Not long ago, the business world viewed 2024 as the year of economic recovery. Fast-forward to today, that optimism has somewhat dampened, in large part because we may see some of the biggest political shifts across the world.
Time calls 2024 the "ultimate election year" as more voters head to the polls than ever. Time Magazine reports that 64 countries and the European Union have national elections in 2024. This means approximately 49% of the global population lives in a country facing a consequential election. Any big shifts that come from the polls could have long-lasting impact on global trade, movement, and stability.
The fact is that HR and Global Mobility teams are facing another year of economic uncertainty. How can you build and manage a global workforce, when H2 can unfold in hundreds of different ways?
To find answers, let’s explore some of the bigger factors that are shaping the business world in 2024.
2024: The year of elections (plus changes and challenges)
The possibility of significant political shifts on the global stage has been on the minds of business leaders for a while now. In December 2023, McKinsey released its survey on global economic conditions. McKinsey noted that concerns over geopolitical instability grew over the course of 2023, with two out of three business executives citing it as their top concern.
But it’s not all doom and gloom. While an equal number of respondents—35 percent—each believe economic conditions are now better or worse than in mid-2023, global business leaders are generally optimistic about the state of their local economies. The tricky part starts when looking at a global scale, and how the movement of talent and services may change.
Geopolitical instability amidst elections: China, Taiwan, and the US
With the ongoing conflicts in Ukraine and the Middle East, it's understandable that geopolitical instability is a top-of-mind concern. The upcoming elections do little to resolve these concerns, as the potential for policy changes increases the longer the conflicts continue. Some of the forthcoming elections might worsen simmering political tensions. To illustrate this point, we look at one of the first major elections this year, the Taiwanese presidential election, held on January 13.
Tsai Ing-wen of Taiwan's Democratic Progressive Party (DPP) emerged victorious for a third straight presidential term. This was against China's long-held assertion that there is one China, and Taiwan is a part of it. The United States has tried to diplomatically intervene in the situation, all while the US and China attempt to mend their relationship. China ramped up the "one China" rhetoric during the election cycle, calling the contest a choice between war and peace. As a result, many analysts now expect Chinese economic retaliation since the Taiwanese people chose the DPP, which favors independence.
A significant portion of the global economy is in the balance of these ongoing negotiations.
Shifting immigration laws and policies
HR and Global Mobility teams must also contend with the shifts in immigration laws and policies resulting from an electoral power change. Much of the worldwide press focuses on the stark differences in immigration policy between the Democratic and Republican parties in the US amidst the likely Joe Biden-Donald Trump presidential election rematch in November. Migration is undoubtedly a key wedge issue for voters in 2024. The outcome of this upcoming election could push immigration policies in two vastly different directions, and few can say with certainty which option is more likely to happen.
These examples illustrate the influence polling results in local elections could have on the entire world, and the global workforce. For changes that are already materializing and restructuring labor migration, there's no better example than the changes to legal migration rules for family and work visas in the UK.
Under the new rules, which will take effect later this year, social care workers cannot bring their partners and children into the UK on their visas. The baseline minimum salary for sponsorship under the Skilled worker visa will rise from £26,200 to £38,700. In addition, the minimum income required to sponsor a partner or spouse will rise in stages from £18,600 to £38,700 — an increase of more than double. With a new parliamentary election coming up in the UK, it’s uncertain whether this policy will continue, or be reversed by the opposition. This lack of predictability is prompting businesses and investors to hold back on big financial moves until the future becomes more clear.
What this means for businesses and global talent management
Given these developments and the uncertainty surrounding elections, it's easy to see why planning for a global workforce may seem challenging. Let’s look at some of the steps teams can take right away to be in the best position later this year.
Economic optimism emerges through global anxiety
Returning to the 2023 year-end McKinsey economic survey, there is still a sense of cautious optimism amongst business leaders and investors. For example, despite the general anxiety caused by so many upcoming elections, only 29% of business leaders in North America cite potential political transitions as a threat to company growth.
Inflation is also cooling down. Following months of interest rate hikes to help control inflation, only 32% of respondents expect a rate hike in the next six months. This is the smallest percentage since 2022. For comparison's sake, 60% of respondents had serious concerns about high-interest rates in March 2023. The takeaway is that the business community expects a stronger economy throughout 2024.
Making the case for Global Mobility ROI
Until this optimism gains more momentum, HR and global talent teams should prepare for budget reviews. The pressure to prove Global Mobility’s ROI is higher than ever – and we have stats to back you up. EU team leads and executives have confirmed that investing in relocations for critical talent can yield high ROI gains for their companies. Across the board, respondents reported a high ROI gain of up to 270% when comparing relocation costs against their impact on performance, engagement, and productivity.
More opportunities for cost savings
Aside from proving the value of relocations, you can expand your Global Mobility program to offer more cost-effective options to work abroad, such as business trips and workations. Short-term work abroad tends to require less investment in immigration and visa support, while talent gets more flexibility to pursue personal development or work flexibly across the world.
But note that workations are not completely admin-free. To maintain global labor compliance, you must ensure your HR and global talent management teams stay on top of changing legislation. As every country has a unique approach to migrant workers (for example, some offer nomad visas, others are more strict), we recommend you study the specifics for the countries your talent is looking to workate in.
We’ve pulled together a few resources to help, covering what you need to know about German work visas and permits, our guide to highly skilled residence permits in the Netherlands, and the ultimate guide to work permits across Europe.
Competing for the right talent
The tech layoffs that plagued 2023 have returned in 2024, with significant staff reductions at Google, Salesforce, eBay, and more. While highly skilled tech workers have been a staple of Global Mobility for years, talent is now more likely to seek work in what comes across as more traditional and stable industries.
With increased competition for available international talent, offering flexibility is more important than ever. Workations emerged as a popular trend in 2023, and the concept will only become more popular in 2024.
Localyze can help you through uncertainty
Do you need help creating a workation policy or navigating immigration in an ever-changing world? Localyze is here to help. Chat with us to learn how we enable risk-free and effortless Global Mobility for your organization. To get started, book a demo of Localyze today.
