The deployment of a global workforce is no longer merely a trend; it is a prevailing reality for companies of different sizes and in different locations. As the annual survey by Weichert Relocation Resources (WRRI) shows, 92% of companies surveyed perceive workforce mobility as critical and important for achieving their talent management objectives. Naturally, effective management of the global workforce calls for progressive and innovative global mobility strategies, as well as the best international practices for anticipating and solving the main talent mobility issues and challenges. The following highlights from the WRRI 2013 survey describe the latest trends in the field.
Compliance with tax regulations is seen as the greatest concern
As the international workforce becomes a norm in many countries, local tax authorities are increasingly turning their attention to companies with expatriate populations, and are becoming stricter and more aggressive in pursuing their country’s tax returns. This trend is definitely aggravated with the economic struggles that many countries are undergoing. Apart from complying with sophisticated tax regimes in countries where companies have already established subsidiaries, further business growth into new markets requires constant expansion and updates of in-house tax specialists’ competencies. As the survey results indicate, for most companies such requirements exert too much of a stretch, which is probably why external tax experts grow in popularity. Indeed, the WRRI results show that tax- and immigration-related organizational functions remain the most frequently outsourced processes.
International assignment programs get more centralized
Another trend to be seen from the study is that, different than before, the management of international assignment programs is shifting from local coordination to a more centralized model. Standardization towards headquarter practices allows companies to ensure greater compliance and a more consistent expatriation experience for all company employees. Practically, a centralized approach means that, in terms of international assignments, all the business units follow the same procedures and policies, and there is one specific organizational division that controls all global moves. The survey results show that 49% of companies follow such a centralization. Another 38% share the responsibilities such that centralized global programs are followed through consistent policies and procedures, but their administration is carried out in regional centers, for example by local HR departments. The minority of surveyed organizations (13%) is managing global mobility on a local, country-by-country basis.
International assignment programs get more diversified
More than half of WRRI survey respondents (66%) predict that the share of alternative assignments in their companies will increase. The most common alternative assignments on the rise are commuter assignments, extended business travel, rotational assignments, core-flex, and local plus. Having a greater choice of mobility programs is driven by a continuous desire for cost control and ways of talent deployment, which would respond to both employer and employee needs.
Commuter assignments were used by 58% of the surveyed companies. Companies see this type of expat programs beneficial when companies require speed and dexterity to react to the changing business environment, as it does not need such profound planning, monitoring and execution as traditional expatriation models. Moreover, as discussed in one of my previous blog posts, commuter assignments may satisfy employee’s circumstances, thus getting the talent where it is needed without substantial sacrifices from the employee perspective. Extended Business Travel shares the same benefits, and poses the same concerns in relation to local work permits and tax compliance.
Rotational assignments are increasing in popularity as a means for career development. For example, as discussed in several of my blog posts, today’s international business success largely depends on global leadership skills, which can also be developed through relocation experiences. In addition, rotational assignments are a good solution to help fill specific project needs, such as knowledge sharing across borders.
Local plus policies follow aims for localization, and are thus typically offered when the intent of the assignment is more permanent. The report indicates that 45% of the companies were using localization policies. However, as it is defined by putting an international assignee on the same compensation and benefits package as local employees, it becomes difficult when employees from advanced countries get localized to lesser-developed countries. To ease these transition difficulties, respondents reported using temporary assistance allowances for either specified periods of time, or on an annually declining scale.
Finally, as the desires of individual employees become more important than a ‘one size fits all’ policy can address, companies look into flexible, or so called core plus flex, options. As the name implies, this option is based on some core benefits provided, with the rest being left up to an employee’s own choice. More on this trend can be read from my January blog post. Even though the current WRRI report indicates that only 20% of companies use the flexpat approach, the trend was predicted to increase at a faster rate than any other alternative assignment program.