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10 reasons to create a global mobility program for your company

By Eric Loff on September 10, 2018

Group Discussion

Global Mobility Programs – A win-win solution for both you and your mobile employees

Thanks to today’s ever-evolving technology, markets are becoming more and more global. Time zones and borders are not as relevant and we can now work simultaneously with our colleagues across all corners of the world. However, some things are better accomplished in a more direct, personal way.  Sometimes, you need a person on the ground in order to get the job done right.  

Globalization and growing business trends are constantly raising the bar on global mobility and you must not lose your place within this the new, global market. You need to think like a great chess player – you have a big table in front of you and every move brings new opportunities. Before you decide to make a move, you first need to have a strategy in mind; you need to move the right person to the right place at the right time. As with everything in business, it is about planning well and knowing both your strengths and shortcomings.

So, what are the major benefits of creating a global mobility program for you, your business, and your mobile employees? Check out the 10 benefits of creating a global mobility program for your company.  Then pack your bags; we have business to do.

Speed to market

In today’s technology-driven, global economy, speed to market has never been more important. Failure to move quickly allows competitors the opportunity to enter new markets first, building market share and their global brand. Your company will want to move fast; they will need the ability to deploy talent quickly into new and existing markets. 

If done properly, global mobility takes a village. Mobile employees may need support for immigration, tax, payroll, relocation, and 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.

Risk management

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, with extreme 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.

Imagine receiving a call from your CEO regarding their unexpected detainment at a border crossing. The time is now to create your company’s mobility program.  

Cost control

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 can be 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.  

Let’s go back to chess. 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?

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: your employees will gain experiences and skills that will ultimately help your business thrive. That makes this a win-win solution for all involved.

Right person, right policy

  • 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.

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.

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 future results 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 knowledge

In today’s global economy, it is foolish for an organization to assume that the best ideas and ways of thinking are in any given physical location. It is critical that your organization is obtaining and exchanging information. 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.

Retaining knowledge

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. The individual may either not have a job or may be expected to return to their old role, in effect, ignoring all of their new knowledge and skills.

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 the focus that your mobility program can provide, your competition will greatly appreciate your organization’s investment in their talent development program.

Should you have questions, please contact us at info@gtn.com or +1.888.486.2695, or visit our Mobility Tax Services page to see what assistance we can provide.

The information provided above is for general guidance only and should not be utilized in lieu of obtaining professional tax and/or legal advice.

Topics: global mobility, international assignments, employee relocation, global mobility program

Author: Eric Loff

With more than 20 years of global tax experience, Eric serves as the Managing Director for the West Central region. Previously, Eric was with Ernst & Young, where he headed up their global mobility practice in Minneapolis. Prior to that, he was with KPMG. Proud of top ratings he's received from clients, Eric is known for, leading by example and finding the strengths in others; improving communication so all participants are engaged in a project; serving as a bridge between a company and its expat employees; and staying even-keeled in the face of challenges. Eric graduated from St. Olaf College, Northfield, MN, with a B.A. in Economics and Finance emphasis. He later earned his MBA from the University of Minnesota's Carlson School of Management with an emphasis in Accounting and is a Certified Public Accountant. A specialist on managing international assignment programs and the related tax, human resource, and payroll matters, he serves as a frequent speaker on international executive topics.
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