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HR CHALLENGES IN THE GLOBAL MARKET Set the global scene Look at recent history Glimpse of the future Explain current international mobility environment.

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Presentation on theme: "HR CHALLENGES IN THE GLOBAL MARKET Set the global scene Look at recent history Glimpse of the future Explain current international mobility environment."— Presentation transcript:

1 HR CHALLENGES IN THE GLOBAL MARKET Set the global scene Look at recent history Glimpse of the future Explain current international mobility environment Trends in international assignments Develop your understanding of international mobility Provide insights on attracting, deploying & retaining international assignees Discuss global immigration trends & issues Questions & Comments

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3 1991 Lecture at Hong Kong University by noted Futurist Whereas the 19 th and 20 th century struggles between nations had been over empire and land, the 21 st century would be dominated by international competition for skilled labour.

4 Our Future, Our World Liberalisation of trade Giant growing youth bulge Penetration of the internet around the world Market demand for a labour force which has truly global experience Creative connective thinking

5 The New Global Village By 2050 there will be 2 billion teenagers on earth and a progressively rising median age worldwide Huge competition for internships (Infosys & Intel examples) Dissolution of trade barriers and rise of internet results in massive expansion of choice and in turn the need to simplify The iPod and eBay experience Eurabia phenomenon –South of Mediterranean have vast population but inconsistent opportunity –North of Mediterranean have vast opportunity but desperately need people

6 A.Inability to secure skilled staff B.High cost of skilled labour C.Competition from low cost countries D.Competition from domestic producers E.Insufficient labour flexibility F.Insufficient domestic market growth G.Inability to retain skilled staff H.Poor innovation culture I.Inability to secure export markets What are the barriers to company success over next three years?

7 74% Inability to secure skilled staff Competition from low cost countries Insufficient labour flexibility Poor innovation culture 74% Inability to secure export markets High cost of skilled labour 70% 63% 59% 57% 47% 46% 23% 20% Inability to retain skilled staff Insufficient domestic market growth Competition from domestic producers Source: World Class Skills for World Class Industries Australian Industry Group, May 2006

8 A.Developing offshore production facilities B.Securing export markets C.Benchmarking company performance D.Being lean (driving down costs) E.Introducing new technology and processes F.Building strong supply chains G.Upskilling existing and older staff H.Introducing new products and services I.Building the skills base J.Strengthening growth opportunities What are your strategies for remaining competitive over the next three years?

9 93% Strengthening growth opportunities Introducing new products and services Building strong supply chains Benchmarking company performance 74% Securing export markets Building the skills base 85% 80% 79% 78% 70% 40% Being lean (driving down costs) Introducing new technology and processes Upskilling existing and older staff 19% Developing offshore production facilities Source: World Class Skills for World Class Industries Australian Industry Group, May 2006

10 World Class Practices World Class firms demonstrate the following characteristics: Their workforce are more highly skilled While all firms value employability skills highly, world class firms put a higher premium on technical competence They have significantly less trouble finding people with the right attitude, problem solving skills, pride in their work and appropriate work experience They are more likely to have formal skills assessment processes and workforce development plans in place

11 Skills shortages and tight labour market General increase in regulatory activities and compliance requirements Cost management also a focus Increased complexity of employment of people internationally Increase in offshore/international activities Increase in mobile workforce (current and international recruits) Need to attract and retain staff internationally More employees spending more time in more foreign locations Regulatory, organisational, employee and third party stakeholders Approach often decentralised and variable International Mobility Environment

12 International Mobility Environment cont/d… Identifying the issues and risks associated with international mobility: Attract and retain the right people Personal health and safety for the assignee and family Equity and fairness Legal issues Immigration compliance Taxation and tax compliance Cost

13 Some Trends in International Assignments Increases Benefits for spouse and family New assignment types Pre departure preparation to ensure safety and compliance Self service, budgets, flexible benefits, local terms Demographics and types of roles eg. female assignees, international recruits, technical roles Focus on compliance Reductions Costly benefits Proportion of assignees on full expatriate terms Home sale assistance Right of return

14 Understanding and Avoiding Barriers to Mobility The Opinion Gap – Family Are you over compensating for the spouse? = Individual perception of barriers = Corporate perception of barriers Loss of partners income Interruption to spouse career Loss of partners income Interruption to spouse career

15 = Individual perception of barriers = Corporate perception of barriers Pay on the way back is important Financial Impact Understanding and Avoiding Barriers to Mobility The Opinion Gap – Assignment Deal

16 = Individual perception of barriers = Corporate perception of barriers Cultural fit is critical Distance Desire to live abroad Corporate Cultural adaptation Understanding and Avoiding Barriers to Mobility The Opinion Gap – Location Cultural adaptation Distance

17 = Individual perception of barriers = Corporate perception of barriers Developing skills makes me more marketable Understanding and Avoiding Barriers to Mobility The Opinion Gap – Career Potential for development Leadership Professional challenge

18 = Individual perception of barriers = Corporate perception of barriers Can you deliver work/life balance? Work/life balance Understanding and Avoiding Barriers to Mobility The Opinion Gap – Life Impact

19 Why do you think individuals leave the organisation following an assignment? A.Reduced responsibilities B.Gain of external networks C.Remuneration D.Loss of internal networks E.More marketable to competitors

20 Why do you think individuals leave the organisation following an assignment? 85% 67% 66% More marketable to competitors Remuneration Gain of external networks Reduced responsibilities 74% 55% Loss of internal networks Im worth more than you think!

21 What is your policy position on an assignees right of return? A.Best endeavour to find a role B.Guarantee of employment C.Physical relocation only D.Guarantee of role at same level

22 What is your policy position on an assignees right of return? 27% 15% 81% 58% Guarantee of employment Guarantee of role at same level Best endeavour to find a role Physical relocation only Its a gamble getting back

23 What happens to your assignees on return to Australia? A.Stayed at same level B.Promoted on return C.Demoted

24 What happens to your assignees on return to Australia? 33% 58% 9% Promoted on return Stayed at same level Demoted So when is the career payback?

25 Sustained Value – Building and Using Competencies and Networks 98% Build Capability 90% Build Networks 92% Increase Motivation On assignment Next job 43% Use new Capabilities 49% Use new Networks 7% Are Motivated A lot of wasted investment?

26 Application to Assignee Profiles Assignee profile Key Individual Motivations Corporate Issues to Manage Decision to GoReintegrationCareer 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 Passage home Little fish in a big pond Career "payback" Career stagnation Leveraging new internal networks Skilled Worker Matching skills to role Life disruption impact Package Role objectives Overpaying Competitor networks Assignments become the career Staying skilled Seasoned Executive Challenge of role Reintegration status Family support Risk reward External networks threat Using experience Peer progression

27 Access to new markets and a cheaper workforce Corporate tax and incentive shopping Difficulties of emerging economies to extract benefits from inbound investment Increasing use of immigration as a corporate compliance tool and a lever to manage economy -China -Saudi Arabia -Singapore -Australia Globalisation Redefined

28 Implement proper processes for assessing host country requirements Develop an effective global immigration services program Cost savings for a company often involve two aspects – time and certainty -Government liaison -Host country labour agreements Information systems play an increasingly important role in managing immigration programs Attract, Deploy & Retain Immigration Health Check

29 Responding to the New Environment Managing International Mobility Effectively What can you do? Recognise the issues Develop policies to address these issues Implement these policies through a comprehensive and systematic process and communication Ensure you have people who are aware of the relevant issues as well as access to specialists when you need them

30 Further Information Mark WrightJennifer Miller PartnerDirector T: (02) T: (02) M: M: E:


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