This article was originally published in HR.com.
Uncertainty in the economy is making it harder for HR teams to plan and manage global mobility. A recent Fed survey shows business leaders feel more unsure about the future now than they did before the pandemic. And with a new US administration taking shape, many are waiting to see how changes to inflation, immigration, tariffs, and other policies will play out.
But companies with international employees can’t afford to pause. Now is the time for HR professionals to build a global mobility program that's flexible and strong enough to handle whatever comes next. In this article, we'll share practical steps to help you create a program that supports your business and your people—no matter what the future holds.
Why global mobility is becoming complicated for HR professionals
With so many questions still unanswered about US policy and the economy, many HR professionals are uncertain about what's ahead for their organizations. Several key challenges are making it harder to build global mobility plans with confidence:
1. Reignited inflation
Though inflation has fallen from its 40-year high in June 2022, it's still weighing heavily on the minds of the majority of people in the US. Pew Research found that 63 percent of Americans think inflation is a “very big problem” for the US.
Continued spikes will affect travel incentives, benefits, and affordability for mobile employees.
2. Shaky supply chains
Business leaders may have crawled out of the global $184 million supply chain crater of 2021, but many are still worried about supply chain strains. According to a McKinsey survey, 90 percent of supply chain leaders experienced supply chain challenges last year. Major reasons for disruption include geopolitical conflicts, natural disasters, and labor disputes. Any of these disruptions could force employees to pack up and move to new locations en masse.
3. Immigration and tariff questions
The new US administration has been vocal about plans for new immigration policies and tariffs, but business leaders are still waiting to see how those proposals materialize. Meanwhile, many companies are considering how they’ll pivot to address administrative changes. According to a CNBC report, “tariffs” and “immigration” are two terms that are popping up at a heightened frequency on S&P 500 earnings calls. As with supply chain issues, these policies could rearrange workforces and incentivize employees to work in entirely new locations.
How to build a more resilient global mobility program
To manage costs and retain top talent, HR leaders need to take a proactive approach to building a more resilient global mobility program. Here are three key considerations for creating a program that can adapt and thrive during uncertain times:
1. Understand company objectives and mobility program goals
In uncertain times, flexibility and adaptability are key to a successful mobility program. To build these qualities into your approach, start by understanding both your organization’s current and future needs—then take steps to proactively identify and close any resource gaps.
Here are some questions to help identify the goals and limits of a mobility program:
- Which locations are critical to support the business, both now and in the future?
- What are the business objectives in these locations, and where is the talent located to support these objectives?
- What types and lengths of assignments are most appropriate to meet business and employee objectives while managing overall costs and administration?
- Does the organization have the internal resources, policies, and processes to support the identified mobility needs, or are new hires or vendors required?
Global mobility takes a village. Mobile employees may require support or impact many areas in an organization, including immigration, tax, payroll, benefits, human resources, and legal. Identifying a cross-functional team in advance will allow the organization to adapt and deploy talent more quickly.
2. Focus on planning
Proper planning can save an 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 can result in incremental US federal, state, and social security taxation.
The need for planning is even more critical for international moves, as each country will have its own rules. Key questions for international scenarios:
- How long can an employee work within a jurisdiction before triggering additional tax obligations?
- What compensation is subject to tax, and are there ways to modify the employee’s compensation or benefits to reduce taxation?
- What types of tax will apply, and are there cross-border treaties, reciprocal agreements, or special expatriate statuses available to limit this taxation?
- What are the visa and work permit requirements, and how long a lead time is required to obtain the appropriate documentation?
- Are there employment laws or other legal considerations in the Host location?
The bottom line? Understanding the rules and planning in advance of an employee’s mobile work can save money, reduce risks, and increase employee satisfaction and retention. These outcomes will showcase the value of the mobility program to your organization’s leadership!
3. Reexamine policies and processes
The key to building a resilient global mobility program is preparation. You’ve proactively identified business objectives and stakeholders. You’ve identified rules and requirements. But are your current policies and processes appropriate to handle the types and volumes of moves that you anticipate will be needed?
If not, serious financial, legal, reputational, and compliance issues can result for the employee and company. This failure can also create delays that provide competitors with the opportunity to act first, giving them a competitive advantage.
HR professionals need to revisit their existing processes and policies and adapt them to fit their current mobile workforce. Organizations such as WERC and SHRM can provide access to resources and events that help to identify best practices and trends. Lean on outside vendors for additional support, benchmarking, and technical guidance.
Refreshing and enforcing policies doesn’t just prevent nightmares—it can proactively save money. For instance, many companies have tax equalization policies but fail to collect on the amounts they’re owed. Others attempt to collect what they’re owed but, because of process flaws, end up chasing former employees for money after they’ve left the company. The solution in either case is to review and enforce policies and processes.
HR professionals can fight uncertainty by adopting a proactive stance
As HR professionals face uncertainty about the economy and new policies, it’s natural to want to sit back, wait, and react to events. But when it comes to global mobility, that reactive approach can lead to tax violations, upset employees, and failed business objectives. Instead, through proactive preparation and planning, leaders can position their mobile employees and their companies to thrive in any environment.
