April 12, 2020
The Changing Shape of Global Mobility Services
The COVID-19 pandemic has created many new challenges for organizations across the globe, especially with numerous governments shutting down large sectors of the economy. Current forecasts show a 3% drop in global real gross domestic product this year, and economists foresee the worst recession since the Great Depression.
Statistics show that global mergers and acquisitions (M&A) will also have an economic decline, as indicated by activity in the first quarter of the year falling by 28%, or $698 billion, from the same period last year. In the USA the value of M&A deals fell 51% to $253 billion compared with the prior year.
The recently published, EY Global Capital Confidence Barometer reported that 73% of organizations believed COVID-19 would have a "severe" impact on the global economy, 77% of organizations indicated that they are taking active steps or are re-evaluating decisions to accelerate automation, and 69% indicated similarly on digital transformation as a result of the current crisis.
However, even as travel bans are imposed and some organizations evacuate assignees, many global mobility teams are being asked to prepare cost estimates and plan for future assignments. AIRINC’s pre-crisis survey revealed that only 29% of respondents were reducing program costs listed as a priority for the year, and current anecdotal reports appear to suggest that this figure might not increase by much despite the gloomy economic backdrop.
McKinsey’s latest COVID-19 Briefing Note encourages organizations to “reimagine the ‘next normal’ – what the shift might look like and how the institution should reinvent.” So how has COVID-19 impacted global mobility today?
In response to the crisis, relocation service providers have had to be agile to evolve their services to meet the needs of a rapidly changing environment. Providers in some locations have facilitated ‘self-isolation’ services when the assignee hits the ground. Additionally, home search consultants have used video calls to help assignees view properties remotely, whilst household goods providers have utilized virtual survey technology and assisted with packing a home in the absence of the assignee.
Will service adaptations like these transform the way services in the future are delivered? Generally, this seems unlikely. It’s more likely that the present situation has simply increased the adoption of services that naturally lend themselves to virtual delivery – for example, language training and cultural training. It’s possible that the delivery of these types of services will continue along an existing curve. Similarly, virtual household goods surveys enhance the assignee experience as a result of the flexibility they provide. The proliferation of the technology that underpins this service took place some time ago and adoption rates have increased accordingly.
Technology-driven home search services were already emerging in the market before COVID-19. Smart algorithms and machine learning help assignees to short-list properties from home, and the elimination of an accompanied viewing makes the service more cost-effective in addition to increasing employee productivity through the relocation process. Online country guides have been a supplemental product offering for a long time.
From a temporary accommodation perspective, products rivaling traditional serviced accommodation have been around for a while, yet organizations continue to be wary of them given the perpetual emphasis on duty of care. The risks in relying on online services is seen in the example of one global mobility professional, who recounted a recent incident in which an assignee on their graduate program used an online property letting service to source their temporary accommodation, only to discover the absence of a smoke alarm.
Current circumstances have ignited discussions around a redefinition of duty of care, but with mental health and well-being already taking an increasing prominence on the corporate agenda as a result of shifts in societal attitudes, it seems doubtful that there will be any fundamental shift in the narrative.
From a global mobility standpoint, the existing situation has highlighted more than ever that organizations need to have an understanding of where their employees are in the world. From the position of program design and the services being provided to assignees, existing trends are likely to continue. Mercer’s 2020 Global Talent Trends study highlighted that delivering on the employee experience is HR’s top priority, with 58% of organizations redesigning to become more people-centric. This is supported by AIRINC’s study that showed 73% of organisations claiming that enhancing the employee experience was a focus for global mobility for the year. However, Mercer reports that only 27% of executives believe employee experience will yield a business return.
For global mobility this may be a case of plus ça change – the more things change, the more they stay the same.
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As Account Director at Sterling Lexicon, Stuart focuses on working with clients to optimize their global mobility solutions. Stuart has worked in global mobility for 19 years. His broad experience of working with different program sizes across a variety of industry sectors helps to bring success to clients' programs and wider business strategies. If you would like to discuss any of the points raised in this article or learn more about Sterling Lexicon, please do not hesitate to contact Stuart Jackson at firstname.lastname@example.org.