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Global Mobility Policy – The Environmental Assessment

October 1, 2010:

If you’ve ever tried to solve the Rubik’s Cube you have a good appreciation of how difficult it is to establish a global mobility program. It is a mammoth task with an equally large number of policy and compensation options. Adding further complexity are the country to country combinations within which these policy and compensation options need to be considered. Wouldn’t it be a shame, after all that hard work, if it turned out that your policy was not right-sized for your company? What if regional groups started questioning it quickly after receiving feedback from assignees? Or perhaps hiring managers openly questioned its cost and sabotage it by offering different benefits? To increase your chance of success your first step should be an environmental assessment.

So what is an environmental assessment?

An environmental assessment is the research into the context in which global mobility will occur basically, your company’s make-up. This is a fact finding phase! It is critical to providing the insight necessary for you to build a global mobility program that will effectively meet your corporate needs.

During an environmental assessment you will look at why your company has global mobility in the first place, where the employees will be moving from and to, the employee demographics and needs and your company’s support threshold. In other words you are painting a complete picture of your company and the objectives behind its global mobility program.

Establishing an international program without doing an environmental assessment is a bit like playing pin the tail on the donkey – while you may hit the right spot every now and then, the odds are that you will miss more often than not. With the cost of international assignments being as large as they are, even a small miss can have a significant impact.

But what if I already have a global mobility program do I still need to do an environmental assessment?

Yes! An environmental assessment is just as important if you are reviewing an existing policy or practice. The only difference is that you will start with an evaluation of the effectiveness of your existing program.

You need to look at what is working and what is not working within the existing program or practice. Remember to include the informal practices that have grown up along side the formal policy. Have these informal practices become de facto policy benefits? A good indicator that the current policy or practice is not meeting needs are the exceptions that have occurred and the frequency within which they occur. This includes exceptions to policy as well as exceptions to the way the policy is administered.

While the occasional exception is virtually unavoidable, frequent occurrences of the same exception are a strong indicator that something is not meeting your company’s or your employee’s needs. The environmental analysis is essential to understanding what the needs are and why they are not being met.

Consultation is Key!

You can’t do an environmental assessment without interviewing others! Remember to speak with employees who went on assignment as well as management, hiring managers, head office, the regions, etc. In short, consultation with all stakeholders is important to the success of the review.

Conducting the Environmental Assessment

There are four key areas that must be examined when conducting an environmental assessment for a global mobility program. They are:

  • Corporate Global Mobility Objectives or why are we doing this?
  • Your Particular Geography or where are we assigning people from and to?
  • Employee Demographics or what will successfully motivate our employees to accept a global assignment or relocation?
  • Support Threshold or how much will we spend and how will we administer it?

Corporate Global Mobility Objectives

The need for global mobility is dictated by business objectives and needs. Understanding these is a logical place to start.

Questions typically asked include:

  • Are you offering assignments to develop employees for future career advancement or are you looking to fill an immediate temporary business need in a particular location?
  • Are you expanding globally and sending existing employees temporarily to new locations to recreate the corporate culture?
  • Are you offering assignments because you have current employees that possess a skill or particular expertise for a defined project?
  • Are you looking to train local staff in the particular skill or expertise in the new location?
  • Is the talent you require simply not available in the location? Are you filling a talent gap with a new hire from a different country?
  • Is the work more project based or will it be ongoing?

You need to understand the why behind the need for your company’s mobility. When you understand this you will be able to make decisions around the type of policy or combination of policies that you need. As an easy example: global mobility programs for career advancement tend to have less rich benefits, as the possibility of career advancement is an incentive in and of itself.

Your Particular Geography

So now you know the objectives but the world is a large place. Do you know where your company will be operating and where you will be relocating or assigning employees from? These are the two sides to understanding your particular geography: 1) where is your company operating globally now and into the future; 2) where are assignees/transferees coming from? The identification of the countries you are currently operating in, as well as those in which you are planning on starting or acquiring operations, is the easier of the two tasks. The harder task is identifying where these people will originate? Where is the talent likely to be?

Why does this matter? No two country to country combinations are exactly alike. Just because you have a successful policy in place for expansion into Singapore from Canada does not mean that it will be a successful policy for your next global location. Are there some of your locations that will never see global mobility versus others that will see frequent global mobility?

Equally as important are the locations from which the individuals will be transferred. Are you assigning individuals from multiple home countries to the same host location? Are the practices these home countries similar or different from one another? What are the differences? What are the similarities? Armed with an understanding your company’s particular geography you are then able to conduct critical research into the compatibility and/or differences in work practices, pay schedules, reciprocal agreements etc. of the countries in which you will be operating. This is important as each origin country may have practices that differ from the other origin countries adding further complexity to designing the right compensation package for your global assignments. Finding the right solution for country to country differences are even more important when the individuals will be working along side one another in the same host location.

The importance of understanding the geographical makeup of your company and its talent pool will become more apparent as you start to build your global mobility program. This understanding will assist you in making policy or practice decisions that do not unnecessarily advantage or disadvantage one individual assignee over the assignee or the local hire in the next office.

Employee Demographics

Understanding what motivates your employees and new hires to accept an assignment or relocation is another important piece of information needed to arrive at your company’s global mobility solution. This can be particularly challenging if your work force, like most corporations, is multi-national and spans across three or four different generations, and various family types.

Developing a policy or program to meet individual needs is not the objective. The objective is to understand the unique make up of your successful team and what motivates them to accept a relocation or assignment. Are your employees largely of the baby boomer generation and more likely motivated by compensation and pension matters? Or, are your employees largely of the Gen Y group who are more likely motivated by softer, non-financial rewards such as life/work balance and flexible work options? If it is the latter then a policy rich in compensation may not be as effective as it would be if the majority of your employees offered global mobility are Baby Boomers. Here again, knowing what the motivators are for your employees and new hires will assist you in making the right policy selections for a right sized global mobility program down the road.

Support Threshold

The final cog in the wheel is to understand the support threshold your company has for a global mobility program. One of they key elements of this is the fiscal parameters that will govern your decision making as you proceed. Clearly a program rich in benefits may not meet the needs of an organization with an overriding objective for cost control. The result is that managers are working around the program and sending people on assignment outside of the global mobility program as stealth expats.

Conversely a program built with a focus on cost control may not meet the needs of prospective assignees and transferees. The result, employees are not accepting assignment so that you are unable to put your key talent where you need it to be when you need them to be there.

Another key factor in the support threshold is what kind of policy can your corporate structure take? Is your structure highly decentralized or centralized? Did your company grow by acquisition or more organically? Within that model, can you create a small number of policy and assignment experts? How are you going to communicate the importance of compliance? Who pays? What is the cost center for each assignment, and can a hiring manager choose to disagree with a benefit package? The answers to these questions will tell you how hard a job you may have in implementing a policy. You may choose to trim benefits in your policy because its implementation may be difficult in a decentralized structure. You may choose to simplify the policy if there are too many stakeholders with too few relocations educating too many stakeholders on the policy, the whys and wherefores of tax decisions, etc this will create confusion and policy resistance and errors.

Is there a conflict between the earliest tasks of the environmental assessment (we should be fully supportive of global assignments) and this look at corporate structure (we are highly decentralized, the hiring manager is paying the costs, so we may get sabotaged in launching a fully supportive policy)? If there is, then you need to ensure that the global strategy that is decided upon has support from the highest levels of company and that even the communication of the final policies and practices is knowingly sanctioned by the highest levels of management.

Conclusion

Conducting an environmental assessment may sound like a lot of work but in the end the insight you will gain will save you a significant amount of time. The answers or insights gained through this process will give you the knowledge to put the building blocks of a global mobility policy together to build a cohesive, cost effective, and productive program. Which leads us to our next step the menu of global mobility program options stay tuned!

Posted on October 1, 2010 in Newsletter

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