The right talent in the right markets at the right timeHighlights

Nontraditional approaches to global mobility—long-distance commuting, frequent business travel, and rotator assignments—are becoming more common. But they bring added complexity, unexpected costs, and compliance risks.

Some companies are aligning global mobility programs more closely with business planning to secure vital skills in priority markets.

Businesses are working fast to replace retiring boomers; global opportunities can offer recruiting advantages for the new generation of talent.

Global talent mobility is increasingly a two-way street, as skill shortages affect mature and emerging economies alike.

Talent is a company’s lifeblood, but maintaining a steady, robust flow has become a major challenge worldwide. Because of talent constraints, 24% of more than 1,200 CEOs PwC surveyed said they were forced to delay or cancel a strategic initiative, while about 30% couldn’t innovate effectively or pursue a market opportunity.1

The degree of to-and-fro today is already stretching traditional mobility programs, and the challenges will likely continue. As more businesses seek growth in their priority international markets, competition is expected to intensify for skills in various job functions, particularly technical and managerial positions, and in certain geographic regions, notably China and other fast developing markets.

Farsighted businesses are adopting new approaches to better manage talent mobility. As part of the process, they are elevating workforce planning to a more strategic level to ensure they’ll have the resources they need—when and where they need them. In this 10Minutes, Microsoft Corp., Fluor Corp., Tiffany & Co., and others share their approaches to global talent mobility.

Trends in talent mobility

1. Greater mobility. More employees will be on the go: PwC projects that the average number of international assignees and host locations at global organizations will increase 50% by 2020.

2. Mobility without moves. Leading candidates for overseas assignments may not be ready to relocate, so employers need to be prepared with alternatives to traditional mobility, such as virtual work arrangements and commuting. Technology, along with more frequent business travel, is helping workers manage remote teams on a virtual basis.

3. Making work mobile. In response to skill shortages, some employers are moving the work to where the talent resides. That’s happening in the healthcare industry, for example, to leverage technology to diagnose and serve patients.

4. Closer mobility monitoring. Employers need to be increasingly vigilant about global relocation compliance matters. Advanced tracking tools have made it easier for both governments and companies to follow employee movements and monitor the related immigration, payroll, and tax issues.

June 2012

10Minuteson global talent mobility

1 PwC, 15th Annual Global CEO Survey, 2012.

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At a glance

The costly toll of global talent shortages, and the urgent need to change

Skill gaps pose a serious problem… as they limit growth opportunities… but companies plan to invest more time and money in talent strategy and development.

43% of CEOs report more difficulty hiring workers

47% of those report that the primary reason for the difficulty is a deficit in the supply of skilled candidates

CEOs face the greatest challenges in recruitment and retention of:

78% of CEOs anticipate some or major change over the next 12 months in strategies for managing talent

71% of CEOs plan a significant increase or some increase over the next three years in investment in creating and fostering a skilled workforce

CEOs responded that talent constraints have affected their companies’ growth and profitability over the past 12 months:

43% talent-related expenses rose/will rise more than expected

31% weren’t/won’t be able to innovate effectively

29% unable to pursue a market opportunity

24% canceled or delayed/will cancel or delay a key strategic initiative

24% couldn’t/won’t achieve growth forecasts in overseas markets

24% couldn’t/won’t achieve growth forecasts in the country where we are based

21% production and/or service delivery quality standards fell/will fallSource: PwC, 15th Annual Global CEO Survey, 2012.

High- potential middle

managers

Skilled production

workers

Younger workers

Senior management

team

Overseas unit heads

53% 17%28%31%33%

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01

Plugging the talent gaps

International assignments were traditionally expected to involve three- to five-year postings, followed by a return to headquarters. While those programs are still needed and remain in place at many companies, much has changed.

Mobility management now encompasses shorter-term postings of a year or less, extended business travel, commuter arrangements, rotational programs, and project-based relocations. All of these options are designed for today’s business realities: to help companies fill urgent talent needs and manage their expenses.

Short-duration assignments—often to set up operations for specific projects or markets—enable employees to share know-how across borders and develop a more global perspective on the business. For example, Adecco Group, the Switzerland-based provider of human-resource services, encourages employees to switch places with colleagues in other countries under its Short-Term Exchange Programme.2

Some employers are making more intra-regional moves, which limit costs, immigration problems, and cultural adjustments. American companies, for example, can transfer skilled workers from Germany to Russia or from Hong Kong to Shanghai more easily than from the US. Other alternatives include recruiting skilled workers on an as-needed project basis and moving them to countries to fill talent gaps on temporary contracts.

Increasingly, companies also are making mobility a virtual experience, taking advantage of online training, video networking, and collaboration software that lets people work together on a single project from scattered locations. These eliminate any concerns about immigration restrictions, moving costs, and employee resistance to relocation. The master engraver for upscale jeweler Tiffany, for instance, travels to other countries to train local employees, but then follows up via video connections.

Barriers to mobility

Regulations and tax considerations affecting international relocations are complex. For instance, employers should be aware that changing tax rules for short-term business travelers and commuters are creating a new area of risk.

Immigration barriers are rising in some high-unemployment countries, where political considerations about work visas limit the movement of skilled workers. At the same time, barriers are tumbling in some developing nations, as they compete to attract talented foreigners or encourage their Western-trained natives to come home.

2 World Economic Forum, Talent Mobility Good Practices: Collaboration at the Core of Driving Economic Growth, 2012.

Recruiting challenges vary by industry

Percentage of CEOs who report:

More difficulty in hiring*

Deficit of skilled candidates**

Pharmaceuticals/life sciences 51% 64%

Insurance 49% 56%

Technology 48% 42%

Healthcare 47% 53%

Industrial manufacturing 47% 40%

Automotive 46% 48%

Consumer goods 44% 54%

All industries 43% 47%

Entertainment/media 43% 41%

Banking/capital markets 41% 46%

Transportation/logistics 40% 56%

Construction/engineering 40% 52%

Chemicals 36% 56%

Business/professional services 35% 48%

Hospitality/leisure 34% 60%

Communications 31% 38%

Asset management 30% 39%

Retail 22% 40%

* In general, has it become more difficult or less difficult to hire workers in your industry, or is it unchanged?

** Of those who say more difficult, which of the following is the primary reason why?

Source: PwC, 15th Annual Global CEO Survey, 2012.

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02

Making global mobility more strategic

Farsighted companies are aligning their global mobility programs more closely with business planning and overall talent management. Their goal is to become more strategic and to adapt with greater agility as the world’s economic growth engines continue to shift, the population ages, and a new generation of employees takes over.

In practice, this means broadening the traditional global mobility program focus on relocation logistics, compensation and tax issues, and other administrative matters. Now, the goal for some companies is to make global mobility central to broader business and HR strategies and not merely a peripheral function.

“Mobility and talent management teams are spending far more time together at a growing number of companies,” says Paula Caligiuri, a professor of human-resource management at Rutgers University. “You need this integration so talent management is involved in crafting the global assignments and in the training and development that takes place. You also need a third element involved—the recruiting staff—bringing in the right candidates for international postings.”

Data-driven mobility scorecards

Consider Microsoft’s plan to revamp its “calcified” 14-year-old global mobility program. The technology giant is crafting a more strategic system to help it forecast talent supply and demand with greater precision. Kelly McGill, director of global mobility at Microsoft, thinks in terms of Microsoft’s “talent ecosystem” and has worked “to integrate

all the key stakeholders with global mobility,” whether human-resources colleagues out in the field or the tax and compliance managers across the hall from her. She also has created a scorecard that lists the types of employees moving, how often they’re relocating, their destinations, the costs, and their performance scores. “Our new mobile talent portfolio allows HR and the business units to make data-driven decisions,” McGill says.

Optimizing the expat experience

To make the most of global assignments, employers need to establish clear expectations and performance measures. Onboarding and orientation should begin immediately to help assignees get off to a fast start when they arrive in their new country. If the aim is to develop local employees’ skills so they can work independently after the assignee returns home, companies should obtain regular feedback on the training and development progress. Once the assignee returns home, employers can build institutional knowledge by capturing key lessons and best practices from the expat’s experience.

Retention also must be part of any long-term mobility strategy. In the past, mobile workers often resigned after an overseas assignment ended. To try to prevent the loss of intellectual capital and international experience, some companies are keeping a regular dialogue going with expats about career planning, assigning mentors to them, and helping them identify a new job to make repatriation smoother and more successful.

Source: PwC, 15th Annual Global CEO Survey, 2012.

A new twist on talent

More than three-quarters—78%—of CEOs around the world expect to shift their strategies for managing talent this year. Here is a breakdown of those planning changes by selected countries and industries:

India 95%

Germany 88%

UK 81%

Japan 78%

China/Hong Kong 77%

Canada 76%

US 75%

Brazil 72%

Italy 71%

Russia 69%

Argentina 60%

Business/professional services 83%

Construction/engineeing 82%

Insurance 82%

Technology 81%

Entertainment/media 80%

Industrial manufacturing 80%

Consumer goods 76%

Automotive 75%

Banking/capital markets 74%

Pharmaceuticals/life sciences 74%

Retail 72%

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03

Attracting the globetrotting millennials

Demographic and generational issues figure prominently in the changing talent mobility picture. The aging workforce and imminent retirement of the baby-boom generation will pose serious challenges for the major developed countries—and even some of the emerging markets like China.

Companies will need to move beyond their traditional recruiting patterns and talent sources. More employers already are using social media to track skilled employees who are willing to relocate abroad, while they also are broadening their potential candidate pools.

In looking beyond their immediate talent gaps, employers realize that members of the millennial generation, born in the 1980s and 1990s, will be key to future business growth. The good news is that these replacements for the baby boomers have traveled the world and are seeking international work experiences early and often in their careers. To many of them, career development opportunities abroad are more valuable than financial rewards. Seventy-one percent expect and want an overseas assignment in their careers, according to PwC’s 2011 survey Millenials at Work: Reshaping the Workplace.

Adjusting talent mobility programs for the new generation

To compete for this brainpower, employers are beginning to transform their global talent mobility programs to appeal more to millennials.

But that isn’t easy for many companies. For example, at Fluor, an engineering and construction company, typical international assignees have accrued 15 to 20 years of field experience, and HR leaders wondered how they could accelerate the development of recent college graduates and satisfy their desire for global opportunities. A group of ambitious millennials in the Netherlands took on the challenge themselves and met with Fluor management to propose a less expensive type of international assignment with relatively few relocation benefits.

Some companies are even offering international experiences to brand-new recruits right out of college. That’s Microsoft’s retention strategy for the young Chinese nationals it’s hiring from top US universities like the Massachusetts Institute of Technology. The company doesn’t want its highly skilled young workers to land in China and be immediately tempted to move to another company. Such losses can be especially painful because when companies lose one employee in China, a group of others often follow them out the door.

So before arriving in China, millennials at Microsoft spend six months working in several different countries. “We get rid of that millennial itch to be in different locations right off the bat, and we also address some development opportunities for them,” McGill says. “We feel we can ensure their loyalty with these tours of duty.”

Note: Survey respondents included 1,470 PwC employees and 2,894 other graduates, all age 31 or under.

Source: PwC, Millennials at Work: Reshaping the Workplace, 2011.

Mobile millennials

Millennials across the globe want to work outside their homeland, with the US the most popular destination.

Total

Africa

South & Central America

Australasia & Pacific Islands

Middle East

Central & Eastern Europe

Western Europe

North America & The Caribbean

Asia

USAUK

AustraliaCanada

GermanyFrance

SwitzerlandJapan

ItalyNew Zealand

Hong KongSingapore

SpainSweden

NetherlandsBrazil

DenmarkFinlandNorwayBelgium

71%

93%

81%

76%

74%

72%

70%

69%

69%

58%48%

39%

33%

32%

31%28%

23%23%

23%22%21%20%19%

16%16%

16%14%

13%

13%

Percentage of millennials who would like to work outside their home countries

Where they most want to work outside their home countries

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04

Building a borderless workforce

To ensure they don’t miss out on key business opportunities abroad, employers must take a hard look at current talent mobility practices and adjust their long-term strategy, as well as short-term tactics. They need to become nimble enough to respond to sudden, unexpected changes.

Ideally, companies will begin regarding their workforce as borderless. That could mean developing talent where the jobs are, relocating talent to the jobs, or moving jobs to where the talent resides. Doctors Without Borders is a prime example of an organization that demonstrates agility in deploying people around the world when the need arises.

Workforce borders will continue to fall, as global talent mobility creates new pathways to deal with skill shortages affecting both established and emerging markets. Indeed, nearly a quarter of companies worldwide are seeking talent outside their home country borders to cope with skills shortages, according to a 2011 survey by ManpowerGroup. The US is most dependent on foreign workers to fill workforce gaps; in contrast, very few Indian companies are looking beyond the domestic talent pool.

Fluor, for one, views the world as its recruitment pool. It recently created a global recruiting group that will be scouring the planet for the best and

brightest. “We’re pushing toward a much more diverse international workforce,” says Larry Poss, Fluor’s international human resources director. “We understand that we can’t rely on North America and Europe, our traditional expatriate markets, to staff the projects of the future. Now, we’ll be looking everywhere.”

Partnering in host markets

Certainly, companies must continue to invest in longer-term stints abroad both to meet business needs and to develop a pipeline of leaders with an international mindset. But in addition to moving employees, some companies are focusing more on cultivating talent in their local markets. Multinationals are partnering with local governments and universities to develop skills, as well as reduce obstacles to mobility, such as immigration limitations.

Perhaps the best perspective is to regard workers as citizens of the world. In the world of luxury retailing, Tiffany has recruited people born in France but residing in such cities as Tokyo and Dubai to become its local market managers. “These nationals have the knowledge of luxury goods,” says Victoria Berger-Gross, senior vice president, global human resources, “along with a local market sensibility.”

Source: ManpowerGroup, The Borderless Workforce, 2011.

Matching global talent supply and demand

Demand is especially high for engineers, laborers, and skilled manual trades around the world, and the top talent suppliers are China, India, and the UK.

Engineers

Laborers

Skilled manual trades

Production operators

Sales representatives

Middle managers

Technicians

Administrative/office support

IT software experts

Senior executives/board members

China

India

UK

US

Philippines

Germany

Mexico

Poland

Colombia

France

Romania

South Africa

11%

8%

7%

5%

5%

4%

4%

3%

3%

3%

11%

11%

10%

7%

5%

4%

4%

4%

3%

3%

3%

3%

DemandTop job categories using foreign talent to meet skills shortages

SupplyMost popular countries for supplying talent

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To have a deeper discussion about global mobility, please contact:

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