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									The Changing Global Job Market -
Relocation Implications
June 2007
David Reynolds
Executive General Manager
Chandler Macleod Consulting
Agenda
 Current trends in the global job market
 New global markets
 The new global people value chain
 Case study – India
 Current relocation trends
 Implications for inter-country people mobility
 The impact of the changing psychological contract
 Recent Chandler Macleod employer/employee research
 Strategies to increase relocation success
Some Current Trends in the Global Job
Market

 Huge growth in demand and competition for people
 between countries
 Corporate intangible assets (people/brains) has
 risen from 20% of the value of companies in 1980
 to 70% today (factories to brains)
 Talent shortages in China and India
 China’s one child policy will impact over next 50
 years
 Continued massive manufacturing migration –
 outsourcing to China
 Western Europe, Japan and North America have
 similar demographic changes to Australia
Creation of New Global Workplaces
  China, Russia, India – characterised by:
    Low wages
    Motivation to succeed
    Growing infrastructure
    Youth and population
    High risk/high returns
    Educated Indians
    Educated Russians
The Old People Value Chain

                PRODUCTION




    CUSTOMERS

                  PROCESSES
         PEOPLE
The New People Value Chain

                                      PRODUCTION

     CUSTOMERS
                 PEOPLE

                          PROCESSES
Global Competition for Jobs/Work



            CEO              PRODUCTION



                    PEOPLE


                                      PEOPLE



                     PROCESSES
         PEOPLE
Current Trends – Globalisation cont.

  Cheap brain power
  R&D going global (e.g. digital displays in South
  Korea)
  Research, Accounting- Philippines
  Microsoft, Samsung and Siemens have set up R&D
  labs in China – 24/7 product development
Current Trends – Cheap Brain Power


           THE JUST-IN-TIME WORKFORCE
            Brickwork is your gateway
             to the Best of India. We
           have access to world class
          MBA, CPA, CFA, PhD, Social
             Science graduates and
            more. We select the best
           resources for you based on
                your requirements.
Current Trends - India
  A 50 hour working week is considered PT!
  Produces 2.5 million graduates each year (inc. 400k
  engineers and 200k IT professionals)
  The great job migration – IT outsourcing (from the
  West to India) will increase from $US193 billion to
  $US260 billion in 2009
  GE Capital India has the following sign on its
  building
              ‘Trespassers will be recruited’
What Does This Mean?
  The change in what is value in our economy from
  inanimate assets to intangible assets (from factories
  to brains)
  The changing demographics of first world OECD
  countries
  The opening up of the labour market – allowing
  people to cross borders, study abroad, immigrate
  etc.
  Changing employer-employee psychological
  contract
Current Global Relocation Trends
  Total revenue generated from outside a company’s
  headquartered country = 41%
  More than 69% of multinationals reported increase in
  the number of international assignments
  65% of companies predicted they would send more
  employees on assignment in 2007 than 2006
  Primary purpose of international assignments to
  build management expertise

       - GMAC Global Relocation Trends Survey 2006
Current Global Relocation Trends
  40% of returnees from overseas postings leave
  within 1st year back
  However if business can retain returnee for
  >18months employee remains loyal
  1/3rd returnees promoted on return; 58% stayed at
  same level; 9% demoted
  81% companies promised “best endeavour” to find a
  job on return
  58% promised physical relocation only; 27%
  employment
  15% guaranteed role at same level

      - PWC/Cranfield University survey 2007
Current Global Relocation Trends cont.

  Employees are increasingly turning down
  international assignments:

     1. Family concerns
     2. Spouse/partner’s career
     3. Career aspirations
Family Concerns
  Include children’s education, family adjustment,
  partner resistance, challenging location, cultural
  adjustment
  These concerns can be overcome by cross-cultural
  training, and a successful cultural transition
  Only 21% of companies require cross-cultural
  training for their assignees (even though most
  companies consider this to be critical to success)
Partner’s Career
  82% of employees tend to be accompanied by
  spouse/partner – most put their own career on hold
  This trend likely to increase financial and
  relationship pressures (during and after the
  assignment)
  Research by Cendant indicated that 50% of
  relocations fail because of partner’s career needs
  not being met
Career Aspirations
  Career advancement not being perceived as a
  benefit
  This is despite HR and management reporting that
  international assignments lead to quicker promotion
  and stronger employability
Other Relocation Trends
  Expatriates change employers more often than their
  locally based colleagues
  More women are accepting assignments overseas
  (20% in 2006)
  24% of expats leave their company during an
  assignment
  China, India and Russia are the primary emerging OS
  destinations – also the most challenging (housing
  and living costs, immigration challenges, payroll,
  employment)
Observations
  Success of employee repatriation after return
  depends on how much they feel valued on return
  It is the responsibility of the employer and employee
  to actively plan for repatriation
  The cost of getting it wrong is significant
  More sophisticated assessment processes requited
  to determine suitability to overseas posting
Variables Influencing Employee
Retention, Intentions & Behaviour
Professional-
        Organisation
        Job
        Rewards
        Development Opportunities
        Professional & personal support
        Colleagues
        Manager
Personal-
        Demographics
        Personality
        Motivation
        Stress Tolerance
        Job satisfaction
        Commitment to organisation

Source- Jennifer Thompson 2007
More Robust Assessment
A number of aspects can impact on ascertaining whether an
    employee will be successful in overseas postings
    Antecedents*-personality & demographic variables
    Agitators# - Job & organisation variables
    Moderators# - stress, job satisfaction & organisation
    commitment

* Organisation cannot influence
# Organisation can influence

Source- Jennifer Thompson 2007
The Right Fit
Good Retention = Positive Fit between Professional & Personal
   Variables

Poor Fit between person and Environment       negative outcomes
   including stress, dissatisfaction, poor performance & turnover


Leavers- have higher levels of need for achievement, independence
   & aggression

Stayers- greater assertiveness & emotional intensity; ability to cope
    with new environments; striving & impatience



   Source- Jennifer
   Thompson 2007
The Changing Psychological Contract

  A significant aspect in the global war for talent
  Definition = the perceptions (promises and
  expectations) of the employee and employer of what
  their mutual obligations are towards each other. It is
  based on the concepts of trust and fairness
The Changing Psychological Contract
cont.

  To compete effectively in the war for talent,
  organisations need to have a clear idea of what
  employees need from their work to stay motivated
  and productive and what is reasonable for them to
  do so
  Expectations differ across demographic groups (e.g.
  Gen X and Gen Y)
The Psychological Contract is Still
Critical!

  Research shows that employees:
    Still need security
    Are still prepared to demonstrate loyalty (although
    more likely to the team rather than the
    organisation)
    Even more important in the global workplace –
    more competition, more variables, more employee
    choice (e.g. rate of unsuccessful overseas
    assignments)
Recent Chandler Macleod Research
  Attractive salary and performance bonuses
  important, but not as important as other benefits

  Employers undervalue the benefits of a positive
  work environment, and work life balance
  Employees want tangible training and development
  opportunities
  A fun, positive and vibrant work environment is
  highly valued
  Career development and progression
  is very important
Recent Chandler Macleod Research
 25% of new staff decide whether to stay within the
 first week, and 58% within the first month

 Employers overestimate the time employees take to
 decide

 An effective onboarding program, and delivering on
 EVP promises is critical – for local and relocated
 employees

 25% of employees reported that promises had not
 been upheld
Relocated Employees – Induction
Strategies
  Based on our research, the following need to be included in an
  effective induction/onboarding program from the outset
    Cultural assimilation and training (self and family members) –
    before the employee arrives
    Work actively to minimise family concerns
    Wherever possible, provide employment options for partner
    Be clear about career benefits (e.g. advancement)
    Ensure that the employees has a full understanding of the housing
    and living situation (including costs, and differences)
    Ensure that the logistics regarding immigration, payroll and
    employment are handled by HR (not the employee) – this needs to
    occur before the employee lands!
    Ensure a buddy/mentor is assigned from the outset
Relocated Employees –Strategies to
Maximise Success

  Understanding of key stakeholders/key relationships
  Introduce key executive team and other relevant team members
  Overview of approach to market and key clients/stakeholders
  HR policies and processes
  L&D plan
  Role - responsibilities and accountabilities
  Monitor employee satisfaction regularly
  Ongoing performance review and follow up
  Actively demonstrate commitment
Questions?

								
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