key positions and these gaps are heightened by the rising competition for scarce talent. Secondly to expand their global reach. Corporations continue to state that market expansion is a key driver for sending employees overseas. One key change identified in the research is the multi-lateral direction of employee engagement. While economies in the west continue to send employees to emerging markets, mobile employees from emerging markets are growing by a lerge percentage. This group is not only being moved to developed markets, but more often to other developing economies, as evidence by the growth in trade between Africa and Asia. The third reason for an expansion in mobility programmes was identified as the need to develop top talent. The development of high potential employees is absolutely key in the future planning of successful organisations and international experience is a fundamental component in nurturing key talent. The head of international assignments for a European-based building products manufacturer explains their process in the report, Strategic Global Mobility: “In our company, we have a profound succession planning process, which is discussed regularly among C-level executives. Global mobility falls directly under this.” The final reason for expansion in mobility programmes came down to the need to attract and fulfil key employees. Employees themselves are asking for and expecting international experience as part of their career development and in order to ensure loyalty, HR teams recognise the importance of providing this key element in the development of their high potentials. Where previous generations had mixed feelings about the personal value of overseas assignments, Millenials in both developed and developing markets are increasing requesting international experience. So in the war for key young talent, international assignments are key.
The top three challenges for employers looking to expand their mobility programmes were identified as cost pressures, compliance and increased program complexity.
The recovery since the economic melt down of 2008 has been slow and has spooked many larger corporations form heavy investments in assignments. Cost management is a key pressure on mobility professionals but rather than mobility volumes shrinking or even budgets being reduced, the largest focus is now on demonstrable effective assignment management and ROI. Changing governmental regulation in every area from tax to immigration is placing increased pressure on mobility professionals and we have seen a big increase in the number of key functions being outsourced to external consultants. 78% of those polled in the Global CEO Survey cited over regulation as a big concern. The Global Mobility Effectiveness Study reported that 40% of respondents did not have formal risk control frameworks in place to monitor payroll and social security compliance and 64% reported incurring avoidable penalties for non-compliance in 2012. Mobility programmes are increasing in volume, but also in complexity. The traditional long term assignment is being supplemented with a wide variety of assignments types which can generate the most value for the corporation.
So what conclusions, if any can we draw for the future of mobility providers across the spectrum?
The value placed on international experience by todays high potentials and tomorrows leaders is not going to change. This coupled with an increasingly conscious corporate environment, will, in my opinion, raise the levels of services required to support international assignments. As companies become more aware of the war for scarce talent, and the need to keep their employees loyal and happy, so supported assignment management should follow, despite the cost pressures placed on HR to deliver more for less. The research is clear that the reasons behind the drivers of increased mobility programmes are two fold; to attract and maintain the very best talent and to continue to expand the operations of the company to increase market share. Common sense would dictate that the cost pressures associated need to be weighed up in a more complex matrix than simply ROI. The notion of Return on Productivity makes more sense and would enable procurement to look at more than just the bottom line. In a perfect world, maybe!