2016 Global Mobility Trends Consumer Goods

2016 Global Mobility Trends for the Consumer Products Industry

How global mobility leaders respond to talent mobility challenges in today’s business environment is, in significant part, related to the economic and market realities of their specific industry segment. This article focuses on companies in the consumer products industry, and is part of a series highlighting key global mobility trends within certain industry segments.

Consumer products companies represent the second largest percentage of respondents (16%) to BGRS’s 2016 Global Mobility Trends Survey, and they average just under 75,000 employees worldwide.

Companies in the consumer products industry are particularly vulnerable to the global economy. For example, the continued slowdown in China, economic instability in key South American markets, and consumer confidence in the United States all play a major role in driving consumer buying patterns. A recent report by the Economist Intelligence Unit predicts overall retail sales globally to remain relatively steady, however, profit margins will likely continue to be challenged by shifting spending patterns.  Competition in this industry segment remains strong and merger and acquisition activity is driving some consolidation, which we expect to manifest in continued scrutiny on managing costs. We expect these market level trends, combined with the challenges inherent in moving employees across borders, will ultimately play into the mobility trends we are seeing in this industry segment.

Specifically for the consumer products industry, the survey reveals:

Cost pressures normalize and assignment volumes remain steady

  • Cost pressures remain steady with 65% of consumer products companies reporting that the pressure to reduce costs has stayed the same when compared to the prior year
  • 58% state they were required to reduce international assignment costs last year; this is lower than the overall survey participants (69%)
  • 50% indicate that the number of international assignments compared to the prior year stayed the same; this compares to 35% of the overall survey participants
  • 58% expect the number of international assignments to stay the same in the coming years; this compares to 39% of the overall survey participants

The alignment of global mobility to talent management: an increased adoption of some talent management practices

  • When we asked consumer products companies to tell us the primary role of global mobility in their company, 67% said it is operationally focused on ensuring employees receive high levels of service; this is significantly higher than the overall survey respondents (46%)
  • 81% of consumer products companies indicate that they’ve communicated to their employees that taking an international assignment is important to optimize their careers; this is much higher than the overall survey participants (61%)
  • 81% also have a process that allows employees to formally indicate an interest in an assignment; this is also significantly higher than the overall survey participants (67%), and the highest of any industry sector
  • 42% have a formal candidate pool for future international assignments; this compares to 27% of overall survey participants
  • Yet, 77% indicate they do not have a formal career management process in place that incorporates international assignments; this is the same percentage as overall survey participants

Careers, compliance and complexity are top international assignment challenges

  • For consumer products companies, the top three challenges to managing international assignments are, in ranked order:
    • career management of international assignees
    • compliance and risk management
    • the complexity of mobility program administration
  • For overall survey participants, the top three are:
    • compliance and risk management
    • the cost of international assignments
    • the assignee and family adjustment to the new environment

Higher international assignment attrition rates accompany certain repatriation practices

  • 23% of consumer products companies say that the rate of attrition for international assignees is greater than that for all employees; this is higher than the overall survey participants (14%)
  • And 35% state that the percentage of international assignees who leave voluntarily within one year of repatriation has been increasing over the past several years; this is 21 percentage points higher than the overall survey participants who say the same (14%)
  • 46% of consumer products companies indicate that they have not put any initiatives in place that are designed to increase international assignee retention
  • Only 8% note they have a formal repatriation strategy tied to retention of international assignees; this compares to 18% for overall survey participants
  • 46% of consumer products companies state that the most common way their company identifies new positions for repatriating assignees is to rely on informal networking; this is significantly higher than the overall survey participants (34%) that do and the second highest of any industry segment

Shifting demographics show a greater percentage of female assignees and single assignees

  • For consumer products companies, 32% of their international assignees are female. This is the second largest percentage reported of any industry segment, and is higher than the 25% reported by overall survey respondents
  • A comparatively lower percentage of consumer products companies than overall respondents (48% versus 59%) think that female assignees face greater obstacles to international assignment acceptance than male assignees
  • On average, 40% of international assignees for consumer products companies are single, which is higher than the 32% reported by overall survey respondents

The widespread cost management focus for mobility programs in consumer products companies has not gone away, but rather has normalized. Most respondents were required to cut mobility costs last year, but at a smaller rate than overall survey participants. And the majority say the cost pressures have stayed the same compared to the previous year. Likewise, mobility volumes stayed the same last year and are expected to do so in the near future.

Despite the fact that more consumer products companies say the primary role of mobility is focused on operational service excellence, an alignment to talent management practices is somewhat evident. Companies are communicating the importance of and allowing employees to express an interest in international assignments. In addition, they are more likely to have developed a candidate pool for future assignments than overall respondents. However, consumer products companies don’t generally yet have solid career management practices in place that fully incorporate global mobility.  This juxtaposition is evidenced by the fact that the top assignment management challenge for consumer products companies is managing the careers of their assignees.

International assignment attrition rates appear higher for this industry segment than others and also appear to be on the rise when respondents look back over the past several years. An explanation may lie in the fact that the top method used for post repatriation job identification is to rely on informal networking. Also, over 90% of companies said they do not have a repatriation strategy tied to assignee retention. In addition, nearly half of consumer products companies indicate they have no programs or initiatives in place designed to address international assignee retention.

Finally, as assignee populations shift toward a greater number of female assignees and single assignees, there will be an opportunity for global mobility leaders to continue to review their programs and policies for optimization.

Global mobility leaders in this industry segment will need to continue working to meet their company’s business and talent agendas, as well as continue managing costs smartly.  Balancing the need to forge a closer alignment to Talent Management against continuing to manage costs in a highly competitive sector, as well as addressing changing assignee demographics, will require a forward-thinking, strategic approach to consumer products companies’ plans and programs.