Smarter moves

How to boost returns on global mobility investment

By Deloitte

For many organizations, growth and even survival hinges on penetrating and scaling operations in rapidly growing and emerging markets unlocked by globalization. That’s a tough challenge, especially when the critical market and production opportunities and critical talent are often not in the same country. Yet a surprising number of companies continue to handle international assignments in ways remarkably similar to how they operated decades ago.

The traditional, and still the most widespread, approach to international assignments typically handles each case as a special event with expectations for comprehensive, high-touch service. This one-size-fits-all approach, however, increasingly overshoots the mark for many situations, unnecessarily raising costs. Additionally, it often fails to meet the specific needs of both the business and the assignee, leaving key business goals unfulfilled and key talent development priorities unaddressed.

More broadly, many executives are uncertain that they are receiving an appropriate return on their global mobility investment, or even that they can measure that return in a meaningful way. And global mobility is a significant investment _ one that, in our experience, can easily top $1 million per assignment. It’s an investment that can drive tremendous value, but only if leaders can effectively harness a company’s global mobility efforts to pursue strategic priorities.

So what can leaders do to better manage ― and improve ― the return on their global mobility investment? In our experience, companies that gain the most value from global mobility show a high degree of alignment between global mobility and the larger business in three areas: 1) Business and talent strategies; 2) Expected assignment value; and 3) Mainstream HR and talent operations.

Achieving greater alignment in these areas can go a long way toward helping companies drive business value through global mobility at manageable cost levels.

Strategy

Aligning global mobility strategy with business and talent strategy means designing a global mobility strategy that supports both the organization’s business goals ― what it wants to accomplish in the marketplace ― and its talent development goals ― what it wants its key talent to learn about working in a global environment.

In this way, global mobility evolves from a check-the-box exercise to a key enabler of business and talent development strategy. We know of several companies that are starting to use global mobility as a strategic tool, not only to advance business goals in different areas of the world, but to give future leaders the global experience and perspective that they will need to run a world-spanning enterprise. Some of these companies even require that all of their top executives have prior experience working outside their home countries, a requirement that we expect more companies will adopt in coming years.

Employees themselves are often coming to view international assignments as a way to develop their skills and deepen their experience, creating a demand for assignment opportunities that an organization can use to its advantage.

The company therefore created a new global mobility strategy that specified that half of the company’s total number of assignments should be distributed among the “strategic opportunity,” “learning experience” and “commodity job” categories.

Each of these assignments would be offered to specific types of employees, and each of them would carry a different set of performance expectations as well as receive tailored support from the company to support the assignment’s specific talent and business objectives.

By developing and communicating this strategy, leaders were able to give the company’s managers effective guidance on how to use the global mobility program to support the company’s key talent development goals. Business leaders and hiring managers can now take a more strategic approach on which employees to consider for assignment, where to send them, and what the company expects from them while abroad ― all of which had previously been decided based on more limited tactical considerations.

Investment

Much of a company’s investment in global mobility consists of the cost of assignee rewards ― typically the largest expense in a global mobility program’s budget ― plus the cost of the services and support (such as language training and relocation assistance) offered to assignees before, during and after the move.

Thus, aligning global mobility investment with expected assignment value is largely a matter of tailoring the cost of each assignee’s rewards and support package ― the assignment policy under which he or she travels ― to the value he or she is expected to generate while on assignment.

Many companies maintain only a few types of assignment policies to deliver rewards and support packages to employees. Typically, these policies classify assignments by their duration so that, for instance, one policy covers short-term assignments, another covers long-term assignments, and a third covers permanent transfers. The problem with this approach, however, is that it fails to align the amount of the company’s investment with the potential value an assignment can generate.

To help avoid mismatches between investment and prospective return, companies can create a wide range of global mobility policies, each of which offers assignees a unique set of rewards and support packages. Leaders can then choose which policy would be appropriate for a particular assignment based on the value the assignment is expected to generate.

Operation

Global mobility is often perceived as a niche activity that requires expert handling in everything it touches. The following are four areas in which companies could benefit from integrating global mobility more closely with mainstream HR and talent operations:

Employee rewards administration: Although expatriate rewards programs require specialized business insights to design, they can often be administered through the same HR processes and systems that serve non-mobile employees. We have encountered many situations where the global mobility function maintains processes that parallel or even duplicate those already in place for local benefits administration.

HR service delivery: Many companies can find a number of opportunities for integrating global mobility service delivery more fully with broader HR processes and infrastructure. For example, apart from relocation, most international assignees have essentially the same basic HR service needs as other employees in the host country.

Talent management: At many companies, assignees essentially drop out of the company’s standard talent management processes during their time abroad. The frequent result is that companies must scramble to find assignees a position when they return home – and the position that the assignee eventually winds up with may not use his or her new skills to their full potential.

Technology: Companies may need to deploy specialized global mobility technology to satisfy unavoidable requirements specific to mobile employees, including complying with certain types of taxes and regulations or managing multiple performance reviews for managers in multiple countries. But they should also try, whenever possible, to leverage the HR technology being used by other employees to deliver services to the mobile workforce. For instance, a company could build integrated online self-service applications that allow mobile employees to manage work/life events (such as childbirth or illness) in the same way that local employees do.

Why align? The benefits

In our experience, companies that take steps to better align their global mobility programs in the ways described above can enjoy a number of benefits:

• Aligning a company’s global mobility strategy with its business and talent strategies allows leaders to use the global mobility program as a focused tool to pursue both business and talent management value. It can help the company define and effectively pursue specific business and talent development goals for each assignment, improving leaders’ ability to understand the value global mobility delivers and the global mobility program’s return on investment.

• Aligning a company’s global mobility investments with the value each assignment is expected to yield can help keep costs in line with the global mobility program’s business and talent development returns, while still meeting assignees’ needs during and after their deployment abroad.

• Aligning global mobility operations with mainstream HR and talent operations can help reduce costs, give assignees a smoother service delivery experience, and refocus the global mobility function from administration to helping the business think through strategic talent issues. It can also help companies take better advantage of its mobile talent by improving visibility into assignees’ performance and career development.

Given the central role of global growth across all aspects of business in the coming decade, we think that global mobility should be a priority for any internationally active company. And to do global mobility well, it is vital to achieve alignment in all three of these areas. Such alignment, in our view, is key to a company’s ability to make smarter moves.