From Expat to Refugee Relevance from 3,000 Miles Away The Forum for Expatriate Management New York, NY June 14, 2011
CONTENTS > Mobility Landscape > The New Normal > A Series of Unfortunate Events > The Case for Relevance 2
MOBILITY LANDSCAPE > With saturated advanced economies and converging BRIC countries, firms will seek growth and purpose in frontier regions. > The wave of instability gripping the Middle East, pervasive challenges in Sub Saharan Africa coupled with the unbalanced economies of developing countriesmakestoday snewsthe new normal in global mobility. > A recent PWC study shows global expat assignments will increase 50% by 2020. 3
EMERGED MARKETS INSERT Slide on Fragmented Structures.and best practice > With real GDP growth 3 times as fast as advanced economies and no ceiling in sight, emerging and developing countries will bring profound changes to mobility practitioners. 4
EMERGED MARKETS > Firms will gain first mover advantage by venturing outside of the BRIC countries and into new frontiers. > 6 in 7 people by 2016 will be located in an emerging market. > Adapting to this reality is the defining challenge for global firms and their mobility leaders. 5
THE NEW NORMAL > The fastest growing markets and regions are among the most unstable. > Many developing and emerging economies are fast becoming pure markets and not just a source for natural resources and extractive products. > The so called fortune at the bottom of the pyramid is calling for firms to become invested and entrenched in new markets, increasing their exposure. * The Economist 2010. 6
RISK MATRIX ADVANCED MARKETS Financial Impact Low Medium High War Kidnap / Ransom Unlawful Detention Extortion Forced Abandonment Piracy Business Continuity Fire WMD Political Risk Expropriation Corruption Brand / Reputation Plant / Equipment Errors / Omissions Duty of Care Theft Natural Disasters Capricious Regulators Injury Disease Looting / Vandalism Loss of Life Crime Personal Safety General Liability Data Security Advanced economies are resilient to these risks, many tools and contingencies are in the arsenal, no real mobility impact. Terrorism Business Risk Physical Risk Personal Risk Catastrophic Risk Low Medium High Perceived Likelihood **WEF / Clements research 2011. 7
RISK MATRIX EMERGING MARKETS WMD War Natural Disasters Financial Impact Low Medium High Emerging markets are prone to high risks and have low resilience, poor infrastructure and low political stability each risk carries a direct impact on mobility. General Liability Errors / Omissions Duty of Care Expropriation Capricious Regulators Plant / Equipment Terrorism Business Continuity Fire Injury Loss of Life Kidnap / Ransom Extortion Looting / Vandalism Data Security Theft Brand / Reputation Unlawful Detention Political Risk Forced Abandonment Corruption Piracy Disease Personal Safety Crime Business Risk Physical Risk Personal Risk Catastrophic Risk Low Medium High Perceived Likelihood **WEF / Clements research 2011. 8
UNFORTUNATE EVENTS Low Relative Safety High Protests / Demonstrations Expatriate Threshold Communication Interruption Company Threshold Civil Unrest / Riots Government Threshold Curfew / Sheltering > Curtailment of movement > Limited commercial egress > Market collapse > Supply chain disruption Government Crackdown Uprising >Organizedviolence > Chartered egress > Ordered evacuation Low Risk Exposure High 9
MASS EXODUS > The so called Arab Spring, together with unrest in Cote D Ivoire, the Sendai earthquake and tsunami have triggered a mass exodus event displacing millions of people in the first half of 2011. THE 4 R s > Mobility practitioners are now facing an even steeper challenge in recruiting, rewarding, retaining and returning expatriates to the world s frontiers a critical task in fulfilling corporate strategy and delivering shareholder value. > Hardship money, while compelling, will lose its appeal as an inducement to get qualified talent to emerging markets. 10
CHIEF MOBILITY OFFICER Internal Structures Mobility Practitioner External Structures HR Finance Risk Management Operations Insurance Brokers Relocation Firms Security Firms Immigration Services > Typically the global mobility practitioner is a complement to HR, facilitating international assignments. > The evolution of global mobility will see the addition of hard power to the traditional tasks of relocation, assimilation, benefits, compensation and so on. > The advent of a Chief Mobility Officer will create competitive advantage and overall accountability. 11
KEY TAKEAWAYS Current Practice Soft Power Reactive Silo Transactional Prone to Risks Chief Mobility Officer Soft and Hard Power Proactive Matrix Strategic Risks Mitigated Key Takeaways: 1. Severe risks in emerging markets are likelier, have high impact and direct mobility implications. 2. Traditional risk management mechanisms protect the balance sheet, but leave many human factors exposed. (e.g. abandoned property). 3. Creating a CMO or comparable role will increase firm wide agility and accountability. 12
PARTNER SOLUTIONS DANTE A. DISPARTE Director, Partner Solutions ANDRES FRANZETTI Manager, Partner Solutions Tel. +1 (202) 872 0060 ext. 1558 Tel. +1 (202) 872 0060 ext. 1580 ddisparte@clements.com afranzetti@clements.com www.clements.com 13
THANK YOU! 14