Is the cost of living crisis impacting your global workforce?

Is the cost of living crisis impacting your global workforce?

Author Head of Global Mobility Growth, Steph Smith

Our Head of Global Mobility Growth Steph Smith takes a look at how the current economic uncertainty, including the effect of an escalating cost of living crisis and exchange rate fluctuations, could be having an impact on your internationally mobile or global workforce

“We’ve been hearing the above terms more than we’d like in recent months, haven’t we? There is a cost-of-living crisis, currencies are doing their best to make you dizzy and who knows what the future holds in terms of global economies with political unrest, war and governments changing across the world.

However, what we do know is that with these uncertainties, when you have employees who are internationally mobile, the current climate can cause even more concerns which you may want to consider supporting your employees with.

Let’s explore this further and start with an example of just one of the scenarios you might be coming across with your internationally mobile employees. You have an employee who is paid in GBP but is working and living in the US on an arrangement set up a year or two ago. They pay their bills in the US and rent a property there. Their bills are becoming more expensive as the pound has weakened significantly against the US dollar. This employee is really important to your US business and so you want to support them. What can you do?

Perhaps you want to consider a cost-of-living allowance for an agreed amount of time or maybe a salary increase to take account of this. There are lots of options, but the main thing is that you’re aware how exchange rate fluctuations can impact your employees when their circumstances are a little out of the ordinary and you would want to explore all those options before making any final decisions.

Let’s take another issue that doesn’t just impact internationally mobile employees but your global workforce – the cost-of-living crisis. This is a real-time issue around the world!

Your employees may be struggling with the price of heating their homes or getting to work due to the price of gas at the pump. Are you thinking about helping them financially in some way? Globally or in a specific country, you might be considering a payment or allowance to help. Internationally mobile employees may find themselves under more strain than domestic employees due to exchange rates, so there is potentially more to consider here for you as a business, in line with the exchange rate fluctuations.

As employers, we of course need to be aware of the pressures our employees are under in these uncertain times, but we also need to be conscious of the needs of and costs to the business as a result of that support. You may operate in countries where the needs of your employees are much more significant than others, and so you might be looking to structure support packages accordingly. You also want to ensure you are structuring a package which would be tax and social security efficient for both you and your employees.”

If what Steph has had to say resonates with you and you’d like further information on this topical and challenging subject, activpayroll’s global mobility and global HR teams are here to help. Working alongside Steph we have a highly experienced team including Graham McKechnie, our Head of Global Employer Services and Kirsten Wright, Head of Global HR Services. Our team will provide you with expert advice and guidance on the implications and requirements of structuring the right support for your employees. Together they will guide you on current market insights, along with any necessary advisory and compliance support associated with whatever package of support is best suited to your needs.

Get in touch today to find out more about how we can help you.