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The future of global mobility

Jun 13, 2017
Peggy Smith, President and CEO of Worldwide ERC, hosted a panel discussion at the FIDI conference to look at the future of global mobility.



Who is driving the mobility business?  What demands are being put on movers now and what will they be in the future?  How can movers thrive in a rapidly changing marketplace?  These were some of the questions Peggy set out to answer with the aid of Steve Lewis, Voerman; Marcel Jörg, Packimpex; Mark Burchell, Suddath; and Neil Bothams, Santa Fe.  

Asked to sum up the current position, Steve Lewis said that Relocation Management Companies (RMCs) had taken a large market share, companies still worked directly for corporations and the private element was being expanded by the trend for ‘lump summing’ where corporations give an assignee a fixed payment to cover relocation expenses making them, in practice, a private client.  In the future, he expected volumes to continue decreasing, there to be more short-term contracts and for technology to play an increasing role.  

Marcel Jörg predicted that in five years all assignees from multinational corporations will go through RMCs but, intriguingly, in ten years those same RMCs will have been replaced by companies outside the industry that will use successful digital models to control the whole process, using technology to reduce the workforce and the cost dramatically. “The RMCs are in a challenging space at the moment to replace their human capital with artificial intelligence,” he said. “It could be that there is a total shift of customer over the mid- to long-term with big players entering the market that we don’t even know now.”  

Mark Burchell said that the market is very fluid.  “In the digital age, customers will come in different ways for different reasons,” he said.  “I don’t think you can look much beyond 12 months. It’s very exciting.”  

Neil Bothams agreed. “We can’t afford to be complacent,” he said.  “We need to look at the technologies ourselves and be very open minded.  Some customers are realising that the service they are getting isn’t what they signed up for and it’s destroying value and causing problems with their employees.” Neil also said that the location of customers is changing, with greater strength in Asia.  

Marcel made a chilling observation.  He said that the power of technology doubles every 18 months yet the way the moving industry serves RMCs hasn’t changed in the last 15 years.  He said that we had stood still and, if anything, there were greater inefficiencies now than in the past.  “I think there will be a major disruption in this industry, it’s just a matter of when and what it will be.”  

HR trends 

The panel then turned its attention to HR.  Neil referenced a recent survey that showed that most CEOs rate the importance of engagement, diversity, leadership and the building of a global pool of talent at 60%; yet they rated their HR departments' effectiveness at delivering those key requirements at just 15%.  A different survey by Santa Fe showed that 60% of CEOs were dissatisfied with their mobility departments’ ability to deliver against the strategic aims of the business.  He said that if clients were prepared to be more collaborative then there was more opportunity for mobility companies to use their expertise to help.  

According to Marcel there is still a shortage of talent and corporations are having a battle between reducing their budgets and the need to motivate young members of staff who demand global opportunities.  Peggy said that this was accentuated by the gig economy, in which young people choose to be self-employed but still want the benefits of working with a global organisation. Neil said that technology has put a lot more power in their hands.  “The individual will drive the mobility story much more,” he said.  “As more people enjoy that lifestyle we might see the relationship between us and them becoming more important.”  In future, it will be necessary to target highly mobile professionals, not the large companies for whom they work.  

Mark looked at the opposite end of the age range.  He said that many retirees were coming back and accepting international assignments because their experience was valued.  “Young people want to go to specific places such as Singapore and Dubai,” he said.  “Postings in the oil and gas industry might be to more remote places that are not attractive.  We have to be very fluid. The more we try to put customers into boxes the more of a dinosaur the industry will become.”    

If this comes about, compliance will become an issue.  Risk and compliance is high on the agenda of all corporations but, when the assignee is doing all the work themselves, probably online, how can they protect their position and their reputations?  “Corporations can’t give up their duty of care to the transferee yet as they force the decision making down to the transferee and the family unit, that becomes very fluid,” said Mark. “How does the balance in compliance fit in an increasingly flexibility driven approach?”  

Steve Lewis agreed, adding that this might give mobility companies an opportunity to help corporations by “walking them through” the processes and ensure that assignees, who are handling their own affairs, don’t contravene compliance requirements.  This might, for example, include providing a tracking service to make sure people on working visas do not overstay in their host country.  

Imminent mobility policy trends 

Peggy finally asked the panel what policy trends they foresaw in the next 12-18 months. Neil said that mobility policies would need to cover a much more diverse range of people and recognise the power of the individual; Mark expected to see more policies that were specific to different industries; Marcel expected budgets to tighten while corporations would require even greater flexibility; and Steve said that the trend to minimise and reduce was not always practical and mobility companies would find it necessary to provide additional services that would help to make individuals more comfortable.   

Will it ever be possible for a relocation to be carried out digitally, without any human contact?  Neil said that technically it was already possible, however Mark thought that the more complex areas of the process would still require a human element. Steve said that, despite the digital opportunities, it would always be important to keep the quality of the service in mind.  

As a final thought, and in view of the importance of the subject for so many in the industry, Neil expressed his surprise that there were not more people in the audience.  “Are people not more concerned about this?” he asked.  “If people are not in the room, perhaps they haven’t woken up to the fact that the future of mobility is going to be very different from today.” 

www.worldwideerc.org


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