Only 51 percent of companies track the actual total cost of international assignments, yet 69 percent say there is pressure to reduce mobility program costs, according to a recent survey report on global mobility trends and practices. In addition, 76 percent of companies do not compare the actual vs. the estimated cost at the end of an assignment and a whopping 94 percent do not measure the program's return on investment.
The Brookfield Global Relocation Services (GRS) 2016 Global Mobility Trends Survey found that a significant majority of companies (90 percent) have not yet fully adopted the best practices that align the global mobility function with their talent management objectives, such as measuring mobility program performance and maximizing the program's investment.
A 2015 survey conducted by global relocation firm Cartus, headquartered in Danbury, Conn., reported mixed progress in a number of areas that reflect mobility and talent alignment.
"Companies relocate employees for a number of reasons—to achieve project or longer-term company goals, to fill talent gaps in particular destinations, and to develop their talent," said Cindy Madden, director of consulting services at Cartus. "Building effective linkages between talent and global mobility helps to ensure that these assignments truly contribute to company business strategies, yet many companies don't have the time or resources to make these linkages, potentially losing out on key company goals such as return on investment and career development."
Brookfield GRS asked global mobility and HR leaders from 163 multinational companies representing over 11 million workers to best describe the role of the global mobility function in their company. Nearly half (46 percent) of the respondents said that the function is focused on ensuring employees abroad receive optimal levels of service support.
Another significant portion (44 percent) said that the primary role of the global mobility function in their organization is to provide expert advice to stakeholders throughout the company. Only 10 percent of respondents said that the function is aligned with the wider talent agenda and is actively engaged in workforce planning.
"Providing high levels of service to relocating employees and their families is unquestionably a fundamental expectation for global mobility teams," said Diane Douiyssi, director of Brookfield GRS's global consulting services practice and co-author of the survey report. However, companies may need to reset their focus to meet global business challenges, she added.
Douiyssi said that international assignments are not well-integrated into the overall career management process, and a contributing factor of this is that "mobility leaders often lack the ideal level of visibility to the company's wider talent management objectives and have limited access to the metrics that could better enable measurement of the organizational value rendered from talent mobility."
Eileen Mullaney, global mobility consulting leader at PricewaterhouseCoopers (PwC), based in New York City, said that aligning talent management, global mobility and workforce planning strategy is paramount to having a clear understanding of what senior leaders need and expect from the mobility function as part of short- and long-term growth objectives.
PwC's 2015 "Moving People with Purpose" survey indicated that two-thirds of participants expect to be partnering with the business to plan for future talent needs by 2017, compared to 44 percent currently. "For the business to succeed, HR must be agile and able to move the right people into the right roles at the right cost at the drop of a hat," Mullaney stressed.
Cost-Containment
One factor intensifying the need for a strategic alignment is the continuing focus on cost control. The high cost of operating global mobility programs has been consistently cited by respondents to all mobility surveys since the start of the Great Recession in 2008. Over three-fourths of respondents to the Cartus survey cited controlling costs as their top challenge.
"In order to address mobility needs but still attempt to contain costs, companies are increasingly utilizing a variety of new policy types, primarily temporary assignment types such as extended business travel or commuter assignments," Madden said.
According to the Brookfield survey, the most commonly reported initiatives to control costs were greater use of alternatives to long-term international assignments (22 percent), followed by ensuring fewer exceptions to the mobility policy (18 percent).
But despite global mobility professionals citing the pressure to contain cost as a major concern, many companies have not yet adopted cost-management practices.
About 6 in 10 organizations prepare cost estimates for all assignments, and only one-fourth of companies require a cost-benefit analysis as part of the business justification for all international assignment types.
"Creating visibility to estimated and actual assignment costs is recommended to achieve optimal cost results and to facilitate internal discussions concerning the business case for overall spending levels or within specific categories," Douiyssi said. "Many companies seem to be answering cost-cutting demands by reducing the number of assignments or changing their mix to include more of the increasingly popular one-way transfers," which are permanent relocations for an indefinite period of time.
Mullaney has also witnessed a move away from "a one-size-fits-all policy" for mobile workers. She said that permanent relocations and "local-plus" moves—where expatriates are paid a local salary and provided benefits not included in local total rewards packages—are set to increase significantly, as companies use these as alternatives to more expensive, home-based assignments.
"We find this is especially true when moving people across developed markets such as the U.K., Europe, the U.S., Australia and Hong Kong," she said.
Madden suggested employers survey internal stakeholders to gather feedback on changes to mobility benefits and services and look at the data that summarizes their current programs to allow for a clearer understanding of the potential impact of any measures eventually chosen.
"While certain benefits and services may be perceived as vital by senior leaders, for example, user feedback may suggest otherwise," she said. "Savings suggestions can and should often be tailored to particular needs, though. Because moving employees globally requires cultural and language training for an assignee and family to be successful, we don't recommend removing such important benefits but, rather, we might look at who is being asked to move and why."
About half (48
percent) of respondents to the Brookfield survey who indicated that cost
pressures have increased also reported less international assignments in 2015. “While
reducing the number of assignments unquestionably reduces program costs,
eliminating opportunities for international assignments could also have other
unforeseen opportunity costs, particularly in terms of talent development, filling
the leadership pipeline and retention of key employees,” Douiyssi said.