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Return on investment
The second step to success is ensuring assignments deliver the required return on investment. Less than 20% of our respondents believed their businesses fully understood the costs of overseas assignments. A clear picture of costs is the baseline in measuring return on investment.
Business divisions often fail to fully appreciate the costs associated with assignments. In addition to salary and any bonus, relocation benefi ts are offered to ensure an appropriate standard of living in the host country and to facilitate the move of the employee and, if relevant, their family. In addition the local taxes, social security, pension and split of who bears these costs (employee or employer) create signifi cant additional costs. Meanwhile, at an administrative level, there is a question of whether premium assignment management services (with minimal disruption to the assignee) should be used or a self-service approach. The latter appears to be cheaper but there may be hidden costs if problems emerge that have to be rectifi ed.
Given the high costs involved, retailers must think strategically before they decide whether to send employees on an international placement and be clear on the business objectives.
LESS THAN 20% OF OUR RESPONDENTS BELIEVED THEIR BUSINESSES FULLY UNDERSTOOD THE COSTS OF OVERSEAS ASSIGNMENTS.
Challenges should be made about the purpose of the move. Is a specifi c skill required, for example, to establish the brand ethos? Is it part of the career development plan of a future leader of the business? Are they training local staff to become employees in new stores? The answers to these questions should drive the level of investment made by the business.
Keeping talent engaged
Finally, talent management is crucial to the long term success of a business. 67% of our respondents did not know whether their employees felt engaged with the organisation while working away from their home countries. Meanwhile 50% said that more than half of employees placed overseas are no longer on the payroll after two years.
Working in a foreign country is seen by a great many employees as both a privilege and important waystation in the development of their careers but the ongoing loyalty of key members of staff clearly can’t be taken for granted.
Retailers must consider ways and means to keep staff engaged not only while they are on placement but also on their return. This requires clear goal setting for the assignment which also incorporate a vision as to the position they may return to in their home country. There also needs to be a commitment by the home country to connect with the employee on a periodic basis and a commitment by the host country to facilitate integration and promote professional and personal development.
KPMG has worked with clients to build solutions which facilitate connectivity with assignees whilst overseas – both between the home country and the assignee and within the assignee population itself. The more touch points that can be created with the assignee throughout their placement, the less likely they will become lost in the ether.
© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative, a Swiss entity. All rights reserved.
MOBILITY
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