MOBILITY 2020 GLOBAL MOBILITY TRANSFORMATION 11 March 2013

MOBILITY 2020 GLOBAL MOBILITY TRANSFORMATION 11 March 2013 Ed Hannibal Partner

Today’s Agenda World Economic Forum and Mercer Talent Mobility Research Findings Impact of Mobility Global Mobility Trends Governance MERCER 10 November 2020 1

Mobility The Historic View MERCER 10 November 2020 2

Global Mobility is in the Midst of MORE Change than EVER … • People are connected – Over 900, 000 Facebook members – Over 175, 000 Linked. In members in over 200 countries/territories • There are over 5. 6 billion cell phones worldwide (80% of population of 7, 040, 000 as of September 2012) • Average of 190, 100 passengers arriving and departing daily from Heathrow – 69. 4 million passengers in 2011 • According to the UK Border Agency, each year over 100 million people arrive at the UK border and 3. 5 million apply to visit, live, work and study there. MERCER 10 November 2020 3

Where are clients sourcing talent? Current demand for expatriates New Home-Country Expatriate Moves * From internal Mercer data requests MERCER 10 November 2020 4

Where are employers sourcing talent? Top 15 host locations 1) Shanghai 2) Singapore 3) Hong Kong 4) Bangkok 5) London 6) Beijing 7) Tokyo 8) Paris 9) Seoul 10) Dubai 11) Jakarta 12) Taipei 13) São Paulo 14) Kuala Lumpur 15) Brussels MERCER 10 November 2020 5

WORLD ECONOMIC FORUM AND MERCER TALENT MOBILITY RESEARCH FINDINGS

World Economic Forum (WEF) collaboration Human capital risk, employability and mobility were critical issues at the WEF’s 2012 annual meeting in Davos “The world is moving from capitalism to talentism” ~Klaus Schwab, Founder & Executive Chairman of World Economic Forum MERCER 10 November 2020 7

World Economic Forum collaboration Why this issue? Why NOW? Talent Employers Talent & Skills Gap 13. 3 million unemployed in US There is a clear mismatch between 3. 3 million job vacancies in US What’s IN DEMAND 205 million unemployed globally and What’s AVAILABLE Globally 34% of employers can’t fill available jobs in the global talent pool Source: U. S. Department of Labor – Bureau of Labor Statistics; 2011 Gallup Employment Survey; Manpower Group’s 2011 Talent Shortage Survey MERCER 10 November 2020 8

Highlights of talent mobility research findings Participating organizations with selected good practices 3 M Western Europe 47 European Ministers of Higher Education ABB Ltd Abbott Laboratories Adecco Group American Airlines Atlas Corps British Columbia Hydro & Power Authority Chub Group of Insurance Companies Cisco COM DEV International Education for Employment Emma L. Bowen Foundation European Commission, Department of Employment, Social Affairs & Inclusion Federal Migration Service (Russia) General Electric Company MERCER George Washington University German Trade Union for Building, Forestry and the Environment, Polish Trade Union of Agricultural Workers GLOBIS Corporation Gouvernement du Quebec Government of Taiwan HCL Technologies Ltd ICT Association of Jordon Infosys Ltd INSEAD International Labour Organization INTTRA JA Worldwide Japan International Cooperation Agency LVMH Moet Hennessy – Louis Vuitton Manpower. Group Marriott International Inc. Marsh Inc. 10 November 2020 Mercer National Skill Development Corporation Oliver Wyman Organisation for Economic Cooperation and Development Philippines Government Polish Confederation of Private Employers Lewiatan Pw. C Standard Chartered Taylor Bennett The Boston Consulting Group The United Nations Development Programme United Kingdom Border Agency U. S. Department of Labor University of the West of England Wipro Technologies Yum! Brands 9

Highlights of talent mobility research findings Definition must expand to fit the new age of talent mobility Talent Mobility: tal·ənt mō·bil·ətē The movement of workers between organizations or among locations of an international organization MERCER 10 November 2020 10

How companies define talent mobility today 2012 survey results from 700 American/EMEA companies Describe your working definition of talent mobility, as reflected in existing HR programs and policies MERCER 10 November 2020 11

Highlights of talent mobility research findings Four primary barriers to talent mobility Widespread unemployability Critical skills gap Information gaps Public & private constraints MERCER Source: Mercer Analysis 10 November 2020 12

Highlights of talent mobility research findings Examples of successful multi-stakeholder collaboration • Partners with local governments, educational institutions and NGOs • Develops talent in India, Brazil, China and Argentina to support its global growth strategy • Drives improved local prosperity and global economic growth MERCER • Collaborates with governments and educational institutions to create international IT/BPO skill standards • Results in easier movement of people across geographies, occupations and organizations • Member nations collaborate to assess workforce competitiveness • Results being used to plan regional labor market integration • Goal is to become more attractive to global employers and thereby drive prosperity 10 November 2020 • A collaboration among multiple stakeholders for growing/developing local financial services talent and driving sector growth • Aim is to enhance competitiveness of Toronto region as an international finance center • Relies on high job mobility to develop talent and future leaders • Places talent in other allied organizations to gain “outside” experience and enhance critical skills to strengthen their team 13

Highlights of talent mobility research findings Develop a collaborative mindset • Think broadly about the greater good, rather than focusing only on your own objectives • Engage “hearts and minds” of workforce • Be comfortable with complexity • Think outside the box to drive innovation • Be sensitive and adaptable to different cultures • Be open to continuous learning and new opportunities • Be able to handle ambiguity and uncertainty • Be good at systems thinking • Take a long-term perspective, but have a sense of urgency MERCER 10 November 2020 14

Driving talent mobility excellence Leading companies optimize their global workforce Build a comprehensive talent planning process and decision framework to support growth strategy Identify workforce and capability gaps Engage and create sense of urgency with senior management Analyze hard data to track dynamics Create lines of sight among talent management, acquisition, learning & development, and global mobility functions MERCER 10 November 2020 15

Intra-company collaboration Also key to successful talent mobility Learning and development Leadership development Compensation and benefits Talent management Employee communications MERCER Global mobility 10 November 2020 16

Driving talent mobility excellence People strategy must remain aligned with business strategy A unique set of prioritized choices about people investments that enables the organization to achieve its business strategy and performance goals Defines the performance goals the organization seeks to achieve and sets parameters for the decisions and investments it will make to support those goals MERCER 10 November 2020 17

Aligning talent mobility good practices with business objectives The discussion each organization needs to have Operating and generating revenue within the borders of one country Significant presence in a large number of countries, revenue outside HQ equals or exceeds home-country revenue Domestic Multilocal Fully global Going global Most revenue in home country, disparate business units Rapidly increasing revenue outside home country, geographic market expansion Where is your organization today? Where will you be in five years? MERCER 10 November 2020 18

Optimizing talent mobility Focus on critical talent and roles Critical talent and roles Development value High Emerging, high-potential talent Strategic business leadership Careerbuilding volunteers Seasoned technical experts Business value Low MERCER 10 November 2020 High 19

Building an integrated approach to talent mobility strategy Successful outcomes through clearly linked programs TALENT The right PEOPLE… TOTAL REWARDS Talent segmentation in the right PLACES and ROLES… Talent identification Identification of need and locations Candidate profiles Critical roles Selection criteria Key skill requirements Selection process at the right COST… for the right length of TIME and RESULT… Contract type Remuneration, benefits, allowances and support Funding arrangements PLANNING Assignment purpose Type and length of assignment Assignment lifecycle management Management of other related costs Transition management INVESTMENT Executed through Administration, Communication, Functional Excellence, Measurement Process, Policy, HR service delivery, Outsourcing MERCER 10 November 2020 20

IMPACT OF MOBILITY LOOKING INSIDE

ILM analysis® for this financial services firm showed that location changes were destabilizing in the short term; on the other hand, moves across business lines have more positive influences Promotion Turnover: Voluntary Turnover: Retirement Rating Pay Level Pay Growth Total Pay Change work location No Influence 15. 5% NA No Influence -2. 5% -. 1% -2. 9% Ever change work location No Influence NA No Influence 2. 6% Changed Business line 18% No Influence NA 5% . 1% 5. 2% Transfer across Op. CO No Influence NA No Influence 7. 5% . 1% No Influence Ever Transfer Across Op. Co No Influence -35% NA No Influence 4% 1% 8% 6% Note: The models on which these results are based control for individual attributes, organizational factors, and external influences. MERCER 10 November 2020 22

ILM analysis® allowed this large energy company to assess the impact of developmental and education experiences, so as to improve the return on their considerable investments in human capital Promotion Turnover: Voluntary Turnover: Retirement Rating Pay Level Pay Growth Total Pay Masters Vs. Bachelors 11% No Influence 3% 5% No Influence 2% Doctorate Vs Bachelors 55% No Influence -83% 10% No Influence 3% 49% 41% Not Applicable -4% 0. 1% 28% 47% -89% Not Applicable -4% -0. 1% No Influence 65% No Influence Not Applicable -13% -0. 2% -4% Ever did Overseas Assignment Ever did Prog. X (Certification Program) Ever did Prog. Y (Degree Program) No Influence 6% No Influence 2% Here, overseas assignments were a ticket out the door, even though it was also a ticket to advancement Note: The models on which these results are based control for individual attributes, organizational factors, and external influences. MERCER 10 November 2020 23

GLOBAL MOBILITY TRENDS

Global mobility trends Traditional mobility MERCER 10 November 2020 25

Global mobility Next gen mobility MERCER 10 November 2020 26

Global mobility Program reporting and organization To which department does the global mobility function report? MERCER 10 November 2020 27

Global mobility and talent management How integrated is your global mobility program and your talent management? How integrated does your management want them to be? MERCER 10 November 2020 28

Global mobility Company profile – cross border programs How do you expect the number of assignments in the following categories to change in the next two years (2012– 2013)? Increase Assignment Types Short-term assignments 71% Typical long-term assignments 57% Developmental/training assignments 48% Permanent transfers 47% Locally hired foreigners 45% Employees on rotational assignments 34% Commuters Contract employees 34% Global nomads/Career expatriates 14% MERCER 16% 10 November 2020 29

Emerging trends Increasing use of talent-tier policies By assignment type By organizational level By business unit By region MERCER 10 November 2020 30

Segmented best practices Establish criteria § Early career § Developmental vs. business need § Position/level – typically manager or below Identify benefits to be eliminated or reduced Compensation philosophy § Analysis of intent of benefit § Modified Balance Sheet § Cost analysis to capture cost savings § Local Plus § Employee accommodation MERCER 10 November 2020 31

Employee profile What percentage of your company’s expatriate population fall into these age bands? 2010 2012 35 or Younger 28% 22% 36 or Older 72% 78% MERCER 10 November 2020 32

International compensation philosophies Multiple approaches Pure Home Salary HQ Salary Structure International Salary Structure MERCER Home Plus Pure Host Salary Integration to Host Equalization to Home Balance Sheet Regional Salary Structure Net to Net Higher of Net to Gross Home or Host 10 November 2020 Host Plus 33

The rise in global tax equalization programs Increasing scrutiny of the compensation package MERCER 10 November 2020 34

GOVERNANCE FUTURE RISK MANAGEMENT RESPONSIBILITES

Program administration Tracking § Tax authorities are increasing their scrutiny of business travelers and short-term assignees § Concerns around shorter-term mobile employees creating “permanent establishment” issues for the corporation § Need to know employee whereabouts from a security, safety and corporate duty of care perspective MERCER 10 November 2020 36 36

Program administration Compliance and governance concerns § One potential control point is combining the per diem data and a calendar tool for short-term assignments, commuters and business travelers § Mercer is working with clients and major mobility software providers to incorporate per diem information into their tools § Employers are looking to use calendar tools to pay per diems only if and when employees fill out their time in country § See the sample Equus Solution MERCER 10 November 2020 37 37

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Looking to the future Planning for 2020 ü Regardless of the reporting structure, make your place at the table ü Evaluate your Internal Labor Market ü Prepare to be the internal mobility management consultant ü Will international “roles” dictate your organization’s mobility approach? ü Audit, evaluate and evolve your Mobility Tax policy ü Implement Global Mobility Risk Management programs MERCER 10 November 2020 39

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