Though sending employees on international assignments has become increasingly popular, 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 on overseas assignments. However, constantly changing local regulations, coupled with ensuring employees acclimate to a new country, can break the bank and put the company at risk.
Global mobility advisor The Expat Experts outlines the key areas that can help employees adjust to their new lives and ensure companies clear the regulatory hurdles associated with global mobility programmes.
Mitigate the risks of global mobility
According to the Global Mobility Survey, the biggest challenge facing global mobility programmes is compliance and risk management, thanks to increasing pressure from local governments to mores 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, taxes—income, wage and corporate tax—and social security, but working with varying local authorities can be challenging for companies without a robust global mobility team—and especially for those 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 their data management is streamlined, with a clear workflow in place—complying with local laws and regulations, after all, often requires tons of paperwork and meticulous reporting.
Employees should not bear the responsibility of ensuring that he or she is in compliance; forcing an employee to understand the taxes and immigration requirements of the new country can add undue stress to an employee, causing more stress than is already associated with an international assignment.
Reduce the costs of global mobility
Tied with compliance and risk management in the Global Mobility Survey, cost containment is one of the greatest challenges facing global mobility programmes. In fact, the survey also reported that nearly 70 percent of respondents said they had plans to reduce the cost of global mobility programmes.
Even though cost containment is high on the list of challenges, only 61 percent of respondents said they prepare cost estimates for all assignments abroad; 31 percent prepare estimates for only some of their assignments, and nine percent do not prepare estimates at all. While cost estimates of international assignments are just that—estimates—and various external factors can unexpectedly add to the bill, these projections ensure the project isn’t over budget before it begins.
Data, again, is key here. The most common challenge in terms of cost containment, according to the survey, was the use of multiple systems and data sources; a lack of sufficient technology was the second most common challenge. Cost estimates can be a tricky endeavour for companies unfamiliar with the local economy; partnering with a specialist based in the region can help more accurately estimate the costs.
Around 10 percent of respondents in the survey said they would reduce employment provisions and payments as a way to reduce costs. However, employees that are sent 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 the housing—employees may receive an allowance of up to a certain amount to find the housing they prefer. Though these costs are high, if employees have a high standard of living in their new countries, it 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 somewhat easy to forget that it is, in fact, a person and 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 to expat life—not how much the employee was paid or how well the company 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 prepare the employees for the experience of expat life. Companies should ensure that family members travelling abroad with the employee are also cared for, and any family-related expenses—schools for the children, housing that comfortably accommodates the entire family and are at least partially included in the cost estimates.
Each international assignment that a company undertakes is a learning experience; those lessons should not be wasted. Companies should document the processes as well as the personal experiences in order to ensure that future international assignments are even more successful.