As our world becomes more connected, savvy companies are starting to venture into markets outside their home countries. They’re creating new branches of business to capitalize on international markets, to promote innovation and development, and to improve outreach to customers worldwide. To help their endeavors succeed, these businesses are sending their own talent abroad.
Given how many businesses are now expanding internationally, it’s astonishing that only 3% of organizations rate themselves “world-class” in global deployments. This statistic reveals a critical problem: most companies are simply doing business as usual when they expand abroad, managing international endeavors the same as they would any ventures in their home countries.
But the world’s markets are constantly evolving, and regulatory requirements—particularly regarding employees—are growing increasingly complex as more countries catch up to top economies: What works for businesses and employees in one country simply doesn’t work in another.
If businesses really want to succeed in this new era of global expansion, they’re going to have to rethink how they manage their international talent pools.
Read on to learn about global mobility, and how you can create a global mobility strategy that will help your international endeavors succeed.
What Is Global Mobility?
Some businesses may not even consider their workforces mobile. But most businesses today do actually have mobile workforces. Mobile employees can be workers who have permanent transfers to another country, long-term or short-term assignments in another country, travel often to other countries, or commute to another country regularly.
Global mobility refers to the ability of a workforce to seamlessly move from one country to another and succeed, both in business and personal lives. If a company has achieved true global mobility, it can navigate the following aspects of international workforce deployment with high levels of proficiency and accuracy:
Global mobility is critical for businesses that want their new international enterprises—as well as their international employees—to thrive.
What Is a Global Mobility Strategy?
A global mobility strategy is your business’s unique plan for seamlessly transitioning your employees who travel or live in foreign companies.
This strategy offers comprehensive guidance and a structure for cross-border employee mobilization. A top-notch global mobility strategy will be closely linked to your business plan, corporate vision, and workplace values. To create a successful global mobility strategy, you will need to ensure that:
One of the difficult things about global mobility strategies is that no two strategies will look the same. Because the strategy ultimately depends on your business’s vision and workplace culture, you can’t simply pick up a global mobility strategy template and use it. You have to create your own.
Of course, because it is so complex, your global mobility strategy will take time to develop—but it will be well worth the benefits in the end. A well-planned global mobility strategy is your key to success abroad.
The Importance of a Global Mobility Strategy
As you’ll see in the following sections, a strong global mobility strategy will take a lot of teamwork and time to create. Businesses—especially small businesses—might wonder why they should spend so much time and effort on a strategy that affects only one aspect of their operations. Only so many employees go abroad to work each year, and making one-off plans when these opportunities arise does work, even if it’s a little inefficient.
But there’s a big problem with bypassing a global mobility strategy. Global expansion is on the rise, and businesses that want to continue to grow are going to have to send their teams abroad. It is to their benefit to create a comprehensive plan for deploying and managing their international talent as they continue to scale and relocate across the world. In fact, 88% of business leaders agree that building a future-oriented organization is an important issue.
Ultimately, a thorough global mobility strategy will empower your business to deploy a global workforce:
Regardless of whether you run a small business or head a multinational corporation, mobilizing your workforce as quickly and as seamlessly as possible is going to empower your business to earn more revenue faster than ever before.
Your Global Mobility Strategy Development Team
When your business begins to craft a global mobility strategy, you’ll want to include all potential stakeholders. To properly develop a strategy, your team will need to involve:
A Global Mobility Consultant
First and foremost, you’ll want to have a global mobility consultant on your strategy team. A global mobility consultant can serve as a single source of knowledge for all things global mobility. Specifically, a global mobility consultant can:
Executives or Thought Leaders
A global mobility strategy is closely linked to your business vision. When creating a global mobility strategy, you’ll be considering forward-looking ideas, like the purposes for your business’s expansion abroad and how much you plan to scale in the upcoming years. For these big-picture insights, you’ll want to include a high-level executive or two.
Your HR team will probably manage some of the ground-level global mobility strategy implementations or coordinate with your global mobility implementation team. In that case, it’s important that they offer their opinions about employee-related processes. In addition, they can bring insights into target employees for your mobility projects as well as talent retention and development strategies. Fifty-three percent of companies report that aligning mobility with talent strategy is a top challenge, so having HR leadership in the room from the very beginning can mitigate this problem.
Your legal team will be important throughout the process of determining your global mobility strategy. They can provide general advice regarding home taxes while an employee is abroad, and they can coordinate with experts in foreign tax and immigration legislation, like New Horizons’ legal experts.
Finally, administrative teams will probably be involved in the global deployment process at some point. It can be useful to have administrators in the room to discuss management of day-to-day global mobility needs, like paperwork workflow.
Key Global Mobility Strategy Considerations
With your global mobility consulting team, executives, HR leaders, administrative leaders, and legal team on hand, you can start to draft your unique global mobility strategy. As you work to create a strong framework for global deployment, be sure to touch on the following topics:
When deploying staff overseas, it is important to consider how this impacts on your legal obligations, both at home, and abroad.
For anything longer than a short trip, deploying staff overseas means thinking about tax and regulatory obligations. If you do nothing, there is a risk of a ‘dependent agent permanent establishment‘ being created, leaving you vulnerable to paying corporate income tax in that country.
You can read more about permanent establishment at What Is Permanent Establishment and Why Does It Matter?
In order to clarify legal status in a country for any staff in a country for an extended period of time, you might be tempted to set up a local subsidiary company there. However, before your company decides to register a company abroad, it is important to consider alternatives. Depending on the type of work your overseas employees engage in, your business’s industry, and local regulations, you may not need to incorporate.
As an easier alternative, you may be able to use a Global Professional Employer Organization (Global PEO) to manage both your relocating employees and new hires. This gives your business the ability to hire new workers or pay current employees in a foreign country — without the business having to set up a legal entity in the first place.
Each country you plan to do business in will have different immigration legislation. With the help of your global mobility consulting team, your team should compile a list of the necessary work and residence permits for the countries you plan to deploy employees to. You’ll want to determine how much of this process your business will handle for your employees and how much they should handle themselves, as which parties will pay for which immigration fees.
Once you’ve decided on these factors, be sure to include them in a comprehensive employee-relocation pamphlet so that relocating employees can understand the process they’ll be going through. Take note that depending on the countries you’re planning to send employees to, a host-country employer-sponsor might be required to manage work permit applications.
Employment Law and Tax Requirements
When deploying workers overseas you need to consider which contractual arrangements to have in place to facilitate this.
One possibility when deploying staff overseas is to consider a tri-partite agreement between the employee, the parent company in the home country, and the subsidiary company or PEO in the target country.
Employee income tax requirements are something your business might also want to consider before determining which countries you send your employees to. You’ll need to work with your global mobility consulting team to determine which countries offer the best benefits when it comes to income tax and social security, and how to to operate a ‘shadow payroll’ for these employees.
To ensure that your business is following the rules and regulations when it comes to taxes, you should seek professional advice in relation to the payroll-related aspects of global mobility, including:
Compensation is critical to your global mobility strategy. With a clear compensation structure, your employees will know what they can expect when they move to a new country—and feel excited about the prospect.
When determining the compensation structure for your global employees, there are a lot of factors to keep in mind. These include:
Talent Acclimation & Retention
Moving abroad can be a stressful experience. If the relocation process is especially hectic or disorganized, or if your global employees simply aren’t prepared for what they find in their new location, you might lose your workers. You’ll also want to have a return process in place for those employees who are not making a permanent move or those employees who do not end up working well abroad.
A lot of acclimation comes down to thorough cultural education. Among other things, you’ll want your global employees to:
Assignments and Assignment Policies
When you deploy your employees to a new location, you won’t be giving them all the same assignments. It’s critical that you adjust your global mobility policies to match the various assignments and assignment types.
For example, you may have 20 different types of assignees, and 2 types of policies that cover their different assignments. You could have 2,000 assignees, and 5 types of policies that cover their different assignments. Whatever the split you choose, be sure that the policy fits the assignment in all cases.
Global mobility is becoming increasingly important for growth-focused enterprises. Before relocating staff overseas, you’ll want to consider various aspects of global mobility, like immigration requirements and permissible legal structures, alongside procedural challenges, like deployment workflows. This ensures that the process of global deployment is seamless for each of your employees.
Plus, you can’t forget that the global marketplace is constantly changing. You’ll need to work with your team and global mobility consultants to update your global mobility strategy regularly, ensuring that it reflects the current international environment.
But once you create and implement your global mobility strategy, you’ll find that your global deployment is efficient, consistent, and compliant—the perfect start to growing revenue in a new country.
Ready to create your global mobility strategy? As global mobility consultants, we’re here to help your business with your strategy and the implementation of your final plan.