In many organisations, all three are considered Mobility’s customers. Identifying key customers and their priorities is a vital step to achieving lasting, positive outcomes. Responses to the question on how mobility defines success, we can see that 87% of companies prioritise business satisfaction. These answers indicate that the business is Mobility’s primary customer. However, when asked how often Mobility engages the business when considering policy changes, most participants responded with “sometimes” or “often” rather than “always”. Engaging the business to learn what they value helps Mobility make good decisions about resources and approaches.

Most participants noted that the primary purpose of moving talent around the organisation is to fill skill or knowledge gaps. Additionally, customer requirements are increasingly diversified. Successful mobility functions are those that can engage with customers to understand their wider needs and offer solutions that allow the business to make good decisions in these areas. Ultimately, good decisions are the result of exploring customer needs and collaborating with customers and external partners to implement solutions that reflect the purpose of mobility within the organisation.

What do you consider to be the most important outcome of a cross-border assignment?
■ to fill staffing needs in locations where skills or knowledge are not available = 4.1
■ to provide strategic business direction = 3.3
■ to provide professional development and global skills for assignees = 2.9
■ to provide training/development for staff in host offices = 2.2
■ to spread organisational values and culture = 1.7

(5 = extremely important, 4 = very important, 3 = moderately important, 2 = slightly important, 1 = not important)

Ensuring effective governance: for some mobility functions, governance is solely about compliance. For a growing number of mobility leaders, it is about balancing oversight and flexibility.

Most participants indicate that multiple stakeholders must approve an international assignment before it moves forward. The host business is typically responsible for absorbing mobility costs and is noted as an approver in 77% of organisations. In contrast, Mobility, which creates and administers the policies, is an approver in just a third of organisations. This approval structure generates a requirement for mobility to respond to the diverse needs of the business and explains the continuing trend of Mobility offering flexible package options for the business. Forty percent of participants meet that requirement by differentiating policies by length and purpose, while 32% (up from 26% last year) offer flexibility via negotiation.

In companies offering assignment flexibility, mobility tends to play an advisory role with 39% of organisations indicating mobility recommends assignment and transfer packages for the business’ consideration. In 14% of organisations, mobility is responsible for defining assignment benefits and support and only 9% allow the business to structure packages without mobility’s input. Expanded possibilities for personalised packages and business choice require a strong and supportive governance framework. Successful mobility programs reinforce the mobility decision-making process with clear governance oversight.

How would you best describe global mobility’s approach to providing flexibility to the business?
■ 40% – multiple policies differentiated by length but also purpose, e.g. standard or developmental policies.
■ 32% – flexibility is provided by individual negotiation and exceptions.
■ 32% – all assignees go on the same assignment length with little flexiblity.
■ 26% – policy offers ‘core’ benefits for all employees, with option to add or adjust ‘flexible’ benefits.
■ 26% – policies outline benefits by job level or other criteria.

Communicating creatively: forty-four percent of companies see an opportunity to improve the way Mobility communicates with employees while 48% are prioritising better communication with the business.

With increasing policy options and governance models that encourage the business to make package decisions, Mobility has begun focussing on communications to provide guidance and distribute important information to the business as well as employees. Both audiences are important customers and connecting with them in a targeted way helps mobility in the short and long term. Eighty-six percent of companies are making efforts to improve employee experience and dynamic, one-to-many communications like videos, portals, and training modules engage employees while reducing administration. These resources can, for example, help the 17% of participants that provide cash lump sums explain the intent of such payments to encourage more thoughtful spending. Communicating with the business has historically been done on a case-by-case basis, but new resources, such as mobility decision guides, help the business create compliant packages or select policies that balance assignment investment and purpose.

Please indicate if your company offers flexible choice to the employee in any of the following ways:
■ 36% – provide a cash allowance in lieu of individual benefits.
■ 17% – offer a cash lump sum for multiple benefits.
■ 16% – offer choice between a cash allowance or in-kind benefits.
■ 6% – offer flexible spending budget or flex points approach.
■ 49% – none of the above.

Policy Trends

Most participants report that the demand for mobility is stable or growing. There are noted changes to the types of assignments and transfers being used today. Compared with last year, 13% more companies now have an international one-way transfer policy (72% vs 59% in 2018). In addition to increased interest in one-way transfers, multiple organisations reported their intentions to add a commuter policy to their mobility program. The growing use of commuter arrangements reinforces the trend of companies supporting more flexible work arrangements.

Looking Ahead

The most significant change in Mobility today is how the function works and communicates with customers. Participants reported ongoing and planned initiatives to improve Mobility’s visibility and engagement with customers, and many are leveraging technology and vendors to make that happen. Mobility is also increasingly focused on providing the business accurate cost estimates and planning support.

In addition to these operational and communication enhancements, there is a continued expansion of Mobility’s remit with many assuming responsibility for business travellers, commuters, locally hired non-nationals, and domestic relocations. The consolidation of all things mobility is increasing market demand for integrated and agile technology solutions that streamline workflow, cost planning, communication, and tracking. The Mobility function of tomorrow will be more connected, resourceful,
and impactful than ever before.

For the full report, visit the AIRINC website: www.air-inc.com/library/2019-mobility-outlook-survey/

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“While most Western European cities have remained stable in this year’s rankings, UK cities have fallen,” said Kate Fitzpatrick, a Senior International Mobility Consultant at Mercer.  “However the drop is not as large as to be expected, with steep rental prices keeping UK cities up.  In the past year we’ve observed strong rental accommodation prices increase in Aberdeen, and to a lesser extent in Belfast. Although there has been only a slight increase in the average rental price in London, this cost remains at the higher end of the scale when compared to cities worldwide.”

“Although the value of the Euro has remained steady against the US dollar, the Pound has fallen, largely due to Brexit fears,” explains Ellyn Karetnick, Head of International Mobility at Mercer.  “But whilst currency fluctuations will always cause a major impact on costs, local conditions like high property prices can counterbalance the impact of currency movements.  It is important to understand local costs when deploying employees in countries across the world and we use the Mercer International basket of goods to help calculate rankings and packages.”

Few organisations are prepared for the challenges world events have on their business, including the impact on cost of expatriate packages.  This year’s survey again proves that factors including currency fluctuations, cost inflation for goods and services, and instability of accommodation prices contribute to the cost of expatriate packages for employees on international assignments.

Mercer’s survey takes into account 375 cities throughout the world; this year’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.

According to the 2016 survey, Hong Kong tops the list of most expensive cities for expats, pushing Luanda, Angola to second position.  Zurich and Singapore remain in third and fourth positions, respectively, whereas Tokyo comes in fifth, up six place from lst year.  Other cities appearing in the top 10 of costliest cities for expatriates are Shanghai (7), Geneva (8), N’Djamena (9) and Beijing.  The world’s least expensive cities are Windhoek (209), Cape Town (208) and Bishkek (207).

Nathalie Constantin-Métral, Principal at Mercer with responsibility for compiling the survey ranking, said, “Despite some marked price increases across the region, several local currencies in Europe have weakened against the US dollar which pushed a few cities down in the ranking. Additionally, other factors like recent security issues, social unrest, and concern about the economic outlook have impacted the region.”

“Cost of living allowances are intended to help protect the purchasing power of international assignees, and can go up or down depending on inflation levels in the home and host location, and the movement of exchange rates.”

Two European cities are among the top 10 list of most expensive cities.  At number three in the global ranking, Zurich remains the most costly European city, followed by Geneva (8), down three spots from last year.  The next European city in the ranking, Bern (13) is down four places from last year following the weakening of the Swiss franc against the US dollar.   Several cities across Europe remained relatively steady due to the stability of the Euro against the Dollar.  Paris (44), Milan (50), Vienna (54), and Rome (58) are relatively unchanged compared to last year, while Copenhagen (24) and St. Petersburg (152) stayed in the same place.

Brussels meanwhile has climbed the rankings quite significantly, coming up 16 places (from 102 to 86) this year.  Nathalie Constantin-Metrál believes the rise in utility costs in Belgium has a large part to play in this as goods and services  in general increased only slightly.

When we enquired about the expected impact of the impending Brexit Kate Fitzpatrick said “Cost of living allowances are intended to help protect the purchasing power of international assignees, and can go up or down depending on inflation levels in the home and host location, and the movement of exchange rates. Generally speaking, the requirement for any sort of cost of living adjustment increases for assignees from a location with a devalued currency (e.g. UK outbound assignees), while the reverse is true for assignees into such a location (e.g. UK inbounds), as the home country currency now goes further and therefore requires less of an adjustment to maintain purchasing power in the host location than in the past.

That said, organizations take many different approaches to the exchanges rates used to calculate such allowances, the frequency with which they review them, and the thresholds at which they would make any off-cycle interventions, so there will be a range of ways for companies to manage this over the coming weeks and months. It is also important to remember that currency movements – even moderately significant ones – are not uncommon, and many multinational companies will have defined mechanisms for dealing with such volatility.”

Mercer produces individual cost of living and rental accommodation cost reports for each city surveyed. To purchase copies of individual city reports, visit:
www.imercer.com/products/cost-of-living.aspx

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