Expert Insight Interview with Yann Blandy, CEO of Santa Fe Relocation - Q&As
If you missed Day Two of our EMEA Online Summit, you can catch up here
You can watch the recorded video of all Day Two sessions by clicking on the link here:
We also collated the questions that attendees posted in the Chat function and Yann has kindly added his answers here:
Q. Do you think there will be further consolidation in the GM provider industry?
Yann: Yes, absolutely. A number of players will come out weakened or strengthened from the crisis and I do expect significant consolidation within the next 18 months.
Q. If a GM program has to make cost savings where should they look?
Yann: Below is a picture illustrating the potential total global mobility costs:
We usually say that global mobility costs have 3 “layers”:
- Direct external costs such as suppliers as Santa Fe, any RMC such as SIRVA, CARTUS or BGRS, or specialists such as Dwellworks or Fragomen or any of the Big 4. That cost is easy to identify as it is external. However, it represents a fraction of the total pie. For example, if Santa Fe moving costs for a customer are €5m a year, say, they represent about 1.6% of the total program costs, which means that the global mobility program costs are about €312m. So, one (read procurement) can of course save 10% on the moving costs, but these are only €500k out of €300m, i.e. a very small saving out of a very big pie.
- Direct internal costs such as salaries, benefits (housing, schooling, etc.), travel, etc. of all assignees in the program as well as internal costs to manage the program (global mobility function). This is where the biggest costs are. The primary thinking on total program costs needs to come from the angle of which talent management strategy does an organization need to realize the business strategy. As part of this, how does global mobility contribute and what can we afford in this space. Based on those reflections, organizations then need to reflect on which global mobility strategies/programs to have in place to meet the business’ talent needs AND the assignees’ needs (as changing demographics mean changing needs). And based on that, organizations can then prioritize where (benefits, etc.) and how (core flex or other policy types; which types of assignments and/or profiles; etc.) to invest their monies to get the best possible ROI (return on investment). The savings, if the strategy is well articulated and implemented, can be significant. To take the example above with a total program cost of €300m, a 1% improvement = €3m per year.
- The third dimension, often forgotten, is the indirect cost of mobility, which is mostly reflected in employee turnover within 12-24 months following an international assignment. Some studies predict that every time a business replaces an employee, it costs 6 to 9 months' salary on average. For an employee making €100,000 a year, that is €50,000 to €75,000 in recruiting and training expenses as well as lost productivity to replace that employee. So, failed assignments (because of point 1 above, for example) can be very expensive. If an organization, for example, has 500 assignees and has 5% turnover within 2 years of repatriation (i.e. 25 individuals leaving), this is a cost of about €1.25-1.9m using the above example with an employee making €100,000 per year. This is an ok result – we know of some of our clients having 0% turnover within 12-24 months following an international assignment. However, if your program generates 15% employee turnover within 2 years of return from expatriation, then we are looking at €3.8-5.6m in indirect costs, which is really bad.
In short, stop looking at the cost of your program only through lens #1 above, even though it is easy for procurement to aim at it. Take a broader perspective across lenses 1, 2 and 3 to see how you can reduce the total costs of global mobility. If you need help to figure those costs out and how to better manage them, let us know and we can help.
Q. What new services do you think providers need to focus on?
- Digital services due to COVID, such as digital destination services (home/school search, etc.)
- Digital services to meet new demands from assignees through self-serve technologies
- Increased duty of care services to meet complexity/challenges as a consequence of COVID
- Ability to offer Core/Flex services to meet new business/assignee demands
Q. Are companies tracking employees – and how does that work with data protection?
Yann: Yes, employers are balancing their duty of care obligations for their employees while respecting the boundaries of personal data. COVID-19 highlighted the importance of knowing where employees are, and this is only becoming more critical with new approaches to working from home or even working from anywhere policies. We find that the approach to tracking is specific to both industry and geography, but all clients with internationally mobile employees are responding to the changed environment by ensuring they can deliver on their duty of care to their employees.
Q. If ‘work from anywhere’ becomes the norm is there any need for mobility?
Yann: Mobility is not disappearing; it is just transforming – The COVID-19 pandemic has accelerated the adoption of remote and virtual working. Virtual working is not a new concept but has become a more common practice as a result of the Pandemic. But is it a long-term solution? There is a need to rethink our approach to mobility. Virtual working is easier and more effective than previously thought. Although its adoption will depend on business applications and the type of organisation e.g. what seem a relevant solution for some industries e.g. technology, may just be part of the solution for others e.g. manufacturing where a physical presence is still required. Global Mobility teams need to assess the risks of these types of assignments, protecting the individuals – is it safe where they are going to work and what are the compliance risks: payroll, tax, social security, labour law.
For a notable proportion of companies international assignments are still seen as mandatory for the most senior staff—the Executive Board, and business area or function heads. Likewise talent development, especially for future leaders, will require a blend of mobility interventions. Some may be remote working but in many other instances, as medical solutions both cure and protect from the COVID-19 pandemic, more physical relocation will return and a rebalancing of work arrangements as the need to close borders and enforce lockdowns diminishes.
Q. Has technological change sufficiently impacted the world of the GM? How is Santa Fe addressing this pandemic-accelerated change?
Yann: We realised at the beginning that even with our globally integrated footprint, we needed something faster and more powerful to support our service delivery in the midst of the pandemic. In a matter of weeks our IT and Operations team conceived, designed and rolled-out a new tech tool which gives every single one of our global consultants the latest status of each of our local offices around the world. We developed that further than a simple status update and ensured that each of our service lines’ status is available also. So whether the employer/employee needs information on Move, Immigration, DSP or Assignment Management, every one of our team can access the information immediately. And realising the speed and power of this information, we developed another element in the tool which provides estimated dates for each of the services on an employee’s relocation. It allows us to produce an early timeline, based on the latest local data at a global level. Yes, technology has and will continue to impact Global Mobility.