30 Jul Global Mobility Experts Need to Develop Talent Management Strategies
The impact of Covid-19 on global mobility has placed talent management strategies in the spotlight. Business executives learned the potential it has to offer in making key decisions with regards to talent management.
A PwC pulse survey shows strategic mobility projects as one of the most prioritized business strategies of companies. Many of these companies need to reevaluate their mobility budgets and business travel, as well as discuss implementation of virtual deployments with apparent travel restrictions.
Undoubtedly, workers were affected by the pandemic — more so for expatriates and mobile employees. This requires much careful and well-thought-out plans of action in tackling the challenges the workforce is currently facing.
Managing compliance risks
One of the more pressing and costly issues that employers come up against is compliance. Businesses now implementing a more spread-out workforce are faced with a number of compliance risks. It is crucial for employers to consult with mobility leaders to prevent avoidable costs from noncompliance issues.
Crowe shared scenarios that present compliance risks. It explained that cross-border workers, repatriated assignees, and new virtual assignments present hurdles with the changing legislation of a host country, especially in these circumstances.
Cross-border workers. This category of workers is most commonly found in the US and mainland Europe, where workers reside in one jurisdiction and commute to another jurisdiction for work. But since the onset of the pandemic, it is probable that cross-border workers are required to work from home.
This can cause problems for employers when not addressed quickly. There’s a good chance these workers are subjected to the tax, social security and payroll requirements in the jurisdiction of the worker’s residence, causing an alarm for tax authorities to meticulously review historical positions of these workers.
Repatriated assignees. It’s possible that existing assignments have been cut short due to the virus, causing assignees to be repatriated but still continue to work remotely for that host country.
It is essential that these companies trace the planned duration of an assignment, the number of days arranged for an assignee’s stay in the home and host country, and important associations the assignee has in each location. These factors impact the repatriated employee’s social security, payroll and tax residency statuses.
If these factors are not revisited, it can result in a huge amount of expenses from having tax obligations in both jurisdictions. When that happens, employers must clarify with involved legal entities to claim tax reliefs or concessions.
This alleviates any incurred monetary penalties and supports mobile workers in understanding their current position in legal obligations compared to their previous positions.
Virtual assignments. Before the pandemic, many businesses saw the potential of acquiring talents across the globe. But today, instead of physically relocating new employees, they shifted to assigning them online in an attempt to adapt to the new normal. However, employers should stay vigilant regarding future tax, social security and payroll commitments when arranging this type of assignment.
In addition, decisions on which country’s jurisdiction where remuneration charges are applied should not be taken lightly. Even working in a host country for just a day could prompt tax obligations in that country.
Effective talent management
The global crisis startled each employed individual whether their company opts to reduce its workforce population while a vaccine hasn’t been made. Now, human resource managers are given a new set of challenges on how to retain exceptional employees and how to strategically look for new talent. Possessing a much more dispersed workforce, human resource managers are now seeking support from global mobility experts.
According to Steve Black, co-founder and chief strategy officer of Topia, the pandemic revealed gaps in companies’ global talent management strategies. These strategies should include these aspects: visibility of employee’s current location, compliance data and software that delivers global talent strategies. Once these are in place, employee retention is predictably achievable.
In terms of attracting high quality hirees, employers should be on the lookout for global talent. With an unemployment crisis, high performing employees who suffered from the mass layoffs are currently seeking job opportunities from companies. However, to acquire these individuals demands strategic talent management to guide them in managing employee relocation -including virtual ones- and the compliance implications that come with it.
Future of global mobility
The switch to a more virtual workforce has led business owners to reconsider investing in global mobility projects as a means to increase workforce productivity by taking all aspects of employee relocations.
As companies become more established, they seek to scale up, targeting potential markets beyond their location. At this point, it is beneficial for them to invest in global mobility plans to efficiently handle the complexities of employee deployments and relocations.
With numerous businesses expanding, the global mobility industry would predictably be placed at the forefront of businesses’ decisions.