Is the Hybrid Model Really a Thing?

This article originally appeared in the January 2019 edition of Mobility magazine.

The what, why, and how

As global mobility professionals, we often wonder what the best global mobility model is for our company. Should I outsource global mobility? Should I handle some functions in-house? What does the best global mobility model look like?

However, there is no single best global mobility model. For some companies, outsourcing the whole global mobility function is best; for others, doing everything in-house is most effective; and for yet a third group, a combination of in-house and outsourced services works best.

So if there is no one single best global mobility model, you may wonder, “How do I determine the best model for my company?”

The Benchmark
First, let’s get a better understanding of what kind of global mobility models companies have nowadays. According to a recent Orion Mobility survey, 52 percent of surveyed companies identified their relocation programs as hybrid models, 33 percent are fully outsourced, and 15 percent are fully in-house.

That result may surprise you, as hybrid models are typically seen as a new trend. What’s interesting, though, is that this model isn’t new at all; in fact, you may be very familiar with it. Take a look at your current mobility program:

  • Do you negotiate contracts with multiple providers, e.g., household goods, temp housing?
  • Do you counsel your transferees before turning them over to your third-party provider?
  • Do you manage any part of the expense and payment process?

If you answered yes to any one of these questions, you have a hybrid model.

The Times Are A-Changing: External Factors

Right-sizing your global mobility model is not just about identifying the best model for your company; it is about the best model for your company now and in the future. Circumstances change, and those changes can impact what model works best for you.

War for Talent and Employee Experience
As we all know, we lost the war for talent. The job candidate pool is shrinking, and employers are vying for top and hard-to-find talent. Recruiting qualified candidates has become a corporate priority that is now discussed within the walls of the C-suite.

As the “candidate experience” (attracting new talent) got more important, so did the “employee experience” (retaining the right talent). The impact on global mobility? Previously seen as a business necessity, global mobility now often functions as a powerful mechanism to attract and retain talent.

Many mobility departments are now re-evaluating what transferees are offered and how they are supported. The overall shift has prompted some companies to return the counseling function to corporate staff, empowering employees to take care of fellow employees. For others, the solution is a matter of proximity, wherein RMC staff members work at the client’s site to improve communications and, equally important, absorb company culture.

Expectations of an Increasingly Demanding Workforce
Technological developments in other industries have changed the expectations of employees. We expect to get full visibility and up-to-date personalized information. After all, if we can get live updates on our pizza order or our online purchase, we certainly expect such visibility and on-demand availability of relevant personalized data when it concerns relocations.

Furthermore, employees expect more—more options and more control over their own relocation. Traditionally, it was common for employers to offer job candidates and employees two or three types of relocation packages. Within today’s competitive climate, employers need to be more flexible and better cater to specific needs and desires.

Availability of Better Technology
Technological developments are impacting all aspects of our life. We use our cellphone to pay for a cup of coffee, our car can parallel park itself, and we use software to analyze job candidates’ facial expressions to assess whether or not they are a good fit for the position.

HR in general and global mobility in particular have been slow to adapt. Global mobility software has been around for more than 30 years, but mostly focused on improving back-office processes. Only in the last three to four years has the focus shifted to improving the process for the users and providing a better user experience.

As technology in the global mobility space is evolving, it is now easier for corporate global mobility teams and vendors to share information and provide instant data access to everyone involved in the relocation process.

Soon corporate global mobility teams will no longer be tethered to a single system with limited capabilities, nor will they be logging in and out of multiple programs to piece together data that is part of a bigger picture. Instead they will use an open software platform that can facilitate vendor collaboration and centralize data.

The Times Are A-Changing: Internal Factors

Just as there are external factors impacting which global mobility model is the best fit for your company, there are also internal factors. These factors are by definition company-specific; however, there are a few that seem to be common to all companies.

Budgets and ROI
Tight budgets and ROI discussions are nothing new, and even though there is more focus on employee experience now than ever before, that doesn’t always result in a bigger global mobility budget. Furthermore, the new federal tax law (Tax Cuts and Jobs Act of 2017) makes relocations in the U.S. even more expensive, as moving expenses are no longer deductible or excludable, subsequently putting more pressure on already tight budgets.

As a result, corporate global mobility teams are more cost-conscious than ever, and they are now demanding that providers unravel complex package deals and complicated billing to get a better understanding of actual costs. This, in combination with technology providing better visibility of all spend with all providers, means that the numbers are no longer blurry; they are black and white, and precise, which often invites further analysis.

Demand for Visibility and Control
Often triggered by internal pressures, global mobility teams are looking for more visibility of and control over their mobility operations. Visibility in itself is a significant benefit, as it provides the insight needed to make strategic decisions and proactively manage the global mobility operations, giving the global mobility team better control over the mobility program.

In some cases, this data clarity has led to a push for more one-on-one relationships with vendors, trimming excessive fees and yielding leaner budgets through direct negotiations and insights into true costs. In other cases, the data visibility has led to strategic decisions to outsource certain functions that are more cost-efficiently handled by specialist providers.

IT Support
Even more problematic than budgets is IT support. A lot of companies have a chronic lack of sufficient IT support for implementing new technology solutions. This limits new initiatives just as much as insufficient budgets do, and it leads to a preference for the status quo. A survey taken during the Corporate Benchmarking Session at Worldwide ERC®’s 2017 Global Workforce Symposium revealed that only 6 percent of respondents have highly integrated their databases with their vendors’ systems, and 70 percent have no integration at all.

Technological innovations and system integration are future certainties, though, and most vendors already have a technology solution that makes integration with other systems easy and seamless, requiring less IT support to implement.

Whether or not these external and internal factors push the global mobility model pendulum in one direction or another remains to be seen. Most likely, though, there will be a greater number and variety of hybrid programs with technology as the enabler.

Read the rest of this article in the January 2019 edition of Mobility magazine.

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