Rise of OTAs poses challenges to business travel
As an industry that used to be a tightly controlled relationship between corporate entities and travel bookers, the Internet has blown open the world of business travel unlike most other industries one can think of. With all of the world’s best accommodation deals available at the average workers’ fingertips, the job of finding and booking business travel is increasingly falling to the employee themselves, and the major beneficiaries of this change in the business model are online travel agents (OTAs) like Airbnb and Trivago who are supplying the platforms that make booking so easy. It seems like a win-win scenario: businesses are freed from the administrative burdens of securing bookings themselves, they’re free to find cheaper rates away from locked-in relationships with hotels, and workers are free to choose the accommodation that most suits their wants and needs. But could all this choice be a false friend to business?
Pushing up cost
One of the major benefits of the OTA booking model for business is that, theoretically, it helps reduce cost. The administrative burden of making bookings is lifted from the company themselves, so they can end up spending much less time and cash on business travel, while there is also the potential to find great deals that hotel companies simply can’t match. However, the increasing popularity of this model of business travel has created a supply problem, particularly in the world’s major cities like New York and London, which is pushing up the cost of accommodation on social booking platforms as a new glut of business travellers compete for beds with tourists.
As well as the supply issue, a more surprising problem is that there’s actually too much money pouring into the sector – something for which the business model wasn’t designed. Instead of ad-hoc visits by travellers and tourists, some of the best run and most attractive properties on OTAs are gaining a steady stream of revenue from business travellers that is pushing the rules surrounding letting and tax requirements to the limit in many countries. By turning empty rooms from an occasional revenue earner into a successful business, many Airbnb properties are attracting the attention of the authorities and finding themselves pushed into tighter regulation and higher tax bands – both of which add further to their cost.
The compliance factor
A second problem that has arisen thanks to this new booking model is one of compliance. One of the major advantages of a relationship with a corporate hotel or serviced apartment chain is the knowledge that each unit will be exactly the same wherever in the world it is booked, guaranteeing global mobility and making relocation smooth for the business. However, by outsourcing corporate housing to the OTA and the employee, the business gets much less visibility over exactly what is being booked and how it is being used. From a purely practical perspective, this means that the employer can’t always be sure what facilities are available or how good they are.
Elements of the accommodation such as the technology available can make a big difference – and issues such as unreliable or slow internet connections can have a major impact on the employee’s ability to work remotely. Other compliance issues can be more serious, and can even impact the worker’s safety. Corporate housing in hotels presents a uniform standard, but the sheer variety of accommodation offered through an OTA means there is a patchwork of standards which may or may not meet company policies. Everything from fire regulations to issues around safety in shared accommodation, as well as how check-in and check-out are managed, is different for each property – generating a totally new and burdensome bureaucratic jungle for corporate travel bookers to navigate that almost dwarfs the task of booking that OTAs were supposed to eliminate.
The future
Despite these cost and compliance issues, the sector shows no signs of slowing down: Airbnb boasts a three-fold increase in corporate bookings year on year, which will surely only increase as more companies adopt the social travel model. Rather than pulling back, the sector appears to be changing to accommodate this phenomenon – setting up divisions or whole companies dedicated to servicing the corporate market in parallel to the domestic one. Airbnb Work was set up in 2014 specifically to serve multinational organisations, while other organisations have also sprung up with a model that addresses the concerns that businesses may have – such as those around technology and compliance with corporate rules. A secondary benefit of this change is likely to be an easing of the pressure on supply, as leisure and business travellers once again court different markets.
Global Mobility Trends of 2020
As we progress into a new decade, it’s becoming clear that businesses are increasingly striving towards increasing their international markets. Indeed, global mobility looks likely to become one of the key HR trends of 2020, with an ever-intensifying focus on transforming ordinary enterprises into worldwide institutions.
No longer are companies content to limit themselves to a single pool of consumers nor a single nationality of worker. Instead, they’re turning their gazes outward and allowing themselves to dip into an international labour pool while also growing their audience.
While global mobility is a trend in itself, we’re also seeing certain patterns emerging within this area specifically, from international commuting to AI and increased inclusivity, and because of this, it’s important for businesses who want to benefit from global mobility to have an understanding of these.
Driving change in 2020, it’s a good idea for businesses and business owners to familiarise themselves with these concepts and how they could advantage their companies as the world of commerce becomes ever more international.
Shifting priorities
While global mobility is a notion that all employers should be embracing and that many employees view in a favourable light, it’s important to understand the toll it can take on those it affects. Indeed, while many professionals appreciate the opportunity to travel around the world with work, priorities are shifting, and there is an increasing focus on the importance of family relationships and self-care too.
As a result, many employees are demonstrating a preference for shorter assignments – ones that allow them to safeguard their mental health, recharge their batteries, and spend more time with their loved ones.
This trend is particularly prevalent among younger millennials, who are now beginning to step into more senior corporate positions. Often children of divorce themselves, many have a more family-focused view than their predecessors, with a 2016 study indicating that millennial mothers spend almost an hour more a day with their children than the previous generation. Millennial fathers, too, are more family-oriented, spending roughly an hour a day with their children compared to only 16 minutes for baby boomer dads.
This means that not only will there be a trend for shorter assignments moving forward, but that those who commute internationally are likely to expect greater flexibility with regards to their working hours e.g. that they’ll show a preference toward a shorter working week that gives them more free time to spend with their loved ones.
Big data analytics and AI will enter the mainstream
Another big trend that’s likely to emerge is the increasing use of disruptive technologies such as AI and big data analytics. While these have made headlines for the last few years now, it’s almost inevitable that they’ll soon become the norm in the global mobility sector.
Experts suggest that global mobility professionals will begin using them as a way of streamlining management processes and communicating with a workforce that will be scattered across the globe, in order to minimise the number of hours expended on admin tasks, compliance issues, and so on.
An increased emphasis on diversity and inclusivity
In keeping with the theme of making their businesses more internationally minded, it’s also assumed that a greater emphasis will be placed on inclusivity and diversity – a seemingly natural but nonetheless positive consequence of dipping into a global talent pool.
While there has been a move toward this for many years, it’s argued that the concept is currently celebrated more in theory than in practice – something that’s likely to change as we move forward into 2020 and beyond.
Interestingly, studies have indicated that not only do increased inclusivity and diversity reap social benefits, but that they’re a business-savvy decision too. Indeed, research conducted in 2018 by Boston Consulting Group indicated that companies with a diverse leadership team not only recorded better business innovation results, but roughly 20 per cent more revenue than their more conservative counterparts.
With global mobility offering an opportunity to dip into a much-more diverse talent pool, this is a perfect time for employers to embrace this concept and marry increased global mobility with a more representative and – according to research – successful workforce.
Isn’t it time you considered how to implement these trends in your business? With a new decade on the horizon and everything to strive toward, there has never been a better time to embrace such changes.
Is 2020 truly the Age of Global Mobility?
Technology is unquestionably changing the modern marketplace for corporations and businesses when it comes to moving their employees or teams to branches in different countries. With many trends maximising the efficiency of mobility professionals, 2020 is rapidly shaping up to be a landmark year for managers looking to optimise their workforce and put their effort and energy where it truly matters.
So, what elements maximise the global mobility of the modern workforce and why are they so effective?
Improved Analytics
Talent sourcing platforms allow businesses to deploy analytics that can help earmark and identify the best candidate for any job. This can be as simple as finding employees that speak multiple languages, possess key performance criteria, or have worked on similar projects and can add value to work in a different region. If employees aren’t quite hitting the mark, these programs can help break down the skillset for the role into concrete keywords; letting you review your internal staff database or recruitment pool for potential quality hires or transfers when it comes to managing your international human resources.
Global Blockchain
Blockchain’s ability to store employee and team data can empower you to review that information more holistically and effectively. Transferring data between departments or countries can result in a segmented view of information and an inability to ‘see the big picture’. Choosing to securely store key data through global blockchain technologies means that businesses are provided with a concrete history of all transactions and interactions and allows the data to be updated from a single point of contact. This cuts down the fuss that comes from teams accessing data and the disruption that can stem from international relocation.
Virtual Assistants
AI programs can take up some of the slack when it comes to handling employees looking for references from different international departments. Mobility managers can deploy chatbots to field questions from teams across the globe in many time zones and choose to personally respond if the assistant is unable to reach a satisfactory conclusion. Many artificial intelligence programs can help employees by providing answers to common problems, links to relevant knowledgebase information, or storing targeted queries and delivering them to their handlers. As the AI encounters more questions, it learns and improves; taking some of the strain off your mobility manager and providing 24/7 support to even the most over-stretched of teams. This way the system and its processes become more refined and more suitable to your unique business needs.
VR Communications
With VR and augmented reality programs on the rise, it has never been easier for individuals working in different geographic locations or time zones to be present for important meetings or data sharing. This can be as simple as holding a group conference call using a range of smart devices such as everyday laptops, phones, or tablets. Alternatively, using augmented reality elements on virtual platforms can allow your attendees to interact as if all your staff were in the same room together. They can also use virtual diagrams or pointers to visualise key projects, build decisions, or add value to the meeting in a way that would be impossible even if people were present in a shared physical space.
- Published in Article, News, Uncategorized
Global Mobility…. A Strategic Contributor?
Through our engagement with HR & Global Mobility leaders we have noticed a trend that many Global Mobility teams are striving to move away from being seen as an administrative function that purely co-ordinates employee moves, to instead being seen as a more valued strategic contributor to the organisation. However, the reality is those leaders are experiencing varying degrees of success.
Support for change is needed from across the business which is no easy task considering the commercial reality, competing priorities and tight resources many organisations are facing.
Buy-in from the senior management teams is crucial to enable and drive change within Global Mobility programmes.
Challenges for Obtaining Buy-in?
There are several challenges for Global Mobility teams who are striving for change.
Organisations are typically resistant to change and generally there is a lack of understanding of compliance duties. Add to this limited resources and the fact that collaboration and integration between functions remain the exception not the norm. This can often mean that there is dearth of consistent identity and positioning for Global Mobility within the business.
Operationally, there is more regulation and compliance than ever before. This adds additional risks and costs when moving and hiring talent across borders. These continually changing regulations and compliance requirements are uncompromising and highly stringent on employers.
A persuasive case to the management will have to focus on how an effective global mobility function will address these challenges, both strategically and operationally.
Aligning Global Mobility to the Wider Business Strategy
A crucial element to gain management support is to ensure that there is a vision of what Global Mobility should look like for the business. This will enable the senior management team to have a better understanding of how Global Mobility can align to the wider organisational strategy.
A few areas for consideration:
- Corporate Culture and Objectives
Understanding the high level goals of the organisation and what it is trying to achieve should ultimately determine the shape and form of any mobility programme.
Due to the ever dynamic nature of international business and uncertainty in the geopolitical landscape, many organisations need more flexibility and agility when deploying employees globally in order to increase competitive advantage.
Also, Global Mobility teams should consider how their programmes are aligned with the culture and core values of the organisation.
If the employee journey and experience is an important focus within the business, does this align with the current mobility programme? Are employee aspirations, expectations or experiences a consideration or is the focus driven by process and compliance tick boxing?
- Reducing Cost and Increasing ROI
Cost and return on investment will always be important for senior management, subsequently the key themes will be around the implications of organisational mobility in terms of investment, savings and returns.
Will changes in policies, procedures, systems or resources require investment? What are the expected returns – cost savings, resulting efficiencies?
Typically, we see the cost of Global Mobility being passed from department to department before ultimately coming out of the HR budget. A fully owned and ring-fenced budget, managed by a centralised Global Mobility function, will enable financial transparency for management purposes, through improved planning, accountability and effective vendor management.
- Technology Innovation
Improvements in technology now offer a huge amount of potential to enhance efficiency and effectiveness within Global Mobility programmes.
Global Mobility teams and organisations are moving away from locally managed spreadsheets to more comprehensive future-proofed technology platforms that support integration between functions such as HR, Global Mobility, Tax and Payroll.
But it doesn’t stop there, there is also an increased focus on data and how it can be utilised to better drive decisions, strategy and action. Analysing accurate data across Global Mobility programmes allows teams to measure and improve service performance, identify risk and trends and enable informed decision-making by both the senior management teams and the mobility function.
- Talent Strategy
The war on talent is relentless and competition for talent is fierce, however an effective Global Mobility programme can offer the potential to enhance talent acquisition and development for all levels of employees.
Strategically, Global Mobility should unite in the process of forecasting and planning for the future talent needs of the business. What skill sets does the organisations need to attract, where will they need to be and when will they be needed?
Another key area within talent strategy and where Global Mobility could add value is identifying and developing future leaders within the business. It is important for these future leaders to acquire the international exposure and experience that is expected for senior management positions.
The opportunity to work internationally is now a key draw for many employees seeking new roles, especially for Millennials who place a huge amount of importance on gaining professional experience within different cultures. Employers who incorporate international opportunities within their employee development schemes will be more appealing to top talent.
On the flip side there needs to be a focus on retaining repatriating employees. In order to avoid high attrition rates, these employees will want to understand what their future remit will be within the organisation.
Impact of Global Mobility Strategy
Securing senior management buy-in is imperative in developing a truly effective and sustainable approach to Global Mobility. Ultimately it rests on convincing senior management that Global Mobility can deliver in alignment with the overall business objectives, supporting the organisation’s competitive advantage.