Global mobility programs are a win-win solution for both your company and your mobile employees.
The COVID-19 pandemic and related economic challenges have resulted in fundamental changes for many industries. We have seen labor market shifts, immigration restrictions, and budgetary challenges for national and local jurisdictions across the globe. At the same time, thanks to today’s ever-evolving technology, time zones and borders are not as relevant, and we can now work simultaneously with our colleagues across all corners of the globe—especially in this new world of remote or “work anywhere” workforces. However, these technology advances will also make it more possible for tax and immigration authorities to monitor and enforce regulatory compliance on both employers and their mobile employees.
Now, more than ever, it will be critical to focus on creating an agile and effective global mobility program for your company. One that provides the ability to confidently have the right people in the right location at the right time and allows you the flexibility to scale for your organization’s global goals. But before you decide to make a move, you first need to have a strategy in mind and build consensus within your organization. As with everything in business, it is about planning well and knowing both your strengths and shortcomings.
So, why is it important to create a solid global mobility program for your business and your mobile employees? Here are 10 benefits to creating a global mobility program for your company.
Speed to Market
In today’s technology-driven, global economy, speed to market has never been more important. Failure to move quickly allows competitors to enter new markets first, building market share and their global brand. For your company to move fast, it will need the ability to deploy talent quickly into new and existing markets.
If done properly, global mobility takes a village. Mobile employees will need support for immigration, tax, payroll, relocation, and/or housing purposes. Failure to have internal processes and procedures to handle the moves may result in serious financial, legal, reputational, and compliance issues for the employee and the company.
Establishing a mobility program with internal stakeholders from areas such as HR, corporate tax, legal, finance, and payroll is a great first step in establishing efficient processes that will allow the organization to move employees in an efficient and appropriate manner. Gaps in internal knowledge can also be identified so external vendors can be selected and at the ready when market opportunities arise.
Not having a global mobility program does not mean that your organization will not have mobile employees. Business leaders still want to deploy resources to new markets and locations. Unfortunately, these mobile employees can generate significant risks for themselves and the company.
Employees without proper immigration status may be denied entry or face serious legal issues. They may become subject to tax in multiple locations which increases the complexity and the possibility of much higher tax bills. The employee may create a taxable presence for your company, creating administrative burdens and unexpected costs. The organization could face employment law or other legal issues because of the unmanaged move. Ultimately, these legal and compliance issues could damage the employee’s reputation, the company’s reputation, or even the ability to do business in that location. In an extreme case, imagine receiving a call from your CEO regarding their unexpected detainment at a border crossing. These calls do happen, so now is the time to act.
As well, don’t make the mistake of thinking that remote workers have less risk than your traditional mobile employees. Remote workers can create risks for your company in areas such as payroll compliance, immigration, and employment law, and can also have personal financial and legal risks if they do not understand the rules. It is critical to have policies and procedures in place to allow for the appropriate review, approval, tracking, and ongoing compliance for both mobile employees and remote workers within your organization.
Of course, concern about costs will always be an important discussion point for a mobility program. But, what about the costs of not having a program?
Proper planning can save your organization significant money, far more than the cost of compliance and administration. For example, limiting a domestic US assignment to less than a year could allow the company to reimburse housing and per diems at no tax cost to the employee or company. A one-day difference could result in US federal, state, and social security taxation.
For international moves, the need for planning is even more critical. For some scenarios, social security tax planning alone can lead to cost savings running 10-15% of the total cost of the assignment. Global Tax Network can help your employee and organization understand the key rules and implement appropriate tax planning to avoid these unnecessary costs.
Global Talent Management
The war for talent is real and is not defined by borders. International assignments represent a great career development tool, one that could help you manage talent shortages and close skill gaps.
First, you need to know your employees, determine their strengths and future development needs. Which employees are in line to be future leaders, and would an international assignment help to provide them the breadth of knowledge and experience needed to run a multinational organization? Which employees are best suited for international assignments? If an employee wants to work remotely, will that be possible for the role, and will the relocation impact their compensation and benefits?
Knowing this information will ensure you make the right moves and allocate your resources the right way. No company wants to send talent around the globe without a purpose. Your purpose: enable employees to gain experiences and skills that will ultimately help them and your business thrive. That makes this a win-win solution for all involved.
Right Person, Right Policy
What is the desired outcome of your mobility program?
- Providing a career development opportunity for a future leader of your organization.
- Sending an employee to explore a new market for your company.
- Sending an employee to another location to cover for a leave.
- Setting up a rotational program for your interns.
- Establishing a framework to allow for remote/hybrid workers or commuters.
These are all possible goals for your mobility program. However, would it make sense for your organization to handle each scenario in the same way? For example, would you provide the same level of housing for a key executive as you would for someone covering a short-term leave? Would you provide the same incentives for an employee-initiated move as for a move that is needed for a critical organizational objective?
By having a mobility program, you can assist the business units in selecting the best candidates to meet their business objectives while providing the compensation, benefits, and other support that is most appropriate.
Employee Relocation Experience
The business unit has identified a critical need and has decided to send one of its most promising employees on a foreign assignment. Without the support of a mobility program, this employee will need to figure out how to move their family, household goods, and pets to a foreign country. The move may have immigration or legal implications. Housing will need to be located for the family in a safe and affordable area of the city. These are just some of the areas that may impact the employee’s relocation experience, and which ultimately will impact their ability to do their job.
Failure to set up a mobility program to provide employee support increases the odds that your employees will have negative experiences. Failure to provide appropriate employee support may also then result in failure for your organization’s business objectives. You don’t have to do it alone. Leveraging specialists from within your organization or using outside vendors can allow you to handle the necessary tasks in a way that makes sense for your company and culture.
Download our Outsourcing Evaluation Checklist for Your Mobility Tax Program for considerations at each step of an international assignment and to help you determine when you should bring on an outside vendor for support.
Family Relocation Experience
Issues relating to the family are often cited as one of the biggest factors in assignment failures. If children are placed in an inappropriate school or company medical insurance does not work in the Host location, the employee may have serious issues to work through that will impact their ability to focus on their job.
A global mobility program can proactively work to identify issues and appropriate solutions in advance, allowing the employee the peace of mind needed to have a successful assignment.
Valuable Data Insights
In the new age of technology, everything is about obtaining important, necessary data – finding it, storing it, sharing it, and using it. The appetite for data is constantly rising. Without data, your organization may be sending the wrong people on assignment, spending money on benefits that do not coincide with the needs of your mobile employees, or missing trends that could limit future results.
By establishing a global mobility program that is supported by appropriate technology, you can help your organization to compile and interpret data relating to its mobile employees. You can help set the stage for better decisions and more successful outcomes for the entire organization.
Exchange of Valuable Information
In today’s global economy, it is foolish for an organization to assume that it has the best ideas and ways of thinking in a given physical location. Local markets may require different products or methods of distribution. It may be important to transfer technical expertise or institutional knowledge to other countries or business units.
A globally mobile workforce can be invaluable in achieving this objective and it is the framework established by the global mobility program that will enable the development of this mobile workforce.
Your organization has sent a key employee on international assignment. Through this significant investment by your organization, the individual has gained significant market knowledge and personal growth through experiencing a new culture and ways of thinking. Unfortunately, for many organizations without appropriate mobility programs, there was no plan for the employee’s repatriation. Once repatriated, the individual may be expected to return to their old role thus ignoring their new knowledge and skills or they may not have a job to return to and be forced to find a role with your competition.
Your global mobility program can work to ensure the employee stays connected to the home office and that an appropriate repatriation plan and timeline is established. Without a flexible and focused mobility program that provides your employees with a plan for repatriation, your competition will greatly appreciate your organization’s investment in their talent development program.
Setting up a mobility program is essential and can be quite complex—we are here to help. Schedule a free, no-obligation consultation with one of our mobility tax experts. We will discuss your specific situation and help you outline a plan of action that will best fit your company and employee needs.