It is our view that there will be no less evolution in employee mobility in the next 50 years as there has been in the past 50. When ECA was established in 1971 organisations typically moved staff from the major economies of Europe and North America to industrialising countries. As Japan prospered in the 1980s, and other Asian economies became richer in the 1990s and 2000s, as globalisation accelerated, companies from the Asia region joined their Western counterparts in moving talent worldwide.
There are threats to this trend posed by geopolitical factors such as Sino-US political and economic tensions, reduced respect for multilateralism and climate pressures (whereby companies may increasingly decide that the environmental impact of relocating a family from New York to Sydney, say, for a three-year assignment is unjustifiable). Furthermore, the response to Covid-19 has shown that companies can still thrive even when they can’t move as many staff around the world as they did previously.
Nonetheless, there will still be considerable employee mobility in the next 50 years. Firstly, there are growth regions and companies will continue to seek them out – Africa will likely be a major destination for many in the years ahead.
In addition, as regionalisation of mobility intensifies, many of the traditional ‘sending’ countries will face demographic challenges associated with aging populations and shrinking workforces. The capacity of employers to assign staff from these locations to meet talent shortages in growth economies may well be reduced. As such, companies will need to rely on intra-regional mobility within growth regions (for example, relocating people from Kenya to meet requirements in Nigeria) and will need to ensure their policies adapt to cater to such changes.
It remains to be seen what the long-term impact of the Covid-19 pandemic will be on mobility. Previously, companies increasingly offered one-way moves to employees on salaries and benefits which were the same as those offered to local peers. The narrowing of the gap in living standards and salary differentials between many economies meant that employees were increasingly amenable to relocating on open-ended contracts and earning local packages as improvements in communications (both technological and travel) made it easier for a person to return home when the need arose.
This also led to simplification of mobility policies. For example, there have been long, downward trends in companies offering rest and recuperation leave and club memberships – benefits which have become less relevant to assignees. However, whether trends towards localisation of packages continue will depend on employees remaining willing to leave their home locations for work. Record numbers of people quitting jobs in the last 18 months shows how many are re-assessing their lives. Some at least will be persuaded that prolonged periods away from family and friends, and risks associated with high-risk assignment locations, may not be worthwhile. Only salaries which are sufficiently incentivising will lead to employees relocating.
However, even if we do see a return to the pre-pandemic trend towards convergence in salary levels and living standards (along with simplification and localisation of mobility policies, particularly regarding salary calculation methods and benefits provision), GM teams will still have a lot to manage. Even if companies are able to move employees, using local salary and benefits packages, to more locations in the next 50 years, GM professionals will still need to manage, among their many other responsibilities, immigration compliance, tax planning, administration and retirement benefits arrangements (all of which have become more complex in many countries as a result of the Covid-19 pandemic). All of this means that there will be plenty of challenges associated with cross-border mobility to keep GM teams on their toes in the years to come.