Maximizing Cross-Border Assignments Through a Strategic Approach to Global Mobility
The opportunities found in the global marketplace go hand-in-hand with the challenges of managing a mobile workforce: attracting and retaining key talent, tracking tax implications of cross-border employee assignments, implementing sound global mobility policies and procedures, and more. Whether sending your first employee abroad or your 10,000th, there are a number of potential considerations to navigate.
Listen as BDO’s Brad Veltkamp discusses key issues impacting companies with a mobile workforce:
Global Mobility Considerations
- How often employees are traveling domestically and internationally, and if the corporate tax department is aware of the travel and potential tax implications.
- When to register with tax authorities and withhold income tax on employee wages earned in the state or foreign country.
- Tax reform – whether in the U.S. or China – and the impact on internal company procedures, the cost of assignments, and/or the number of relocations.
- Types of retirement plans offered and the tax impact to the participants in those plans in other countries.
- Data privacy regulations in the EU (known as GDPR) and the need for secure technology solutions that protect data transferred from one country to another.
Managing business travelers and the challenges that come with administering a global mobility program is something that many companies are still learning how to control. While these aren’t new challenges, many companies still struggle with how to adapt.
Taking a Strategic Approach to Global Mobility Programs
When developing a global mobility strategy, companies should first assess where their policies and procedures stand today. The Global Mobility Highway illustrates programs at various stages of maturity:
MILE MARKER 10
- No set policies
- Individual negotiations
- Moving people to fill immediate needs
- No long-term planning
MILE MARKER 25
- Hiring 3rd party providers to assist with relocation and tax issues
- Some standardization of benefits begin to be formulated
- Use of assignment letter to specify benefits
- Still moving to fill quick needs
- Little or no long-term planning
MILE MARKER 50
- Creation of relocation and tax policy
- Relocations for strategic reasons
- Discussions around length of relocation become more prevalent
- A view to global payroll compliance becomes a priority
MILE MARKER 60
- Increasing moves per year
- Consideration of hiring Mobility Manager to oversee process
- Creation of policies for different type of moves (short, long-term, permanent)
- Consideration of end of assignment plans are discussed in advance of repatriation date
- Global equity and trailing liability assessments/monitoring is prevalent
MILE MARKER 85
- Policies change based on employee and needs (e.g. developmental assignment, strategic move, employee initiated)
- Formalization of assignee selection at start of assignment
- Discussion of end of assignment planning
- Consideration and review of cross-border retirement issues and global pensions
MILE MARKER 100
- Talent management becomes part of the process and is used in assignee selection criteria
- Assignments are used as part of natural progression of employees to management
- Development of an ROI formula is done to measure success of assignment
- Diversity and inclusion are considered during assignee selection and policy benefit development
Each company will have a different journey based on their business needs and the complexity of employee assignments. By taking a proactive approach, companies can ensure their policies and procedures are both efficient and cost effective.
Learn more about BDO’s Global Mobility Consulting services.
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