Author: Graham McKechnie, Global Tax Director, activpayroll

When it comes to the business of moving people and corporate activities from one part of the globe to another, unexpected world events put paid to even the best-laid plans. In the aftermath of the Covid-19 pandemic, and the midst of an escalating war in Ukraine, it has become more important than ever for businesses to reassess their global mobility processes and ensure they plan for every eventuality.

From shifting working styles to emergency evacuations, join me as I delve into the impact of recent and current world events on global mobility. I’ll cover the new demands facilitated by crises, the ever-shifting social, political and environmental landscape, and, most importantly, the steps global mobility teams can take to better plan for the future.

But first… what is global mobility?

But first, let’s recap.

Global mobility concerns the relocation of employees or business activities from one part of the world to another. While beneficial, and often necessary, for international expansion, relocation comes with a host of considerations for the employer – from tax compliance and social security to local employment law and cultural integration.

Against a backdrop of global crisis, it’s unsurprising, then, that the complexities of global mobility become ever-increasing. Faced not only with changing employment processes and legislation, companies are required to react quickly, making agile yet strategic decisions to ensure the survival of their businesses and, more importantly, the safety of their workforce.

Importantly, in times of global crisis, the responsibility of global mobility teams does not end with the immediate crisis response. Global pressures often present the beginning of a cultural shift, bringing about new ways of working, thinking, and interacting with others. These are changes that global mobility teams must be in-tune with, to ensure their business is changing and adapting to meet the new demands of the business world they are operating in.

Let’s consider some examples.

A changing world

When the full magnitude of the Covid-19 pandemic became clear in March 2020, companies of all shapes and sizes were confronted with a complex variety of difficult and urgent decisions. Some industries were forced to halt business operations completely, others restructured teams and placed employees on short term leave, and the rest of us, well, we shifted to working from home.

While the decisions faced by domestic companies were bound to a single set of government guidelines, multinational companies encountered much muddier waters, dealing not only with varying degrees of government restriction, but the relocation of possibly hundreds of employees.

Up against imminent border closures and air travel controls, global mobility teams had to prepare immediate evacuations – considering the best option for each individual employee, personalised to the severity of the situation in their current location. Of course, beyond the logistical challenges of removing employees from a country with any degree of urgency, businesses still have to consider tax and payroll implications once the initial steps have been taken.

While the impact of the Covid-19 pandemic on business operations was not small, it did give rise to vastly new ways of working which have been adopted positively across many industries. A shift to hybrid working models gave more flexibility and autonomy to team members, increased productivity, and significantly reduced corporate carbon footprints in the important pursuit of net zero targets.

In saying that, the pandemic didn’t halt international relocation completely. As businesses continue to move towards fully-remote ‘international workforces’ and introduce ‘work-from-anywhere’ schemes, we are seeing a new kind of ‘relocation’, one in which the country an employee lives and the country an employee works need not necessarily be the same.

While this can be an exciting proposition for both existing and prospective employees, ‘work-from-anywhere’ policies still present a host of global mobility considerations for companies of any size, including immigration, tax and payroll obligations. Ultimately, the evolving nature of the Covid-19 pandemic clearly demonstrates the ways in which global crises can continue to present new challenges and demands for global mobility teams, months and years after initial impact.

When crisis becomes conflict

As the most widespread health crisis in over a century, the Covid-19 pandemic came with its own very unique set of challenges. Turning our focus towards more current events, we can see the very different set of barriers faced when global crisis becomes global conflict.

When Russia declared its ‘Special Military Operation’ against Ukraine on 24th February 2022, the initial and prime focus for international companies was ensuring the safe evacuation of the people they had situated in the region. Amid border closures and escalating on-street violence, global mobility teams were required to consider the safest route out of the conflict areas, arranging safe passage through bordering countries while ensuring strict adherence to local laws and immigration policies.

Alongside this humanitarian effort, businesses were simultaneously required to assess the wider effects afflicted by the shifting political landscape. Many western companies took quick steps to reconsider their relationships with Russia – reassessing who they were doing business with and at what level. A large number of multinationals responded by restructuring supply chains or withdrawing business activities from the country completely, highlighting the immense power of political unrest to affect tangible and intangible change on global mobility processes.

As the war continues to escalate in the region, further challenges continue to unfold in the shape of rising living costs, particularly in relation to energy and food prices. This is a further global mobility consideration for international companies, ensuring they are taking steps to support and protect employees through these financial challenges, while personalising that support based on the needs of employees across each individual country.

Ultimately, the evolving situation in Ukraine once again highlights the variety of demands placed on global mobility teams in response to global crises. From mobilising emergency procedures on initial impact, to managing social change months and years down the line, the responsibilities, priorities and actions of global mobility teams are ever-changing.

Looking ahead

But, of course, with any crisis comes the opportunity for learning. The global impact of both the Covid-19 pandemic and war in Ukraine have shone a spotlight on global mobility more than ever, requiring international companies to be increasingly agile as they plan for the future.

This starts with mobilisation. Multinational companies must have robust mobilisation strategies in place when assigning employees from one location to another, not only to ensure the initial transition is seamless, but to protect employees from unexpected events further down the road.

This includes carrying out in-depth scenario planning; carefully considering a wide variety of internal and external challenges to ensure the right processes are in place to tackle them. These processes should be rooted in the knowledge and learnings from past scenarios, and take into account wider industry guidelines and expert advice.

With high quality scenario planning comes high quality risk assessment. International companies should consider putting disaster recovery plans in place for staff, much like they would for an IT failure, or other security risks. If the last two years have shown us anything, it’s that global disasters do happen, and international companies must be able to respond quickly to them.

Always people-first

Fundamentally, it is no longer enough for international companies to ‘tick the boxes’ of international expatriation. To remain globally competitive, multinational companies must ensure they are continually forward planning, putting robust risk assessment strategies in place and keeping abreast of the ever-changing social and political landscapes in each of their operational countries.

Most importantly, human factor comes into play. Employees are not just another business asset – they are people with families, pets, hobbies, ambitions and worries. In short, when it comes to global mobility in times of crisis, real life comes to the fore.

ENDS

With an expansive global partner network spanning 154 countries, activpayroll has cultivated a highly qualified Global Mobility team, offering the extensive expertise of a “Big 4” accounting firm, with the personal and friendly touch of a local partner.

Over the last 20 years, we’ve supported many clients to uplevel their global mobility processes, from core compliance and employment structuring to cost analysis and policy design. Find out more and reach out to one of our advisors today.

By scaling, streamlining, or ensuring your people are taken care of, we bring absolute clarity to your global business.

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