MEASURING THE VALUE OF INTERNATIONALASSIGNMENTS

CONFIDENTIALThis presentation contains proprietary methodologies and tools that remain the property of Mercer.© 2014, Mercer

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Today’s Presenters

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Steven NurneyNorth American Global Mobility LeaderMercersteven.nurney@mercer.com

QUESTIONS

To submit a question use the floating panel, on the top of yourscreen, and click the Q&A button.

CLICK HERE TO ASK A QUESTIONTO “ALL PANELISTS”

Julia HowesPrincipal, Workforce Analytics & PlanningMercerjulia.howes@mercer.com

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AgendaWhat we’ll cover today

• Four key themes in today’s mobility environment

• Descriptive Analytics - The data challenge

• Predictive Analytics

• Q&A

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TODAY’S MOBILITY ENVIRONMENT4 KEY THEMES

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Today’s Mobility Environment#1 - Using talent mobility to fuel corporate growth

TRADITIONAL MOBILITY

Catalysts• Globalization• Organizational complexity• Demographic changes• Cost pressures

NEW MOBILITY

• Transactional• Focus on costs• One size fits all• An island within HR

• Strategic

• Focus on value creation

• Segmentation by talent type

• Connected to human capitaland business goals

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Today’s Mobility Environment#2 – Program design differentiation by business and talent purpose

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BUSINESS VALUE

DEV

ELO

PMEN

TVA

LUE

Low High

High

Emerging/HighPotential Talents

International learningand development togrow the nextgeneration of leaders

Career-BuildingVolunteers(e.g., Generation Y)

International experienceto fulfill personal lifeobjectives (opportunistic,employee-drivenmoves

Strategic BusinessLeaders

Fill mission-critical rolesand deliver specific,strategic businessresults

Seasoned TechnicalExperts

Providing specialist skills,resource or expertise tofill local gap; completespecific project or task

Corporate-ledcareer pathwaysand successionmanagement

Business-ledresource planningand deployment

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Today’s Mobility Environment#3 – Greater internal collaboration

CHRO

Global Reward COE Global People & OrgDevelopment COE

• Compensation• Benefits• Mobility• Equity• Sales Comp• Exec Comp• Regional Rewards Leaders

• Org Development• Talent Acquisition• Talent Management• Learning & Development

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How to identifyand select

the right talentto deploy

internationally

How to lookstrategically

for sourcing andplanning

to meet talentneeds

How to setcompetitive, cost-effective rewardsfor various kinds

of mobileemployees

DEPLOYMENT OFCRITICALTALENT

STRATEGICWORKFORCE

PLANNING

TARGETEDEMPLOYEE VALUE

PROPOSITIONS

How to ensurethat mobilityinvestment

delivers expectedresults

BUSINESSOBJECTIVEANALYSES

TALENTMANAGEMENT

WORKFORCEPLANNING

INFORMATIONTOTAL REWARDS

MEASUREMENTAND ANALYSIS

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Today’s Mobility Environment#4 – Focusing on mobility return on investment

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Can ROI really bemeasured?

The Mobility Challenge for Analytics

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And what exactly are we measuring?

WorkforceOutcomes

BusinessOutcomes

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Workforce outcomesconcern changes inindividuals and the

workforce at large – e.g.,their capabilities,

commitment, careers

Business outcomesconcern changes in the

performance of theenterprise – e.g.,

profitability, revenuegrowth, market share

RETURN ON MOBILITY CAN BE UNDERSTOOD IN TERMS OF HOWIT AFFECTS TWO SETS OF OUTCOMES

MOBILITY DASHBOARDSTHE DATA CHALLENGE

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Modern organisations are exploiting “big data” to develop two types offacts critical to effective decision making about human capital

DESCRIPTIVE ANALYTICS PREDICTIVE ANALYTICS

Facts = counts, rates and tabulations Facts = proven inferences about cause andeffect relationships

Delivers what the current state is:• What is our turnover rate?• How many promotions did we make?

Delivers why the current state is and what isimportant to measure about it:• What leads to unwanted turnover?• What drives leadership readiness?

Uses include:• Reporting (internally and externally)• Tracking progress toward strategicobjectives

• Responding to queries

Uses include:• Dashboard specification and design• Strategy making• Forecasting• Problem solving

Ongoing with frequent (e.g., monthly)updates

As needed with occasional updates

Business intelligence software is thefoundation

Statistical modeling joined with expertise isthe foundation

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Organizations find it difficult to calculate the value ofinternational assignments

Source: 2012 Worldwide Survey of International Assignment Policies and Practices

37%of respondents keep

statistics on turnover ofrepatriated assignees

6%of companies usemetrics to track

assignments’ success/results

Only

2%of respondents say

they have establishedhow to determine theROI for assignments

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Consider

What metrics does yourorganization track to get atmobility impact (valuecreation or loss)?

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Systems: International assignment data sits in different systems

? What metrics would you like totrack to get at mobility impact?

What are the barriers in the way?

Home/Host: even within one HRIS, home/host records causeconfusion and inconsistencyCommon

Datachallenges

Does not exist: valuable information manager and secondeeexperiences, assignment purpose is not being collected.

Time: often the return on investment occurs after the assignment,when the employee is no longer flagged as an ‘international secondee’.

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To integrate different data sources we need to create an employeetimeline for each employee

EMPLOYEE TIMELINEDevelop Detailed Story for Each Employee

EmployeeHired

Feb 2009

John SmithEmployee EE001101

Mercer Analytics

Nov 2010InternationalAssignmentCommencesHome: USHost: Japan

Nov 2011InternationalAssignmentCompletedHome: US

Nov 2012Promotion,CompensationAdjustment, JobPosition Change

2009 2010 2011 2012 2013

• Attribute 1:Promotion inLast 12 Months

• Attribute 2:Returned fromInternationalAssignment(1-2 years)

2013

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Mercer Analytics

To integrate different data sources we need to create an employeetimeline for each employee

EMPLOYEE TIMELINEDevelop Detailed Story for Each Employee

EmployeeHired

Feb 2009

Jay BrownEmployee EE002202

Nov 2010InternationalAssignmentCommencesHome: USHost: Japan

Nov 2011InternationalAssignmentCompletedHome: US

Jan 2013Terminated

2009 2010 2011 2012 2013

• Measures:Terminations

• Attribute 1:No Promotion inLast 12 Months

• Attribute 2:Returned fromInternationalAssignment(1-2 years)

2013

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Which allows us to answer the critical questions that matter

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• Are we retaining employeesthat have been on anInternational Assignment,after they return to theirHome Country (one yearafter they return, two yearsafter they return, threeyears after they return)?

• How does this compare totheir peers (same tenure,grade, location).

• Over time, do employeeswho have been on anInternational Assignmentexperience higher rewardscompared to their peers:– greater pay increases;

bonuses;– promotions; change in

supervisor status, othercareer opportunities?

• Does the number ofInternational Assignmentsimpact this?

RETENTION REWARD PERFORMANCE

• Over time, do employeeswho have been onInternational Assignmentexperience higherperformance upgrades(e.g. a move from amedium to a highperformer), compared totheir peers?

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Employees ever on assignment

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The power is in the combination

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• Termination Rate• Promotion Rate• Pay Increase

• Age• Tenure• Job• Grade• Performance

STANDARDMEASURES

EMPLOYEEFILTERS

INTERNATIONALASSIGNMENT FILTERS

• Total number ofinternationalassignments

• Ever oninternationalassignment

DEEP DIVE ANALYTICS

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Case Study – Busting a Myth

BUSTING A MYTH

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Making the most of mobility requires the “right” facts……both what people and employers say and what they do

• Individual employee records• Employee turnover• Business performance

measures such as customersatisfaction, growth, profitand productivity

Complete, verifiable understanding of the interplay betweenemployer action and employee reaction

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SAYWhat employees

and employers sayas measured

through

How employeesand employersactually behave

as measuredthrough

DO

• Focus groups• Leadership and HR interviews• Employee surveys• Company policies• Comparative/pattern

databases

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Employee survey

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Perceptions

“SAY”Employees said thatpay and promotionswere not driven by…

InternationalExperience

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Less Likely More Likely

-60% -35% -10% 15% 40%

College Fair vs. Employee Referral

Agency vs. Employee Referral

Have an M.A. vs. a Ph.D.

Walk-in vs. Employee Referral

Took Diversity Course

Work in EPD vs. SPD

Work in MTE vs. SPD

International Experience

60%

However, international experience was the strongest predictor ofpromotion likelihood

PROMOTION LIKELIHOODS

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It was also one of the highest drivers of pay growth

Not all significant drivers shown24

PROMOTION LIKELIHOOD

PAY

GR

OW

TH

Low High

High

Started indivision

Born nearHQ city

Younger

More than2 years indivision

Meritincrease

Took diversitycourse

Enter via agencyor college fair

TenureLateral movesTop tier school

New to division

Recent promotion

Older

Internationalexperience

Education(PhD, MA)

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Actual promotion and pay patterns told a very different story fromthe all employee survey

ACTIONSClose gaps through communications

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Perceptions

“SAY”Employees said thatpay and promotionswere not driven by…

Causal analyses usingHRIS data showed that

pay and promotionswere driven by:

Behaviors

“DO”

InternationalExperience

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Advanced Analytics helped assess the impact of the substantialinvestment in education and developmental experiences

Note: The models on which these results are based on control for individual attributes, organizational factors, and external influences.

Overseas assignments were a ticket out the door, even though they werealso a ticket to advancement.

Promotion VoluntaryTurnover

PerformanceRating Total Pay

OverseasAssignment 49% 41% 6% 28%

CertificationProgram 47% -89% No Influence No Influence

DegreeProgram 65% No Influence 2% -4%

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Three key questions must be addressed

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How do your employeesperceive the value ofinternationalassignments and otherjob reassignments –what do they believe isin it for them in terms offinancial and careerrewards (or penalties)?

What does theorganization in factvalue as evidenced inthe individual attributesand experiences itactually rewards, overtime, through pay andpromotion decisions?

Do these assessmentsof “return on mobility” inyour organization matchup – or is there adisconnect?

DISCONNECTIN FACTPERCEIVE

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Summary

• Business and HR leaders are more and more demand fact-based, datadriven evidence on people investments, including mobility programs.Therefore, mobility functions need to consider how to measure their returnon investment.

• Two types of analytics can be used:

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Descriptive AnalyticsDESCRIPTIVE ANALYTICS PREDICTIVE ANALYTICS

Facts = counts, rates and tabulations Facts = proven inferences about cause andeffect relationships

Delivers what the current state is:• What is our turnover rate of employeesthat have returned from internationalassignments.

• What is the promotion rate of employeesthat have been on multiple internationalassignments.

Delivers why the current state is and what isimportant to measure about it:• What effect does international experiencehave on the promotion likelihood andretention likelihood of employees,controlling for individual and organizationalfactors.

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What’s Coming Up NextWorkforce analytics webcasts, workshops, and data

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www.mercer.com/mercer-workshops

Webcast Serieswww.mercer.com/webcastseriesFALL SERIES UNDER DEVELOPMENT• Cameco• Experian• John Deere• UMass Memorial Health Care• Johnson Controls• Diversity & Analytics• Mobility & Analytics

Mercer’s Workforce MetricsBenchmark Reportswww.imercer.com/wmrs• Workforce composition and

retention metrics• 66 countries• 6,000+ participants• Regional and custom editions

available

Mercer Global MobilityAlternative International Assignments SurveyLocal Plus SurveyCompensation LocalizerSeminars:• North America• Europe

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Questions and Answers

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QUESTIONS

To submit a question use the floating panel, on the top of yourscreen, and click the Q&A button.

CLICK HERE TO ASK A QUESTIONTO “ALL PANELISTS”

FEEDBACK

Please take a minute to fill out thefeedback form so we can continue toimprove. It will pop-up in a new windowwhen the session ends. Thank you!

Steven NurneyNorth American Global Mobility LeaderMercersteven.nurney@mercer.com

Julia HowesPrincipal, Workforce Analytics & PlanningMercerjulia.howes@mercer.com

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Biography – Julia Howes

• Julia Howes is a Principal with Mercer, and is the Product Line Leader for MercerAnalytics and Planning.

• Julia has over 10 years of experience specializing in workforce analytics andworkforce planning. She has had experience guiding clients in the formulation ofworkforce planning and workforce analytics strategies including technologicalrequirements, project planning, change management, stakeholder engagement,process design, and COE structure and support.

• Julia is also experienced in leading specific workforce planning and workforceanalytics engagements for clients across a broad range of sectors and regions,principally with large multinational organizations. Julia has also practiced as alawyer in Australia and Vietnam.

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Biography – Steven Nurney

• Steve Nurney is a Partner with Mercer’s Information Solutions business. Based inNorwalk, he serves as the North America Global Mobility Leader, leading a teamfocused on expatriation and global mobility issues.

• With more than 25 years of experience in the corporate and consultingenvironments, Steve helps multinational clients develop effective internationalassignment programs, compensation policies and supporting services. Prior tojoining Mercer, Steve worked with the MITRE Corporation, a large systemsengineering organization, where he worked in both finance and HR, managingdomestic and international relocation and expatriate compensation. He also led ateam charged with reengineering travel and employee relocation functions. Hespent several years as Manager, International Corporate Alliance, with PHHHomequity, a leading international relocation management firm, where hedeveloped the framework for the company’s expatriate outsourcing services.

• Steve holds a Bachelor’s degree in Finance and Economics from Utah StateUniversity. He has served as a member of the Employee Relocation Council’s(ERC) Board of Directors and Chairman of ERC’s International Committee. He is amember of Worldwide ERC and the Canadian Employee Relocation Council(CERC).

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