TOWERS WATSON, global-mobility-talent executive report

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Multinational organizations are reexamining their mobility practices to compete in the war for talent. But while rapid globalization has made a talent focus almost universal, in practice, it varies according to business strategy and organizational maturity.

Towers Watson and workforce mobility association Worldwide ERC® teamed up to survey mobility professionals across three regions on how their organizations approach the discipline, how their policies and processes vary — and how effectively their structures attract and retain key talent

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TOWERS WATSON, global-mobility-talent executive report

  1. 1. A Global Talent Mobility Study Regional Differences in Policy and Practice Rapid business globalization has demanded that •• How are organizations headquartered in Asia, “The focus of talent mobility “multinational organizations reexamine their talent Europe and the United States changing the way should no longer bemobility practices to compete effectively in the talent they approach talent mobility as part of their talent country centric, but withwar. While the increased focus on talent mobility management strategy?is universal among organizations, existing policy •• How different are the existing policies and a global focus to reflectand process vary depending on overall business processes across these three regions? Are there the dynamic global talentstrategy and organizational maturity. Organizations commonalities in the overall process? landscape”are developing local talent as well as deploying •• How effective is the current mobility structure in — Vice President, Humanpersonnel from the United States and Europe to attracting and retaining key talent?emerging markets in Asia Pacific and Latin America. Resources, a European Among the key findings from over 100 participating multinationalWhile Asian multinationals started globalizing 20 companies:years ago, the overall globalization process did nottruly accelerate until the past decade. As a result, Talent Managementtheir talent mobility process was more inward- •• Sixty-seven percent of Europe-headquarteredfocused (domestic) than outward-focused (global). companies and 53% of U.S.-headquartered companies report that they have an organizationalNow, armed with strong local currencies and ample development/talent management group withcredit, and encouraged by Asia’s relatively quick primary responsibility for talent management,emergence from the global recession (compared compared with 21% of Asia-headquarteredto many developing markets), Asian companies are companies.aggressively entering new markets and becoming •• Fifty percent of survey respondents indicate thatglobal players. However, as a result of their late entry decisions about international assignments areinto the globalization arena, these companies have made as part of an integrated talent managementto compete fiercely against mature American and process.European multinationals in an already crowded talent •• Of those, 91% of Asia-headquartered companiesmarket. involve the human resource department inThis background prompted researchers at Towers these decisions, compared to 86% of Europe-Watson and workforce mobility association headquartered companies and 100% of U.S.-Worldwide ERC®to partner in surveying mobility headquartered companies.professionals across these three regions to studythe following questions:
  2. 2. Candidate Selection Policy•• Across all regions, business needs and the •• Just over half of organizations (54%) report assignee’s knowledge and expertise are that they made revisions or additions to their “Talent strategy will focus “ consistently cited as the key criteria for global mobility policy in 2010 or 2011. The most on specific markets that international assignee selection. Career prevalent revisions were intended to create a more our company want to development is considered by 56% of Asia- formal and clearly defined mobility policy. headquartered companies, 73% of Europe- •• Sixty percent of respondents anticipate major develop and invest in and headquartered companies, and 44% of U.S.- global mobility challenges over the next two to not necessarily for specific headquartered companies. Language capability is three years. The most frequently cited challenge is function.” considered a more important selection criterion by cost control. — Senior Director of Asia-headquartered companies (44%) than it is for •• Eighty-seven percent of European companies Europe-headquartered (33%) or U.S.-headquartered and 85% of U.S. companies report using a Relocation Services, companies (17%). “Soft” factors such as cultural global mobility policy, compared to 51% of Asian U.S.-headquartered or social adaptability and family situation are less companies. multinational widely considered in candidate selection. •• Regardless of headquarters location, the most•• Family circumstances are considered by only commonly outsourced functions are relocation and 16% of respondents in selecting candidates for tax preparation services. international assignment. This is surprising, given •• The kind of assistance companies provide to their that a family’s inability to adapt to host country international assignees is generally not affected culture, and family/personal situations are cited as by the type of market (emerging or developed) the primary reasons for failed assignments by 21% the assignee is moving to or from. To clarify, most and 57% of respondents, respectively. companies provide employees sent on assignment from a developed market to an emerging marketMobility Program Management and the same policy provisions as they would for anAdministration assignee sent from an emerging market to a•• The overall structure for managing the international developed or another emerging market. This is true assignment process is centralized at headquarters regardless of assignment type. for 60% of U.S. companies, compared to 50% of •• Across regions, the overwhelming majority of European companies and 34% of Asian companies. companies keep traditional expatriates (82%) Fifty-six percent of Asian companies report sharing and short-term assignees (90%) on their home- the responsibility for international assignees country remuneration plan. Approximately two- between corporate headquarters and the regional/ thirds of respondents remunerate permanent local offices. transferees and cross-border new hires on the local•• Mobility program outsourcing is more prevalent or destination area plan. Only a small percentage among European and U.S. companies — 69% of use local-plus plans for expatriates, regardless Asia-headquartered companies note that no portion of the type of assignment. Asian-headquartered of their program is outsourced. companies, however, are more likely to than their•• Regardless of headquarters location, 80% of U.S. or European counterparts to use local-plus respondents agree that the reporting manager packages. in the host country is primarily responsible for •• Just shy of one in four Asian companies provide performance review and formal development of mobility assistance for domestic partners of employees on assignment. traditional expatriates, compared to 67% of Europe-headquartered companies and 73% of U.S.- headquartered companies. Nearly all respondents provide assistance for dependent children and legal spouses to accompany traditional expatriate assignees to the destination location. •• The majority of companies, regardless of headquarters location, do not provide assistance for other domestic relatives who reside with the employee.
  3. 3. Assignment Costs •• The majority of companies, regardless of— Traditional Expatriate Assignments headquarters location, cite prohibitive cost as•• Roughly two-thirds of companies report spending the most significant challenge related to their approximately two to three times the assignee’s traditional expatriate assignment programs. annual salary on each traditional expatriate Compensation and tax-related issues are the most assignment. difficult challenges facing companies sending•• The United States has the highest percentage of employees on alternative assignment types. companies (54%) with an average expenditure of approximately three times an assignee’s annual Average Annual Expenditure per Assignee on Traditional Expatriate Assignment* salary, while 8% of European companies have an average expenditure per assignee on traditional 0% 20% 40% 60% 80% 100% assignment of four times annual salary.•• Asian companies overall have the lowest average All expenditure for a traditional expatriate assignment, 22 40 37 2 with just over half (53%) spending twice an Asia assignee’s annual salary. 25 53 20 3Types of Assignments Europe•• Just over half of assignees (53%) are on traditional 23 46 23 8 expatriate assignments. Short-term assignments are a distant second, followed by permanent USA international transfers, cross-border new hires and 19 27 54 localizations.•• Just less than one-half of traditional expatriate *Percentages do not total 100% due to rounding assignees are considered executives (47%). By Apprx. 1 year Apprx. twice Apprx. 3 times Apprx. 4 times of assignees assignees assignees assignees contrast, executives comprise only 22% of short- annual salary annual salary annual salary annual salary term assignees and 33% of cross-border new hires. Executives account for 28% of localizations and Types of Assignments 32% of permanent international transfers.•• Eighty-seven percent of Asia-headquartered and 9% Traditional Expatriate 39% of U.S.-headquartered organizations report Assignments that most localizations occur in Asia. European 13% Short-term Assignments companies are more likely to localize assignees within Europe (75%). 7% Localizations 53% Permanent InternationalChallenges to Talent Mobility 18% Transfers•• Only about one-fifth of Asia-headquartered Cross-Border New Hires companies cite the loss of dual-income as the result of a move as a challenge faced by their mobile employees, compared to 85% of Europe-headquartered companies and 60% of Further information U.S.-headquartered companies. Rather, Asia- Please contact Towers Watson or Worldwide ERC®: headquartered companies identify language skills and education issues as bigger assignee Towers Watson Worldwide ERC® challenges. Cathy Loose Mariam Lamech +81 3 3581 5436 +1 703 842 3400 cathy.loose@towerswatson.com mlamech@worldwideerc.org towerswatson.com worldwideerc.org
  4. 4. About Worldwide ERC ® Worldwide ERC®, the workforce mobility association, networks and educates more than 10,000 mobility professionals, and is the recognized industry authority on assignments in the U.S. and major global traffic areas.About Towers WatsonTowers Watson is a leading global professional servicescompany that helps organisations improve performancethrough effective people, risk and financial management.With 14,000 associates around the world, we offersolutions in the areas of employee benefits, talentmanagement, rewards, and risk and capital management.Copyright © 2012 Towers Watson and Worldwide ERC®. All rightsreserved.TW-AP-12-24564

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