2016 Global Mobility Trends for the Financial Services Industry

2016 Global Mobility Trends for the Financial Services 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 financial services industry, and is part of a series highlighting key global mobility trends within certain industry segments.

Financial services companies represent the fourth largest percentage of respondents (12%) to BGRS’s 2016 Global Mobility Trends Survey, and those responding companies average just under 78,000 employees worldwide.

A recent report by the Economist Intelligence Unit identifies key trends that they believe will prove promising for financial services companies and will shift conversation away from the financial crisis in 2008, such as the general rise of financial related technology applications, the continued expansion of bank usage in developing markets, and the recognition that most individuals worldwide have not saved enough to cover life scenarios, such as retirement or healthcare costs, which will eventually drive greater push to savings and usage in the financial sector. These trends should be considered against the overall slowdown of the global economy and the fact that financial services companies exist in a much more tightly controlled regulatory environment than in the past. We expect that these business realities, 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 financial services industry, the survey reveals:

Room to evolve the role of Mobility and talent management

  • While 61% of overall survey respondents indicate they’ve communicated to their employees that taking an international assignment is important to optimize their careers, a smaller percentage (50%) of financial services companies have done so
  • 50% of financial services companies use their mobility policies to recruit external talent; this compares to 41% of overall survey respondents
  • At the same time, 80% of financial services companies (versus 77% overall) indicate they do not have a formal career management process in place that incorporates international assignments

Cost, complexity and compliance are top international assignment challenges

  • For financial services companies, the top three challenges to managing international assignments are, in ranked order:
    • containing the cost of international assignments
    • the complexity of mobility program administration
    • compliance and risk management
  • 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

As international assignment volumes remain steady or increase, cost pressures may be leveling out:

  • 70% of financial services companies expect the number of international assignments either to stay the same this year or to increase; this compares to 63% of the overall survey participants
  • Cost pressures remain steady with 65% of financial services companies reporting that the pressure to reduce costs has stayed the same compared to the prior year
  • Only 50% of financial services companies state they were required to reduce international assignment costs last year, which is 19% lower than the overall survey participants (69%) and the lowest percentage reported by any industry segment in the survey
  • Financial services companies nearly universally agree that the pressure to reduce mobility costs has had no adverse impact on the ability to execute global business strategy, retain high potentials or grow global talent

With cost management practices in place, the focus is on cost versus value

  • All financial services companies prepare some type of comprehensive cost estimate for international assignments; 70% do so for all assignment types, which is higher than that of the overall survey respondents (61%)
  • 65% of financial services companies track actual assignment costs, which is significantly higher than the overall survey respondents (51%)
  • 40% of financial services companies compare actual to estimated assignment costs at the end of the assignment; while only 24% of overall survey respondents do
  • However, when it comes to providing a balanced cost-benefit analysis in support of an international assignment, fewer financial services companies (35%) than overall survey respondents (44%) provide for some, or all, assignments

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

  • For financial services companies, 37% of their international assignees are female. This is the largest percentage reported of any industry segment, even Consumer Products (32%) which has traditionally had a comparatively higher number of female assignees
  • A comparatively lower percentage (50%) of financial services companies than overall respondents (59%) think that female assignees face greater obstacles to international assignment acceptance
  • On average, 42% of international assignees for financial services companies are single, which is significantly higher than the 32% reported by overall survey respondents

Many financial services companies appear to be evolving in terms of aligning mobility with talent management. While mobility policies are sometimes used to recruit talent externally and to encourage internal mobility, financial services companies don’t yet have solid career management practices in place that fully incorporate mobility.

In addition, since cost is a primary assignment challenge, the good news is that financial services companies are performing better than most in terms of having solid, basic cost management practices in place, which is not surprising given their core business competency. That said, there is still room to evolve on the assignment benefit/value continuum and explore fuller assignment quantification and measurement, whether in terms of providing cost benefit analysis or tracking assignment return on investment. Finally, as the assignee populations shift toward a great number of female assignees and single assignees,  there will be an opportunity for Mobility to continue to review its 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.  Balancing the need to continue to forge a closer alignment to Talent Management, continuing to manage costs against operating in a more tightly regulated and complex international environment amid changing assignee demographics will require a forward-thinking approach to a company’s mobility strategy.