Article published on HRreview on 16/June/2022.
Moving employees globally can have massive benefits for employees and employers alike, from improving skill sets, development of careers, and creation of diverse and effective teams. According to a survey by McKinsey Global, organizations with effective talent management programs are more likely to outperform competitors.
Global Mobility post pandemic
The coronavirus pandemic imposed travel restrictions, quarantine requirements, visa rejections, and an increase in remote working, all factors that quite obviously had a huge impact on global mobility, disrupting the very nature of the sector. As the pandemic now begins to fade, and restrictions have eased for most of the world, businesses should start imagining how their global mobility strategies will look post-pandemic. This will naturally vary from organization to organization depending on their locations, industry, and nature of work.
Undoubtedly, the pandemic will have an impact on the types of international assignments we now see. Many businesses have had to shift to virtual assignments as an immediate solution, and although this will continue to be part of their strategy, for most physical deployment of talent is a necessity to address the needs of a business. It is now quite clear too that there is an increased desire for hybrid working and this will impact housing arrangements. Another strategy change as a result of the pandemic is an increase in short-term business trips instead of permanent relocations too.
What can organisations do to make sure their global mobility strategies provide the maximum benefit?
Set clear post pandemic objectives & strategies
It is crucial that organisations are aware of their post-pandemic business objectives and whether their global mobility program is aligned. Is there a need for different assignment types?
Build awareness around global mobility programs
Creating awareness around global mobility programs allows organisations to use it as a perk for attracting, developing, and retaining employees, dramatically improving the employer brand.
Target the right people
Using global mobility to improve talent strategy is about targeting the right employees. If you provide the opportunity to those who are willing to take it, you will discover profound benefits. If the wrong ones are pressured into it, it will be a failure. Surveying employees can help find out who is interested in an overseas assignment and what assistance they require.
Create flexibility around global mobility programs
Moving abroad can be stressful, which means the pros must outweigh the cons for your employees. International assignments should be designed in line with talent objectives and employees should be given the opportunity to be involved in the decisions to some extent. The pandemic has changed our perception of life – are employees willing to relocate under the same conditions?
Move people to the right locations
Employees should be assigned to international assignments where they can provide the greatest impact. Place assignees in international roles where they can assist struggling teams and improve output, or in a challenging role that will develop their skills.
International reward strategy – The challenge of expatriate compensation
When developing an international reward programme it is crucial to ensure that the benefits outweigh the costs. If it’s decided that an expatriate assignment is the best decision, the employee’s reward should be considered carefully to compensate for the inconvenience of the international move. Employees should also be reminded of the benefits associated with the international assignment in terms of career prospects and personal development.
Should a reward strategy be developed centrally, or should each subsidiary set its own strategy?
CIPD suggests that organisations adopt one of the following main approaches:
- Set reward centrally: The advantage of setting a reward strategy centrally is to ensure consistency and control over cost. However, this approach might cause difficulties as it does not take diversity into consideration.
- Develop a central reward approach that is adapted for each subsidiary: The benefit of this approach is that it takes the local culture into consideration.
- Permit each subsidiary to set its own reward packages: The local culture and the regulatory environment are taken into consideration and the reward approach is compliant. However, the lack of control can lead to increasing costs. Furthermore, inconsistency across the organisations could arise with some locations being perceived as less/more appealing to work for.
Expatriation compensation approaches:
The most common approaches to compensation are; home-based pay, host country-based pay, and headquarters-based balance sheet.
- The home-based approach sets the reward package that the employee received at the home country as the foundation for the reward. It considers the cost of living, housing costs, taxation, and allowances relevant to the assignment. Home-based pay should be developed carefully as it can create inequalities between the expats and the local employees.
- The host country-based pay reward package approach offers the same compensation as employees of the country hosting the expatriate assignment. The downside of this is that the employee might reject the offer if the salary is lower than in their home country.
- The headquarter-based balance sheet approach is an international approach in which the expat’s compensation is in line with what they would be paid if they were working for the headquarters.
Creating a global reward strategy to support diversity
HR professionals need to consider reward packages carefully depending on the location and the cultural and legal variations. Furthermore, they should recognize multigenerational and diverse workforces with multiple requirements. However, it is important that this is kept in line with the organization’s culture and reflects its compensation philosophy. Local pay scales, practices, and tax need to be considered alongside employment law when setting up a reward package.
Cultural differences affect the way employees perceive the attractiveness of various benefits. Therefore, it is important to give the option of choice to meet the diverse needs of a global workforce. Whilst there is still work to be done, the understanding of the importance of diversity and inclusion in the workplace has increased.
Developing a flexible global reward strategy to meet local requirements and expectations can be a complicated and expensive process. However, it has been proven that the most attractive packages are personalized.
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