MOBILITY MATTERS '“ a european perspective

The emergence of new markets and an ever more complex international supply chain means that few businesses can afford to confine their activities to one country. At the same time, the shift to a knowledge-based economy demands that businesses identify and acquire the right skills and know-how. Together, they mean that for a business to succeed, it must be able to recruit and retain its preferred mix of skills, knowledge and experience wherever it needs them quickly and cost-effectively.

As a consequence, mobile labour is likely to become an increasingly important resource that business will need to access to meet these needs, especially in Europe, where the competition for talent is a pressing business issue. At the same time, business is under growing pressure to control its costs. For many, this means that the traditional expatriate assignment is seen as too costly: instead business is looking for cheaper and more flexible ways of meeting its resource needs. Additionally, the European Union (EU) has recognised that low levels of labour mobility within Europe threatens its competitiveness. The factors hindering mobility have been examined by a High Level Task Force and EU leaders are expected to agree a plan to reduce the obstacles that hinder mobility. Against this background, PricewaterhouseCoopers and Landwell, its correspondent legal practice, have conducted an extensive and in-depth study of labour mobility in Europe.

Managing a mobile future
Labour mobility is multidimensional: it is not restricted to the traditional concept of expatriate employees moved around the world by their employer. A whole range of other types of mobile worker exist including those who commute between different countries, locally-employed foreign-born workers, those on rotational assignments, virtual assignees and teleworkers. All of these types may take place on a short or long-term basis.

Eight key types of mobile worker from the business perspective

1. '˜Traditional'™ expatriate: employee moves to live and work in a foreign location, traditionally long-term (3-5yrs) but increasingly short-term (up to 1yr)
2.  '˜Permanent'™ transfer employee takes up a permanent contract of employment on local terms and conditions
3. International hire recruited to work on local terms and conditions from another country
4. Local hire foreign-born individuals already working outside their '˜home country'™ who are recruited locally
5. Cross-border commuter commutes to work in another country while place of residence remains unchanged
6. Rotational assignee commutes from home country for a few months without changing home
7. Virtual assignee assumes responsibility spanning several countries without relocating (supported by local teams, business travel and ICT)
8. Teleworking works from any location supported by ICT

The changing nature of mobility
Increasingly, mobility also means being able to move work to where suitable people are located, as well as people to the work. As businesses internationalise their activities, and with the development of outsourcing and shared services, the distinction between the two is becoming ever more blurred.
Recognising the multiple dimensions of mobility is essential to formulating effective policies that address business needs and create organisations that align the people strategy with the overall strategic vision. Both phenomena are visible. Many companies in the ICT sector are already working in India and China as well as recruiting employees directly from these countries. The pharmaceutical industry is looking to Asian countries to meet skill shortages in the R&D and technology fields. And; health care providers in the UK, for example, are actively recruiting nurses and doctors from other countries and are even sending patients for treatment in countries which have the appropriate facilities or spare capacity to treat them.

Different perspectives
Within Europe around 17% of people of working age would like to live and work in another European country. There is, however, a significant mismatch between the skills and experiences that these people represent and those required by business:
'¢ individuals who would like to live and work abroad tend to be younger and less experienced than the people business has the most difficulty in recruiting
'¢ many potentially mobile workers express a preference to live and work in non-EU countries, notably the USA, or countries where they are perhaps less needed
'¢ individuals appear most motivated by lifestyle factors and the search for greater financial reward whereas business is looking to control its costs.
Reconciling these contradictory findings will require business to implement proactive strategies which encourage more workers to consider mobility and address individuals'™ concerns and desires about where they live and work and how they are rewarded.
Over 48% of the firms surveyed agreed with the statement 'There is no skill shortage in Greater Europe, people are just in the wrong place.' Less than one quarter disagreed.
The findings suggest that business will have to implement innovative solutions to address the unique concerns of a mobile workforce. Such solutions should include considering relocating the business to where the people it needs are available.
Whilst nearly half of businesses have increased the training of their existing workforce to address recruitment difficulties, more than 20% have increased their use of mobile workers. The study suggests that, over time, this percentage is likely to increase. Around 70% of European businesses believe their use of mobile labour will increase in the next five years.

How do businesses deal with their recruitment difficulties? 

Source: PricewaterhouseCoopers survey

Almost half of the businesses interviewed (49%) indicated that they had experienced difficulties in recruiting key senior and professional staff. Looking to the future, the study confirms that business recognises the need to look beyond its own borders for the human capital it needs to build competitive advantage. This is reflected in the approach to managing recruitment difficulties.
There are certain skills and competencies for which increased training will not provide a satisfactory solution in the ever-diminishing time frame within which business must compete to succeed. This is particularly true of experienced senior and professional staff '“ a key determinant of success '“ where the balance between demand and availability is least favourable.
Implementation of new technologies has also been used as a response to recruitment difficulties by 40% of businesses. Whilst there is little doubt that advances in information and communications technologies will create more closely-integrated
international organisations, it will not obviate the need for face-to-face interaction. In fact, new technologies may increase the need for mobility as employees are liberated from having to be in one place most of the time and become able to work where demand for their skills and know-how is greatest.
Just 18% of businesses agree that technology will reduce the need to have mobile staff. Rather, most recognise that technology will become the key tool for enabling organisations to be more closely connected at a global level.

Business view of the barriers to mobility
Business believes that the key barriers to worker mobility are primarily linked to the lack of public policy development, especially within the EU. This is at odds with the EU'™s pledge to create more flexible labour markets within Europe, but perhaps indicates the difficulties of dealing with some of the key policy issues, such as pension reform and fiscal harmonisation.
The slow rate of progress towards a genuinely single market for labour means that business should not assume that the existing barriers to mobility will disappear quickly. These barriers include differential tax burdens, lack of pension portability, differences in social security systems, differences in employment law and inconsistent immigration policies. For instance, despite European case law seeming to allow non-EU workers to move freely between Members States, invariably separate immigration clearances are demanded by each state. Instead, whilst remaining alive to the changing policy environment, business must continue to find ways to operate as efficiently as it can within the existing legal and regulatory framework. Managing expatriate taxation, for instance, has become a thriving business in its own right.
Interestingly, business is less concerned that social and cultural issues are barriers to mobility. This contrasts with the views of individuals and implies that the potential challenges of creating a multi-cultural, diverse workforce should not be ignored. At the same time, business needs to recognise that employees are looking for incentives to mobility which address social and cultural concerns not just salary and benefits issues.
Both business and individuals share a concern that language skills and career options for spouses are important barriers to mobility.

What does mobility mean to individuals?

Top 5 barriers to mobility - Business Individuals
1 Lack of integrated employment legislation Family e.g. child education
2 Differing tax systems Language skills
3 Need to provide spouse employment Information on employment opportunities
4 Language skills Recognition of qualifications
5 Differing benefit systems Spouse employment

Historically, Europe'™s workforce has not been very mobile, and significantly less mobile than workers in North America. In the future, many more people would like to live and work in other countries. Younger, single people are much keener to work internationally than any other group. In addition, citizens of certain countries demonstrate more peripatetic leanings than others. Poles are the most enthusiastic about mobile working and Hungarians and Spaniards the least. Factors such as shifting attitudes away from a '˜career for life'™ and increased focus on work-life balance play their part. There is a strong '˜lifestyle'™ element to individuals'™ preferred destinations: individuals from the EU are keen to live in France, Italy and Spain whilst those from the accession countries favour Germany. Many individuals also expressed interest in working outside the EU in countries like the US and Canada.
Economic self-interest is a powerful motivating factor attracting individuals to consider working in another country whilst commitment to an existing employer is the least powerful factor. This highlights the need for business to focus on fostering greater employee loyalty within the organisation by cultivating the internal brand.
People balance the attractions of living and working in another country with concerns about the impact on other aspects of their lives. Concerns about education provision for children and the impact on partners'™ careers can create powerful disincentives to mobility.
Many employees also feel that mobility can harm their opportunities for advancement within an organisation, and worry that when returning '˜home'™ to work, they will have difficulty reintegrating into the organisation or have been '˜forgotten'™.

What motivates individuals to be internationally mobile?
Improve living standard
Experience life abroad
New employment opportunities
Commitment to employer
Develop skills
Enhance career opportunities
Improve pay/income

Planning for a mobile future
Given the undoubted and growing importance of talent and knowledge as a source of competitive advantage, this means that the approach to the management of human resources, including mobile workers, needs to be fully aligned with broader business strategy.

For any business seeking to develop a strategic approach to mobile workers, 6 key strategic issues need to be addressed:
'¢ What kind of business need exists for mobile workers?
'¢ How will changes in technology affect this need?
'¢ How should mobile workers be recruited?
'¢ What should businesses do to retain mobile workers?
'¢ How should mobile workers be rewarded?
'¢ What needs to be done to create a truly international organisation?
PricewaterhouseCoopers has identified several reasons why a business might wish to employ mobile workers:
'¢ to support global integration and management of the business
'¢ to develop the business in new or difficult local markets
'¢ to support the transfer of skills through the business to locally engaged staff
'¢ to reduce the overall costs of the business
'¢ to provide personal development opportunities for key employees, and thus help to retain these employees
'¢ to access talent which might not otherwise be accessible, that is to overcome actual or potential skills shortages.

There should be clear policies and guidance, to channel the value gained from the mobile workers'™ experience back into the business, whilst making the individual feel valued and important.
The relevance of each role will frequently be linked to the seniority, experience and skills of the individuals concerned as the table below illustrates. The different forms of mobile worker identified are also more or less suited to each of the roles identified. It will be evident that the potential role of mobile workers will be linked to the organisation of the business.
The potential impact of new technologies on the business need for mobile workers is another key issue. It is also an area of uncertainty. In general, developments in technology will accelerate globalisation with the result that more and more businesses, regardless of their size and age, will be looking to operate on an international basis. This can only increase the need for mobile workers.