Connecting Reward in South Africa
K2’s mobility report, from October 2013’s South African Reward Conference in Johannesburg.
2013 has been a year of development for businesses within South Africa. So far immune to the economic pressures weighing on Europe and America, third quarter results suggest that manufacturing and productivity have been impacted by tumultuous relationships between employers and employees- GDP growth has dropped to its lowest in four years. With this background, HR reward management has never been so integral to the success of businesses. Last month, K2 engaged with South Africa’s Reward Association to present and discuss reward trends at their 2013 conference, and present highlights below.
The importance of integration
As a result of globalisation the mobility landscape is changing. Businesses have reported an increased focus on benefits paid to expatriates- more audits, better cooperation between countries and tax authorities, and the need for compliance in this heightened regulatory environment. There has been a shift from a highly administrative to a more strategic approach.
An ultimate goal in many businesses is to integrate mobility with the overall HR and business strategy- forming true business partners. A strategically integrated HR partner can facilitate growth in emerging market economies- a strong presence in new locations can be secured by relocating key people, facilitating global leadership, training and reinforcing the culture of the organisation.
Finding the perfect fit
An infinite dilemma faced by mobility specialists is how to best create the ‘perfect package’- incentivising international assignments, whilst driving cost saving initiatives for the business. The plethora of scenarios created from an infinite combination of continents and countries leads ‘one size’ policies and processes to present an ever shifting challenge for mobility teams.
With four of the world’s top ten fasting growing economies predicted to be based in Africa, African development is now firmly in the front line of many business strategies. Four out of five of K2’s top clients have seen an increase in African assignments, as businesses deploy or return talent to the continent. Whilst one size policies may be the way forwards, K2 suggest that African growth, development and idiosyncrasies should play an important role in the building of mobility policies- learning from past expansion into the 'emerged' markets such as Brazil, Russia, India, China and South Africa (BRICS).
Understanding key business goals
- How does mobility align to global talent management?
The practise of expanding in to BRIC locations has reminded all mobility departments that assignments cannot simply focus on the logistical practicalities of getting an assignee from A to B and back again. Although it is essential that the move is right, too often assignee feedback reports an ‘out of sight out of mind’ phenomenon. Integrating with a greater talent framework will not only increase positive feedback, but reverberate within the business- positive experiences are more likely to encourage sequential or associated assignments than those who feel ‘neglected’. Selecting the right candidate, actively managing performance, evaluating ongoing potential and planning for the next role should all be planned, pre-departure.
- Why is the governance process critical in securing the right people?
It’s all about return on investment (ROI). An upfront transparent authorisation process with a well documented business case, a cost estimate and thorough selection process signed by the business is critical to ensure that line managers own and are accountable for assignees and their performance. Lack of infrastructure, goal setting, assessing and reviewing of performance can result in an underperforming assignment, at a high cost to the business.
- How can organisations ensure maximum benefit from the investment in assignees?
By providing opportunities to develop leadership competencies, a global mind set and cultural adaptability, organisations develop leaders and benefit from the investment in their assignee population. Sound processes, good ownership and thorough planning facilitate ROI and an effectively managed repatriation plan is key to a successful assignment. Companies often don’t change until they reach crisis point or something happens. This is evident with the high failure rate of repatriations. Focus therefore needs to be on assignee retention and providing adequate opportunities for development.
Ongoing policy development
Organisations need to continue to review their model carefully. Although a ‘one size fits all’ approach to mobility may no longer apply, it is important to work from a consistent framework, recognising that there are global, regional and country specific needs and differences. This framework forms the structure for designing success and contributes to a successful assignment, the growth of future leaders, knowledge transfer and retention.
Antoinette Isaacs of SAB Miller commented:
Corporate Mobility is changing rapidly in Africa and at the 2013 SARA conference K2 Corporate Mobility portrayed this scenario rather aptly. Traditional Mobility and Modern Mobility are a far cry from what it once was. HR, Compensation and Mobility have to join forces to become partners to enable growth forecasts in the African economies. The ultimate challenge to reach one goal in “moving the right person, to the right place, on the right package, at the right time.
About SARA: South African Rewards Association
SARA was established in 1997 to connect reward specialists within South Africa, sharing subject matter knowledge and promoting development within the fields. The 2013 SARA conference in Johannesburg discussed and hypothesised on the immediate and long term future of reward within businesses.
Read more: Sources and references
The fastest growing and shrinking economies in 2013, The Economist, 3rd January 2013 Read more
Many of Africa’s fastest-growing economies have not relied on oil or mining, The Economist, 2nd November 2013 Read more
South Africa Growth Falls to 0.7% in Third Quarter, Wall Street Journal, 26th November 2013 Read more