Is your organisation structured in the best way to deliver your Global Mobility programme?
The approaches companies take to organising their Global Mobility (GM) function often depend on their size and the number and type of assignments undertaken in their organisation. But external factors such as continuing pressure to contain costs and improving technology mean that GM teams must constantly review how they are structured if they are to continue to deliver successful mobility programmes in the most effective way.
Unsurprisingly then, in 2011 99% of companies we surveyed said that they were either currently reviewing, or planning to review, their GM organisation within the next 2-3 years. With ECA’s Global Mobility Organisation survey now open, this blog looks at three of the main themes arising from our previous survey and considers how they might have changed over the last five years.
Staffing and costs
The most commonly cited reason for reviewing the organisation of GM departments was cost pressures; in fact, we found that the average administrative cost of around EUR 5 000 per assignee had reduced from the previous survey.
This cost is already very low compared to the total cost of the average assignment, so the potential for further savings in this area is perhaps limited, even for companies with large numbers of assignees.
Despite the decrease in costs, our previous survey found little change in the ratio of GM staff to assignees. Keeping the expertise required to run a successful GM program in-house is likely seen as highly desirable; as controlling the costs of assignments themselves is one of the biggest challenges faced by GM departments, reducing their in-house capability could be detrimental to broader efforts at reducing costs.
We did find large differences in the ratios of staff to expatriates depending on the number of staff on assignment. The chart on the left clearly shows that organisations with larger numbers of assignees can allocate their resources more economically.
There has been no let-up in cost pressures since 2011, and preliminary results from our current survey confirm that this is still the biggest challenge facing GM departments. However, our results so far also show that “insufficient resources” is the second biggest challenge, so again we might not see any large reductions in staff numbers this time.
Focus on strategy
We often hear that employees within the GM function wish to be freed up from administration to devote more time to strategic work, and initial results from our new survey suggest that there has been some success in achieving this shift over the last few years. In addition to the use of technology, which we will discuss later, appropriate organisational structure can greatly facilitate time-saving.
Most companies use a mixture of organisational systems depending on the GM functions in question. In our last survey, we saw an increase in general “centralisation” of GM functions back to the company HQ, and initial results from our current survey suggest that there has been further centralisation over the last five years.
Centralised structures were also perceived to be more effective than decentralised structures, as the chart below shows.
Reasons for centralising include the growing need for cost control, corporate compliance, consistency in policy application and effective management reporting. This trend towards a more hands-on approach to managing international assignment programmes is likely to continue, given ongoing pressure for cost constraint and consistency. It should be noted however that although companies who are centralised were generally the most positive about the effectiveness of their administration, they also reported that their biggest area of weakness was the lack of support they were able to provide to assignees.
In addition to increasing cost pressures, a significant trend in recent years has been towards increasing complexity in mobility operations (e.g. more policy types, an increase in alternative assignments, more home and host locations involved).
As complexity increases, being prepared for the future and having increased agility and flexibility is essential, and the appropriate use of IT solutions can be a hugely significant advantage. It is encouraging, therefore, that preliminary results from the 2016 Global Mobility Organisation survey suggest that there has been significant investment in IT solutions over the last few years and even further investment is planned.
In financial terms the cost of assignment management software can be large, however. While IT solutions have become commonplace among large companies, they are less common in smaller companies.
IT solutions used in 2011
The chart above gives some examples of the areas in which IT solutions were being used at the time of our last survey. In the new survey we expect to see the use of IT expand from salary calculation and database functions, which are already relatively common, to more advanced calculators which provide cost-estimates and employee ‘self-service’ tools and portals. The latter can help to provide greater flexibility and choice that modern assignees are asking for, without adding significant administration for the GM team.
Find out what makes an effective mobility function
There’s still time to participate in this year’s Global Mobility Organisation survey and learn about the latest trends in staffing ratios, administration costs, outsourcing, technology and more. Take part before 18 November and receive a FREE copy of the results.