‘Research Insights’ is a series of invited pieces by distinguished scholars in the field of management. They offer a critique and/or retrospective contribution on issues and debates relevant to the field of management in a short, thought provoking manner
The way in which multinational enterprises (MNE) staff their global operations has been a key question for researchers in international human resource management (IHRM) for a number of decades at this stage. It is now widely recognised that getting staffing right on the global scale is key in enabling MNEs to deliver on their strategic objectives (Cascio and Boudreau, 2016; Collings et al., 2009). The use of expatriation, particularly of parent country nationals (PCNs), individuals from the home country of the MNE, sent on assignment to subsidiary locations, has been long since viewed as a key strategy in this regard (Baruch et al., 2016; Caligiuri and Bonache, 2016; Kraimer et al., 2016). Indeed, we can trace the relocation of parent country managers to foreign locations where business operations were based to around 1900 BC. Local managers were generally viewed as inferior and restricted to lower-level jobs while PCNs enjoyed superior conditions as far back as then (Moore and Lewis, 1999). The perceived benefits of utilising people known to owners emerged at an early stage as a key means of minimising agency issues (Jensen and Meckling, 1976) associated with managing spatially diverse organisations.
There is little doubt that the number of staff moving internationally (Dowling et al., 2008) fluctuates from time to time and priorities around international staff mobility have shifted over the years. For many years the key focus was on PCN expatriates. In their seminal study, Edstrom and Gailbraith (1977) identified three drivers of expatriation. Firstly, as position fillers when appropriately qualified host country nationals (HCNs) were unavailable. A second rationale aimed at developing individual managers. Knowledge transfer within the MNE and modifying and sustaining organizational structure and decision processes were identified as a third rationale. As the literature expanded, so did the focus on HCN (employees who were nationals of the subsidiary location) and third country national (employees from a country other than the home or host country) managers as effective alternatives to their PCN colleagues (Cascio and Boudreau, 2016). However, from the first decade of the 2000s, the literature expanded considerably recognising a much more complex topography of global mobility. This included the increased usage of short-term assignments, commuter and rotational assignments, increased business travel, and virtual assignments (Collings et al., 2007). This literature reflected increasing broader staffing arrangements in MNEs and overall increasing mobility of staff globally (Cascio and Boudreau, 2016).
At the time of writing (August 2020) the COVID-19 pandemic poses a significant challenge for the future of global mobility and amplifies a number of trends already challenging our understanding of global staffing arrangements. In this invited Research Insight, we reflect on these challenges and the likely future for global mobility. We also identify some critical areas of focus for scholars in researching global mobility moving forward.
Writing in 2007, Collings and colleagues argued for a fundamental reassessment of the value of, and prospects for, the international assignment as conventionally understood, with a shift from the traditional international assignment (typically 3–5 years) as a primary mode of international staffing. They pointed to challenges including; the high costs of traditional assignments which generally involved generous supports with the entire family relocating; shifting demand for international assignees to locations which may be less attractive such as developing economies where much business growth was occurring; challenges around supply as individuals considered careers in different ways, impacting on their willingness to undertake such long term assignments. This resulted in the emergence of a more varied landscape of international mobility with an increased emphasis on short-term assignments, commuter assignments, international business travel and virtual assignments.
Annual reports from the practice literature, confirm the downward trend in the number of traditional assignments and a concurrent rise in the significance of alternative forms of mobility. While traditional assignments remain important, the use of more flexible alternatives has become more prevalent, with short-term assignments, international business travellers (IBT) and commuter assignments prime amongst these (Deloitte, 2019; KPMG, 2019). Indeed, by 2019, Santa Fe Relocation Services reported that the use of short-term assignments had overtaken the use of traditional assignments for the first time and expected this use to grow further (Santa Fe, 2019). This trend was predicted to accelerate in the following 5 years, with participants in one survey predicting an even greater reliance on short-term assignments more recently (KPMG, 2019). The use of virtual assignments was also expected to increase - something we might expect to become more prevalent in the context of the COVID-19 pandemic (Deloitte, 2019; Santa Fe, 2019). Thus, the world of global mobility has shifted significantly over the past two decades, however, as these new realities continue to play out, the longer-term impact of the COVID-19 pandemic will also be a key question (Levere, 2020; PWC, 2020b).
These data point to a number of trends over the past decade or so (Collings and Isichei, 2018). Firstly, short-term assignments had emerged as the most common alternative to the long-term assignment. International business travel was also growing as an alternative to the traditional assignment in recent years. Commuter and rotational assignments which also limited the requirement to physically relocate families were also growing in popularity. We saw an increase in the development of formal policies around these options. For example, 29% of participating organisations to KPMG's annual survey had formal commuter assignment policies, with 11% expecting increased use of this assignment type over the next five years (KPMG, 2019). International business travel also continued to grow as an option, with up to 65% of MNEs reporting the use of IBTs as a means of coordinating their global operations (Santa Fe, 2019). The benefits of international business travel are increasingly recognised with IBT considered a useful means of developing cross-unit social ties and sustaining social networks in multinational organisations (Bozkurt and Mohr, 2011). While we have less data on the deployment of commuter and rotational assignments, the limited data we do have points to relatively wide usage in the multinational context (Collings and Isichei, 2018). Thus, all of the trend data were pointing to an increasingly complex landscape of global mobility, with MNEs increasingly moving people globally to meet their strategic business needs over the past decade or so.
However, counterbalancing these trends, there is little doubt that there have been increasing tensions around the movement of employees globally more recently. Reflective of this, the 2020 PWC CEO Pulse Survey identified the decreasing mobility of workers globally as one of the drivers of the upskilling agenda in organisations (PWC, 2020b). Even prior to the emergence of the COVID-19 pandemic, international mobility was under the spotlight in a number of ways (Collings and Isichei, 2018; Horak et al., 2019). For example, populist political regimes in a number of major global economies represent one key challenge. Two key examples in this regard are the election of Donald Trump in the US and the passing of the Brexit referendum in the UK and the subsequent election of pro-Brexit Boris Johnson as Prime Minister. There was a strong nationalist discourse in these individuals’ election campaigns, and this was a key theme in the Brexit campaign also. This nationalist agenda has an implicit anti-immigration theme which was operationalised in Trump's “travel ban” and revisions to the H-1B visa programme which both directly impact on the attraction of skilled talent into the economy there (Mahmud, 2017; Shear and Jordan, 2020; You et al., 2017). As early as 2017 there were reports of the Brexit vote impacting on the availability of talent in the UK (Allen, 2017). Recent policy proposals suggest a shift towards a points-based emigration system targeting highly skilled talent in key areas (UK Home Office, 2020). While in the US, organisations were already reported to be opening satellite operations across the border in Canada to get around the challenges created by the regime there (Dixon, 2017). There has been little sign in a softening of the approach in either country since then, with challenges likely to endure for the foreseeable future in the UK, while perhaps the November election in the US may bring a change of policy.
These challenges culminate in the current COVID-19 pandemic which arguably presents the biggest challenge ever faced by MNEs in terms of the movement of employees globally. As countries put in place travel advisories and national borders shut down in the first quarter of 2020, organisations and individuals around the globe were faced with hugely complex decisions around whether and how to repatriate to their home countries with the myriad of challenges around health and safety, family, quarantine arrangements not to mention tax and pay (Boccagni, 2020). One survey suggested that almost two thirds of firms allowed currently mobile employees to return to their home countries during the pandemic and only 44 percent of respondents expected a return to normal with the same number of moves in the future (PWC, 2020b). The pandemic is likely to significantly impact on the future of global mobility and we consider three illustrative challenges here as we consider the future of global mobility. We begin with questioning what work can actually be done remotely.
A key question for any organisation in considering how to staff international operations in a post-Covid world concerns what roles require international employees in the first instance? This will require a rethinking of traditional assumptions around global staffing and the consideration of alternative means of staffing. The domestic context provides an interesting point of comparison in this regard. Here the global pandemic has forced organisations to re-evaluate their traditional assumptions and policies around working from home (WFH). In the past many leaders resisted WFH owing to concerns around
In a similar vein, MNEs will need to reflect on what work can be done remotely and how strategic objectives can be best supported through global staffing arrangements. A key decision point will be on understanding the objective of the role under consideration. This should be a key part of the sign off process for any international role. However, MNEs have long struggled with the approval process for international assignments which is in part reflected in challenges around measuring the return on investment of such assignments (McNulty et al., 2009). Such considerations will depend on the type and purpose of the assignment. For example, some tasks traditionally achieved through commuter assignments might be relatively easy to implement remotely, given those individuals have existing relationships with those they are working with. However, in cases where site visits are required, for example as part of an audit, this might be more challenging. Additionally, from a development perspective, international rotations have long since been core to global talent management programmes (Collings, 2014). How such rotations will look in a post-COVID world remains an open question. Many MNEs have for example relaunched high potential programmes and removed the international travel normally associated with them (Collings and McMackin, 2020). Equally some research on corporate volunteering programmes suggests that global competencies can be developed through such programmes even without international relocation (Caligiuri et al., 2019). This may offer some potential for developing global leadership competence.
There are many open questions in this regard but MNEs will be required to carefully evaluate which roles can be completed virtually and to develop a decision framework around when individuals will need to be relocated internationally and under what terms. For example, could technology offer an alternative to control foreign subsidiaries in the absence of international assignees (Caligiuri et al., 2020)? Do MNEs aim to reduce short-term travel and short-term assignments and replace these with virtual communication platforms and increased usage of virtual teams which had been growing in popularity in a pre-COVID world (Hoch and Kozlowski, 2014)? Such decisions would also potentially reduce an organisation's carbon footprint which is a key sustainability objective for many global firms.
Where MNEs determine that an international assignment is an appropriate staffing option, the availability of individuals to undertake that assignment will be key in enabling the strategy. We now turn to the consideration of an individual's’ willingness to undertake such roles.
Finding willing international assignees has been a key human resource challenge for quite some time (Caligiuri and Cascio, 1998) and remains so, with Santa Fe (2019) highlighting it as a key barrier to organisations fulfilling their global mobility objectives. Collings et al. (2007) highlighted four reasons for this challenge: dual career issues, the underrepresentation of females in assignee populations reducing the pool of available talent, repatriation issues and, weaknesses of global talent management systems. While each of these factors remain relevant, given the current COVID-19 pandemic and the associated health risks, personal health and safety considerations will likely become more prominent factors.
We already know that the perception of the host country, along with the perceived attitude and behaviours of HCNs, can have a significant influence on an individual's willingness to relocate to that country (Dickmann and Mills, 2009). Personal safety has also long been recognised as a key consideration for those considering accepting an international assignment (Wagner and Westaby, 2009) with the perceived risk of ill health potentially negatively influencing an individual's willingness to relocate (Fischoff et al., 1987). There appears to be little doubt that as an individual weighs up potential international assignment opportunities, the differences in national responses to COVID-19 and the resultant impact of the pandemic in relative countries may well form part of the decision. This may mean a new hierarchy of nation states emerges where individuals rank them in their decision making, in terms of their health care systems or by how effectively they have navigated the current pandemic.
A key area which could be considered in future research is how individuals weigh up the risks attached to international assignments with the perceived benefits they bring. These benefits may be extrinsic such as the remuneration and the package offered to potential assignees. We may, for example, see increases in hardship payments (PWC, 2020b) or higher levels of health insurance as a means of incentivising individuals to travel to those locations perceived as higher risk. Of course, intrinsic motivations are also likely to be important. For some, vocational motivations may provide the impetus to accept international assignments (Cleveland et al., 1960; Oberholster et al., 2013). For others, the longer-term career benefits of a challenging location may be an important counterbalance to the perceived risks in a country. Equally, it will be interesting to explore how the status of international work evolves in a post-crisis world. For many years international work has enjoyed high status in organisations and society more generally. However, the current crisis may well result in a rebalancing of the relative status of different types of work and international work may well be re-evaluated in this regard (Kramer and Kramer, 2020). There is little doubt that the experiences of those who return to international travel earlier in these new conditions may also have an impact on employee perceptions and willingness to accept assignments going forward (Froese et al., 2013).
We now turn to ensuring the well-being of those who are abroad and those who relocate internationally in the current environment.
There is little doubt that COVID-19 pandemic has elevated the discussion on employee health and well-being to a level never seen in the past. The crisis is first and foremost a human crisis and corporate boards and leaders were forced to put employee needs front and centre in early decisions in responding to the crisis. This meant a swift focus on moving employees to WFH arrangements where possible and on repatriating employees from around the globe for many MNEs.
The question of the health and safety of globally mobile populations has received relatively limited consideration in the academic literature in the past (c.f. Bader, 2015; Collings et al., 2007; DeCieri and Lazarova, 2020; Shaffer et al., 2012). As is consistent with much practice in the global mobility space, there has been a key focus on minimising risk around compliance from a health and safety perspective in the past. Commenting on the annual Santa Fe mobility survey (2019) McNulty questioned if we might see in the coming years there may be a move away from a duty of care focused on compliance to one focused on employee well-being (Santa Fe, 2019). This question becomes even more apposite in the current environment. In broader terms, emerging data point to significant declines in key mental health outcomes in light of the COVID-19 pandemic. For example, statistics from the UK's Office of National Statistics (2020) show that 49.6% of people in Great Britain reported experiencing high levels of anxiety in March 2020 compared with 21% at the end of 2019. Similarly, the Irish Central Statistics Office (2020) reports that while 44.3% of people reported high levels of overall life satisfaction in 2018, by April 2020, this had dropped to 12.2%. It is highly lightly that such challenges will be amplified for those who are working internationally, owing to the additional stressors known to be linked with such roles. For example, we have evidence on the negative impact of frequent travel prior to the crisis. This literature points to the negative impact on assignee health and well-being (Burkholder et al., 2010; Mäkelä and Kinnunen, 2018) as well as family relationships (Welch and Worm, 2006).
The alternatives to international assignments are also likely to result in significant challenges for MNEs from a health and safety perceptive. For example, those individuals who are grounded owing to the COVID-19 pandemic may be experiencing loss as a significant part of their identity and the lifestyle they are accustomed to are placed on hold (Caligiuri et al., 2020). Additionally, the isolation and loneliness likely to be experienced by individuals who are working from home may be particularly acute for individuals highly engaged with MNE networks through business travel or international assignments. The literature points to the value of high-quality social interaction, such as informal work chats, for positive social emotions at work (Methot et al., 2020) and employee health and well-being (Mogilner et al., 2018). The lack of such interactions is likely to be particularly impactful for those for whom relationships in the workplace are core to their roles. Additionally, it is highly likely that those who held global roles will have replaced some of their travel and interaction through global virtual means. The research points to the considerable challenges created by virtual environments, including overcoming geographic and cultural distances, building trust, and team identity. This is significant as such factors are key to enabling collaboration and knowledge sharing (Zimmermann, 2019). The wider research on virtual collaboration highlights the value of information and communication technology (ICT) in information gathering and the like, with face-to-face meetings more effective for tasks such as problem-solving and decision making (Malhorta and Majchraz, 2014). These factors create a duty for MNEs to consider the impact of new ways of working on the well-being of employees and to ensure HR systems and processes support employees in this regard. As Caligiuri et al. (2020:11) suggest ‘…the extreme situation of the pandemic challenges us to support managers who are dealing with health matters that include serious outcomes among employees, including depression, substance abuse, or suicidal ideation…’. It is likely that health and safety supports will be less of an optional added extra and more of an expectation moving forward and understanding which interventions have the greatest impact is an important question.
Global staffing is complex and challenging, requiring MNEs to constantly recalibrate their staffing options. There is little doubt that the COVID-19 pandemic represents the greatest challenge to the movement of people globally we have witnessed in recent memory. The rationale for moving employees globally whether on a shorter-or-longer term basis requires interrogation. MNEs must re-evaluate the assumptions underpinning their global staffing decisions and their assumptions around the supports required for individuals in these roles. While there is a considerable body of research in I HRM which could inform such decisions, there is a requirement that these findings are considered in light of the fundamental changes to the nature of work and employment that will result from the COVID-19 pandemic. This will require considerable academic research to inform future practice. This represents a challenging but exciting time for IHRM scholars as these questions are explored in detail.