The ways in which the attraction and retention of talent will change
Emanuela Boccagni, Commercial Director EMEA
Over the last couple of years, the need for remote work as a consequence of the pandemic drove the adoption of more flexible solutions and working arrangements. This determined a shift in mindset, from 'where' the work is done, to 'how' it is done. This mindset, with the challenges and opportunities it brings about, is here to stay and will shape the way we build talent strategies.
People-related issues are and will continue to be top of mind - we have already seen an increased focus on employee wellbeing, with GM professionals calling for a more empathetic and holistic approach to the management of the mobile workforce. This alone won't suffice though; organisations worldwide are already experiencing unprecedented levels of staff turnover, so in order to attract and retain talent it will be essential to keep pace with the speed and scope of the shift in employee expectations, and where necessary re-build company culture around it. Work-life balance and lifestyle are already playing a bigger part in driving employment decisions, and this trend is likely to intensify in the future, with employees choosing employers based on company values, the ESG standards they uphold, and a demonstrable Diversity, Equity and Inclusion (DE&I) record.
To accommodate the needs of a highly-skilled talent pool, which may well include sought-after, highly-mobile 'gig' workers, we can certainly expect a higher degree of complexity in reward policies. The conversation is already moving well beyond the merits of home vs. host-based approaches, into the tailoring of packages around the individual, making the whole experience more personal and thus enhancing engagement levels. A fluid transition between extended business trips, short-term assignments, commuter arrangements and virtual assignments may well become the norm, to truly move jobs to people. And with GM-specific technology and tracking solutions supporting the introduction of flexible models, implementing more flexibility will no longer be driven by concerns around additional administrative burdens, but rather by how much it fits in with the company culture.
The role technology will play in the future of Global Mobility
Rebecca Darling, Director of Product and Delivery
We've been talking about virtual assignments for many years, but it took a pandemic for most companies to finally start using them. Thankfully technology has developed to a point where it could enable many jobs to be done remotely while international travel was restricted. Companies rapidly adapted out of immediate necessity but changed working patterns forever as they did so.
While not appropriate for all roles and circumstances, remote working has proved to be a viable means of working across borders for many, and preferable to a physical move or commute for some. Companies who give employees the flexibility to work from anywhere are at an advantage when recruiting and retaining the best talent globally. As sustainability becomes an increasingly important consideration for organisations in the years ahead, virtual assignments are a way to reduce the carbon emissions previously generated by frequent international travel. Improvements in virtual reality technology will also reduce the need for employees to physically visit other countries for certain activities.
Remote international working may provide flexibility but brings with it a set of compliance issues. Governments who relaxed their rules during the pandemic will be applying greater scrutiny to the professional activities of foreigners in their country as travel restrictions ease. Technology will become integral in managing compliance for these workers, helping companies track where their employees are, alerting them to potential risks amidst a background of constantly changing legislation, and automatically triggering tasks that are necessary to ensure compliance.
A particular compliance area already benefitting from the introduction of more advanced tech (dedicated portal environments for employees and business stakeholders, for example) is with data protection legislation. GDPR requirements are now starting to be truly embedded in the way most companies operate – ECA led the way by adopting ISO27001 certification in 2018. Looking ahead, it will become unthinkable to rely on traditional methods, such as sharing sensitive information in email attachments, to communicate with employees. Having a host of solutions in place that ensure personal data can be transferred, updated and shared securely will be critical in the success of any organisation.
It's not just for new types of international working where the use of technology will flourish. Given that successful international moves of any kind require the coordination of multiple processes and stakeholders, it's surprising that technology is not more widely used already to lighten the load. This will change as technology advances, making it easier to connect all the systems involved and provide a seamless and engaging user experience for everyone in the process, from the GM team, business leaders and vendors to the mobile employees themselves. Most administrative tasks will be automated, freeing up mobility professionals to add strategic value to the business, perhaps drawing on data and analysis that they now have at their fingertips in their mobility management system.
The future of mobility patterns
Lee Quane, Regional Director - Asia
It is our view that there will be no less evolution in employee mobility in the next 50 years as there has been in the past 50. When ECA was established in 1971 organisations typically moved staff from the major economies of Europe and North America to industrialising countries. As Japan prospered in the 1980s, and other Asian economies became richer in the 1990s and 2000s, as globalisation accelerated, companies from the Asia region joined their Western counterparts in moving talent worldwide.
There are threats to this trend posed by geopolitical factors such as Sino-US political and economic tensions, reduced respect for multilateralism and climate pressures (whereby companies may increasingly decide that the environmental impact of relocating a family from New York to Sydney, say, for a three-year assignment is unjustifiable). Furthermore, the response to Covid-19 has shown that companies can still thrive even when they can't move as many staff around the world as they did previously.
Nonetheless, there will still be considerable employee mobility in the next 50 years. Firstly, there are growth regions and companies will continue to seek them out – Africa will likely be a major destination for many in the years ahead.
In addition, as regionalisation of mobility intensifies, many of the traditional 'sending' countries will face demographic challenges associated with aging populations and shrinking workforces. The capacity of employers to assign staff from these locations to meet talent shortages in growth economies may well be reduced. As such, companies will need to rely on intra-regional mobility within growth regions (for example, relocating people from Kenya to meet requirements in Nigeria) and will need to ensure their policies adapt to cater to such changes.
It remains to be seen what the long-term impact of the Covid-19 pandemic will be on mobility. Previously, companies increasingly offered one-way moves to employees on salaries and benefits which were the same as those offered to local peers. The narrowing of the gap in living standards and salary differentials between many economies meant that employees were increasingly amenable to relocating on open-ended contracts and earning local packages as improvements in communications (both technological and travel) made it easier for a person to return home when the need arose.
This also led to simplification of mobility policies. For example, there have been long, downward trends in companies offering rest and recuperation leave and club memberships – benefits which have become less relevant to assignees. However, whether trends towards localisation of packages continue will depend on employees remaining willing to leave their home locations for work. Record numbers of people quitting jobs in the last 18 months shows how many are re-assessing their lives. Some at least will be persuaded that prolonged periods away from family and friends, and risks associated with high-risk assignment locations, may not be worthwhile. Only salaries which are sufficiently incentivising will lead to employees relocating.
However, even if we do see a return to the pre-pandemic trend towards convergence in salary levels and living standards (along with simplification and localisation of mobility policies, particularly regarding salary calculation methods and benefits provision), GM teams will still have a lot to manage. Even if companies are able to move employees, using local salary and benefits packages, to more locations in the next 50 years, GM professionals will still need to manage, among their many other responsibilities, immigration compliance, tax planning, administration and retirement benefits arrangements (all of which have become more complex in many countries as a result of the Covid-19 pandemic). All of this means that there will be plenty of challenges associated with cross-border mobility to keep GM teams on their toes in the years to come.
An outlook on the economy, inflation and exchange rates
Andrew Payne, Senior Economic Analyst
The world is learning to live with Covid-19, and many of its economic impacts are proving short-lived, but the pandemic has nevertheless changed us irreversibly. People are re-evaluating lives, spurred by flexible working, with many moving from cities to less-stressful environments. Never have so many left their jobs, voluntarily or otherwise. Despite higher unemployment, employers find it ever more difficult to fill vacancies, suggesting potential workers are in the wrong places with the wrong skills.
Coronavirus containment accelerated technology adoption (thereby increasing productivity – essential for raising average incomes), but the trend outpaced training capabilities. Catch-up could take decades and education is now a rapid-growth industry. While virtual assignments and online business 'travel' are here to stay, the war for talent will be fiercer than ever (expect high wage inflation) and employers will have to spread hiring nets far and wide. Globalisation may become regionalisation, but mobility for work is unlikely to decrease, not least because the climate crisis will be a powerful driver of assignments, as specialist skills and technologies are needed around the world. However, global heating could also spur mass migration of climate victims and tighter border controls could complicate international moves.
Central-bank digital currencies (rather than cryptocurrencies) should make remunerating international staff simpler and enable cheaper remittances, but they won't mean exchange rates can be ignored. Relative currency values will remain an essential factor for global mobility teams managing expatriate spending power and could be set for prolonged volatility as the world's upheavals continue. The other main cost-of-living factor, inflation, is already soaring as supply chains remain disrupted by the pandemic and transition to a 'greener' world brings unexpected shortages of as-yet-still-vital fossil fuels.
Learning to live with Covid-19 should mean supply chains adjust fairly soon, but coming to terms with climate heating – assuming that's possible – is a much longer project with huge consequences for mobility – indeed, for us all.