The globally-connected nature of trade, technology, capital, and regulation will necessitate a significant swell in the movement of employees between countries, leading to increased use of short-term and ‘commuter’ international assignments, according to new research by PricewaterhouseCoopers LLP.
These factors – coupled with the rise of emerging markets, increased focus on new revenue streams, and changing demographic imperatives – are projected to increase the number of people working outside their home country by 50% over the next decade. Population trends will undoubtedly mean some organisations will enter new locations and exit some of their traditional ones bringing a host of new immigration, tax and communication requirements.
Additionally, the number of countries that employers host employees in is expected to continue to increase presenting new compliance, remuneration and communication challenges, according to the PwC report – Talent mobility 2020: The next generation of international assignments.
CEOs identify having the right talent in the right place as a critical factor for business growth with over half (55%) planning to reconsider their approach to global mobility as a result of the downturn. It is clear that businesses recognise both the economic benefit of international assignments and the need to evolve the way they are managed and used.
“Governments and companies will have to work together to manage some of the barriers to international mobility that will otherwise impede global competition and operations,” explained Billy Owens, international mobility leader, PwC LLP US.
Fortunately for organisations, the new generation of workers ‘the millennials’ see overseas working as an important part of their personal development. PwC research show 80% want to work abroad, with 70% expecting to use a non-native language at work and 94% expecting to work across geographic borders more than their parents.
“Younger employees’ appetite for working overseas could eventually remove the need for financial enticement, but current immigration and tax systems, combined with the need for certain skills or experience levels, can make deploying staff around the world complex and costly,” Owens added.
New business hubs, impact of demographics
The growing importance of emerging markets will change mobility patterns as skilled employees from these territories operate domestically and beyond. PwC research projects that the E7 countries will overtake the G7 in terms of GDP by 2020 and that the combined E7 GDP will be around 30% higher than the G7 total by 2030. These countries (China, India, Brazil, Russia, Mexico, Indonesia and Turkey) present not only a very real source of demand and competition, but also an increasing pool of talent.
Additionally, the populations of traditional business capitals have changed and many are now dwarfed by growing locations elsewhere. Of the 30 most populated cities in 1950, 11 have slipped off the list to be replaced by new destinations. New entrants include Lahore, Shenzhen and Chennai. By 2025, London and Lima will be pushed out by emerging ones.
