Today’s talent marketplace is spread across international borders, bringing the benefits of global teams and expertise, with the ability to source the people critical to the business's future success.
Those entering the workplace have different demands and expectations than previous generations and view their careers more dynamically. This has resulted in frequently changing roles and working locations, with a ‘job for life’ mentally now a thing of the past.
For businesses, this creates the opportunity to create global mobility programs and consider how they are evolving, including progress with mobility, tax and immigration policies, technology, automation, international remote working and more.
Facing compliance and regulatory challenges
Being able to benefit from the global economy and its digital communications has enabled businesses to expand internationally and at pace, but the need to ensure compliance with regulatory requirements in different countries is an increasing challenge.
According to AON, regulatory and legislative changes are the fifth biggest risk facing organisations today. There are, however, a few different ways for businesses to ensure compliance, one of which is to have individuals in-house, but this can be a significant burden and involves frequently monitoring changes to employment law and other relevant legislation. For mature businesses, who typically have more of a hybrid approach, with an in-house global mobility or payroll team that liaises with an external vendor, this helps to alleviate some of the internal resource and time limitations.
When it comes to regulations, signing up to receive notifications from the appropriate authorities can be a great resource. However, payroll can lead to other challenges, but external vendors can help to integrate HR and payroll services with global mobility and compliance services. There are many benefits to doing this, for instance, being able to speed up time to market by offloading critical global mobility tasks such as cost analysis or having access to better expertise in every country or region.
Maintaining a positive payroll experience
Clarity is key for employees. Payroll for globally mobile teams and individuals is often complex, with multiple allowances and reimbursements involved, whether that’s for expenses incurred or different local costs or even to recognise home-country commitments.
In addition, the tax circumstances can feel very different from the employee’s perspective. For example, a shift from pay-as-you-earn to being paid gross and taking on the responsibility of putting income aside each pay period for future tax demands can be difficult. Being clear about the components of the pay, the purpose and practical aspects of each pay element, and the ways that taxation will work against all the items will help the employees to settle quickly and not be derailed by unexpected expenses or claims down the line.
Bolstering employee satisfaction
Even though it is difficult to find a balance, employees are increasingly recognising that they can expect career benefits from the experience of working overseas and that they are likely to land more senior and responsible jobs in the future – with higher salaries to match. By making it clear up front that the career advantages will be seen over time, and that the value of international experience should be substantial in the future, it gets easier for the employee to accept that not everything can be covered by their employer. Sending an individual to a new location can be expensive for the company, but by talking about the anticipated benefits and likely progression, there can be a better balance of costs between employer and employee.
It is also increasingly recognised that some allowances, especially those that are provided to bridge a cost of living difference or cover transitional costs, can be reduced as time goes on as the employee finds ways to live “more like a local”. Being transparent about what will happen over time and staying flexible enough to adapt in case of genuine need, will make all the difference.
The future of global mobility
Global mobility has been enhanced by technologies, such as the cloud and artificial intelligence, both of which will continue to impact global mobility strategies in the coming years. Artificial intelligence can process data and help to visualise it, benefiting the end user, and if businesses want to view short-term visitors then a dashboard system makes that possible.
The future of global mobility will also be influenced by what can be described as a marketplace that focuses on skills rather than jobs. Employers will look for somebody with the right skill set rather than conventional requirements, such as degrees, especially when it comes to technical and valuable skills like software development.
The years ahead present both challenges and opportunities for organisations and employees, with major changes in immigration, social security and tax legislation that will all require companies to adapt swiftly. By understanding and embracing what is best for businesses and their employees, organisations can navigate the evolving global mobility landscape and continue to attract and retain talent that will further enhance their workforce.
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At activpayroll, we provide our customers peace of mind when moving their people globally. With extensive experience facilitating global mobility for employees, we provide policy design, double tax treaty guidance and employment tax compliance services.
As your partner in navigating global operations, we're here to support and enhance your journey through our solutions, knowledge sharing and collaboration, so come and see what we can do for you.