Global Mobility in Harsh Times: Planning for the Future Dr Michael Dickmann March 2009 SM
Over the last few years we have seen globalisation becoming more and more
important. Given the current credit crunch, however, there are some strong
implications about what might change. To explore this, in the studio today is Dr Michael Dickmann. Michael, we have seen globalisation really take off in the last few years, but now there are a lot of cost pressures. How do you think that will affect things? MD Quite dramatic effects, I think. There is a tremendous pressure on simply reducing expatriation costs or coming up with solutions that the packages of individuals will suffer, will be reduced. Now, I think, reducing expatriate numbers might not be the best solution. If you combine it strategically with getting more local talent in, then that might work. But generally speaking all the trends have been an increase in expatriate numbers because globalisation is becoming more important. SM So one of the things that people often say is with better communications, e‐mail, video conferencing and so on maybe we can cut down the number of expatriates? RB Yes, it’s sad, and some companies like GlaxoSmithKline try to do that. If you only do it technically – better communications, e‐mails and so on – I don’t think that really works and we know that because the projects of organisations have become more complex so you actually need different perspectives of people. However, if you manage to get local talent in to do this, which is normally much less costly, that can work. So it’s something to do with how you structure your work internally and really how important communication and knowledge management in your organisation is – how do you compete as an organisation? SM One of the things that is clearly going to happen is pressure on the bottom line. Now that is going to put pressure on HR managers to cut back their budgets, to reduce the number of development secondments, for example, abroad. Do you see any ways round that? MD Yes, for example, who is the real beneficiary of developmental assignments? It’s the expatriate him or herself. We know from our research here at Cranfield that the factors that drive people to accept or seek working abroad are manifold, it’s a combination, but finance, financial factors are sort of hygiene factors. They are not very high up, but you Dr Michael Dickmann
need to have some sort of general level covered. We know in our samples it’s only the eighth most important factor. Much more important are things like what happens to my career, how can I develop the necessary skills, what happens to my family? Now if you manage that as an organisation it is much more cost effective, it’s better for retention of people over the long term and therefore you don’t need to reduce your numbers of expats dramatically. SM In the kind of hardnosed world that we live in, over the next two years, how do you see things actually turning out as opposed to the way you would like to see them turning out? MD I do believe that companies will reduce their developmental assignees and they will work on the package, they will try to reduce it, which as I said should be OK for certain types of assignments. So I will see a dip, but sometimes I fear that companies are trading the future for the present. SM So in other words people are saying look, we need to pay attention to the future, but if it is going to cost us money we will sacrifice that to take care of today? MD Yes indeed. Two years ago, three years ago, the picture was totally different. HSBC set the goal of having eighty per cent of expatriates were developmental assignments, for those future leaders. Nowadays these considerations have changed dramatically. SM So the likelihood is that globalisation in terms of real movements of people and so on, and people getting experience outside their home country, will suffer? MD Yes. If you look at it from the perspective of moving people around, now we might see ‘cheaper’ expats coming on from developing countries, going into the head office. We might ironically see that this triggers off much local talent getting into important positions abroad. So that doesn’t mean that globalisation actually suffers dramatically, it just simply means that the head office managers who want their career abroad, that might be curtailed. SM So finally, if you were to leave a message for companies with responsibilities for expatriates, for globalisation from a human resources perspective, what would that message be? MD The message would be focus less on money, focus more on careers and development, focus more on the whole pool of talented people you have – not just in the country of origin – and think about how you can effectively manage the knowledge and skills transfer from your expats to local Page 2
Dr Michael Dickmann
successors. SM That’s some interesting perspectives. Thank you very much Michael. MD You are welcome, Steve. Page 3