Multinationals are not effectively using their mobility programs to drive competitive advantage, with more than half of mobility executives in multinational companies involved only in operational and administrative deployment tasks, rather than talent management and larger business strategy, according to research by global professional services company Ernst & Young.
At the same time, the number of assignees continues to rise, creating challenges especially in emerging markets, with governments trying to protect home labor with increased immigration barriers and additional tax and social security collection schemes.
“Mobility needs to be seen as a tool to enhance the talent pool, not simply an easy way to fill a vacancy without any strategic insight,” said Dina Pyron, Ernst & Young’s global director for human capital. “The function must be connected or integrated with the talent management team, combining their specialist skill sets to improve the retention and development of top talent and potential future leadership.”
Further, Pyron said “as our survey reveals, many companies are still struggling to link mobility to talent. Many organizations continue to debate whether mobility is purely an operational and administrative function, or whether it has a more strategic role in the management of its talent.” Additionally, trying to balance business objectives with employees’ needs remains an ongoing challenge, she said.
Ernst & Young interviewed 264 senior mobility executives for the survey report Your Talent in Motion: Global Mobility Effectiveness Survey 2013.
One of the ongoing frustrations many mobility teams experience according to the survey results is being asked to facilitate an assignment after the business unit has already made the talent selection. While 58 percent of survey respondents reported that they now have global talent management agendas, up from 51 percent in 2012, 56 percent of companies reported that the global mobility team was involved only in deploying services rather than actively selecting assignees. “Mobility professionals are more attuned to many mobility-specific issues overlooked by the wider business and can contribute significantly in assessing who is the ‘right person,’ ” the report said.
Seventy-eight percent of respondents reported that their mobility function did not measure return on investment and a further 18 percent were unsure. Only 39 percent of survey respondents indicated that the host-location team was required to provide formal feedback for the assignee, with 21 percent saying that feedback was not properly documented and tracked either during or after the assignment.
“We see minimal resources dedicated to facilitating repatriation and a return to the home business at the end of assignments, which puts at risk the retention of talent,” the report said. Most organizations came up short in tracking employee retention, performance rating and career progression of recently returned assignees—with 16 percent of assignees leaving the company within the first two years after repatriation. A further 41 percent simply return to their pre-assignment position.
Selecting the right employee for an assignment should go far beyond making sure they have the right set of skills, according to Adele Yeargan, director of global mobility for AIG.
“We have to look at how successful and adaptable the employee can be,” Yeargan said. “That requires a holistic approach, because even though the employee might have high potential and be a rising star, if you put him on an assignment without proper assessment and preparation, it can hurt his career. Mobility goes far beyond facilitating movement, she added. “Mobility as a function needs to go beyond relocation. Our future is really to support talent mobility.”
Family and spousal issues continue to be the biggest challenges that threaten the success of international assignments, according to Ernst & Young. Sixty-five percent of respondents cited personal issues such as a lack of adequate schools, insufficient housing or inadequate work opportunities for a spouse as reasons for failed assignments and early repatriation. That’s up from 61 percent in 2012.
The survey also revealed that many organizations do not have the adequate procedures in place to track tax, payroll and immigration issues for those on formal or informal assignment.
This is despite almost half (49 percent) reporting deploying more employees into high-growth emerging markets, where laws are constantly in flux and compliance risk is high.
Forty percent of respondents reported that they did not have a formal risk-control framework to monitor payroll tax and social security compliance, with 64 percent reporting they incurred avoidable penalties for noncompliance in 2012. Another 31 percent of the respondents reported that they have had to engage outside consultants or firms to address those violations, while only half of companies are tracking trailing liabilities after assignments end.
“Robust, global payroll guidelines are essential to establish consistency and reduce the potential for error by local personnel who are often unfamiliar with the complexities of cross-border compliance,” said Mike Hibberd, Ernst & Young’s global compensation services leader for Europe, the Middle East, India and Africa.
“The majority of organizations that need to collect compensation details from multiple sources only review this for accuracy annually, or less. This is simply no longer sufficient with increased scrutiny on employer obligations and harsh penalties and sanctions in play.”
The unanticipated risks created by “business travelers”—those not on formal assignment—are also a growing cause for concern. Few global mobility teams monitor business travelers, with 73 percent saying that business travelers were not part of the global mobility team’s responsibility.
Those not on formal assignments are flying under the radar and may unknowingly generate huge problems for their employers, the report said.
“There is widespread frustration with the fact that many businesses do not want to address the task of minimizing and pre-empting risk,” said Kevin Cornelius, Ernst & Young’s mobility services leader for Europe, the Middle East, India and Africa. “Too often, there is a tendency to wait or be aware of a tangible negative consequence before deciding to act,” he said. “Educating the business units outside of mobility to recognize the risk is a key first step, but it remains an enormous challenge that is likely to become even greater as we see more flexible working arrangements and increased travel outside of traditional expatriate assignments into the high-growth, emerging markets.”
Roy Maurer is an online editor/manager for SHRM.
Follow him at @SHRMRoy
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