- KPMG survey data reveals that companies are opting for business travel and short-term assignments to deploy their workforce globally
- Conversely, shorter assignments often create a higher risk of non-compliance with tax and immigration laws
- Increases in the diversity of mobile work arrangements and international assignment types continues globally
KPMG International's latest Global Assignment Policies and Practices (“GAPP”) survey (www.kpmg.com/gappsurveyreport) has found that many companies are moving away from long-term international assignments (a transfer overseas typically lasting between one and three years) in favour of short-term moves (a temporary transfer overseas usually lasting between three to 12 months) to reduce costs and better address changing business and talent needs. This shift allows organizations more flexibility to move talent globally, however companies must ensure they implement the necessary processes to remain in compliance. The study surveyed global mobility program leaders across 275 organizations, who provided valuable insights and trends on how global businesses manage their global mobility programs.
The analysis shows that in the next five years, organizations believe their overall number of staff members working overseas will remain largely unchanged. Yet 75 percent of the companies surveyed expect to rely on short-term placements, and 56 percent on extended business trips, to deploy their staff to overseas locations. Furthermore, half (51 percent) of businesses expect to reduce the use of traditional long-term assignments, which often involve comprehensive global tax, immigration and payroll reporting compliance. Additionally, there is a significant amount of talent management and employee-related administration to consider to help ensure a smooth transition and overall employee satisfaction. This includes broad-based logistical support for relocating employees and their accompanying family members, often arranging the shipment of household and personal goods, destination services to assist in home finding, identifying international schooling options, local transportation and area familiarization for daily living.
Businesses are opting to send staff on short-term deployments and use business travel to avoid costs and administrative burdens associated with moving employees temporarily abroad. Global mobility leaders cite income tax (31 percent) and immigration (26 percent) as the two main risks for relocating personnel, underscoring that these shorter moves types often create a higher risk of non-compliance with tax and immigration laws, especially when these move types are not managed by the global mobility function.
Belinda Wright, Partner and National Leader of Immigration Services, KPMG Australia, commented: “For large businesses violating immigration and tax policies on a larger scale generates the potential for catastrophic reputational risk, yet risks are still not being managed appropriately. The global immigration landscape has changed, and businesses must take a more holistic approach examining the reputational damage of their mobility actions with as much gravitas as traditional risk functions. Until there’s a change in the attitude about global mobility, these risk factors will continue to be an unforeseen threat to management teams.”
Global Mobility programs playing a key role in retaining and developing staff
The GAPP report reveals that over a third (38 percent) of organizations have a dedicated functional global mobility team, with 45 percent of those managing global mobility reporting into the broader Human Resources and Compensation and Benefits functions. Often, as programs evolve and grow, increased global risk and compliance requirements frequently result in organizations arranging a dedicated Global Mobility function. Seasoned global mobility professionals are able to support complex logistical and compliance requirements associated with diverse employee mobility scenarios.
The uptake in its recognition as a standalone function is demonstrated by companies who are taking a more purposeful approach to mobilizing talent globally, developing stronger integration between talent management and the global mobility function throughout the employment lifecycle. For those that have aligned their global mobility program to their organization’s talent management framework, nearly half (47 percent) note that global assignments are a formal part of their organization’s talent development, succession and retention initiatives.
Achim Mossmann, Principal, Global Mobility Services, KPMG in the US concluded: “We are increasingly seeing global mobility programs becoming part of recruitment and retention initiatives for talent teams. Organizations who embed global opportunities into employees’ careers and manage mobility as part of their talent management lifecycle generally generate a higher return on investment on their global moves. In basic terms, this means losing less intelligence and investment to competitors.”
Previously most Global Mobility departments principally focused on managing the relocation aspects of their international assignee population; often concentrating exclusively on traditional long-term assignment moves, which frequently started and ended in the home country of their corporate headquarters. Today, the scope of services delivered by Global Mobility has changed significantly and is still very much in motion. The logistical relocation of global talent and ensuring global compliance remains a core aspect of responsibility, but the functional accountabilities of Global Mobility departments have developed exponentially, and will continue to do so, in response to today’s diverse and ever-evolving employee mobility types, talent development and retention objectives and global business needs.