Are economic conditions for international relocation improving? What does the future hold?
A substantial increase in the number of employers anticipating a rise in the globally mobile workforce has been recorded in an annual survey by financial services giant MetLife, writes David Sapsted.
11 October 2024This article is taken from the Winter 2024 issue of
Think Global People magazine
MetLife’s survey, involving more than 2,500 company decision-makers and almost 3,000 workers, found that 68% of employers expect global work to increase. This compares to only 45% in the same survey last year.Published in October, MetLife's 'Expat Employee Benefit Trends Study', also found a shift in the demographics of those taking up global assignments. Younger, single employees now comprise 42% of the workforce, compared to 33% relocating with a spouse or partner.MetLife also noted that this year's research had recorded “the importance of care delivery during and beyond critical work and life moments that are unique to global assignment experiences”. The report said that when employers demonstrate “always-on care” at key moments, globally mobile employees are 36% more loyal to their employers, 40% more productive and 40% more engaged.“If employers can find a way to show additional support to employees in the form of customised and value-added benefits then the appetite for global assignments can only increase and result in increased productivity and loyalty,” commented Tim Imre, vice president and head of MetLife Worldwide Benefits.
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Connecting people with the business
A second report this autumn – produced by KPMG – concluded that, in the ever-evolving world of international assignments, companies’ mobility policies must be “connected, transparent and equitable to promote agility and empathy for workers”. The report, ‘The Future of Mobility’, said that organisations must ensure all employees have ready access to information about mobility opportunities through “a unified point of entry”, such as the intranet.“Today’s mobility teams need to get involved in much more than the usual transactions of mobility and relocation,” argued KPMG in the report. “Putting the employee experience at the centre means engaging in their health and wellness, financial wellbeing, family impacts and career development.“Mobility also requires the necessary connected insights into the business strategy as well as into talent to provide effective assessments and recommendations for employees’ movement around the globe, their development, career pathing and leaders’ talent decisions.”According to the KPMG report, ideal global mobility programmes should be designed to:- align with and support an organisation’s overall philosophy, culture and strategic objectives
- align and integrate with the employers' talent management philosophy, priorities and processes
- deliver on multiple global mobility policies that support the changing business landscape
- clarify roles and responsibilities among internal stakeholders, the mobility function and their vendors
- be readily scalable and adaptable.
Economic headwinds easing?
On a purely practical level, the latest report from Crown World Mobility suggests that a couple of key factors impacting the cost of sending staff abroad – interest rates and shipping costs – are on the way down.“The cost of shipping a forty-foot container has fallen 33% in the last two months, with maritime and supply chain advisors Drewry expecting costs to decrease further in the coming weeks,” said Crown at the end of September. “And with central banks across Europe, the Americas and some parts of Asia nudging down interest rates, several of the key economic indicators are starting to suggest that some of the economic rainclouds might – just might – be beginning to clear.”The report says that with both the costs of shipping and interest rates easing, the financial outlook for international relocation is improving. “Not only do falling spot rates make shipping the precious things of your assignees cheaper, but falling interest rates could substantially reduce the cost of borrowing for major purchases, such as a new homes – or, in some cases, renting accommodation. These changes may provide an opportunity for organisations who have been waiting for more favourable conditions to ramp up their mobility management programmes.” Of course, the future of shipping rates remains volatile, mainly because of conflicts in the Middle East and elsewhere and the threat of a longshoremen's strike in the US, now scheduled for January. But on interest rates, Crown is quietly optimistic as inflation rates stabilise and fall across the world after steep post-pandemic rises. “In the USA, an eagerly anticipated – but not entirely expected – cut to interest rates has taken place, with the Federal Reserve moving to reduce its key rate by half a percentage point, meaning the federal funds rate sits at a range of 4.75 to 5%,” says the report. “Through August and September, 15 other central banks, including those in the UK, New Zealand and Europe, have cut base rates – albeit by just a quarter of a percentage point in most cases, but more reductions are expected in the coming months.” But Crown admits that supply chain volatility is here to stay. “So we are advising our clients [and their relocating assignees] in the coming weeks or months to bake additional lead time into plans as far as possible and budget for increased transport costs. “But after months of high costs and the challenges this brings, the combination of declining shipping rates and easing interest rates suggests that conditions for international relocation are starting to improve.”
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