Global mobility is a nightmare for most HR professionals because many companies don’t have the infrastructure and policies to support large scale relocations. When putting together a relocation policy, it’s important to factor in global mobility and how easy a good policy can make it for you to move employees around the world.
It’s one thing for a company to have a policy and an idea, but how easily are these policies executed and implemented throughout your company? Or worse yet, it’s possible that your global mobility program actually hinders your employees instead of supports them.
Global Mobility Definition
Global mobility is a 21st century term to describe the process of physically moving employees around the world. More and more companies both large and small are expanding outside of their home countries for a variety of reasons. As a result, global mobility has become more popular and the workforce has become more diverse.
The Biggest Mobility Challenge Facing Companies
Doing so creates challenges though. Moving people across the world from different countries requires a lot of preparation, paperwork, and pivoting as things change day-to-day. For most companies, this process is a disaster and it becomes riddled with bottlenecks, and other issues that hurt your morale and that of your employee.
International relocation requires a different approach, you need to have a solid plan that is duplicatable across the board. If you don’t, you’re wasting a lot of time and money. This is one of the reasons why people hire a corporate relocation company like ARC Relocation. We specialize in this and take it out of your hands. The company may simply not have the resources to handle a large scale move, in-house. If that’s the case, there’s no need to worry, because outsourcing the job to ARC will not only make it easier on you, it ends up being more affordable in the long run as well.
How to Develop a Global Mobility Program
If you’re still determined to develop your own global mobility program, that’s fine too. This will serve as your strategy for transitioning employees out or into the country. The strategy offers guidance to both the employee and the employer and a high-quality program will coincide with the company vision and values.
The best way for you to develop a program is to sit down with the chain of command and get some of the employees involved as well. Sit down and develop a strategy that you will tirelessly follow until you’ve determined that it doesn’t work or needs to be changed.
The problem is, this will look different for each company and each country you’re relocating someone to or from. So, as you can see, it’s a very complex process. This is once again why we recommend hiring professionals to handle your large-scale relocation projects.
The Importance of a Global Mobility Strategy
Nonetheless, no matter what you choose to do, having a global mobility strategy is crucial to the success of your company. It takes a lot of time and work to create but so many employees are relocating anymore that this will become a standard operating procedure. Providing this option to employees is a great thing and it represents a strong, forward-thinking company culture. Employees in younger generations look for this type of thing.
In fact, 22% of workers are now working remotely and 65% report are wanting to work remotely full-time. These statistics open the door to companies that have a global mobility program because employees will feel more inclined to work with the companies that take their desires into consideration. In some cases, employees will even sacrifice pay in exchange for a flexible, remote-working environment.
Another important reason why global mobility matters is because you can then access a global workforce, rich with people who want to work for you. When you’re only looking within driving distance of your office, think of how limiting that is? In years past, companies had to open additional offices in other cities if they wanted to access the workforce there. Now, you don’t have to do that. You can let the employee work remotely, as long as you have a global mobility strategy in place for onboarding and managing that employee.
Key International Mobility Considerations
Once you’ve answered “what is global mobility” and you’re ready to put together a strategy, there are some important factors to consider.
When you’re operating with employees overseas, you need to understand how that impacts you legally. For anything longer than a month or two, the staff working outside of the country may have legal responsibilities to pay taxes in that country. If you don’t, a “dependent agent permanent establishment” may be created which could make you as the employer responsible for paying corporate income tax in both countries.
There are a few different options like setting up a subsidiary company in that country if you’re moving a large number of people to the same place. You can also require each employee to obtain a temporary visa in the country but keep in mind that the requirements and regulations will vary dramatically based on where they’re moving.
Every country handles immigration differently so it’s important that this is a part of your global mobility planning as well. You should have a list of each employee, where they’re located, and the work and residence requirements for each of those countries. This will not only help you in the long run but it’ll help you develop an overall strategy for each country which will increase the overall global mobility initiative of the company.
It’s also important to determine how much of the relocation is the employer’s responsibility and how much of it is on the back of the employee.
Employment and Tax Requirements
This is where things get tricky. You’ll need to understand the relocation tax and employment obligations of the home country and the destination country. Figuring this out ahead of time is the best choice because some countries have more difficult tax requirements than others which makes it difficult for employees to relocate there.
Shadow payroll is a popular strategy here that involves keeping employees on their benefits and insurance in the home country while temporarily relocating them. This is a great option for employees that are spending more than six months in a new country.
Determining the compensation structure for an employee living abroad is different than doing it for someone in the country. You’ll need to consider things such as cost of living differences, exchange rates, pay raises for relocation, compensation packages or relocation bonuses, and more. The employee needs to know exactly what to expect in terms of income to help them feel more confident and comfortable with the move.
Don’t forget how many changes this employee is going through. Moving is a stressful experience even when it’s across town, moving across the country (or globe) is a whole different ball game. It’s up to the HR team to make this as smooth of a process as possible and that’s where proper global mobility practices come into play.
If your policies don’t work or they don’t run smoothly, you may end up fronting the bill to send someone to Vietnam only to have them leave the company when they get there.
Part of your global mobility strategy should also involve acclimating the employee to their new surroundings. Perhaps having someone there to show them around and teach them about the culture would be nice.
Global Mobility FAQs
What are global mobility services?
Global mobility services exist to make the move much easier for the employer and employee. Some of the services include:
- Researching local laws and tax requirements
- Assisting with hiring moving companies
- Helping employees find residence
- Helping employees acclimate to the cultural changes of their new country
How do you explain global mobility?
It refers to a company’s ability to relocate employees anywhere in the world. A company that has global mobility, has policies in place to make this process easy. A company without global mobility does not.
Global mobility is becoming more important for growing companies. Employees are expecting employers to have policies and procedures in place for relocation and remote-working. Companies must also understand all the legal, regulatory, and tax requirements so they can ensure a smooth process for both the employee and the employer.
This is a lot of work for the HR department. It’s a lot to handle, there are a lot of legal loopholes, and many things can go wrong.
ARC Relocation understands that, and we specialize in global corporate relocation. If you need help creating a global mobility strategy or you’d like to learn more about how ARC makes your job easier, contact us today!