China key destination for global expansion: AXA report
China, Asia’s most populous country as well as having the largest economy in the region, is set to become the global destination for international expansion over the next five years, according to research published by AXA.
The research was compiled from responses from some 250 companies in eight countries, as well as 372 globally-mobile workers. It reveals that while western economies dominate the list of countries that employers say they most commonly allocate resources to, the balance of power between Eastern and Western nations is changing.
The most popular destinations for companies sending staff on long-term contracts to are the US and China, followed in order by Germany, the UK and France, the AXA research shows.
However, it notes that looking ahead to the next five years, China is expected to nudge the US into second place, where it will be followed – in joint third place – by France, Russia and China, with Germany in sixth place.
The UK is seen as dropping to joint seventh place, alongside South Korea, under this scenario.
Among the report’s other findings is that more than a third (38%) of the human resources and global mobility managers questioned said they were looking to recruit more local employees in the countries in which they’re operating than they have done previously.
In an introduction to the AXA World of Work report, Tom Wilkinson, chief executive of AXA’s global healthcare team, noted that while all businesses can use the Internet “as a shop front to trade with the world”, any organisation that is seeking to achieve “significant global scale needs to deploy people on the ground to provide intelligence and information”.
“These staff also provide a vital ‘face’ and in-country management that achieves the objectives of the parent company, while tailoring the way that business is done to meet the specific commercial and cultural needs of each market,” he added.
“On that basis, it is perhaps no great surprise that 98% of multi-
national firms we surveyed said they think globally mobile
workforces are important, and over a third (35%) say they are
‘critical’, to allowing them to achieve their objectives.
“For a successful global workforce, businesses must structure
assignments, pay and benefits to make the opportunity
rewarding for staff.”
As for why a global healthcare specialist like AXA would conduct research into the area of international human resources issues, Wilkinson noted that the Paris-based insurance giant itself employs approximately 114,000 employees in its salaried workforce in 64 countries around the world, and thus has “a deep understanding of the healthcare needs of both corporates and their international workers” and has “a wealth of statistics and big data that demonstrates where people work, what they do and the healthcare and lifestyle challenges and needs they have today, and are likely to have in the future.
“[And yet], while there is a wealth of data available on the hard trends and drivers for global working… few studies have asked ‘why’? Why, in a world of digital communications and virtual working, do employers still want to physically send people to work
internationally? What do they seek to achieve?
“Do their staff still want to take on these international roles, and how does that impact their careers and their lives? How should organisations recruit, reward, retain and protect the talent they need?”
Among the other findings in the AXA report, the full title of which is A World of Opportunity: Developing Global Talent for International Businesses:
- Despite the unstable economic climate, rising political populism and uncertainty caused by the Brexit negotiations and other protectionist stances, the world’s biggest companies still view a flexible and globally-mobile workforce as key when it comes to building a successful business
- More than half (51%) of businesses questioned said sending staff on global assignments has improved performance in their
international operations, and 44% said it increases staff skills
- However, the research also shows that staff don’t necessarily want to move their life and potentially their family to another country
- Three-quarters of employers said there is a trend for staff to accept jobs abroad while they continue to live at home: They become international commuters
- The rewards for working internationally do, however, appear to make the commute or relocation worth the effort. The majority (51%) of staff working on international assignments said they took global placements to gain higher pay and benefits, with 47% saying they took roles to gain accelerated career development and improve their skills
- Two-fifths (42%) of companies surveyed said they tend to promote staff at the end of their assignments, and 40% said they work with staff to find a new role within the country they are working in which utilises the local knowledge they have built up
- However, companies are having to work hard to get the right talent, with 46% of HR directors saying finding the right people is the key challenge they face
- Sending staff on international assignments costs an average of
$50,000 over and above an employee’s base salary
To download a copy of the AXA report, click here.