How international mobility programs can meet the business and talent needs of multinational organizations in a fast moving and globalizing business environment?

How international mobility programs can meet the business and talent needs of multinational organizations in a fast moving and globalizing business environment?

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Thesis presented in 2011 - ESSEC (honors)
International assignments are increasingly becoming a strategic instrument for multinational companies to successfully compete internationally. The needs of the globalization of business must be addressed by multinational companies willing to make the best use of their talent pool. This challenge is even more crucial that talent will be rare... Talent management will have to be approached in a holistic manner, as should that of any scarce resource...
Some industries are already experiencing shortages of highly skilled talent, and increasing the mobility among countries to deploy talent around the world where and when it is needed, will be a key part of the solution. Yet the need for agility and international mobility will increase significantly in the ten coming years, the mobility equation will require necessary adjustments of its key parameters. Which mobility? For whom? How much? For some reasons, these questions will no longer get the same traditional uniform answer.

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ESSEC Business School Advanced Masters in Human Resources November 2011
How international mobility programs can meet the business and talent needs of multinational organizations in a fast moving and globalizing business environment?
Author: Thierry Garnier Director of Research: Jean-Luc Cerdin Thesis on November 28, 2011 in presence of Jean-Marie Peretti and Jean-Luc Cerdin
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Table of content
Table of content................................................................................................................3 Introduction and purpose................................................................................................7 I. THEORY AND LITERATURE .........................................................................................9 1. Global mobility for global business...........................................................................9 1.1. Trends in global mobility .............................................................................................9 1.1.1.International mobility then and now .................................................................10 1.1.2.The world in 2020: raising the bar on global mobility ......................................11 1.1.3.Change in expectations towards career and mobility ......................................12 1.2. On the path to global mobility ....................................................................................15 1.2.1.Themobilityequation.....................................................................................15
1.2.2.Gathering facts ................................................................................................16 1.2.3.Attitudes to international operations and mobility ...........................................18 1.3. Various international assignments for various purposes ..........................................21 1.3.1.Choosing the right drivers ...............................................................................23 1.3.2.Choosingtherighttalents................................................................................262. Why international mobility fails -or succeeds ........................................................29 2.1. Criteria for success: individual and organizational dimensions .................................29 2.1.1.Individual success ...........................................................................................30 2.1.2.Organizational success ...................................................................................30 2.2.Repatriationofreturnees..........................................................................................312.2.1.The role of the work environment ....................................................................32 2.2.2.The role of the social environment ..................................................................32 2.2.3.Premature return of Expatriates ......................................................................33 2.2.4.Lack of repatriation programs ..........................................................................34 2.3. Supporting expatriates before and during the assignment ........................................35 2.3.1.Eleven tools for a successful return .................................................................36 2.3.2.The “repatriation agreement” ...........................................................................36 2.3.3.Mentoringtheexpatriate..................................................................................37II. OBSERVATION AND EXPERIMENTATION................................................................39 1. Challenging global mobility at AB Volvo .................................................................39 1.1. Enhancing global mobility: a strategic project for the Volvo Group ...........................40 1.1.1.Strengthening global mobility: a priority ..........................................................40 1.1.2.An ambition for mobility ...................................................................................40 1.1.3.A vision for mobility .........................................................................................41 1.1.4.Moving from words to action............................................................................41 2. Describing the as-is situation: the internal analysis .............................................42 2.1. Figures and statistics gathered .................................................................................43
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2.2. Interviews with key talents and HR ...........................................................................44 2.2.1.Expected benefits for the Group and for the employees .................................45 2.2.2.Improvements needed to enhance mobility .....................................................46 2.3. Internal Diagnosis: current situation and needs ........................................................49 3. Gathering experience from companies: the external benchmarking ...................49 3.1. Inviting participants ....................................................................................................50 3.2. Questions to interviewees .........................................................................................51 3.3. Benchmark analysis summary...................................................................................51 3.3.1.Assignees’ recruitment process .......................................................................51 3.3.2.Targeted groups for assignments ....................................................................52 3.3.3.Driversforassignments...................................................................................533.3.4.Mobility policy ..................................................................................................54 3.3.5.Returnprocess...............................................................................................543.3.6.Measurement and KPIs ...................................................................................55 3.3.7.Cultureandcommunication.............................................................................564. Proposed deliverables to improve mobility throughout the Group......................57 4.1. Internal mobility policy ..............................................................................................57 4.1.1.Purpose 58 4.1.2.Content 58 4.1.3.Responsibility .................................................................................................59 4.1.4.Definitions 60 4.2. International mobility decision tool.............................................................................60 4.2.1.Targeting the right category of assignment ......................................................60 4.2.2.Choosingtherighttalents................................................................................624.3. Career forums............................................................................................................64 4.3.1.Participants 64 4.3.2.Leadership 64 4.3.3.Calendar 64 4.3.4.Agenda 65 4.3.5.Talent presented ..............................................................................................65 4.4. Career mentoring for expatriates...............................................................................66 4.4.1.Why mentoring for an expatriate is important: .................................................66 4.4.2.Theroleofthementor....................................................................................664.4.3.Critical success factors of the mentor-mentee relationship .............................67 4.4.4.The mentor-mentee agreement .......................................................................67 4.5. Additional barriers to remove ....................................................................................68 4.5.1.Shorttermassignments...................................................................................684.5.2.Foreign local hire policy (‘local +’) ...................................................................69 4.5.3.Additional obstacles to mobility .......................................................................69
4.6.Createacultureofmobility........................................................................................704.6.1.Change management scope - overview ..........................................................70 4.6.2.Messages to be communicated .......................................................................71 4.7. Communication strategy............................................................................................73 4.7.1.Step 1: sell the need for change ......................................................................73 4.7.2.Step 2: start-up the change .............................................................................74 4.7.3.Step 3: drive the change..................................................................................74 Summary and conclusions ...........................................................................................76 III. REFERENCES............................................................................................................79 Bibliography ...................................................................................................................79 Internet and consulting resources ...............................................................................80 IV. APPENDIX..................................................................................................................82 1. Reports from interviews with benchmarked companies ......................................82 1.1. Axa Group .................................................................................................................82 1.2. ABB 86 1.3. General Electric .........................................................................................................90 1.4. Nestlé 93 1.5. Price Waterhouse Coopers........................................................................................97 1.6. Sodexo ....................................................................................................................100 1.7. Total 103 1.8. Unilever ...................................................................................................................108 1.9. Overall synthesis from external benchmarks ...........................................................112 2. Key data from internal interviews ..........................................................................113 2.1. Expected benefits for the Group and for the employees .........................................113 2.2. Improvements needed to enhance mobility .............................................................115 3. Performance/potential grid (Korn Ferry/Lominger, 2005) ....................................117 4. Change and communication...................................................................................118 4.1. Communication platform: blocks of messages ........................................................118
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“There are three principal means of acquiring knowledge: observation of nature, reflection, and experimentation. Observation collects facts; reflection combines them; experimentation verifies the result of that combination.” Denis Diderot.
Introduction and purpose
Globalization and other key business trends raise the bar on global mobility. As companies do more and more business across national borders, they need to be able to move their people around quickly and easily. They also need leaders with global experience to help manage and run their broad, geographic operations. But even with today’s technology, which allows anyone to work from almost anywhere at any time, it is still a huge challenge getting the right personnel in the right roles and places… We see a shift from country-based multinationals to global multinationals, and a change in how and where business operates – this is namely the case for the Volvo group. While mobility programs should fit center of gravity of the business operations, the purpose of the assignments must not only cope with the business needs but also tie talent management policies by involving both the performance and the potential of the individuals in the selection of assignees – who can expect a real developmental value of their expatriation. Different assignments have different value for the business; and for the individuals. Identifying the right drivers in order to choose the right assignment that will bring a vested interest to both parts is therefore crucial. In addition to the specific challenges of their globalizing business operations, multinational companies need to simultaneously manage the different needs and expectations of three generations of workers. The millennial generation in particular views overseas assignments as a rite of passage, an outlook that change the way workers and organizations approach overseas opportunities… In the coming years, companies’ ability to meet the needs and expectations of this generation will certainly be another key condition for success for international mobility programs. For the time being, organizations still tend to select high performers and to a lesser degree, people with high future potential for international assignments - although most of them are well aware that selection should be linked to performance, potential, and the purpose of the assignment… Setting clear assignment goals is important to the outcomes of an international assignment for both an organisation and the individual assignee. However, a successful expatriation depends not only on effective performance during the assignment, but also on the individual's perception of its future prospects beyond the assignment, especially job opportunities upon return and building a career in the long run; and therefore, on the individual’s intention to stay in the company that invested in his/her talent. Retention of returnees is therefore a key condition of success for the organization as well as for the individuals and excessive turnover after the return should be seen by multinational corporations as a sign of failure of mobility programs and policies.
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On-going career links with home country need to be maintained, that involve both the home and host country management. Mentoring, in this application, can be used as a tool to support the assignee during a long term international assignment and repatriation.It also supports the assignee in staying connected with the organization.
In recent years, the Volvo group has strengthened its position in important growth markets in Asia and South America, and the group is now turning from an international company expanding its business abroad, to a global group operating worldwide. Its organizations are becoming more and more global, with gravity shifting eastward in a fast moving environment. The group needs to improve its ability to make the best use of talent in an efficient way and in accordance with business environment, and internal expectations. Beginning of 2010, the Executive Committee decided to make movements across borders and units of its top priories for 2010-11. End of 2010, a “Global Mobility project” was set up to deliver and implement a new vision, shared policies, processes and tools, and the communication, to make mobility an integral part of the business and the HR strategy -and a key factor of success for the group’s global operations. The Global Mobility project was the first step in the process of aligning Volvo group business and talent strategy with mobility strategy. In this respect a comprehensive survey was conducted, both internally and externally. Internal focus groups gathered more than eighty key talents and/or expatriates, as well as HR stakeholders in five countries. Ten large multinational companies agreed to participate to a benchmark interview on their policies, processes and tools. Based on the results of the survey, we were able to propose and deliver some outputs in four focus areas to improve and support internal mobility in the group: to develop an Internal mobility policy, to create a number of selected processes and tools (international mobility decision tool, career forums, mentoring for expatriates…), to remove barriers for compensation/benefits, and of course to create and communicate a culture that embraces and promotes mobility.
I. THEORY AND LITERATURE
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Global mobility for global business
1.1. Trends in global mobility
In the coming years, global business will be a primary source of growth for many companies. Organizations will source talent from all over the world and international assignments will be “business as usual”. To succeed in this new environment, companies will need to dramatically improve their international mobility capabilities. Yet, international assignments have been traditionally managed as a high-touch, low-volume activity. Every move received special handling, and the main focus was on addressing the employee’s short-term needs (a relocation that is pleasant and hassle-free) without much thought to long-term employee development or the strategic needs of the business. This approach to international mobility probably doesn’t do anymore. Globalization is now driving the need for global mobility by increasing the number and variety of international assignments. In particular emerging markets such as Brazil, Russia, India, and China are fueling the global mobility trend as companies in mature economies look abroad, and namely eastward, to achieve their aggressive growth objectives. Global talent trends such as baby boomer retirements, aging workforces, and declining interest in science and technology education are creating a chronic shortage of critical talent. To survive and thrive, companies must find ways to tap into the world’s talent wherever it happens to reside and deploy it wherever it’s needed. They also must use international assignments to cultivate leaders with global experience to help run their increasing broad, geographic operations. It is still common that HR mobility teams spend most of their time on transaction issues such as compensation, benefits, and cost management. Meanwhile, the need for talent management is virtually ignored. In some cases, the people selected for overseas assignments are not consistently the company’s best-performing and brightest. And returning employees often lack a planned “landing pad” to ease their re-entry and harness the new skills and experience they have gained. In fact, many of these 1 employees leave the company shortly after their assignment ends Mobility programs generally revolve around the needs of the employee — not the needs of the business — with, sometimes, little regard for cost. The business rationale for an assignment is often not clearly defined, and there is generally no formal tracking
1 According to a recent survey of Cranfield University, organizations lose up to 40% of returned assignees within 12 month.
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mechanism to evaluate an assignment ROI impact on short-term business performance or long-term leadership development.
The literature suggests that large multinational companies are now well aware of the weaknesses of their international mobility policies and programs. However, are they ready to radically change them in order to cope with the needs of economic globalization and new employees' expectations in terms of career and mobility? Nothing is less certain. Indeed, the literature and case studies show evidence that the practices of international mobility, including the types of contracts offered, remain rooted in an approach to human resource management unprepared for the challenges of international management talent in a globalized economy, still frozen in representations of international mobility inherited from years 70, 80 and 90...
1.1.1.International mobility then and now
In the 70’s, international assignments were mostly driven by large multinationals based in the US and Europe. These organizations sent talent from the headquarters country out into the field to manage operations in other parts of the world. Assignees were usually sent off for a two-to-five-year period and were incentivized with attractive expatriate packages… This first era of international mobility lasted along the 80’s and the 90’. Then, during the following two decades, demand for global mobility of talent has been increasing as new markets emerged for companies to sell their products and services, and also manufacture their goods at lower cost. Offshoring gathered pace. A new breed of mobile workers emerged alongside the expatriate and met the globalization demand through commuter, rotational, and technology-enabled virtual assignments. The flow of talent was still predominantly from West to East or intra-continental, but companies began to tap into rich talent pools in emerging markets, particularly China and India… In 2011, knowledge, trade, technology, capital, and goods and services are more globally connected than ever. It is hard to imagine events that could more dramatically establish today’s characteristic global and interconnected nature than the financial and economic crisis of recent times. Coupled with the rise of emerging markets and focus on new revenue streams, these trends have created a swell in global worker mobility.
As the turmoil settles and the worldwide financial future unfolds, governments, regulators, and the business community will increasingly work together on the great issues of the day—economic recovery, new governance models, climate change, and technology advances. But how will businesses adapt to the “new normal” and what talent will they need to operate in this collaborative global environment?