Geodesy - PwC


are major influencing factors for individuals. This area is the most important for individuals as they see international assignments as an opportunity...

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Human Resource Services

Geodesy Understanding and avoiding the barriers to international mobility

Geodesy noun: Geologic study of the size and shape of the earth

The relentless pace of globalisation is increasing the role international mobility plays in achieving business goals. HR professionals face major challenges dealing with new mobility patterns, working methods and an increased demand from management to demonstrate the value obtained from expensive internationally mobile staff. Geodesy is the PricewaterhouseCoopers and Cranfield School of Management international mobility research initiative. Through a programme of research studies, Geodesy will deliver practical, evidence-based insights into the future of global working.

Introduction Understanding and avoiding the barriers to international mobility

Following consultation with Geodesy members, PricewaterhouseCoopers Human Resource Services and Cranfield School of Management selected the topic of understanding and avoiding barriers to mobility as the first in the Geodesy research series. The consensus was that there is currently a lack of empirical evidence or practical models to apply in understanding mobility barriers and how to overcome them. “Unless organisational Organisations are trying to maximise the efficiency of their and individual motivators international assignment strategies – and understanding the are understood and reasons why individuals choose (or refuse) to pursue international assignments is a critical factor in designing and implementing aligned, the significant an effective strategy. value international assignments can achieve Organisations need to understand the complex array of factors is likely to be wholly or that, in different combinations and in changing contexts, motivate significantly wasted.” their first choice candidates to accept the international assignments offered to them.

Unless organisational and individual motivations are understood and aligned, the significant value international assignments can achieve is likely to be wholly or significantly wasted.

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Introduction

Analysis with a difference “Organisations PricewaterhouseCoopers and Cranfield School of Management undertook and survey process that extended beyond the traditional boundaries participating in the survey aofresearch analysis in this area. We looked beyond the beginning and end of an cover all industry sectors assignment, and evaluated the entire assignment experience, including the and have more than longer-term impact on careers. 10,000 internationally We canvassed the opinions of individual assignees and the corporations which they work, and analysed the “opinion gap” between their respective mobile staff and employ in views. We also conducted face-to-face interviews to investigate the context more than one million and motivation that lie behind these views. Organisations participating in the cover all industry sectors and have more than 10,000 internationally staff globally.” survey mobile staff and employ more than one million staff globally. In formulating our analysis, we have summarised our findings in three areas:

1. The decision to go The key differences of opinion between organisations and individuals in the 26 “influence areas” we assessed. 2. Reintegration When and how this is managed and why some people stay and others leave. 3. Career outcomes A look into the effect on individuals’ careers and how international assignments provide a springboard to leave the organisation or to progress within it.

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Executive summary of the research findings

The decision to go Major differences exist in 10 of the 26 influences Our survey identified major differences in the views of individuals and organisations in 10 of the 26 areas we assessed, as illustrated in the graph below.

Loss of partner’s income

Interruption to partner’s career

Financial impact

Cultural adaptation

Distance

Job-related skills

Potential for Leadership development

Professional Work/life challenges balance Assignee n Corporate n

“Individuals are The key messages that emerged from the opinion gap are: conducting their own are principally motivated by building new skills complex career • Individuals and by leadership development. risk-benefit assessment • Organisations are over focused on the financial package on before accepting or the way out – it is more important to individuals on the way back. seeking an international • Spousal financial support is a lot less important to individuals assignment.” than organisations realise. Our analysis indicates that individuals are conducting their own complex career risk/benefit assessment before accepting or seeking an international assignment. Understanding this assessment and developing motivational profiles of candidates is likely to become increasingly important both in the selection of assignees and to ensure that support is tailored to suit different ‘profiles’ and individual expectations.

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Executive summary of the research findings

Reintegration Important to 85% of organisations but only 20% of organisations believe they get it right “Valuable individuals This alarming statistic explains why in the 12-month period following an turnover levels can exceed 25%. If this turnover level applied are often left to assignment, to new recruits in their first 12 months, serious questions would be asked reintegrate themselves about the effectiveness of integrating new staff. Yet when it comes to internationally mobile staff, high turnover levels continue to without real support reintegrating be tolerated despite the significant loss of value to the organisation. and guidance.” Career outcomes Understanding and managing the “career wobble” is the key to longer-term retention In the first 12 months after returning from their assignments, many Individuals suffer, a “career wobble”. The factors that underpin the career wobble are more complex than simply the effects of “reverse culture shock”. The factors that emerged in our analysis include reduced autonomy, a lack of recognition for achievements on assignment, and an overall lack of clarity about how an international assignment has helped to develop a career. Unless assignees are effectively supported during this time, there is a great risk that they will leave. Organisations need to understand the combination of reasons and circumstances that prompt career wobbles and the exact reasons why individuals contemplate leaving the organisation.

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Executive summary of the research findings

Practical application Issues to consider and actions to take Our research has dispelled a number of myths and highlighted a number of issues that organisations need to evaluate. The main areas that organisations need to consider are:

“Organisations that use international assignments as part of career development must ensure they are not investing in individuals’ career prospects outside the organisation.”

• Adopting motivational profiling to assist candidate selection and policy development. • Investing sufficiently in cultural adaptation support since this is a critical area for individuals. • Spousal support policies that focus more on practical than financial assistance. • Reassessing the financial package on reintegration since individuals are more concerned about remuneration on return than when they leave. • Ownership for career management to facilitate reintegration and retention. • Understanding and managing the “career wobble”.

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In-depth analysis The decision to go Successful policies for international assignments should reflect the individuality of the assignees deployed.

The Geodesy survey investigated the importance of 26 different factors in making the decision to go on assignment. Based on the responses we have grouped the findings into the following six core areas: Family The impact on partners and dependants. Assignment deal The financial package and practical support. Career The short- and longer-term considerations. Location The relevance of culture, language and motivation to live overseas. Development Both personal and professional development, including leadership skills. Life impact The relevance of disruption to social and business networks.

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In-depth analysis The decision to go

Family Practical assistance is more important than financial support

Willingness of partner to move

Children’s education

Loss of partner’s income

Interruption to partner’s career

Individual perception of barriers n Corporate perception of barriers n

Organisations are very focused on the financial impact of losing a partner’s income, which is viewed as far less important by individuals compared to other factors, such as their children’s education. Organisations may be financially compensating where it may be unnecessary to do so. Understanding the personal issues and motivations that are unique to each family and directing measured support towards them should prove to be a more effective approach.

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In-depth analysis The decision to go

Career Alignment on the way out but is there a happy ending?

Progression

Position on return

Position on assignment

Individual perception of barriers n Corporate perception of barriers n

This is the one area where there is no difference in opinion in making the decision to go. However, when you start analysing the views on reintegration it becomes clear that many individuals see international assignments as a springboard to develop careers in or outside the organisation. In fact, the high turnover levels experienced on reintegration indicate that, in many cases, there is not a happy ending.

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In-depth analysis The decision to go

Location Cultural integration support is a key consideration

Host culture

Culture adaptation

Language

Distance

Standard of living

Desire to live abroad

Individual perception of barriers n Corporate perception of barriers n

Organisations attach more importance to distance from home than individuals. Individuals are more focused on how they will culturally adapt, and providing effective support in this area will not only be important in supporting the decision to go but also be critical in ensuring that individuals can integrate quickly into new assignment locations.

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In-depth analysis The decision to go

Development Building skills and leadership development are major influencing factors for individuals

Job-related skills

Potential for development

Leadership

Professional challenges

Individual perception of barriers n Corporate perception of barriers n

This area is the most important for individuals as they see international assignments as an opportunity to accelerate their own development. If there is a “career risk” of taking an international assignment, individuals are willing to take it since they can develop marketable skills that can be used in or outside the organisation.

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In-depth analysis The decision to go

Assignment deal Organisations are over-focused on the financial package on the way out

Pre-departure preparation

Financial impact

Security

Repatriation package

Individual perception of barriers n Corporate perception of barriers n

Throwing money at the barriers to international mobility is expensive and creates a cost ratchet effect, which in many cases is ineffective. Organisations are preoccupied with the influence of the assignment financial package in the decision to go and are underestimating the importance to the individual of the financial package on return. In the reintegration analysis, the financial package features as a critical issue to individuals who are expecting to “cash in” on their international assignment experience when they return.

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In-depth analysis The decision to go

Life impact Can assignments deliver work/life balance?

Career risk

Work/life balance

Personal networks

Health status

Work networks in home location

Individual perception of barriers n Corporate perception of barriers n

When individuals are on international assignments, there is typically a significant impact on business and social networks, which explains why achieving work/life balance is the most important issue in this area for individuals. As individuals seek to prove and establish themselves in new roles, there is a real risk that work/life becomes unbalanced at a critical time when the family unit itself is adapting to the challenges of living overseas and establishing new support and social networks. This is another area where throwing money at the problem is no guarantee of success since practical solutions are likely to be more effective.

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In-depth analysis The decision to go

Our view More investment in candidate motivation profiling can pay dividends Candidate motivation profiling is likely to become an important area in international assignment decision-making in the future. Organisations need to ensure they are equipped to deal with this and to move away from a preoccupation with transaction support processes that are mainly focused on the financial package.

“The cost of an The decision to hire new staff typically includes some rigorous and independent of skills, ability and motivations, supported in many cases international assignment assessment by complex profiling models and techniques. The cost of an international is three times that of assignment is three times the spend on a local hire and yet there is minimal in candidate profiling. Where it does take place, it is typically limited the spend on a local investment to assessing an individual’s ability to adapt to a different culture. Organisations hire – yet there is need to understand the motivations of a candidate and the need to create suitable support package. If they were able to understand better the individual minimal investment in amotivations of their managers with top potential and react accordingly, candidate profiling.” this would be likely to have a positive impact on assignment success. In response to these challenges, some organisations are beginning to move responsibility for international assignments to talent management professionals. This reflects a move away from the transaction process, with more emphasis on candidate assessment and profiling. Organisations that get this balance right are more likely to maximise short- and long-term value from international assignments.

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In-depth analysis Reintegration If the level of turnover seen in the first 12 months post-repatriation was experienced with new recruits, an organisation would ask serious questions about itself.

Reintegration theory is not supported by actions 85% of organisations regard reintegration as important, yet only 20% believe they manage it effectively. This finding is supported by the views of individual assignees, with 75% saying reintegration is not managed well. There appear to be two main causes for this. Firstly, there is lack of clarity within the organisation about who should ‘own’ the management of the reintegration process. Secondly, the initiation of the reintegration process occurs too late – only 16% of individuals were engaged in discussions about reintegration more than six months before repatriation.

Individuals are left to reintegrate themselves Only only 27% of individuals have a guaranteed “right” of passage home which perhaps explains why so many start considering external alternatives. Assignees are typically left to find their own way and take the initiative to secure a role following completion of an international assignment.

27% Guarantee of employment 15% Guarantee of role at same level 81% Best endeavour to find a role 58% Physical relocation only

With only a quarter of individuals guaranteed a right of passage home and with a lack of financial recognition when they return, it is not surprising that many individuals “cash in” on their international experience through leaving. Organisations are struggling with creating accountability for managing reintegration and are typically intervening too late in the process.

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In-depth analysis Reintegration

Why individuals leave Our survey identified that during assignments, individual’s internal networks deteriorate and external networks develop – this may partly explain why 85% of individuals believe they are more marketable externally since they have established more effective external networks. Remuneration level on return is more important than the financial package on commencement. This appears to reflect the individuals’ views of their self-worth – they are looking to “cash in” on the international experience they have acquired.

85% More marketable to competitors 74% Remuneration 67% Gain of external networks 66% Reduced responsibilities 55% Loss of internal networks

Our view Are organisations in denial on turnover levels? The majority of organisations, 75%, believe turnover for internationally mobile staff is no higher than the average for all staff. This may reflect both a lack of information on turnover figures for internationally mobile staff and a degree of denial about the impact of current international assignment policies. If organisations do not invest in addressing these reintegration challenges, they will continue to experience high levels of turnover. The cost of this turnover is considerable as it comprises not only the loss of valuable individuals and the investments made in their development, but also the time and resources that are required to find suitable replacements.

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In-depth analysis Reintegration

Case study – HSBC Organisations can integrate long-term planning, continuous networking with the home locations, skill development and expectation management. Experience at HSBC has shown that the key to international assignment success is to provide all assignees with a “home business sponsor”. The sponsor is a senior player within the company and is responsible for overseeing the entire assignment process from departure to reintegration. Key role of the home business sponsor at HSBC All secondees have a sponsor at General Manager, Chief Executive Officer or Business Head level who will: • Sign-off the secondment letter • Make sure that the proposed secondee is a member of a talent pool and/or a subject-matter expert who is valued by the business and warrants the investment of an international secondment • Ensure that talent pool secondees, in particular, are closely career-managed • Ensure that a suitable role, ideally utilising the secondee’s new international skills, is found when they return. The sponsor will also: • Review the annual performance of the secondee to understand how they are performing and countersign the performance appraisal • Review and sign-off the pay, bonus and share awards • Make contact with the secondee on a regular basis • Review the impact of any request to extend (or localise) the assignment on the secondee’s career plan • Agree the severance terms if a return role is not identified. The role of home business sponsor is seen as key to the success of the international assignee programme, and key accountability is included in sponsors’ job descriptions. If a sponsor moves to a new role while the secondee is abroad, responsibility is handed over to their successor. Secondees also initiate contact with their ‘new’ sponsor if a change takes place during the life of their secondment. A range of responsibilities and processes are outlined, including how sponsors and HR business partners interact.

In-depth analysis Career outcomes International assignments are good for successful careers, but who really benefits?

Using acquired skills Since developing skills is one of the key reasons why individuals accept an assignment in the first instance, it is inevitable that frustration will grow if those skills cannot be put to good use on their return. In our survey, less than half of the managers were able to use new skills and capabilities in their new roles on their return.

43% Could use new technical skills 49% Could use new professional networks 13% Could not use their newly acquired capabilities at all

Development and motivation grind to a halt The graph below illustrates the impact for individuals in building competencies, networks and motivation during the assignment role and in the job posting on their return. The reduction is dramatic and explains why many individuals experience a “career wobble” in the first 12 months after returning from an international assignment. On assignment 98% Build capability 90% Build networks 92% Increase motivation

Next job 43% Use new capabilities 49% Use new networks 7% Are motivated

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In-depth analysis Career outcomes

Is there a career payback? “Organisations must do Many organisations promote the need to acquire international experience in to progress careers. Organisations must do more to demonstrate they more to demonstrate they order value an international assignment. They must demonstrate commitment in value an international a measurable and visible way. In our survey, 1 in 10 individuals suffered demotion an international assignment and only a third of individuals achieved a assignment. They must after promotion. Since, in many cases, the underlying motivation of the individual is demonstrate commitment development and career acceleration, these figures explain why organisations be struggling to promote the direct link between international assignments in a measurable and may and career progression. visible way.” 33% Promoted on return 58% Stayed at same level 9% Demoted

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In-depth analysis Career outcomes

Our view Managing the “career wobble” is the key to sustaining value from international assignments The extent to which individuals experience doubt about their career options on return to an organisation is determined by a combination of several factors. For organisations to ensure that they retain the individuals in whom they have made considerable investments, the relationship between an individual’s capabilities and the challenge of the role in which they find themselves on return is critical. Different combinations of role and capabilities can give rise to very different scenarios, each requiring a specific management approach. For example, individuals may feel particularly stretched by a new role and feel that they are not capable of performing effectively. Those individuals will need specific forms of support and assistance. In contrast, individuals at the opposite end of the spectrum (ie with enhanced skills, who return to a less demanding role) will need to have their expectations managed carefully if they are not to look outside the organisation for a role that they believe suits their enhanced skills and abilities. A specific combination of factors will determine an individual’s willingness to take on an international assignment, similarly, a variety of influences and circumstances will shape their perception of their careers on their return. Organisations committed to sustaining value from international assignees must ensure that they understand the specific circumstances for each individual and manage their experience effectively.

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Conclusion Retaining the talent that makes a difference Understanding the individual and corporate views of barriers to mobility supports more effective assignment management and reintegration.

Aligning perception and reality Our research clearly demonstrates that many organisations’ international assignment policies fail to reflect the varying motivations of individuals considering an assignment. The different emphasis that organisations and individuals place on the factors influencing the decision to go on international assignment create a number of perception gaps. For individuals, personal circumstances and their career stage determine the relative influence of a diverse range of factors motivating or impeding their decision to go. Organisations need to understand how these factors operate in a variety of contexts, and using that knowledge, begin to customise the incentives and support that they offer to encourage the take-up of international assignments.

The “career risk/benefit assessment” Individuals undertake their own career risk/benefit assessment when considering an international assignment. Based on our experience, we have identified four distinct assignee profiles and summarised below the behaviour that typically underpins their decision-making. Adventurer: The generation “x” expatriate is more interested in acquiring skills and experience. The right position is a critical factor in the decision process. If their partner is working then practical assistance in finding work locally may be important as the partner is more likely to be in the early stages of building their own career. These individuals are likely to be less loyal, and if organisations wish to keep these employees, they should understand and communicate how the international assignment will integrate into their career development during their posting. Waiting until the end of the assignment may be too late. Ambitious manager: The two strongest factors are the need for international experience to accelerate their career and the positive family impact of the experience of living overseas. A balance must be struck between these two motivations. Without sufficient “family spirit” or support while on the assignment, there will be little an organisation can do to persuade this type of candidate to go. Research shows that additional financial compensation is no guarantee of success here.

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Conclusion Retaining the talent that makes a difference

Skilled worker: These individuals are more likely to be driven by the financial impact of the assignment and so a competitive financial package will be a key factor. Also, the older a potential candidate, the greater the relevance of specific skills. There is a major risk in asking this group to undertake a job they are not skilled to perform, as they will expect to be paid a premium for doing so and may fail to adapt adequately to ensure success. Seasoned executive: This group is defined not only by age or tenure but by their status in the organisation and potential effectiveness in the role. The financial and/or partner impacts are less relevant to this group as they are likely to be financially secure with either an older family in later education or to see the benefits of living overseas for younger children. There is an expectation that the financial impact of supporting their children’s education will be provided and there is likely to be a strong family spirit supporting the move. There is more emphasis for this group on personal health and security, factors that are likely to increase with age. Also, the challenge of the role is a key factor in their decision to go.

Key considerations for different assignee profiles Based on the assignee profiles above, we have summarised in the table below the key individual influences and critical issues that organisations need to consider when making the offer of an assignment, reintegrating and sustaining career management.

Assignee profile

Key individual motivations

Corporate issues to manage Decision to Go

Reintegration

Career outcomes

Adventurer

Building skills and experience Longer-term career impact

Practicalities are ignored Candidate selection

“Cash in” on experience Loyalty

Overtrading Overpaying

Ambitious manager

Career acceleration “Payback” on return

Family vs career

Little fish in a big pond

Career stagnation

Passage home

Career “payback”

Leveraging new internal networks

Skilled worker

Matching skills to role

Package

Overpaying

Life disruption impact

Role objectives

Competitor networks

Assignments become the career Staying skilled

Challenge of role Reintegration status

Family support Risk reward

External networks threat Using experience

Seasoned executive

Peer progression

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Conclusion Retaining the talent that makes a difference

Issues to consider and actions to take Organisations that wish to improve the success of international assignments need to assess their approach to each of these stages and create a detailed approach to managing each of them. Supporting the decision to go Better profiling of candidates, clear accountabilities and ownership of the selection decisions will help to create clarity. Adaptable policies along with a visible commitment to ongoing support will have a positive impact on ensuring that the top talent is persuaded of the value of an international assignment. Achieving smooth re-entry The survey shows that reintegration is difficult for international assignees – so difficult that many leave the organisation and the consequent cost is considerable. Individual assignees must feel they are supported in the development of their careers and organisations need to manage reintegration actively. Specific responsibilities are required that stress a sponsorship role, so that individual assignees feel that they are supported in the development of their careers. Organisations need to manage and track how well they reintegrate international assignees and use this information to refine and improve their approach. Steadying the “career wobble” Many different factors combine to create the uncertainty, disillusionment or frustration that can prompt an individual to leave an organisation. Organisations with a clear vision of possible outcomes from international assignments are able to communicate that clarity and are more likely to retain their top talent. Our survey demonstrates that whilst there are presently some significant gaps between individuals’ and organisations’ perceptions of the barriers and motivations for international mobility, there are also some clear and straightforward measures that can be taken to address these. Investing in the appropriate tools and techniques to bring about a closer alignment of these views, will allow organisations to tailor their policies to ensure that they can develop their employees through international assignments and reap the rewards when it is time for them to return.

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Contacts PricewaterhouseCoopers Human Resource Services

Robbie Wigley-Jones E [email protected] T +44 (0) 121 265 5584

David Wignall E [email protected] T +44 (0) 20 7804 5249

Dr Michael Dickmann Cranfield School of Management E [email protected] T +44 (0) 1234 751 122

www.pwc.com/geodesy

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Human Resource Services

PricewaterhouseCoopers Human Resource Services PricewaterhouseCoopers Human Resource Services practice works with clients who strive to make their people a sustainable source of competitive advantage. Our strategy is built on our own belief in developing our people to be creative and effective team players committed to outstanding client service. We bring the ability to take fresh perspectives, to think differently, and to develop and implement new and value adding solutions. We work in close relationships with clients to offer practical, multi-disciplined approaches to the increasingly complex challenges facing businesses. One of the main challenges is to create environments in which their people can work most effectively. Our Human Resource Services practice brings together all of the professionals working in the human resource service arena – tax, benefits, retirement, communications, financial planning, international assignment, equity, culture and change, compensation, strategy, regulatory, legal and process management – affording our clients an unmatched breadth and depth of expertise, both locally and globally. Our expertise in tax, law, actuarial, accounting and compliance issues, combined with our knowledge of employment best practices, sets us apart.

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