These are the thoughts and takeaways from the latest Reward and Mobility Think Tank (R&MTT) held on Tuesday 28th April 2015, hosted by TUI Travel Group’s Jane Rhodes (Head of Global Mobility) titled ‘Global Mobility in a Modern Age: Virtualisation of the Workforce’.
The following summary has been prepared to reflect a segment of the discussion held amongst senior HR and Reward and Mobility professionals from leading national and international businesses. Specific company details, experiences and examples have been omitted from this summary as all discussions are held under ‘Chatham House Rules’.
Over the last couple of years many companies have experienced significant growth in the international mobility of their workforce as employees move between markets to meet business objectives. This increase in global mobility means that employee populations are becoming more diverse than ever; in both background and personal circumstance. And whilst traditional assignment approaches remain relevant, technology has evolved to a place where individuals can work on a more flexible basis and adopt a ‘virtual role’ working across geographies.
Within this mobility trend, ‘commuter assignments’ are becoming more prevalent and an increasing number of employees are making personal requests for this type of arrangement to accommodate their family situation. An arrangement like this enables an individual to live in one country and work in another; travelling between the two regularly. Whilst ‘virtualising’ certain roles provides individuals with a greater degree of flexibility and hopefully makes job opportunities more widely accessible. It is certainly not without its challenges from a mobility perspective. This summary aims to look into these challenges to discuss solutions that can lead to best practice and consistency where possible for global mobility based on virtualisation of the workforce.
Business Drivers – why do companies need to get it right?
- Costs, taxes and social security implications associated with these assignments. Each case needs to be defined to ensure the employee is having the right allowances that suit them but do not cost the business unnecessarily
- This is a trend that seems to be growing – people don’t see boundaries to working abroad and working virtually anymore
- Millennials seem to expect virtual working and mobility
- National tax authorities are becoming a lot more stringent. Companies are becoming more flexible but tax authorities are not – this creates a hard balance to ensure the company is compliant but offers what is needed and expected by employees
- Staying commercial both in terms of costs of mobility and need from the business for it
- Global technology issues– technology is not at the same level in some countries compared to others, this means there is a need for travel within global businesses
Firstly, it is important to define different types of mobility eg commuters vs business travellers vs short term / long term assignment. It is essential to ensure the right policies are in place for the right type of mobility. The type of mobility is often defined by frequency of travel and length of stay. Different allowances are provided dependant on the bracket someone falls within to keep controls on costs. Therefore, having clear guidelines to differentiate each type of mobility is essential. It is also important to identify all possible scenarios within mobility to be able to understand the company’s position on all of these in case they come up.
Companies quite often have issues with being unaware of who is travelling when. Having a central system to book travel through is essential to know who is going where and then this must go through immigration. Corporate tax departments within the organisation need to be aware of all types of mobility and global mobility teams need to have regular communication and work with this department to ensure correct procedures are being followed.
Companies need to support all employees on assignments that are not in their local country. Online cultural awareness tools can be used as well as using this tool to communicate virtually between teams. Sometimes this audit / training process needs to be for the employee as well as their family members to raise issues that they may not have thought of when moving internationally. However can shorter term assignments warrant this investment? Companies can set up online “chat” facilities for people on virtual assignments to support each other. To read more on how employees can be supported on international assignments have a read of one of our previous Think Tank summaries on this.
Education of employees
The current issue businesses are facing is that employees may well be completely unaware of the company’s policies and barriers faced in terms of mobility. Therefore education, especially of line managers, is key so that everyone knows what they can and cannot do and are doing it in the right way to comply with legislation etc. For clear communication a range of scenarios and how they should be handled should be communicated so that employees know exactly what they should be doing if they pick one of the scenarios.
How long should an individual sustain a mobility assignment?
Trial periods are needed to assess and review how an assignment is going – policies need to have limits and review processes. Are people being lost because they can’t cope in this environment and working in this way? Can people change when they are used to working in one office with all their team for many years and now the team is global and they are moving around a lot for their work? Do companies want people that can’t adapt to this? Line managers need to be educated to be asking the right questions in reviews to determine if mobility assignments are applicable and successful.
- Who is accountable for many of the issues associated with mobility? Resourcing, Mobility, Tax departments?
- Working around (sometimes archaic) systems and processes that are currently in place
- Local policies often override global policies which mean cases often need to be looked at on a case by case basis
- System management – there needs to be one hub that links up all businesses globally for visibility of what is going on. This needs to be inputted correctly and not doubled up which is difficult when you have someone based in one country who also works in another as both put in data about this employee. Many companies do not have this global system
- The responsibility people take in terms of tax often depends on the culture someone comes from and how much responsibility they take in this in their lives – often harder for the younger generation
- Tracking who is going where – businesses often don’t have the resources to track all employees and especially globally- Sometimes the only way to find out about when people are moving around is by monitoring requests for travel or passes. Some companies are even looking into using mobile tracking which would show which country people are in – however this has data privacy issues. An option is that tracking could look into when and where people log into the network
- Whose responsibility is it? The employee to update the business or the business to know where it’s employees are? Ultimately the business is liable. Is there a group responsibility that also includes management? The business also needs to take responsibility that if it is encouraging individuals to be mobile they should be able to support them with this. Communication that goes out to the workforce is essential and needs to be correct. As discussed education of the employee is key, they can’t just think they can go to another country and work virtually and not realise the affect this has on the employer. This needs to be communicated and a culture change is needed to understand this
- Cultural and technological differences between countries
- Some policies need to be in terms of their own costs so they can’t be aligned centrally. For example salaries cannot be aligned globally due to fluctuation in economies – this creates problems when deciding on pay for international assignments and more specifically when they come back to their home country and expect similar pay.
- Is it fair that employees who have roles that can be more virtual can travel more and move to countries where they don’t need to pay as much tax? Should globalisation be company requested or individual requested? Should companies only be responsible for company requested? However they will still be hold liable for all mobility
- People are trying to cherry pick their way around the world for their personal benefit but on the best contract from a chosen country . How does this affect the business? It is often dependant on the talent whether this is offered. This makes it hard to treat people consistently.
- Changes in trends for expectations of length in a role – do people expect to move somewhere for 3 years? Will they stay in that role for that long? If not is the investment worth it?
- Many companies have issues with ex pats who are being offered benefits for being ex pats but then stay in that country for quite a few years. Some organisations will slowly scale back these benefits after 3- 5 years as they are considered as living locally. This can be difficult when the salary is lower in the new country but this is something the employee has to accept . This conversation needs to be had prior to the individual going on the assignment as well as throughout the assignment. Does this sit with the talent team?
- Globally mobility is often low on the agenda until issues come up. Global mobility needs to be part of the HR systems.
What does / will good look like for a business? – decide this and then work backwards in terms of how to achieve this and use this as a benchmark when measuring success
Some examples for what good looks like are:
- Having a streamline approach
- Removing duplication
- Ability to provide clear advice – guides that are proven to be right
- Management of risk – reputation rather than just financial
- Data gathering on employees which can lead to data analytics – therefore can be seen as more strategic than operational
Often the rest of the business are unaware of all the work that is going into global mobility and the processes that are in place. A way to determine how effective communication and standard of processes could be by assessing managers on their opinions for how fit for purpose global mobility is within the organisation and gaining feedback for any negative response.