Filed under: TrainingTagged with: employee engagement, human resources, talent acquisition
Mobility programs have become a key talent management strategy in today’s war for talent, giving companies a way to deploy the best people to the right locations in support of their business goals.
And as more of these organizations expand globally, the need to mobilize their employees has steadily increased — especially as they expand overseas. Company growth and lack of local talent tied for the top factors that affected relocation volumes in 2014, according to Atlas World Group’s 2015 Corporate Relocation Survey.
“We’ve seen a huge jump in cross-border relocation in recent years,” said George Bates, senior vice president of global business development for Graebel Cos., a global relocation and moving management company.
That’s causing companies like Graebel and other mobility service providers to expand their offerings, opening offices overseas, extending their network of service providers, and expanding their service offerings to meet clients’ needs. Some companies build out their supply chain through organic growth or acquisition, adding moving companies, destination service providers and real estate functions in these countries; while others expand their reach through partnerships so they have access to local resources without having to invest in the infrastructure to support them.
Feeling the Pressure
At the same time, corporate mobility managers are facing their own pressures to rein in costs and demonstrate the value of these often-pricey relocation packages. Brookfield Global Relocation Services’ “20th Annual Global Mobility Trends Survey Report” shows the need to find cost efficiencies, and capturing the return on investment realized from international assignments are the primary challenges mobility managers face today.
For many organizations, cost-containment has become a prevailing issue related to relocation, leading them to adapt their policies to be more flexible and economically focused.
“There is always a budget element to every relocation decision whether it is a temporary assignment or a permanent move,” Bates said. “Even if you find the best person for a role, it’s no longer a ‘move at any cost’ scenario.”
In response, many companies are replacing total reimbursement packages with more customized offerings that are still designed to benefit the employee but in a more cost-effective format. The most popular shift is the move to lump-sum offerings, in which the employee is given a fixed amount of money to cover all moving expenses at their discretion. Roughly half of firms use lump sums for moving employees, and about two-fifths use partial reimbursement. Roughly half of all companies have moved to this model, according to the Atlas report.
Lump sums can be more cost effective for organizations because they put a cap on spending. But they can also be a more appealing alternative, especially for younger workers who are accustomed to doing their own research and finding relocation information without someone walking them through the process, said Steve Nurney, a leader in the global mobility practice for Mercer. “Millennials rely on mobile devices to get information. They don’t need their hands to be held through this process.”
This has led some relocation service providers, like Avail Move Management, a subsidiary of Atlas World Group, to roll out technology-based software to allow employees to manage the relocation process on their own. Movr is Avail’s Web-based platform that provides information about moving services, tools to track expenses, savings opportunities and other resources to help employees plan and execute their move. “It’s a self-service tool so it is still hands-off, but the employee isn’t completely alone in the process,” said Jessica Nichols, manager of business development for Avail.
Many other global relocation providers are rolling out similar online and mobile tools to help employees better understand their package options, track their goods through the moving process and learn more about the communities they move into. “You have to offer technology-based solutions to support employees moving today,” said Cindy Madden, director of consulting services at Cartus Corp. in Danbury, Connecticut.
Beyond lump sums, the influx of millennials into the workplace has also affected the kinds of relocation benefits that companies offer. These younger workers are less likely to own homes, so they usually don’t need real estate support, and because their social networks are more global, they may choose to stay with friends temporarily in a new city rather than incur temporary housing costs. That can save their employer money in the relocation process, however, these workers may expect other benefits to compensate, like a travel allowance or help subletting their apartment. “Relocation companies need to tailor their services and their relocation plans to support demographic changes,” Nurney said.
Mobility and HR Join Forces
One of the biggest trends to emerge from these cost and customization pressures is a stronger collaboration between mobility and human resources. Roughly one-third of respondents in the most recent Cartus “Global Mobility” report say there is a close relationship between global mobility and their organization’s other HR and talent functions.
As companies look for better return on investment and cost-containment in their relocation efforts, talent management and mobility teams are working together earlier in the process, to support candidates and ensure the move is timed and delivered to have the greatest business benefit with the least economic impact.
Bringing mobility experts into the decision-making process sooner does more than just streamline the move for candidates, said Neil Heline, director of mobility for Fidelity Investments, the U.S. multinational financial services corporation. It can also help the business avoid expensive mistakes.
Last year, Heline rolled out an international mobility pre-decision program, which he created with the help of Graebel, his relocation service provider. The program asks a series of questions to help business-unit leaders calculate the cost implications of the move as well as potential obstacles like immigration and tax issues. “Business-unit leaders have a false sense that they can send anyone anywhere at any time,” Heline said. “They don’t understand the hoops you have to jump through.”
Employees Abroad Should Spark Global WarningBy Heather A. JacksonIs the world becoming increasingly dangerous? With the outbreak of Ebola in West Africa, natural disasters around the globe, the threat of terrorism at home and abroad, and international political unrest, it certainly seems dangerous.And when employees are stationed abroad, they face unique security, health and other risks. In light of these dangers, multinational employers have an ever-growing need to identify and manage risks abroad, and to prepare employees for disruptions and emergencies that their employees may face in unstable parts of the world.Here are five things to consider for employers who have employees working abroad:1. Develop and implement an emergency preparedness plan. The plan should define the roles within the organization for evacuation and relocation, as well as a communication plan among employees at the location abroad and with the home office. The plan should also include what to do in the event of a natural disaster, civil unrest, a fire, or a medical emergency or health epidemic. Finally, the plan should establish evacuation procedures.2. Conduct country-specific training before stationing employees abroad. Training should address not only the emergency preparedness plan described above, but also safety procedures; medical preparedness (including required vaccinations and avoiding communicable diseases); fire department, police, hospital and physician contact information; host country culture (such as appropriate dress or other unique cultural norms); information about the local political system; contacts at home and abroad as well as in the U.S. embassy or consulate; geography, including unsafe areas; local law (such as the illegality of alcohol in certain places in the world ); and information technology and business continuity procedures.3. Remind employees always to carry an informational card with emergency phone numbers for any sort of emergency, from illness to natural catastrophe, to an arrest by local police.4. Talk to your insurance broker about global assistance insurance that may already be provided in your current policy or policies. If it’s not included in your existing policies, discuss your company’s needs and appropriate level for additional coverage, considering the number and location of employees working abroad. In the event that a policy provides concierge services for international workers, ensure that contact numbers for those services are provided to all appropriate employees.5. If you have a significant number of employees abroad, you may consider the creation of an overseas emergency hotline or an online travel registry to track employees abroad.Heather A. Jackson is a partner in the Chicago office of Taft Stettinius & Hollister specializing in employment and litigation matters. To comment, email firstname.lastname@example.org.
Heline recently worked with a business-unit leader who was relocating a senior-level employee from the United States to the United Kingdom. The manager didn’t want to go through the pre-decision program because he already had confirmation that the employee would take the assignment, and he didn’t want him to get spooked. But Heline insisted, and the benefit was immediately evident.
“It turned out that the employee would have had a significant tax implication if he moved in November, as was initially planned,” Heline said. The combination of his compensation, bonuses and extra income would have caused him to take an extra $80,000 hit if he moved in 2014. “By delaying the move until January, we were able to avoid all of those taxes.”
The lesson is that relocation isn’t just a yes or no decision. It’s a nuanced business process that requires careful planning and consideration, Heline said. “You need a strategy, and you need a mobility service provider to help you identify best practices and resources to make the most of these assignments.”
Mobility’s Elusive ROI
“We see much more attention being spent looking at the whole picture of who is the right fit for the role,” said Eric Egnet, chief operating officer and chief information officer of MSI Global Business Solutions. That includes identifying candidates with the right characteristics necessary for success in an expat assignment, defining the ideal assignment length and addressing any skill gaps as part of the preparation process.
“That all happens in the talent management arena, but mobility is getting involved a lot sooner,” he said.
The vast majority of firms today (77 percent) perform candidate assessments prior to relocation offers, according to the Atlas survey. And the 2014 Cartus “Global Mobility” report shows 44 percent of companies rank candidate assessment and selection as a leading area in their mobility program in need of improvement.
“Selecting the right candidate, especially for international moves, is more critical than ever with the increasing cost of relocation,” said Lauren Falls, marketing specialist for Atlas.
These companies are also interested in finding out whether their assignments are actually delivering a return on investment — though they have yet to implement effective metrics to calculate that sum, said Cartus’ Madden. Cartus’ survey shows that only 4 percent of companies actively measure the return on investment of relocation, though an additional 28 percent believe it would be valuable if they did. For those who do measure, actual assignment spending and expenses justified as part of a long-term global strategy are the most common approaches being used. Though that fails to take into account the qualitative effect of these assignments.
One of the big challenges with this process is that the return on investment of mobility is not purely a financial measure, said Mercer’s Nurney. “You have to consider the value of using mobility as a tool to develop people,” he said. That means evaluating whether the experience gave them the skills and experience to progress in their career, did it aid in retention and engagement, did it help the company achieve its strategic goals, and did that employee help develop local talent so the company could avoid relocation costs in the future? “The true ROI of mobility requires a series of complex and focused metrics,” he said. “It’s not just an evaluation of overall cost.”
This is an area where mobility service providers can establish themselves as strategic partners — if they can figure out how to convert internal and external data into actionable results. “Right now there’s a gap between the availability of data and accessibility to insights, and we need enabling technologies to close this gap,” said Matthew Dickerson, senior vice president and global CIO of SIRVA, a worldwide corporate relocation services and moving company. In response to that demand, SIRVA recently launched SIRVAlytics, which provides companies with access to relocation program data and dashboards to inform the decision-making process.
Similarly, Graebel has also begun packaging analytics services with its relocation products that help companies compare internal talent data to international benchmarks to help them more accurately assess which candidate is the best choice for relocation.
Such services are still relatively new, although industry leaders predict that analytics will become core to the relocation industry as demand for return on investment continues. “Advanced analytics are allowing for interactive insights that are helping companies make better relocation decisions in a timelier manner,” Dickerson said. “These added insights help to ensure a consistent, quality relocation experience for everyone involved.”