An HR Leadership Perspective: LINKING GLOBAL MOBILITY AND TALENTSHIP

Companies and organizations often struggle with failed international assignment efforts caused by early returns, or poor performance and attrition, once an employee has returned from an assignment. Applying the principles of talentship can improve the quality of international assignment decisions, reduce turnover, improve the employee experience, and enhance long-term organizational success.

A COMPELLING NEW BUSINESS OPPORTUNITY FOR HR LEADERS Though the costs of an international assignment are, on average, three to five times greater than a typical employees annual salary, few organizations use a consistent process to analyze the strategic impact of global mobility investments. According to a 2005-2006 Mercer Consulting International Assignments Study, many companies confirm that, while they have a general understanding of their international assignment costs, only a few are able to measure the specific resulting value and ROI. As a result, HR leaders are looking for better methods to demonstrate the business impact of well-managed international assignments. Talentship provides a logical framework HR professionals can use to improve decisions related to globallydispersed employees (talent): how they are organized, how they interact, and how their contributions to the organization can be enhanced. Global Mobility Managers oversee the complex processes and interdependencies involved in moving employees and their families from one global location to another, either temporarily or permanently. As organizations increase employee movement across borders, they remain under pressure to contain costs, track and measure the effectiveness of their programs, and meet the immediate needs of Line Management. Typically, they evaluate assignment costs, employee performance while on assignment, and assignee retention, compared to the general employee population. Global mobility managers have measures to evaluate operational costs of international assignments, but not a decision framework for the talent. They tend to use metrics internally rather than providing information that may be useful to the business and drive global talent decisions.

2007 N. Paris and D. Saks All Rights Reserved.

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TALENTSHIP IS TO HR AS FINANCE IS TO ACCOUNTING AND AS MARKETING IS TO SALES Though HR has a well-developed set of practices in such functions as Staffing and Total Rewards, HR activities are more similar to sales or accounting than to finance or marketing. When it comes to human capital measurements, HR organizations are becoming more proficient at aligning HR program outcomes to business outcomes. However, the decision science model can provide a more comprehensive decision framework and improve HR strategic decision-making relating to global mobility. The competencies and activities within sales, accounting, and HR are very different from the decision sciences they support, but one cannot exist without the other. Giving line managers and senior leaders quality information about how best to manage international assignees and improve decisions about this resource is one good example of the discipline of talentship.

In todays global environment HR leaders and global mobility professionals need a combination of two measures: 1. Financial measures to determine if any gains or losses in the business are attributable solely to the performance of employees on assignment. 2. Strategic measures to determine who is on assignment and what they are there to accomplish. Strategic measures can be quantitative or qualitative. They can address business, organizational, or talent issues. For example, are international assignees there to perform a specific task, or is it a developmental assignment? Using both measures helps clarify which decisions are critical. Successful HR leaders and global mobility professionals could begin to make strides by enhancing the quality of their discussions regarding assignments and linkage to business effectiveness. Functions such as finance and marketing generate the information needed to drive decisions that impact strategy and the bottom line. Finance and marketing are both decision sciences that use an agreed-upon set of objective methods to generate information that supports decision-making. John Boudreau and Peter Ramstad coined the term talentship to refer to the decision science that improves organizational performance by enhancing decisions that affect or depend on people. Talentship is to HR as finance is to accounting and marketing is to sales. In finance, there is a clear distinction between the professional practice of accountingnecessary for reporting and dataand the decision science of finance that develops the tools to make decisions of where to allocate capital within diverse business units. There is an equally clear distinction between sales practices and the decision science of marketing that uses tools to make decisions about customer segmentation. GLOBAL MOBILITY DECISION CHALLENGES As organizations continue to define the benefits of moving talent worldwide, the loss of key talentduring and after an international assignmentis an ever increasing challenge. Contributing to the risk of turnover is the lack of employee and family support at the departure and destination locations. The solution should include a myriad of international assignment support services: finding suitable housing in the new location, disposing of or managing the departure location property, assisting the spouse and family in the new location, and providing intercultural and language training. However, in a fiscally conservative business climate, programs designed to adequately prepare and assist employees moving worldwide are often rare or non-existent. All too often, cost-conscience line managers consider international assignment activity to be far too complicated, too expensive, and too annoying. We just want HR to make sure the employee shows up for the new international assignment on Tuesday. We dont want to deal with the complex support stuff. In contrast, there are global organizations that provide almost five times the internal resources and support to employees on international assignments, compared to their domestic relocation programs, which experience less turnover.

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There are three key, global mobility decision challenges facing HR professionals. The first step is to improve the quality of discussions in the following areas:

Identify specific strategic and financial global mobility measurements Enhance employee performance while on assignment, and ensure long-term engagement upon repatriation Balance assignment benefits with assignment expenditures

Talentship, like other decision sciences, reveals the power of applying the decision framework when it can have the greatest effectbefore making the decisions. Use Impact, Effectiveness, and Efficiency as anchor points in your discussions to build the framework for making global workforce decisions.

MOVING TO A DECISION FRAMEWORK As organizations create a vision for business and strategic success, the vision must drive each functions decision-making process. We provide an International Assignment Decision Science Framework in Figure 1. Each level of the model must align with, and build from, the business objectives that ultimately guide the development and the implementation of international assignment measures. Applying the principles of Talentship using the anchor points of Impact, Effectiveness, and Efficiency in the Talentship Discussion Framework (Figure 2) will improve international assignee decision-making by using the following fundamental discussion questions:

Figure 1: TALENTSHIP: INTERNATIONAL ASSIGNMENT DECISION FRAMEWORK

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Figure 2: TALENTSHIP: DISCUSSION FRAMEWORK

STEP 1: Identify business impact based on the relationship between performance of international assignees and long-term strategic success. A critical impact discussion is: How much will business and or strategic success increase by improving the quality or availability of international assignees? For example, employees who return to their home country after an international assignment are an underutilized resource who can impact a firms competitive advantage with their newly acquired knowledge and skills. However, surveys show that more than two-thirds of longer-term (over one year) assignees are not content with their firms re-entry approach to their home country and consider leaving their employer during or after their work abroad. The risk of turnover upon re-entry clearly highlights a problem of lost value to the organization. Another example is an organization that revealed turnover costs for returning assignees approached $25M in lost investment each year. International assignees are a neglected resource that increases the likelihood of potential assignee candidates being less interested in choosing to accept an international assignment. This can have a serious impact on an organizations global business strategy.

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On the other hand, there are organizations that place a substantial emphasis on the development of talent worldwide. For example, a worldwide professional services firm in more than 70 countries successfully utilizes international assignments as a developmental opportunity, and provides a suite of formal development programs to support ongoing professional development. With a high percentage of top performers on international assignments, support is provided by an internal international assignment administration team that encourages review of professional development plans every six months, along with the use of home and host mentors throughout their assignment period. The firm has very high retention ratioscreating an environment that facilitates improved performance and internal promotion resulting in a healthy supply of potential global leaders in the company. STEP 2: Establish how the management of your international assignment programs and practices affects employee performance during and after the transition, and how those practices integrate with internal stakeholders. Effectiveness is the relationship between employee performance before, during, and after transitioning to a new location and the expenses allocated for managing critical support services and resources. Typically, effectiveness measures employee performance and attitudes immediately after an assignment. But, effectiveness measures should also help you determine if line managers are working in concert with staffing, and if staffing is working in concert with global mobility and relocation. Measures should also help determine if employee adaptation and performance contributions continue to improve over time. With the increase in decentralized decision-making within multi-national organizations and increased employee movement in regional marketplaces, there is the perception by line managers that working outside the international assignment program is not only faster, but also more cost-effective. But, silo thinking can lead to unexpected costs and employee performance consequences. An example of a critical effectiveness discussion is: Which international assignment policies and programs will enhance employees capability, opportunity, and motivation to contribute? Line managers often know what theyre trying to achieve in assigning people in the short-term and have a selection process of their own, but may not be as thorough in communicating their goals to HR who administer assignments. The missing link is line managers who look at selecting assignees on the basis of short-term goals without considering long-term talent management perspectives and implications. Plus, there could be a limited awareness of the full spectrum of candidate assessment and selection processes available to increase the chances of assignment success.

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STEP 3: Analyze how international assignment expenses affect the administration and management of international assignment programs. Efficiency is the relationship between the administration and management of international assignment policies and programs, such as departure and destination support services, and the expenses for those services, including internal support staff. Many decisions regarding where to allocate financial resources for support services depend on employee noise level. If employees are silent, were paying too much for the assignments and their transitions. If the noise level rises, were not paying enough! The issue is not only how much youre spending on services to ease their transition, but where you target spending modifications for those services that will keep the employee productive during and after an assignment. For example, many organizations who aim for more predictable international assignment costs make the decision to outsource some or all administrative and management functions with the goal of reducing expenses, buying in expertise, managing risks, and moving their HR resources to more strategic activities. An example of a critical efficiency discussion is: How much should we spend on international assignment support programs and resources, and where in the portfolio of services and resources should we spend it? For example, a 2006 PricewaterhouseCoopers study entitled Measuring the Value of International Assignments, found that when problems arise with employees on assignments, often the first reaction and decision is to offer more money to the employee, perhaps hoping this will delay or prevent having to confront the more difficult issue of performance or an early return. This might provide a shortterm solution, but may not achieve a longer term benefit for either the employee or the organization if the fundamental cause of the problem is not understood, or appropriately managed. THE WHAT TO MEASURE CONUNDRUM Once youve engaged in rigorous and quality discussions, you can now move toward applying quality decisions that address critical international assignment issues. Figure 3, Talentship: Key Decision Questions, demonstrates examples of global talent decisions applying the three steps of Impact, Effectiveness, and Efficiency. By implementing the decision framework, youre now beginning to improve global mobility decisions throughout the organization and utilizing the fundamentals for designing and refining a measurement system.

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Figure 3: TALENTSHIP: KEY DECISION QUESTIONS

According to talentship decision science, what should be measured is the impact (Step 1) of workforce contribution to the achievement of organizational and business goals and how international assignments facilitate this achievementboth short-term and long-term. Since employees are assigned as a way of developing the individual, or to address a business need, its difficult defining international assignment ROI and gathering the data necessary to develop meaningful measurements for two reasons: 1. The costs of moving an employee to another location or sending an employee on an international assignment are immediate 2. The return or value created by the employee is partially intangible, may extend over a period of years (except for project assignment cases), and may apply to various functions and departments in the organization.

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Even though international assignment measurements include a combination of financial and strategic components, most ROI calculations are used primarily to demonstrate the value of assignment expenses after the fact, and may not be helpful until we decide what the questions are that impact strategic success. And that is precisely when it becomes time to apply the principles of talentshipto help build a decision science that asks key global talent movement questions, challenges existing measures, and produces better approaches. The logical framework leads to better conversations, better questions, more influential talent decisions, and meaningful metrics. ROI may not be helpful until we decide what the questions are that impact strategic success. AN INVITATION TO THINK DIFFERENTLY Talentship is an invitation for HR leaders and global mobility professionals to think differently. The business opportunity is to more successfully manage the international assignment operations and its talent pool. Asking the right questions up front, and improving the quality of discussions and decision-making can improve business impact and assignment success. International assignment management should be evaluated not only by the quality of programs and practices, but by the quality of decisions about global employee movement. International assignment management is far more than an HR imperative. It is a business imperative that is vital to strategic success.

Nancy L Paris is Vice President, Strategic Consulting at Bristol Global Mobility, a mobility management and consulting firm that supports workforce success among organizations involved in Domestic US and International movement. She has over 22 years experience realizing beneficial business outcomes for Global 1000 leaders designing talent management solutions across multiple industries and is a frequent national speaker focusing on the diagnosis and resolution of global mobility issues for mid-sized and large multinational firms. Nancy can be reached at nparis@ bristolglobal.com Deborah Saks, M.A., is CEO of 1 Source Consulting, a human capital management company that provides top management with strategic, organizational and human capital solutions. She has held senior executive roles for more than 25 years. Deborah co-authored The New Standard in HR Leadership. She is a frequent guest speaker on a variety of leadership and human resources topics and is the Co-Director for the Human Resources Leadership Center for the Leavey School of Business at Santa Clara University. Deborah can be reached at dsaks@1sourceconsult.com.

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