It sounds cliché, but the world really is getting smaller. In an increasingly globalised marketplace – helped greatly by the internet – it’s never been easier for businesses to tap into the international – not just local – community. Businesses in the UK may use Skype to communicate with their sister company in China, and e-commerce has helped small local business open their doors to the world.
However, for some industries and certain roles, there is a need for people on the ground, and that’s where global mobilisation comes in. Placing staff overseas in on the up. PwC’s report – Talent Mobility: 2020 and Beyond, states that overseas placement levels have increased by 25 percent in the last decade, and this is set to rise by an additional 50 percent by 2020.
For most HR professionals, this can present a recruitment, relocation and staffing headache. Not least because global mobility is a costly affair. Never-before-considered fees for immigration, relocation and professional services mean that the price of global mobility goes way beyond the salary of the staff.
So how best can a HR professional take advantage of global mobility and be cost effective? The two may seem impossible to marry, but at AeroProfessional our core business is offering global mobility solutions to airlines and aviation companies across the globe, whilst being cost-effective. So yes, it is possible.
We’ve broken down the key things to consider:
Benchmarking local salaries – global candidate placement is not a cookie-cutter strategy. So what may seem an appropriate salary in the UK, could be disproportionately high (or low) in another country.
A common mistake is for the HR department, or key decision maker, to offer the same pay and benefits to a relocated member of staff as they would a domestic employee. This can result in a business overpaying, particularly when you consider locations such as the Middle East which are tax free, therefore the salary should adjust in light of this benefit.
On the other hand, paying too low for a location can result in disengagement, and a reduced quality of candidate. This is particularly key for us at AeroProfessional, as aviation pay rates can vary dramatically from one location to another. You could be faced with the argument that the worker shouldn’t be any worse off than if they were performing the work in their home country, so perhaps a pre- mobilisation strategy could be to recruit locally rather than mobilise existing workers.
Consider the local compliance costs – These include taxes and any social security, which can be varied. Cross border compliance is complicated, so check to see which country’s regulations will apply, taking into consideration employee residency, duration of assignment, time spent in and out of location, double taxation treaties, etc. Check to see if you can utilise any approved overseas subsistence allowances to lower employment costs and also increase employee salary retention (such as HMRC subsistence allowance guidelines). At the very least, be aware of these additional costs as they could be the surprise that isn’t initially budgeted for.
Think about the costs of supporting the assignment – Additional support costs include accommodation, transport, relocation and logistics. These can be negotiated with local suppliers to obtain favourable levels of cost based on scale and/or duration of need. So multiple relocations for an onsite project may benefit from economies of scale.
Plan carefully and allow for an appropriate budget – it’s not surprising that overseas assignments go over-budget, given the myriad of unforeseen costs that crop up throughout the process. Budgeting is not a ‘finger-in-the-air’ or estimation process. And the answer is not necessarily on Google. Each business and sector has its own unique considerations, so a one-size certainly does not fit all. To help with budget planning, a HR professional could take a step-by-step ‘walk’ through the whole relocation process, and note down all the costs, surprises and other factors that come up along the way. This will help establish a realistic, but still conservative budget for the global mobility strategy. This will also help key stakeholders remain on target and cost-conscious. Every stakeholder likes to keep costs under budget, so set a cost ceiling.
Outline the global mobility policy carefully and monitor closely – this will help ensure that the policy is applied evenly across the business, and adhered to accordingly. This can reduce the risk of ‘discretion’ (i.e. one rule for some departments, not for others). The key to a successful, applicable and robust strategy is avoiding inconsistency and varying costs.
Prepare your employees and support them throughout – At AeroProfessional, we see great value in providing as much information as possible to employees on the location, from basic detail such as currency, cost of living, public transport to culture and religion. This ensures they are prepared, and a more intangible but valuable factor is that they are regularly engaged and taken care of by HQ. The employee will then spend less time trying to acclimatise and therefore be more productive from day one, being able to hit the ground running.
Engage in specialist external support where required – The other option for creating a cost effective global mobility strategy is to enlist the support of an external company who specialise in the international labour market. This can often end up being more efficient as you are paying for the exact expertise required, and external advisers can provide local information and advice. The other saving with this option is time, as the HR professional is often juggling this responsibility at the expense of other priorities. At AeroProfessional, we work as an extension of the in-house team, to ensure that HR team, internal stakeholders and the employee is engaged throughout the whole process.