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Written by: Mike Piker
Until recession hit, global mobility was in the ascendant, as you might expect in an increasingly global business world. But the boom in global mobility masked the fact that many international assignments fail – that is, individuals leave the job early, don't meet their goals or return to take a job with a competitor. Such failures cost companies dear, and in the low- or no-growth post-recession climate, where controlling costs will remain a priority, such failure will not be tolerated.
Understanding this, companies are scrutinising their global mobility programmes and policies carefully in order to ensure that they are getting as much return on their investment as possible by ensuring that they have the right person in the right role in the right location at the right time.
The traditional segmentation approach – by assignment type – has not always delivered this. The four most common assignment types have typically been commuter or extended business trip assignments, short-term assignments, long-term assignments and global cadre assignments – but these were not always handled strategically. For example, they were often handled in isolation from whatever job planning, talent review and career management activities went on in the organisation.
So, instead, forward-thinking organisations have started to segment their overseas assignments according to their human capital value both to the organisation and to the individual – and, crucially, they segment relocation packages accordingly. For example, an assignment whose main purpose is to develop an individual's career should arguably be rewarded less than one that is critical to the growth of the organisation. However, to date, most companies' policies have not reflected that difference in value.
Careful segmentation can save organisations between half and two-thirds of what they have traditionally paid their expatriates – and that's not to mention the considerable opportunity costs involved in reducing the number of assignments that fail.
The most important criterion for segmentation should be the business drivers, which generally fall into four categories: strategic business need, skill/technical need, emerging/high-potential talent and career building/opportunistic moves.
The expatriate population and business drivers
The good news is that there are growing numbers of employees who are highly motivated by the kind of development opportunities that international assignments represent. Generation Y and, to a lesser extent, Generation X are keen to volunteer for international roles, which they see as both furthering their careers and fulfilling their personal life objectives. Largely young, free and single, they are unencumbered by the kind of ties that make traditional expatriate assignments so expensive. And, hungry for new experiences, they relish assignments in far-flung corners of the world or "hardship" locations that their experienced colleagues increasingly baulk at.
Indeed, one of the trends in global mobility is a new kind of international assignee – the "global nomad", who, if they can hold on to them, will drive the future growth of international organisations. Global nomads might hail from any country – and there are growing numbers from emerging economies such as China and India – but they typically think in terms of perpetual international assignments within either one or across several firms throughout the course of their career. They put a high value on career development and a people-centred way of doing business in developing countries, and they see their careers as a set of opportunities and experiences rather than a path or grade progression.
So while organisations' desire for these high-potential individuals will intensify, they will have to pay far more attention to how to attract, motivate and retain them than they do for traditional expatriates. Providing "gold-plated" packages is not the answer.
The "career-building volunteers" are a big and growing asset, but because of their youth, inexperience and job-hopping tendency, they are a risk, which is why, despite their potential value to the organisation, firms can always get away with sending them purely on a local package.
However, they may well evolve into the next group of expatriates the organisation should focus on – the emerging/high-potential talents, who, through international learning and development, could become the next generation of business leaders and, as such, are highly valued in an organisation's talent pool.
These strategic business leaders could themselves be expatriates, as the mission-critical roles they will need to fill and specific strategic business results they will be expected to deliver may be anywhere in the world.
The career-building volunteers may equally turn into the kind of seasoned technical experts who provide invaluable specialist or expert skill either to fill local gaps or to complete specific projects or tasks in different parts of the world. The fact that they are accustomed to international assignments makes them more effective than people who need to accustom themselves to the differences in language, culture and so on, which can be so disruptive and unsettling for the novice expat.
Managing this human capital progression is part of the new, more integrated approach to mobility, reward and talent management that enlightened companies are adopting. Aligning their mobility strategies with overall business strategies is helping them achieve the twin objectives of business growth and efficiency.
We have come a long way from the days when companies' compensation practices used to distinguish them from each other. Today employees are far more interested in development opportunities, career paths and satisfying jobs than they are in salaries per se. As such, the way companies manage their talent has become the major differentiator between them – and it is far less replicable than compensation policy. And businesses that marry such development opportunities with the kind of international experience that younger generations are increasingly seeking in order to fulfil their personal life objectives will be the biggest winners.