Mobile employees at the centre of companies expanding abroad

Pictured launching PwC's new Talent Mobility 2020 report today are (l-r): Cecilia Ronan (HR Director, Citi Ireland), Lucian Tarnowski (founder, BraveNewTalent.com) and Mark Carter (HR Services Partner, PwC).

International employee mobility to increase by 50% by 2020
88% of Irish employees want to work abroad
Half of Irish professional employees rate flexible working (48%) over bonus
Number of ‘host countries’ to increase by 50% by 2020
Globalisation and new markets are top drivers for increased mobility

Over the coming decade the number of people working on international assignment will increase by 50% – this is one of the key predictions from PwC’s latest report -Talent mobility 2020: The next generation of international assignments – launched today at the PwC HR Business Breakfast Briefing.

With 42% of Irish CEOs planning for their businesses to enter new markets,it is not surprising that a significant portion of the talent to successfully globalise these businesses is likely to be sourced through international assignees.

Almost all global CEOs believe that having the right talent in the right place is a critical factor for business growth but that the economic crisis has highlighted flaws with existing people management practices. Many CEOs now plan to change their approach to talent development and mobility and those tasked with developing and implementing such strategies within a business are likely to face growing pressures in the next few years. Not only will they have to cope with increased international worker numbers, they will also have to grapple with moving people in and out of more countries – PwC predicts an increase in the average number of host locations which employers have workers in rising to 33 locations by 2020, which will present new compliance, remuneration and communication challenges for employers.

PwC Irish research on employee mobility further reveals:

Almost one third of Irish businesses with foreign operations have no formal international employee mobility policy in place to support their international business development plans;
Nearly three-quarters (73%) said that the top business driver for a mobility strategy is expanding into new markets;
The top challenge for Irish companies when it comes to their people mobility programmes is managing risk and compliance (64%); this is followed by effective cost management (50%); implementing tax cost control strategies (46%) and tracking employee movements (46%);
Other challenges identified by Irish employers include managing new locations, managing international employee benefits and payrolls, dealing with complex regulatory environments, inefficient process administration, overcoming employee barriers to mobility, and effective costing of mobility programmes.

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% (88% in Ireland) want to work abroad. However, only 26% of Ireland’s millennials expect to use a foreign language at work compared to 70% for their global counterparts. This also supports the indication that Ireland’s younger generation have a preference to work in English speaking destinations, with Australia and the United States being the most preferred locations.

PwC research also reveals that Irish professional employees rate flexible working (48%) above bonus and other benefits as their top work benefit. Interestingly 22% also see themselves as being self employed in 10 years time. It will be a challenge for companies to successfully implement attractive and cost effective international assignee programmes that match the aspirations of these modern employees.

Launching the report, Mark Carter, HR Services Partner, PwC Ireland said:

“It is clear that businesses recognise both the economic benefit of international assignments and the need to evolve the way they are managed and executed. One of the biggest challenges organisations will face post recession is motivating the workforce in an era of new customer demands and changing risk requirements. Galvanising employees with the right skills and experience will be critical to operating and competing effectively in this new emerging environment.

“Irish businesses tell us that they see expansion into new markets as a significant and vital opportunity. Such expansion will require an increased level of worker movement out of Ireland which might include commuter, short term and long term mobility. This all carries tremendous strategic and operational challenges which employers should address upfront if they are to fully capitalise on the market opportunities”.

Addressing the Breakfast Briefing, Lucian Tarnowaska, Founder and CEO of BraveNewTalent.com said:

‘Talent attraction and retention remains one of the key issues affecting businesses despite the economic times. Gen Y are unique in their approach to the workplace. For the first time in history the youngest entering the workplace are an authority on something that really matters to the new economy. Young people today are the authority on technology, the social web and new collaboration tools. This puts them at a unique advantage to be drivers of the innovation in industry.

Employers need to be aware of the paradigm shift taking place. Gen Y (born 1980-2000) are loyal to their skill rather than their career. They are more interested in training and development opportunities than salary. Competitiveness still comes down to talent and the rules have changes with this generation. At BraveNewTalent.com we believe the world of work has changed. Both the current model of education and recruitment are broken. We are looking to social media and social networks as the solution to enable employers to engage and recruit Gen Y and build an employer brand fit for the twenty first century.’

Also speaking, Cecilia Ronan, HR Director and CAO, Citi Ireland said:

“Employers must create the right conditions to engage, retain and develop tomorrow’s workers, whether they are required to work in the Irish or in foreign markets. Up to now one of this country’s attractions for US and other multinational employers has been the strength and the flexibility of our workforce. But a key issue for the future is whether multinational employers will find sufficient people with the rights skills to ensure business success in Ireland. Apart from continuing to produce our own strong supply of well educated graduates, I believe that if Ireland is become an even more attractive corporate location, we also need to attract more than our share of mobile international skills in what is likely to be an increasingly competitive talent market in the next ten years”.

“For example, while the introduction and expansion of the Special Assignment Relief Programme in recent Finance Acts is a very welcome addition to the ‘Ireland Inc’ incentivisation toolbox, many in the international business community here feel that if the relief was more flexible it would prove more effective in attracting people to run tomorrow’s global businesses from Ireland. Otherwise Ireland is in danger of losing out in the hunt for mobile talent to competitor locations which will prove to be more attractive for people to live in and work from in the years to come” she said.

Other key trends identified in the report include:

Companies now face the additional challenge of managing three or four different generations’ needs, expectations and skills;
Advances in technology will change the way global and virtual teams are managed;
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:
The best and brightest employees may have their own agents;
Global passports will 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; and
Immigration barriers begin tumbling down for specific skillsets to address gaps in the ageing workforce and to stimulate economies.

Mark Carter concluded:

“As Irish companies become more international, mobility programmes can bring great benefits to the employee including skills development and travel opportunities, while also acting as a motivational tool. However, in order to minimise cost and tax leakage, employers need to ensure that these programmes meet the complex regulatory, tax and compliance requirements of both the home and destination countries. Creating a mobility policy framework which can be used to support a range of assignment types should realise several benefits including the promotion of equitable employee treatment, the support of employer compliance, and the control of mobility costs. It should also help to attract, engage and motivate the right people and to promote talent development – in an international context this is even more important as employee loyalty, which has declined in many organisations during the economic crisis, is even harder to foster across borders”.

ENDS

Notes to the editor:

PwC’s Talent Mobility 2020: The next generation of international assignments.
Is the fourth instalment of the Managing Tomorrow’s People series. The report is based on trend data from 900 international employers (including many with Irish operations), population data and the opinions of CEOs and workers around the globe. It 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. The report is available here.

Earlier reports in the PwC Managing Tomorrow’s People series are available at www.pwc.com/ie/managingtomorrowspeople

Other reports citied above include:

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