Global Mobility Functions: Bringing Value, but Struggling to Demonstrate It

iese picIn my latest blog entry I argued that globalization is in need of global leaders, who would allow for a more integrative approach in fostering globalization further. Indeed, globalization seems to need an extra push, as contrary to general perceptions of global interconnectedness, actual data indicates that the world is still not ‘flat’. Echoing this paradox, Santa Fe’s recent Global Mobility Survey Report states that although global mobility is generally high on companies’ business agendas, the global mobility function itself seems to be undervalued and under-resourced. In other words, their Leaders’ Survey indicates that leaders do believe in the value of global mobility functions; yet, they do not think that this value is being demonstrated well to the wider organization.

Hence, global mobility functions need to prove their value. Objective and demonstrable metrics are probably the field to start from. Indeed, 57% of global mobility professionals find it difficult to effectively demonstrate their team’s value to the wider business, which sounds like a familiar trend of lacking financial metrics for global mobility. For example, according to the current survey, only 9% of global mobility functions are always able to provide measures of ROI (return on investment) for individual assignments. The survey data indicates that the biggest information gaps exist for metrics about a) revenues generated from new business opportunities, b) employee retention and c) financial performance of the destination countries. Compared to the previous year, mobility professionals are seemingly using more of the necessary criteria to evaluate ROI. Employee retention and job progression continue to be the main metrics of ROI. However, more and more global mobility professionals also start accounting for other metrics, such as financial performance of the destination country, key skill development, revenue generated from new business opportunity, and reduction of business risk. Informal feedback is usually also included in the evaluation of ROI, but it is the only dimension of information flow, which is provided by the global mobility function on a slightly larger extent than the C-suite would actually be willing to see.

As such, even though global mobility are getting more and more complex (e.g. more destinations, different types of assignments), the need for evaluating the value of assignments is only growing. Naturally, calculating ROI is impossible without evaluating the costs of global mobility, and, as Santa Fe’s report indicates, this is where global mobility functions also fall short. More specifically, estimating costs already seems to be a difficulty, especially in terms of short-term assignments. The report data show that fewer than half of the global mobility functions generate pre-assignment cost estimates for one-way relocations, graduate programs or short-term business travelers. Given that the evolving global mobility landscape points to increased diversity and a rise in short-term assignments, this trend seems to gradually become a more serious matter.

Finally, there is also a need to track actual assignment costs. Predicting costs is important for accurate budgeting, while the evaluation of actual costs is essential for evaluating assignment performance. Global mobility professionals indicate that data about assignments’ total costs and their comparison to forecasted costs are the most important metrics for the management teams as well. Unfortunately, little success can be reported here either: only 44% of the global mobility functions provide total cost data and only 21% provide comparison data.

All in all, while it seems that for many businesses global mobility is a strategic decision, global mobility functions struggle to have their seat at the top table. Management teams need to be convinced, and there is nothing better than providing objective performance metrics to do that. It seems that global mobility functions have a long way to go…

3 thoughts on “Global Mobility Functions: Bringing Value, but Struggling to Demonstrate It

  1. Having provided investment ROI calculations in a previous career, I can assure you that much ROI is calculated on the old formula: Garbage in -> garbage out. Almost anything can be included on either side of the equation.
    But as everything else related to HR, the main indicator for if something will be a smart thing to do has nothing to do with the HR function and everything to do with management. If there is no plan for how to utilize returning expats’ new skills, they will not stay long in the organization and ROI will lack a significant part of potential revenue. Can you plan for that in a ROI calculation? No, you can only give guesstimates.

  2. I strongly believe that global mobility functions have a major role to play in helping certain organizations respond to all the changes, driving out new cultures and behaviors across the organization. Sustainability, shift in economic power, demographic change, technological breakthroughs are only small part of the opportunities and challenges for global mobility functions to address. I hope the whole process of crucial transformations as a result of globalization will be handled as smoothly as possible.

  3. I would say that predicting costs is one of the most important things for accurate budgeting, while the evaluation of the actual costs is essential for evaluating assignment performance. These 44% and 22% are really low. I thing not only here but in general predicting costs and cash flow is vital.

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