Global growth continues to be a dominant priority on the agenda for CFOs and finance leaders worldwide, with a majority citing overseas expansion as a specific business priority, according to Deloitte's CFO surveys. The challenges of global mobility -- the who, what and how of deploying and developing executives across geographies -- is a critical part of the global business equation and, given its potential impacts and generally high costs, an area of growing interest -- and often concern -- of CEOs.
The results from Deloitte's recent "Strategic Moves: A new direction for global mobility" survey of 141 HR and business executives from around the world provide critical insights into global mobility programs, priorities and strategies. The specific finding: While global mobility programs are critical -- and expensive -- they are generally not perceived as strategic or well aligned with business priorities. Most of the surveyed executives see significant upside in capturing the value of these programs. Let's look more closely at the findings and central recommendations.
Here are some of the specific findings from the survey:
- Nearly 50% of respondents identified emerging markets as their top strategic business issue.
- Three quarters of survey participants anticipate that the total number of global employees will increase or increase significantly over the next three to five years.
- Nearly 80% of respondents anticipate that global mobility will become more important or significantly more important during the same period.
- Fully 88% of respondents feel it is important or critically important to align their organization's global mobility strategy with its business and talent objectives. Yet only 2% feel there is full alignment at present.
- Three quarters of survey participants perceive their global mobility program is no better than adequate, with nearly 40% citing the need for significant or radical improvement and 36% ranking their program adequate with room for improvement.
- Nearly 50% of business executives outside of HR feel their mobility program is not fulfilling the company's business and talent requirements.
- Less than 10% of participants feel their organization currently perceives global mobility as a fully strategic function.
The Importance of a Global Mobility Strategy
The increasing importance of the global mobility function within the organization is prompting some companies to reevaluate their view of mobility as simply a tool for short-term resourcing to that of strategic enabler of global growth, and builder of leadership capabilities and strengths. As highlighted in "Smarter Moves: Improving the value of global mobility by aligning strategy, investments and operations," effective global mobility requires a formal strategy that focuses on a company's long term business requirements and global talent priorities, rather than simply reacting to individual opportunities as they arise.
Although many organizations spend substantial sums on international assignments, these investments are often made on an ad-hoc basis to fill short-term requirements, rather than with a view to the enterprise's strategic business and talent priorities. An integrated global mobility and workforce strategy that establishes objectives and guidelines for the company's global mobility efforts can help leaders make better decisions about how to focus their investments and achieve the desired returns, both in the short and long term.
An effective global mobility and workforce strategy should:
- Identify which business objectives should be supported by global mobility, e.g., development of capabilities in strategic growth markets, accelerated development of management bench strength.
- Identify the talent objectives supported by global mobility. Who should go on international assignments? Why? How are they selected?
- Identify roles and career paths for which international assignments are important to supporting business goals.
- Identify job families and employee types to be prioritized for mobility.
- Identify preferred source and destination countries for global deployments.
- Develop a multi-year plan and budget for mobility at both the organization and division levels.
- Define measures of effectiveness for the global mobility program, including anticipated talent outcomes, and contribution to business results.
An effective global mobility program should foster a portfolio view of the cost and impact of mobility on the business, and provides a clear business rationale for specific mobility investments. It can also enable business leaders to make smart decisions that align with the organization's larger business and talent requirements.
Additionally, an understanding of the core business drivers can determine that policy and processes are tailored appropriately. For instance, if expansion in emerging markets is a specific business strategy, the global mobility program can facilitate movement of talent with a policy designed to include additional compensation or allowances to incentivize acceptance of assignments in targeted regions. In some instances, a central budget/alternative cost-sharing approach may be used to encourage host locations to use international assignees, by providing them with an alternative to single-handedly taking on inflated expatriate costs.
Improving Global Mobility Effectiveness
Despite the stated importance of global mobility, the majority of survey respondents gave their company's efforts a generally low assessment. This disconnect can provide finance leaders with the opportunity to raise the bar by contributing to transforming the global mobility function from an engine that simply moves employees from one country to another into a strategic business collaboration focused on deploying global talent in service of business strategies.
An effective global mobility program should be able to provide guidance to the business and assignees with high quality services that are cost-effective, consistent, and easy to use, manage and administer. To that end, an effective program should:
- Provide guidance to businesses on mobility-related decisions. These include estimating the cost and developing the business case for particular assignments; selecting assignment goals and developing related metrics; helping managers evaluate candidates for assignment opportunities; advising managers on policy selection and assignment duration.
- Provide a full spectrum of assignee-required services, including: coordinating physical moves; assisting with tax and other compliance issues; assisting with acculturation and integration; delivering services including reimbursement, payroll, benefits, and administration services.
- Integrate global mobility and talent management practices to determine appropriate deployment to suitable positions upon home country return or reassignment.
- Utilize both internal resources and external service providers as needed to provide cost-effective, high-quality service.
Those organizations with an effective global mobility strategy are typically those with leadership focus and guidance. The fact that so many organizations require significant or radical improvement in their mobility program may be, in part, the result of a lack of clear direction and sponsorship from senior executive leadership.
Expanding the opportunity in global and emerging markets can effectively be done with the desirable talent and specialization. This likely requires that organizations change their approach and what they expect from their global mobility programs. Increasingly, the effective global mobility programs expect strategic results, higher returns (in terms of business impact, and leadership and talent development), and more efficient and new deployment options.
There is no generic, leading-practice model for global mobility management, but there are some emerging insights as summarized here. Specific among these are raising expectations and aligning the organization's global mobility efforts with its business priorities. Transforming global mobility from an administrative function to a component of an organization's business strategy requires deliberate planning and organization, focused investments, and the development of new capabilities.
The need for improvement is clear. The opportunity can be significant. This is an effort finance executives are well positioned to sponsor and assume an increasingly central collaborative role with business and HR leadership.
Jeff Schwartz is a principal with Deloitte Consulting LLP's Human Capital practice. He is a regular contributor to Business Finance, sharing his perspective on executive talent development, where the next generation of finance leaders will come from and some of the best practices organizations are applying in addressing these issues.
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