In a world where there are more and more regulations to identify and adhere to in the global mobility space, compliance to social security regulations, employment rules and a host of local and international laws is one of the key challenges for mobility professionals. And, as the world becomes more volatile, uncertain, complex and ambiguous, specialist knowledge and team work are defining characteristics of global mobility work.
The RES Forum is an independent international research and networking community of 1,250+ global mobility professionals in more than 600 organisations across 40+ countries globally. The forum regularly canvasses opinion from its members and, in this article, we will look at how mobility experts in some of the world’s leading organisations comply with the regulatory context given the increasingly diverse forms of international work. In addition, it will explore the core approaches to in-house and outsourced work and will depict the key programme management challenges in relation to expatriates and business travellers.
More than half of the 75 international companies taking part in this RES Forum survey have in excess of 25,000 employees and a similarly huge number of reasons for the rise in international assignments. These vary from those that are deemed as business critical to those that are personal development focussed. Add cross-border commuters, career expats or global nomads as well as international business travellers and we can see some of the compliance and programme management challenges that organisations face.
The survey also asked respondents how their mobility functions/teams were positioned within their organisation. The answers showed a lack of strategic positioning, with the global mobility function having direct involvement in strategic business decisions largely only when they worked as HR Business Partners; which occurred in less than one in ten organisations. It was most likely that mobility experts partnered with HRBPs to manage strategic business needs (44%). In 40% of corporations, mobility professionals respond to information from the business provided and managed by the HRBPs but they have no strategic involvement in assignment planning. It’s clear that mobility professionals are working towards becoming more strategic and towards being sought after strategic partners – however there is still a long way to go in many organisations.
Outsourcing Activities and Challenges
The majority of companies do not completely outsource their mobility work with 88% having an in-house function that undertook a range of duties. Of the 88%, half of the mobility activities were managed globally and executed in one
global HR service centre while a further third were managed regionally in HR hubs. Less than 15% of organisations managed their mobility in a dispersed way through local teams. There is little appetite to fully outsource mobility programmes; only four companies were reviewing this move and no one had decided to do so.
Nevertheless, all organisations seem to outsource some aspects of their mobility work with a broad array of outsourced services. Amongst those, tax services provision, household goods shipment and destination services such as home and/or school search, were the most popular. About one in five companies undertook immigration work themselves.
About an equal number of organisations used a ‘one-vendor’ model as opposed to a ‘multi-vendor’ model. The reasons to work with several vendors were predominantly to retain in-house control of the overall mobility programme and to ensure maximum cost savings. Interestingly, quality issues such as supporting assignees better were less prominent with just 9% using multiple vendors for this reason.
The RES Forum survey asked specifically about key compliance areas with respect to in-house or outsourcing provision. Where there was highly specialised and dynamically changing knowledge requirements , companies preferred to outsource their activities predominantly to specialist providers and/or used a mix of in-house and outsourced provision of services. The key areas where companies rely mostly on external service providers were immigration, individual tax and social security compliance.
With specific regard to the changing personal taxation environment, only a small minority (5%) of companies manage this part of tax compliance themselves. Given the complexity involved and the variations between different countries, outsourcing is understandable. And, of course, it can shield companies from some of the risks involved in tax compliance.
However, with respect to the areas which impact company compliance (rather than individualised employee compliance) organisations often choose to have more control over this work. Around 75% of responding organisations either manage corporate tax compliance and expat payroll compliance in-house or have chosen to coordinate extensively with specialist providers while doing some of the work themselves.
The survey data indicates that mobility functions are highly centralised. More than 90% of respondent companies have a mobility Centre of Expertise (CoE). The most frequent activities CoEs undertake are policy writing and management (91%), global vendor management (78%) and the management of assignment documentation (76%). About 2/3 also undertake assignee tracking and management as well as global tax compliance with half working on global immigration compliance and the management of compensation and salary reviews.
Assignee Tracking and Management
Assignee tracking is an important issue given the substantial regulatory implications and it seems that tracking solutions are slowly become more sophisticated and accurate. Only 4% of organisations now believe that their systems do not give accurate assignee data with almost two thirds stating that their systems are reasonably accurate and the remainder arguing that their system is totally accurate.
Nevertheless, there is still some way to go in becoming more effective in tracking and management. More than 80% of the tracking systems are not fully interactive and cannot share data with payroll and wider HR Information Systems. While 12% can at least download reports, in 68% of cases data has to be manually input into other systems. Moreover, only 40% of companies use the same assignee tracking tools to track their international workers for tax and immigration compliance.
In addition to the usual longer term expatriation roles, short term international business travel is booming and, for mobility professionals, one of the key challenges is to ensure compliance with the various jurisdictions that these international business travellers visit. Therefore, it is surprising that 38% of companies do not track regular business travel activity. A further 8% of companies are simply notified by the employee and some other companies through the networks of personal assistants who may support internationally mobile employees. All of this leaves ample room for error and almost half of the organisations leave themselves exposed to compliance risks with respect to their international business travellers.
At times, it can be difficult to decide an individual’s eligibility for inclusion into a company’s commuter policy. Earlier RES Forum research indicated that the most frequently used criteria for multinationals was time spent in location, the number of trips over a period of time or the tax implications. Less frequently used criteria included travel time, responsibility for at least two countries or the trips replacing an expatriate assignment.
The Quality of Outsourcing Providers
We also asked respondents whether they would recommend an outsourcing service provider. There is a stark contrast of areas in which mobility experts would frequently recommend (approx. 60% to 75%) and less frequently recommend (below 15%) outsourcing providers. Household goods shipment, immigration provision, destination services programme and tax services provision are the areas where the mobility experts would most frequently recommend external vendors. A third of corporations would also recommend their inter-cultural training providers. All other outsourcing service providers are not as strongly recommended.
While organisations are bound by a strong, albeit shifting, regulatory and legal context, they are still seeking those service providers that are high quality, reasonably priced and responsive to their wishes. Moving beyond a ‘commoditised’ service towards strategic insight, intelligent management and context-sensitive outsourcing provision is likely to have a strong impact on the success of professional service organisations.