28 Jan The Rise of Informal Mobility: Be Aware of Risks

Budgets, operational expenses, salaries, taxes, and all other costs have to be documented, calculated, and analyzed

Sometimes, global mobility specialists and their executive leaders pay a lot of, and admittedly needed, attention to external threats that they neglect the internal corrosion happening in their midst. Crises like Brexit, the fluctuation to the stock market, and President Donald Trump’s hard-handed policies on immigration and trade can be anticipated, although their eventual outcome would be hard to predict. From the time that the first news breaks out about the British people’s discontent about their European ties, or Trump’s announcement of his candidacy, the signs are present. Everyone can turn a watchful eye to these events to see how these will impact them and their areas of responsibility.

But, ironically, as a study by PWC stunningly reveals, the unseen but steady rise of informal mobility can soon take an unexpected toll on the corporate structure. The survey covered 224 companies spread across 26 countries. The conclusion had far-reaching implications on companies which make use of global mobility:  31 percent of these participants surveyed admitted that they simply had no capabilities of tracking their employees who were informally mobile. Neither did they know what these individuals accomplished. More telling was that they could not approximate the costs that they incurred.

One fact that stands out is that these leaders did not even know how many of their employees had gone informally mobile.

Informally mobile employees refer to staff who go on short-term projects, attend business conferences, or take a month or two in another country to do negotiations with partners and other shareholders. Global mobility specialists themselves come under this category when they visit international talent hubs to recruit assignees, participate in learning sessions, or network with their peers. But these professionals recognize that they have a mandate to return, and the fulfillment of their task does require their being situated in the home office.

Unfortunately, according to the PWC study, many of these informally mobile staff take advantage of the opportunity, as well as their manager’s neglect or failure to follow up. They extend their stay, prolong their schedules, and perhaps indulge in a lengthier tour of the destination sites. As a result, budget for these trips can skyrocket even as the informally mobile employees start lobbying to become permanent expatriates. By that time, they would have so cemented themselves in their assigned countries that their stay in them have become integral to the job. In short, they can’t be recalled.

The Irish Times warns that the continuation of this development can lead to other repercussions like increased taxation for the organization. In her interview, Mary O’Hara, tax partner of PwC, points out, “Companies must develop an understanding of who their mobile people are, where they are going, and what they are doing, to be best placed to identify the risks.”

Global mobility specialists must do the same for their assignees who are on short-term contracts, regardless of how knowledgeable (or not) their bosses are. There are three ways they can do this:

Create a bond founded on trust and transparency with your assignees

A relationship should have been established by the time they signed on board their U.S. assignment. Open communications should be the norm of the future. An assignee who trusts you will be open to you about his plans. And let’s face it, regardless of current hurdles in the Trump administration, many of these foreign talents would want a longer stay in the U.S. Millennials, in particular, always want to be mobile. If they enjoy their working arrangement in Northern California, they may want to apply for the next post in New York a few years from now. If they feel that you encourage their career aspirations, then the less inclined they would be to do something surreptitious to lengthen their U.S. assignment.

Build a database of talent, present and potential

Now is the time to convince your boss to create your own recruitment database of candidates that you had hired, and whom you might consider in the future. Take a page from IBM which boasts 40,000 profiles of qualified talents. Aside from putting together a pipeline of succession and reducing costs in recruitment, this online pool can be a tracking device that will note down your assignees’ past, present, and current movement. No one will be missing in action.You can also tap into this database for future recruitment efforts, reducing the usual amount of time, money, and effort expended in this area.

Create your own financial documents, and don’t rely on other bean counters

By all means, have an accounting professional go through your spreadsheets, but the foundation has to be laid down by you. Budgets, operational expenses, salaries, taxes, and all other costs have to be documented, calculated, and analyzed. After all, this documentation is your main justification to management to keep their budget for your department going. Short-term assignees are also covered. Finally, make sure that the return on investment culled from the performance of your hires is seen by higher management. More than 80 percent of them recognize the need for global mobility; they just need to see the numbers to keep on funding them. An ROI report will keep them happy — and stop them from falling into the trap of neglect or ignorance that 31 percent of the RWC respondents had succumbed to.

Informal mobility may be causing confusion among some officers of the corporate structure, not to mention incurring unexpected expenses and laying the groundwork for permanent assignments that are not in the pipeline. However, global mobility specialists do not have to succumb to what amounts to one massive operational flaw, because they know the ins and outs of global recruitment and employment. In fact, they can leverage on their skills, knowledge, and experience to control this new trend that is informal mobility, and perhaps turn it to their advantage as well as of the company’s.

No doubt their executives will value them more highly, especially if they create structure out of this chaos, and produce tangible benefits, such as ROI’s whereas previously there was none.