Industry Updates a Highlight of the 2021 Global Workforce Symposium
Mike Moran - Nov 05 2021Mobility professionals gather into industry vertical sessions to explore common themes and current challenges and look ahead at the 2022 mobility industry.
The Global Workforce Symposium featured eight special sessions where the 800+ attendees gathered in smaller workgroups according to their industry sector. In formal presentations, question-and-answer periods, and one-on-one discussions, peers shared experiences, perspectives, and plans for the mobility industry. In this first of two report-outs, we will focus on some of what was gleaned from the first four of these in-person information exchanges. While these summaries give a sense of the depth of intelligence available to attendees with specific interests, they also illustrate the breadth of information, diversity of experience, and generosity of this professional community.
Immigration
One of the few things that has remained constant in the immigration sector over the past 18 months has been the need for comprehensive immigration reform. State Department backlogs that the pandemic only exacerbated stem from outdated infrastructure and a crippling series of executive orders. The system is struggling to function at the bare minimum even as demand continues to rise, and there is little hope solutions will be advanced during fiercely contested election cycles.
People who are caught up in the immigration systems suffer as much from the unpredictability as the dysfunction. Mobility professionals who shepherd people through the system are spending more time simply listening to clients even when they can offer no immediate solutions. It is a source of stress for people accustomed to solving client problems to provide only emotional support, but it is a vital part of the work. Ultimately managing expectations is the theme as weeks stretch into months.
Consular appointments are a good example where people still expect a high level of services, but appointments can be difficult to schedule and disappear as soon as they appear.
Many believe the most significant source for optimism is an apparent commitment from DHS Secretary Mayorkas to investing in technologies and efficiency. At US Immigration and Customs Enforcement, Mayorkas' emphasis on technology drove $160 million in cost savings while exceeding goals for processing time and maintaining the quality of service. For 2022 that optimism is tempered by the DHS need to hire additional staff in a challenging labor market.
Immigration lawyers, global mobility, and HR professionals have all committed to a rapid acceleration in the digital transformation and are finding ways to align business goals with the new reality. Particular success has been realized in eliminating paper in favor of electronic processing and leaning into automation to deliver increasing workloads without sacrificing the quality of service. As this industry adapts, evolves, and finds ways to operate remotely, it serves as a good model for its counterparts in government.
Relocation Management
As international companies were swept up in the pandemic, the first challenge was determining precisely where their people were. Systems to track staff were not sufficient to provide real-time data, and extensive efforts were required to reach out and verify locations.
Many organizations struggled to establish physical and virtual structures to create and disseminate health alerts to staff and stakeholders. Sharing information was only the first communication challenge as efforts shifted to gathering information. When possible, many families wished to return to their home country, while others preferred to remain where they were stationed. Executing on moves to return families became more complex by orders of magnitude as travel restrictions and supply chain issues rapidly created unforeseen obstacles.
Efforts shifted to the assignee's long-term health and well-being once primary Duty of Care issues were addressed. Beyond the traditional management of assignees—compliance, taxes, and immigration—companies realized the need to monitor more human aspects such as sentiments and mental health.
In the waning days of the pandemic, compliance issues have become a significant challenge. Risk has risen considerably as tracking compliance has become more complex with a distributed workforce. The competition for talent prevents most companies from requiring a full return to pre-pandemic use of office space. Many staff are making their preferences for continued remote or hybrid work arrangements a condition of continuing employment. With more jobs available than job-seekers, the market in the US has shifted to offering both higher compensation and flexible work arrangements.
With remote and hybrid work arrangements becoming a competitive requirement, companies struggled to get up to speed quickly on long-term compliance implications. Moving into 2022, companies like Cartus are seeing rapid adoption of Core/Flex solutions that automatically manage compliance while offering transferees increased choice and personalization of benefits that employers classify as "core" or "flex." Cartus projects within 3-5 years that 90% of businesses will be using systems like these.
Clients increasingly depend on relocation management companies (RMC) as a key advisor and a source of timely information that allows them to take decisions quickly. In stark contrast to the fears of industry obsolescence that accompanied the early days of the pandemic, the need for relocation expertise has only become more critical as access to global talent has become more complex, supply chain issues continue, and workforce-related risk exposure increases dramatically.
There will continue to be fewer international assignments in the short term, though shifts in corporate leadership may ultimately be a driver towards increased global mobility. Short-term moves have increased in 2021 and will likely continue for the next two years, but longer-term moves will return to pre-pandemic levels beyond that.
Corporate Housing/Temporary Housing
Corporate and temporary housing inventory issues have been strained in 2021. Staffing in apartments is a particular challenge in 2021, creating routine problems with the level of service provided. Traditionally it was expected that one or two things would go wrong somewhere in the supply chain; in 2021, having just one or two things go wrong is a happy exception. Relocations that used to take three months are now averaging nine months.
Shipments from the Pacific Rim to California that would cost $1,500 before the pandemic are now running as much as $19,000. Those costs will come down, but there is little hope they will ever return to pre-pandemic levels.
While the market tempo remains slow, experts are expecting volume to pick up substantially in January 2022. The focus will increasingly shift to assignee experience—what consumer expectations are and striving to deliver more of an emotional impact and away from the "corporate" feel of the traditional units.
Rents that ballooned in the past 18 months have simply become costs that must be passed on to customers as there are no ways to compensate or avoid them. This problem is clearly worse in some regions and metropolitan areas than others, but even less competitive markets have risen substantially and show little promise of returning to previous rates.
Prices for furnishing also remain inflated, and again these costs simply need to be passed along. Many vendors are streamlining processes and creating efficiencies as a way to increase value as costs remain outside of anyone's control.
Along with the pandemic, global awareness of diversity, equity, and inclusion also became a transcendent issue in every industry and region. Mobility professionals are also taking a sober assessment on who is in the workforce and finding ways to make a contribution in recruitment as well as engagement of current staff who may be working in distant regions and coming from different cultures. The expanding DE&I conversation is taking more than race and gender into its immediate areas of concern as physical disabilities, and generational representation encounter new challenges and opportunities in the remote workforce.
As with other sectors, corporate and temporary housing is dealing with the rapid adoption of new technologies. Technology providers make a sound case for embracing technology and encourage companies to keep pace with consumer expectations. And while the promise is real, one shared value underscored by the pandemic experience has been the visceral need for human connections and the one-on-one experience. Maintaining that emotional network amongst staff that had worked together for years was relatively seamless. On-boarding new staff who had no insights into company culture and lacked access to the implicit knowledge that is routinely shared in physical proximity is proving more difficult. These challenges will only grow as attrition breaks down and personal connections are largely or exclusively remote. Lost for now as well is the fluid interaction and creative group work that occurs naturally in person but becomes strained in the group video conferences.
Moving/Shipping
Volatility, uncertainty, complexity, and ambiguity; in no sector do these challenges loom larger than in the supply chain today. In truth, some of these troubles, like the labor shortages amongst drivers and packers, are spikes in what were already troubling trends. The shortage of drivers has been a topic of industry conversation for years. At an average age of 55, a labor crisis was only a matter of time. The pandemic hastened many of these retirements even as it shut down training schools for an extended period, starving the supply of new talent even as veterans walked away for good. The "Great Resignation" has only contributed to these labor shortages as job-seekers recognized hourly wages were going up in industries that required less physical effort.
The modern economies conditioned reliance on just-in-time delivery increased pressure across the board as efficiencies in inventory honed over decades began to reveal a shadow of fragility in the system. As the gaps emerged, logistics that once required twenty touch points soon required forty.
Experts at GWS believe there will be no simple solution any time soon and for perhaps as long as 18 months. Ultimately the industry as a whole will need to adapt to higher labor and material costs as well as shortages of equipment. There will need to be greater investment in recruiting a new generation of drivers, and attention and resources will be required to retain them. Even as shipment volumes have decreased, van lines will continue to be managed as a critical link as never before.
There is positive news coming out of this sector as well as labor shortages are drawing employers back to taking a fresh look at the talent pool and recognizing that diversity, equity, and inclusion programs are ultimately a means of tapping into a source of high-value staff. New attention is also being paid to sustainability initiatives as clients want to track and measure the environmental impact of how and what they are shipping. This is a sector of mobility that is already moving into quantifying the results of its efforts.
Wages across the US are up 5% on average and higher where labor markets are particularly tight. Ultimately higher pay for front-line staff will redound to the benefit of the industry in the form of enhanced recruitment, increased retention, and a happier workforce. These factors also undergird a company's culture and improve client experiences, creating a virtuous cycle in which best-in-class providers will be competing for labor with compensation rates they could not previously justify. All this will go directly to the cost of moving and shipping and be passed along to clients, so it is not clear what the ceiling is; when it all just gets too expensive.
That is not an answer that will be revealed by any single sector of the mobility industry but by the combined efforts, coordination, and competition among them all. Consolidations and new enterprises will tell part of the story. Ultimately, it will be corporates that give the early signals as higher costs create incentives for revising policies. In these decisions, they will be creating the new future of work.