Globalization and the increasing pace of business are reshaping a key aspect of talent readiness: International assignments.
Since 2000, global assignments shorter than 1 year have nearly tripled – rising from 10% to 27% of assignments. That is one finding of the latest Global Relocation Trends Survey Report by GMAC Global Relocation Services, released in 2007. A 2006 survey by ORC Worldwide, TheMIGroup and Worldwide ERC found a similar trend: 60% of 530 multi-national employers surveyed reported an increased in short-term expatriate assignments lasting 3 to 12 months.
At the same time, U.S.-based companies are finding that a global presence can be a buffer against fluctuations in the domestic economy. Two examples are General Electric and IBM. GE reported that more than half of its revenue last year was generated outside the United States, and IBM’s non-U.S. business accounted for 63% of its 2007 revenue. That’s good news for employees’ 401(k) accounts as well for CEO bonuses and shareholder returns. Even middle-market companies are seizing these opportunities to tap new sources of revenue. In March, KPMG’s Global Enterprise Institute announced survey results showing that 58% of middle-market executives plan to expand their global presence within 5 years.
Yet global leadership isn’t created overnight. The groundwork must be laid well in advance.
There is a growing business case for making the investment in preparing candidates for short-term global assignments. Shorter postings mean less disruption to the employee’s work and family lives. A shorter global assignment is also less expensive and less complicated from a compensation and benefits perspective. The approach also benefits the talent pipeline. Companies can cycle a greater number of employees through shorter international assignments. A candidate being groomed for a global leadership role can take on two or three relatively brief assignments in the same amount of time that they previously would have spent in one location. All of this is consistent with the adaptability and agility that characterize Next Generation Enterprise organizations.
From a recruiting and retention perspective, the prospect of short international assignments within career path options holds tremendous appeal for the Generation Y or N-Gen employees – those under age 28. Our 2007 Re.sults report Project YE: Engaging Today’s Young Employees found that Generation Y employees scrutinize learning and development opportunities when choosing to join – or stay with – a company. They also want more frequent and shorter rotational opportunities. Our 2007 research report Harnessing the Global N-Gen Talent Pool noted that N-Gen is arguably the most relationship-driven generation in history. Providing suitable N-Gen employees with a short international assignment at the appropriate point in their career will help them build the kind of network they will need for a subsequent global leadership role.
In preparing candidates for global assignments, employers often focus primarily on selecting candidates and then addressing the tax implications and logistics of their assignments. What is often given short shrift is the process of “seeding” candidates. We see great value in integrating preparation approaches into performance, learning and talent processes.
Does your company currently do any of the following to prepare future short-term expatriates?
· Create global awareness and networking opportunities: While the GMAC survey showed that 80% of companies surveyed offer their employees formal cross-cultural preparation for international assignments, only 21% of those companies made the training mandatory. Companies can hedge against that risk by creating global awareness early in candidates’ careers with learning programs and information. These offerings can whet employees’ appetites for self-directed development in this area.
· Build global acumen into performance goals: Providing global awareness performance goals, development opportunities and feedback can initiate an employee’s journey toward a short-term global assignment. Assigning an employee to a global project is an effective way to help them build global contacts and expand their cultural horizons. This approach can also give a company an early indication of who is most suited for short-term global assignments.
· Link global assignments to talent and succession planning: Including relevant global assignments in the talent management and succession planning processes is a way to ensure that earlier learning and development efforts bear fruit. Importantly, integrating the assignments into these processes can bring rigor to the approach and ensure that the international assignments are aligned with critical business objectives.
Starting these efforts early and providing an ongoing focus will help ensure that you are selecting the right candidates and maximizing your company’s investment in short-term global assignments.