These three HR case studies demonstrate how People Management functions keep getting swept up in big global stories – and how managers are responding to chaos and turbulence

Zain Ali, 31 May 2024

Few seek a career in Human Resources hoping to get caught up in Great Power rivalries. Yet geopolitical frictions are now regularly impinging on the working lives of Global Mobility professionals.

Earlier this month, Microsoft wrote to hundreds of its China-based employees, recommending that they relocate out of the country. These workers were carrying out critical research and development in the AI and machine learning departments.

The American computer giant has cooled on its Chinese operations because of the febrile arms race between Washington and Beijing for AI supremacy. The two superpowers aren’t just pouring unfathomably large resources into frontier technologies. They’re also trying to cut each other off at the knees through combative trade policies like export controls on semiconductors.

Now, private companies – and their Talent Management teams – are being dragged into the AI Cold War. Before Microsoft recommended those employees down their tools and leave China, in-house Global Mobility teams would have scrambled behind the scenes to lay a smooth path for them. This means carrying out full risk and logistical analyses, making space in other branches and developing comprehensive relocation packages that cover all associated costs.

Microsoft’s move is unlikely to be the last of its kind. When the free trade of goods across borders becomes more challenging, the conditions for moving people tend to follow. We predict that the ‘friendshoring’ strategy currently restructuring supply chains – moving key operations away from geopolitical foes onto friendlier soil – will increasingly alter international talent management and recruitment. Whichever way you look, HR is more and more at the mercy of events.

These three HR case studies in international talent migration could prove instructive for Global Mobility specialists responding to a changing world.

Singapore calling to the Hong Kong-based firms

For many years, Hong Kong was Western companies’ bridge to the Far East. Drawn by its business-friendly customs and strong rule of law, multinationals were happy to call the special administrative region their APAC home away from home.

But the Chinese state’s assertion of itself in the former British governorate has dulled its lustre in the eyes of Western firms. An extraordinarily strict and long-lasting lockdown, coming soon after crackdowns on democracy protestors, has set off a race for the exit. This shows up most strikingly in the workforce statistics.

Since 2019, the number of staff employed by global companies with regional headquarters in Hong Kong has plummeted by 30%. This exodus of staff is flowing out of all sectors to one place in particular: Singapore.

FedEx moved their Asia-Pacific headquarters from Hong Kong to Singapore in 2023, along with around 15% of its staff (including regional president Kawal Preet).

British American Tobacco shifted its HQ to Singapore a year before, moving 44 staff from a downsized Hong Kong office to the island city-state. The Wall Street Journal cut its Hong Kong staff and shifted its ‘center of gravity’ to Singapore.

Big banks are fleeing from the city that was, until very recently, the nerve centre of Asian finance. National Australia Bank Westpac Banking Corporation, Commerzbank and Royal Bank of Canada have all shut their Hong Kong offices in favour of Singapore since 2021.

All this in a city feted not so long ago by the likes of Milton Friedman as the ultimate blueprint for capitalism in the 21st century. The erosion of Hong Kong’s status should teach Global Mobility professionals how quickly and decisively the chessboard can change.

Don’t assume that the focal points of your company’s operation will still be the same in a few years’ time.

Singapore – the usurper of Hong Kong’s APAC crown?

From Russia, without love: SAP takes a stand

When Russia invaded Ukraine in February 2022, the world shivered as Europe entered its most serious conflict since WWII.

Politicians in Brussels and Washington quickly imposed sanctions, while the business world mobilised in a rare display of unified moral initiative. Over 1,000 companies have since curtailed their activity in Russia beyond the minimum level required by sanctions. Household names in all sectors, from Breitling and Nike to McKinsey and EY, have all exited the Russian market.

At the human level, these corporate pull-outs have triggered huge movements of employees, particularly in Russia’s once booming tech sector. The immediate aftermath of the invasion saw multinational tech firms racing to charter flights and book visas at speed for their key staff. Many others laid off their Russian workforce en masse.

Up to 10% of Russia’s tech workforce is estimated to have left the country, many for a life of digital nomadism. Western recruiters are now reportedly jostling to sign up these digital exiles.

German software conglomerate SAP’s withdrawal from the Russian market is a useful reference point for how corporate relocation works in times of crisis. The company officially confirmed in April 2022 that it was seeking an orderly exit from its Russian operations.

It targeted a reduction of its workforce in the country from 1,250 to a skeleton staff of 100 by the end of that year. While some companies laid off their local staff, SAP gave them the option of relocating to nearby countries like Georgia, Armenia, Kazakhstan and Azerbaijan. In late 2022, over 150 employees had taken up this offer.

Troubles finding a buyer for its units, combined with legal hazards imposed by Putin’s government, caused SAP to miss its initial deadlines. However, by March 2024 the company had terminated all its remaining services and contacts in Russia.

SAP’s commitment to offering relocation options and severance packages to its Russian employees shows how Global Mobility and HR specialists can work fast, under intense pressure, without sacrificing their responsibility to their workforce.

But the delays to SAP’s withdrawal speak to just how complex leaving a market can be, even under the most urgent of circumstances. If there’s a moral to the story, it’s this: work as fast as possible, do the best by your staff, but leave space in your plans for some degree of failure.

The City of London after Brexit – exodus or boomtown?

Brexit and The City: the flood that never came

When Britain voted to leave the EU in June 2016, the mood music in the financial sector was funereal.

The City of London, a fulcrum of global finance since the 18th Century, braced itself for mass outflows of assets and jobs to the continent. Analysts projected that the City would lose between 75,000 and 100,000 jobs. All at once, London’s long-unrivalled status as Europe’s top market for financial and professional services seemed about to slip away. When it rains, it pours.

Except it didn’t. Eight years on from the referendum, the European Union’s own estimate for jobs relocated out of London stands at just 7,000; a significant sum, but far short of the exodus forecast.

There are all sorts of possible reasons for this. The cost of detaching from London’s dense concentration of interlocking businesses – the legal firms who keep financiers compliant, the ad agencies who run their TV spots and so on – might have outweighed the advantages of integrating into the EU’s frameworks.

Perhaps the UK Fintech boom that happened roughly simultaneously created new opportunities. Maybe bankers simply didn’t fancy trading in the bohemian airs of their favourite Soho cocktail spots for a more sedate life in Frankfurt.

Whatever the cause, Global Mobility departments were spared a deluge of relocation cases, and life in the Square Mile went on much as before.

The City’s great Brexit anticlimax suggests that HR managers shouldn’t always believe the hype. The big banks will have conducted painstaking analyses of the cost-benefit ratio of moving each job, coming, in most cases, to the conclusion that it wasn’t worth doing. Regardless of what consultancies’ projections think you should do, you know your business best.

Given the years of unpredictable horse-trading in Brussels and Westminster, HR teams should be praised for getting the balance right and not overreacting. Agreements on crucial details between the UK and EU usually came right down to the wire. Amidst this fog, executives might have been forgiven for just moving a swath of jobs to Dublin or Amsterdam and hoping posterity would vindicate them. The City never asked for Brexit, but its careful scenario planning and analysis should prove instructive.

Finding direction in a turbulent world

While the consequences of these three HR case studies are very different, they all signal a world where old certainties are in flux. Global Mobility, Human Resources and International Talent departments work in the eye of this storm.

When circumstances change, people need to move. But poorly-informed decisions can cost money – and, in the gravest scenarios, lives. Cool-headed analysis becomes very difficult when the facts on the ground develop so fast. That’s why HR specialists need a strategic framework that they can apply to a range of scenarios.

At Centuro Global, we specialise in helping businesses establish, grow and reappraise their international footprint. If you ever need guidance or advice on maintaining a strong talent strategy in a volatile global context, get in touch for a consultation.

Check out our own HR case studies to see how cutting-edge, AI-powered technology can make managing international teams simpler and quicker than ever.