2016 Global Mobility Trends Manufacturing

2016 Global Mobility Trends for the Manufacturing and Engineering 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 manufacturing and engineering industry, and is part of a series highlighting key global mobility trends within certain industry segments.

Manufacturing and engineering companies represent the largest percentage of respondents (23%) to BGRS’s 2016 Global Mobility Trends Survey, and they average just over 71,000 employees worldwide.

Companies in the manufacturing and engineering sector continue to remain vulnerable to the global economic situation. The overall slowdown of the global economy, moderating growth in China, and unstable markets in South America all continue to impact manufacturing and engineering companies where there is  intense pressure to keep costs down and to develop compensating strategies. 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 manufacturing and engineering industry, the survey reveals:

Despite optimistic volume expectations, cost reduction pressures intensify with variable effect on mobility  

  • 50% expect the number of international assignments to increase next year; this compares to 36% of the overall survey participants
  • A significant majority, 82%, state they were required to reduce international assignment costs last year; this is higher than the overall survey participants (69%) and the highest reported for any industry
  • Respondents believe that the efforts to reduce mobility program costs have had an adverse effect on the company’s ability to grow talent (43%) and on the ability to retain high potentials (45%).
  • However, containing cost is only fifth in the list of top international assignment management challenges
  • Although it is not reported as the most successful cost control initiative, the reduction in policy provisions and/or financial amounts offered to assignees is reported by a higher percentage of respondents than any other industry

Widespread, sometimes challenging assignment destinations impact spouses/partners and families 

  • China, Brazil and Saudi Arabia are the top three most challenging destination countries for global mobility teams, while China, Saudi Arabia and India are the top three most challenging countries for assignees
  • The United Arab Emirates, the U.S., and South Africa are the top three countries emerging as assignment locations
  • The top challenge to managing international assignments is the assignee and family adjustment to the new environment
  • By nearly three times more than any other issue, family concern is the top reason noted for assignment refusal, and family related issues is cited as the most common reason for assignment failure
  • 94% of respondents believe that spouse/partner employment concerns have an impact on their ability to attract first choice candidates for international assignments, which is 11 percentage points higher than the overall respondents (83%)
  • More than half (51%) believe that spouse/partner employment related resistance to accepting an international assignment will increase, which is significantly higher than the overall respondents (39%)

A lower adoption of candidate selection tools is coupled with adaptability concerns

  • 16% formally assess the adaptability of potential candidates for international assignments, this compares to a similarly low percentage (22%) of overall survey respondents
  • Only 18% utilize a self-assessment tool which is the lowest of any industry reported; this compares to 29% of overall survey respondents
  • 18% indicate their company has a formal candidate pool from which to select potential international assignees, this compares to 27% of overall survey respondents
  • Respondents note that one in five (20%) international assignees experience notable difficulty adapting to the local culture or in conducting day to day job requirements there
  • Respondents believe that nearly one in three (32%) leaders sent on an international assignment do not possess the skills to effectively negotiate, lead employees and manage/resolve conflict in the host country; this is higher than the percentage for overall respondents (26%)

A more traditional assignee profile and concerns on the impact to gender balanced diversity

  • Manufacturing and engineering companies report 76% of assignees are married; this is higher than the 68% reported by overall survey respondents
  • Only 19% of international assignees are female compared to 25% of overall respondents
  • 68% believe that females face greater obstacles to accepting international assignments than males, which is the significantly higher than for overall respondents (59%)
  • 42% believe that the acceptance rates of international assignments among female candidates is having an adverse impact on creating a gender balanced senior management team in their companies; this is higher than the overall respondents (37%)

Despite widespread cost management efforts in recent years, mobility programs in many manufacturing and engineering companies continue to be subject to intense cost pressure.  A significant percentage of respondents are concerned about the effect of cost reduction efforts on their company’s ability to grow global talent and retain high potentials; but, they are firm that it has not impacted their ability to execute a global business strategy. At the same time, containing cost is not a top three international assignment management challenge for most companies. And, although expectations are split on whether assignment volumes will rebound next year and increase, overall the industry is more optimistic than others.

New assignment locations may also prove challenging for global mobility teams, as well as assignees and families. Family concerns and spouse/partner resistance are more pronounced and remain top of mind for respondents in this industry sector. At the same time, manufacturing and engineering companies have comparatively lower adoption rates of certain key candidate selection tools. We speculate that one reason could be that certain key assignment locations are challenging, which impacts assignment acceptance rates,  and, as such, there is reluctance to bring in what could be perceived as an additional barrier to assignment acceptance. Whatever the reason, respondents remain concerned, about the suitability of candidates going out on assignment at a higher rate than overall respondents.

Finally, companies in this sector have more assignees that match a more traditional assignee profile – more often married and male – than in other industries. However, here again, participants express greater concern on what this could mean to their companies overall.  There is a clear recognition that females often face greater obstacles than males in accepting assignments and that this disparity can have a real impact on the company’s overall diversity objectives.

Global mobility leaders in this industry segment will need to continue to support their business partners by meeting their company’s business objectives and managing costs smartly. However, moving people into countries that prove challenging will require the right amount of support. Investing in selection tools and educating the business regarding their long term worth should also be an area of focus.  Balancing these sometimes competing demands will continue to require a strategic approach to manufacturing and engineering companies’ mobility plans and programs.