In spite of some temporary slowdowns, trends of globalization have continued to increase.
For businesses, these trends present significant opportunities to grow and diversify their workforce. By establishing a strong global mobility program, HR managers can make the most of the opportunities of a global labor force.
What is Global Mobility?
Global mobility is the ability of a multinational corporation to move its employees around the world. It is an integral part of a company’s talent acquisition strategy as it helps attract skilled candidates, retain staff and create a more diverse workforce and leadership team.
The Role of Human Resources in Global Mobility
A key role of HR managers is to provide employees with the support and training they need to have a successful transition – either as a new employee joining the company or as a current employee moving from one place to another. For the latter, HR managers help employees relocate by handling the documentation requirements that the employee and any accompanying family members require.
In order to have a smooth onboarding experience when transferring to another country, HR managers should prepare employees for possible challenges they might face. These challenges may include potential changes to job responsibilities, as well as language and cultural barriers. HR managers work with employees to make the transition easier and maintain an open line of communication to ensure the transfer is successful.
HR managers may also assist transferring employees as they transition their family members to their new country. Foreign nationals with dependents will have additional considerations in mind when moving to a new country. For instance, they will need to find schools for their children, open a bank account and obtain a driver’s license. Spouses who plan to work must confirm that they are eligible for employment and apply for the requisite employment authorization.
Creating a Global Mobility Strategy
Employers may consider multiple factors when relocating employees, including helping them find a place to live, coordinating logistics associated with the move and handling the employee’s immigration paperwork. Developing a sound global mobility policy is key to a successful relocation.
A sound global mobility policy should incorporate the following elements for a smooth transition:
Challenges may arise when relocating talent abroad, which is why considering all of the factors associated with mobility before the employee relocates is essential to avoid problems and delays. Of all the challenges that arise from the relocation process, costs are a primary concern.
Overspending and miscalculating relocation costs may be among the top challenges employers encounter when moving top talent to international offices. Working with a professional relocation group can help provide transparency and insight into costs associated with relocation, which in turn reduces the likelihood of overspending.
Additionally, immigration requirements necessitate work permits and visas for all employees who move around the world. Employers must also understand the tax requirements involved when sending their employees to international destinations to ensure they are tax compliant. The Internal Revenue Service (IRS) provides helpful information and guidance for the tax payment requirements of U.S. citizens abroad, including foreign earned income. U.S. citizens, for instance, are subject to paying U.S. taxes on their globally earned income unless they meet certain exclusions. Employees may also be required to pay taxes in their host country.
Employers should also note that they may need to compensate their employees in local currency or have them on a local payroll.
Types of Global Mobility
Employers are increasingly turning to what is referred to as “non-traditional” mobility, or short-term assignments. Short-term assignments range from one to three years and include business travel and localized assignments. Short-term assignments can also include after-sales services or intermittent travel across international borders. Business travel and short-term stays are increasingly popular as they provide cost-effective options for employers and flexible living arrangements for employees.
For long-term projects, employers often send their employees to international locations for assignments lasting from three to five years. Permanent relocation, which has no definitive project completion date, is another type of long-term assignment. Permanent relocation is a less popular long-term relocation option for employers, as it is often cost-intensive and uses a significant amount of resources.
Global Mobility Services
Regardless of the employee’s intended length of stay, employers can use a variety of services to help ensure their transition from the home office to the international office is smooth. Services an employer can utilize include employment tax services to navigate payroll complexities and employment tax issues, global business traveler services to help employees travel to various countries and mobility consulting services.
By considering all the factors involved in relocation prior to and following an employee’s move, employers have a better chance of ensuring their global mobility program is cost-effective and beneficial for all stakeholders.
Envoy is pleased to provide you this information, which was prepared in collaboration with Brendan Coggan, who is the SVP of Global Services at Envoy Global.
Content in this publication is for informational purposes only and not intended as legal advice, nor should it be relied on as such. For additional information on the issues discussed, consult an attorney at one of the two U.S. Law Firms working with the Envoy Platform or another qualified professional. On non-U.S. immigration issues, consult an Envoy global immigration service provider or another qualified representative.