KPMG: More companies aim to drive growth with global assignments

KPMG: More companies aim to drive growth with glo...

Worldwide, more companies are relying on global mobility assignments to develop business in new locations – with the biggest increases in the Nordic countries, Latin America and the Asia Pacific region. Most participants in a KPMG International survey say their use of international assignees will stay the same or increase over the next five years. This is especially true for European headquartered companies and those in the energy industry. Many companies struggle to track and communicate their return on investment in global mobility: 27 percent do not know how many assignees leave the organization within 12 months of returning home, for example, and 31 percent do not know departing assignees’ reasons for leaving. About half of the participants say these programs take too much time and effort to administer. To manage the volume and complexity, most survey participants use external providers. Tax and immigration services are the most commonly outsourced activities.

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For companies pursuing growth in new markets, having the right people on the ground is essential. Worldwide, more companies are drawing on the experience and know-how of their internal talent to develop business in new locations through global mobility assignments.

 

At the same time, companies with established global mobility programs – such as those based in the US, Canada, the UK and other European countries – continue to expand and adapt their global mobility programs to meet ever-changing needs. Supporting business objectives and adapting to changing business requirements are the primary goals of these programs for the majority of companies.

 

These are some of the key findings from KPMG’s Global Assignment Policies and Practices (GAPP) Survey 2015. Now in its 17th year, this annual poll of over 600 organizations worldwide continues to present benchmarking data and insights on how global companies manage their international assignment programs.

 

“With a well-run global mobility program, companies can enhance their culture by giving talented employees the opportunity to live and work in a different country, broaden their experience, learn new skills and establish a personal global network,” says Mădălina Racovițan, Partner, Global Mobility Services, KPMG in Romania. “And internationally experienced employees bring deeper insights and demonstrate exceptional value to local clients and targets by supporting speed-to-market goals while minimizing business risk.”

 

Overall, 86 percent of survey participants say their use of international assignees will stay the same or increase over the next five years. Results are even higher for European headquartered organizations and those in the energy industry.

 

The survey reveals companies are broadening the variety of assignment types on offer to improve the flexibility and adaptability of these programs:

  • 81 percent of participants offer short-term assignments (typically defined as less than 12 months)
  • 96 percent offer long-term assignments (typically 1–5 years)
  • 47 percent offer permanent transfer/indefinite length assignments.

 

Companies are also becoming more flexible in their assignment policy approaches – setting policy frameworks with core and optional provisions and expanding the range of choices for either the business or the assignee (e.g. through menu-driven or points systems).

 

“Approaches like these show a clear trend toward supporting more customized programs that aim to better meet assignee needs while keeping costs in check,” says Daniela Oprescu, Director Global Mobility Services, KPMG in Romania.

 

But many companies struggle to track and communicate their return on investment (ROI) in these programs. For example, 27 percent do not know how many assignees leave the organization within 12 months of returning home, and 31 percent do not know departing assignees’ reasons for leaving. Indeed, only 12 percent of survey participants say that controlling global mobility costs and assuring an acceptable ROI is important.

 

Companies would do well to give more attention to ROI. “Having agreed-upon metrics to measure ROI helps objectively demonstrate the value of mobility programs to the broader organization and secure continued program funding,” says Oprescu.

 

The survey results also underscore the high demands of global mobility programs for program managers. About half of the participants say these programs take too much time and effort to administer. To manage the volume and complexity, most survey participants use external service providers. Tax and immigration services are the most outsourced processes, while payroll and expense processing tend to remain in-house. The major reason for outsourcing is to gain access to the service provider’s global resources and knowledge.

 

Finally, as companies work to better integrate their talent management and global mobility programs, the report highlights the broader trend that sees HR teams focusing more on demonstrating value to their businesses through predictive workforce analytics.

 

“Global mobility programs need to have built-in capacity to adapt to ever-changing business needs while continuing to support the organization’s goals” says Racovițan. “With real-time access to talent skills data, HR teams can use analytics to identify future talent gaps. Looking ahead, this capability will be a key strategic differentiator that global mobility professionals can offer their organizations.”

 

About the survey 

KPMG’s Global Assignment Policies and Practices (GAPP) Survey 2015 report analyzes the responses of more than 600 individuals worldwide who are responsible for or interested in global mobility. Seventeen years after its launch, this web-based survey continues to provide valuable trends and insight on how global organizations administer their international human resources (HR) programs. The survey website allows you to view results sorted by headquarters location, organization size, program size, and industry classification so you can benchmark your organization in areas such as assessment and performance, assignment compensation and allowances, preparation and planning, administration and outsourcing, and taxation policies.

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