Talent mobility 2020

Mark Carter
First published in the PwC HR Business Services Newsletter
April 2010

The issue of stimulating economies through improved global talent mobility was high on the agenda at the recent World Economic Forum's Annual Meeting in Davos. Over the next decade the global economy will be faced with an unparalleled talent shortage that may hinder economic growth in both developed and developing countries if left unaddressed. The Forum believes that more needs to be done to prepare for an era of a fast-changing, dynamic and increasingly mobile workforce and have issued a “Declaration of Talent Mobility” to begin to address this problem.

In this context the publication of Talent Mobility 2020: The future generation of international assignments(1) is timely. This is the fourth installment of PwC’s Managing Tomorrow’s People series, and gives some foresight around the workforce of the future and how global trends such as changing demographics, technology advances, and an array of other factors may influence talent mobility policies and practices over the next decade. It presents a vision of 2020 which is markedly different from today, one where:

  • the best and brightest employees have their own agents,
  • global passports allow for more fluid travel across borders,
  • the global harmonisation of pay across some industries and skill sets changes competitive strategy in the war for talent,
  • immigration barriers begin tumbling down for specific skillsets to address gaps in the ageing workforce and stimulate economies, and
  • technology advances will change the way people work and will facilitate better tracking of workers’ global movements so the appropriate immigration, tax and other regulations can be adhered to, but this sophisticated tracking also raises data privacy issues.

It is clear that businesses recognise both the economic benefit of using international workers and the need to evolve the way they are managed and used. Almost all (97%) of the participants in the PwC 13th Annual Global CEO Survey identify having the right talent in the right place as a critical factor for business growth but leaders clearly believe that the economic crisis has highlighted flaws with existing people management practices with more than half planning to change their global mobility strategy.

Fortunately for organisations, the new generation of ‘millennials’ see overseas working as something of a ‘rite of passage’ and an important part of their personal development. PwC research into the expectations of graduates in 44 countries shows that 80% (84% in Ireland) want to work abroad.

It is predicted that employers around the world will have to cope with a further 50% growth in the numbers of people working internationally in the coming decade. Additionally PwC charts an increase in the average number of host locations which employers have workers in rising to 33 locations by 2020. Almost three out of four Irish businesses in a recent PwC Ireland Mobility Survey stated that expansion into new markets is the key business driver behind their mobility strategy. Such expansion will present many new challenges on the people front.

Adjusting Strategy and Moving Forward
Businesses’ mobilisation strategies will need to progress quickly to keep ahead of both changes in the organisation’s geographic landscape, and the further increases in assignee numbers that will result. They will need to carefully think through how they will operate in this new environment, what talent they will need to compete, and how will they safeguard the talent pipeline for the long term. Those tasked with implementing mobility policy within a business will face growing pressures as the transactional support needs become increasingly demanding.

Technology Supporting Compliance
In a recent PwC survey, 64% of Irish organisations responded that managing risk and compliance is a key challenge faced in relation to managing mobility, and almost half said that tracking employee movements is a challenge. Businesses already struggle with country specific immigration requirements, an issue that will only grow in importance as global travel trends evolve. Looking ahead, we believe that new technology tools should drive faster more efficient compliance. Companies will have primary responsibility for reporting on where their employees have been and the wage allocations associated with their whereabouts. GPS tracking may become an accepted norm as one component of the tracking process.

By 2020 on the tax and payroll side we expect to see:

  • more robust payroll reporting systems that can handle gross pay and benefit management, coupled with local country delivery software for net pay
  • comprehensive global management reporting capabilities of these items for year end reporting in all countries for any period of time, with the potential to generate tax deposits to
  • particular locations based upon days of presence in each non home territory for specific reports
  • some tax authorities providing on-line, real-time receipts for taxes paid to facilitate speedy home country credit claims where available
  • more simplicity in the design of long term incentive plans and more cash only plans to cope with the ever increasing complexity in reporting and trailing liability requirements.

Picking the Winners
The winners of 2020 will be those companies that now begin to adjust their mobility strategies to compete in the world of tomorrow, and take steps to plan the effective implementation of such strategies. By doing so they will increase their chances of attracting and retaining the talent needed to prosper in an increasingly globalised business environment.