Sending employees on international assignments has become increasingly popular. However, those in charge of managing expat employees still find the process of global mobility complex.
It is somewhat surprising that the same issues keep arising, with so many global companies – over two-thirds, at last count – sending employees overseas. However, constantly changing local regulations, coupled with ensuring employees acclimate to a new country, can break the bank. This can also put the company at risk. Here are some measures that companies can take to ensure a smooth transition when relocating employees.
• Mitigate the risks of global mobility
• Reduce the costs of global mobility
• Help the family adjust to international assignments
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Mitigate the risks of global mobility
According to the Global Mobility Survey, the biggest challenge facing global mobility programs is compliance and risk management. This is due to increasing pressure from local governments to more strictly enforce immigration and employment laws and regulations; which seem to be changing at a rapid pace.
International companies must prepare for issues regarding immigration such as income tax, wages, corporate tax, and social security. However, working with varying local authorities can be challenging for companies without a robust global mobility team. This is especially true for companies sending employees to countries for the first time.
Besides working with a global mobility advisor, companies can help themselves in terms of risk mitigation by ensuring that they streamline their data management. They should have a clear workflow in place which complies with local laws and regulations. After all, employees should not bear the responsibility of ensuring that they are in compliance. Forcing an employee to understand the taxes and immigration requirements of the new country can add even more stress to what is already a huge assignment.
Reduce the costs of global mobility
In addition to compliance and risk management, cost containment is one of the greatest challenges facing global mobility programs; according to the Global Mobility Survey. In fact, the survey reports that nearly 70% of respondents have plans to reduce the cost of global mobility programs.
Even though cost containment is high on the list of challenges, only 61% of respondents said they prepare cost estimates for all assignments abroad. Around a third (31%) prepare estimates for only some of their assignments, and 9% don’t prepare estimates at all. While cost estimates of international assignments are just that – estimates – they can ensure that the project isn’t over budget before it begins.
Data, again, is key here. According to the survey, the most common challenge in terms of cost containment is the use of multiple systems and data sources. A lack of sufficient technology is the second most common challenge. Cost estimates can be a tricky endeavor for companies unfamiliar with the local economy. With this in mind, partnering with a specialist based in the region can help more accurately estimate the costs.
Around 10% of respondents in the survey said they would reduce employment provisions and payments as a way to reduce costs. However, employees that move abroad expect an equal or better standard of living than they have in their home country.
One of the largest costs associated with relocation packages is housing. This is because employees may receive an allowance of up to a certain amount to find the housing they prefer. Although these costs are high, if employees have a high standard of living abroad, this can increase the chance of each assignment’s success.
Help the family adjust to international assignments
When preparing an employee for an assignment abroad, it can be easy to forget that it is a person; not just an extension of the company. However, the failure of an international assignment often has to do with family-related issues and the employee’s inability to adjust; rather than how much the company paid them or how well they arranged visas and housing.
To ensure the success of an international assignment, companies must not only mitigate the legal risks associated with global mobility but also prepare employees for expat life. Companies should ensure that family members traveling abroad with the employee are also cared for. Any family-related expenses should at least be partially included in the cost estimates. This might include things such as schools for the children and housing that comfortably accommodates the entire family.
Each international assignment that a company undertakes is a learning experience and those lessons should not be wasted. Companies should document the processes as well as personal experiences. That way, they can ensure that future international assignments are even more successful.
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