Multinational companies, especially those in North America and Europe, are increasingly looking east at emerging markets, especially those in Asia, as the new engines of growth.
With a growing middle-class and adoption of technology on the rise, these markets present opportunities at a time when growth in other parts of the world may have slowed or plateaued. To be able to enter and scale their presence across these markets, multinationals are presented with the challenge of having to mobilize their seasoned executives and persuading these executives to move to emerging market hubs.
With increasing improvements in the infrastructure, public services and transportation across Asia, this persuasion is less of a challenge than it used to be. However, the development in the region has not been evenly spread. Therefore, the question of hardship, especially in long-term assignments, invariably comes up. Hardship, and how an employer might address it, is often compounded if the assignment entails movement for entire families.
Differences in living standards across the region warrant consideration, for a number of reasons. First, they can create anxiety for the assignee and family, which may lead to reluctance to undertake the assignment. Second, living conditions may erode the employees’ morale and affect their performance over time. This could ultimately lead to “assignment failure,” which is the failure to achieve the desired objectives and/or a request to be repatriated prematurely. Considering the significant financial investment made in deploying an employee overseas, assignment failures are best avoided.
Finally, poor planning and preparation for differences in living standards can expose the assignees to a number of risks with potentially harmful or even lethal consequences. Employers have a “duty of care” obligation towards their employees, which extends to overseas assignments.
According to Mercer’s recently released ‘Quality of Living 2018’survey, Singapore -- the most progressive nation state -- continues to lead the region in terms of ranking, even as we see marked improvement in other metropolitan hubs in the region with the continued investments in infrastructure and public services by governments in Asia.
“Attracting and retaining the right talent is set to be one of the key challenges for businesses over the next five years,” according to Ilya Bonic, senior partner and president of Mercer’s Career business. As with most strategy and policy decisions, there are no silver bullets, and every multinational will need to weigh in their employee mobility decisions in the context of their business and the macroeconomic environment.