How Global Mobility Services Enable Long-Term Growth

How Global Mobility Services Power Long-Term Growth

Learn how embracing global mobility services can unlock meaningful growth in the years ahead

6 June 2024

Companies today can only meet the demands of a changing market by focusing on long-term growth. In an increasingly multipolar world economy, this means expanding your global footprint.

A palpable shift in the employee/employer dynamic highlights how crucial it is for businesses to operate across many geographies.

Since the onset of the pandemic, remote and hybrid working patterns have allowed any business to cultivate a global workforce. Global mobility services can build on this, but to reap the benefits, you’ve got to deploy them judiciously.

Let’s explore the basics of global mobility services, how they open the door for growth, and why so many companies fail to capitalise on this incredible growth opportunity.

What are global mobility services and why do they matter?

To harness global mobility services and get the most out of them, you need a firm grasp of global mobility as a concept in itself.

Also called employee relocation, the term simply refers to the transfer of existing employees from one establishment to another.

In-country employee transfers are common within larger companies and relatively easy. However, global transfer logistics are more complicated, as we’ll see explore.

Employee assignments are generally classified into four categories: Permanent, short-term, long-term, and business travel.

Business travel

Business travel generally involves short trips to international destinations to attend meetings or conferences, network, or negotiate contracts.

These assignments can last 24 hours to a week or more. Once the task is complete, the employee returns to their base workplace.

Short-term travel

The typical duration for a short-term travel assignment is three to twelve months, ideal for developing internal talent.

The goal is often to provide specialised training for a specific proficiency or skill, fill a temporary position vacancy, or initiate or participate in a project.

Short-term assignments provide employees with valuable first-hand experience and exposure they can use to improve their performance at their base workplace.

Long-term travel

A long-term travel assignment typically lasts one to three years. It is often deployed instead of a permanent re-assignment in cases of limited timelines.

These assignments are typically used to develop global leaders, expand new markets, or open new facilities.

While not a permanent move, long-term assignments are an excellent alternative to a new hire and allow the company to build its internal talent pool.

Permanent travel

Permanent travel is another phrase for relocating an employee for an indefinite amount of time. During this assignment, the employee becomes a resident of the host country.

Permanent assignments are typically used when the company prefers the employee to work on-site locally, the position is not suitable for remote work, and specific skills are needed not currently available at the host location.

Creating a separate global mobility services programme allows companies to develop formal policies that:

Address the company’s objective, clearly outline employee expectations, and identify market opportunities.
Explain the programme’s role and real-world application.
Outline relocation assignment benefits.
Provide a benefit eligibility overview.

The biggest benefits of global mobility services

Global mobility services can breathe new life into a company, allowing it to expand its outreach while developing its employees’ skills.

This route offers major benefits over simply recruiting new hires, including the following:

Increased employee retention

Retention is one of the biggest challenges facing companies everywhere. Just keeping hold of employees is getting harder and harder.

Since the Great Resignation of 2021, when over 50 million workers chose to leave their jobs in search of better working conditions and higher pay, employers have had to contend with an altered work mindset.

Employees are now more apt to quit their jobs if they feel overlooked or underused. Global mobility helps solve this issue by deploying internal talent for new or more advanced positions.

It also keeps people’s lives interesting. After all, who doesn’t dream of a change of scene sometimes?

Global mobility opportunities can increase employee satisfaction and engagement, improving long-term retention.

Greater diversity

Diversity is a hot-button issue that demands companies evaluate their operations to ensure they’re providing fair and equal opportunities for all.

Global mobility services facilitate cultural exchange and allow a globally dispersed workforce to become better integrated. Moving employees between branches also injects greater diversity across your offices by mixing up your employee pool.

Diversity shouldn’t just be a welcome byproduct of other objectives; it’s a goal in itself. Companies with greater diversity have a 33% chance of gaining higher profit margins. It also allows for greater skill development, which benefits the company as a whole.

Improved innovation and insight

Using global mobility services to create a more diverse workforce can encourage creativity, increasing the chances of innovation.

When you bring together workers with different backgrounds, opinions, knowledge, and ideas, you have a better springboard for solving problems. Employee mobility also keeps useful insight into international markets percolating around within a company. The more strategic knowledge of the customs, language, and the differing habits of consumers and customers, the better. A global perspective is invaluable for branding, competitor analysis, and customer or market research.

A picture of a beachside city of a kind that employees who use global mobility services might want to live in

Global mobility services can give employees the chance to try out a different pace of life in a new location

Why many companies struggle with global mobility

With so many benefits to global mobility services, the question arises of why so many companies don’t have them in place. Unfortunately, the answer is simple: global mobility is hard.

For global mobility services to work successfully, the company must identify the employees who have the right skills to fill the correct positions at the right time – and who are willing to move. That’s no easy task!

Global mobility is a different kettle of fish from domestic transfers. If the placement doesn’t work, it’s not as easy as sending the employee back to a different region. So much work goes into global relocations that can’t just be rolled back on demand.

Global mobility brings with it a unique set of requirements. Each of these also challenges that, when the wheels are set in motion, can be hard to anticipate. Effective global mobility requires you to consider:

Obtaining employee visas and work-eligibility requirements.
Employment laws and local compliance risks in a new country.
Regional employee classifications and payroll changes.
Known and unknown costs.
Hiring additional employees for taxes and local payrolls.
Obtaining physical offices.

With so much to consider, it’s no surprise many companies choose to forego global mobility services, regardless of the growth opportunities they offer. Mistakes in any of the above processes could land your company with fines or legal woes.

Global mobility services: compliance considerations

Global mobility compliance is demanding and confusing, as every country has its own regulatory environment.

Regardless of where a company’s home office is located, it must comply with all employment laws and local regulations for the foreign country in which it chooses to operate.

These are the three biggest compliance issues for companies that operate internationally.

Immigration

Ensuring immigration compliance is essential, and resolving issues is complex and time-consuming.

All international employees must retain the proper work permits and visas, as violations could lead to government penalties and audits. For instance, the UK’s recent statement of changes to immigration law has raised the penalty for employers who hire employees illegally to £60,000 per worker.

Non-compliant companies could also face relocation limitations that could impact their ability to send employees abroad in future.

Corporate taxes

Global corporate tax rules are many, complex and treacherous. And expanding a company’s global surface area creates new potential risk factors.

The biggest danger for international long and short-term travel assignments is creating a permanent establishment risk, or PE risk.

A PE risk refers to a foreign country’s local tax authority assessing that the company has a permanent operation instead of a temporary or sporadic one. If the agency rules this to be the case, it may declare that the company is liable to pay corporate taxes.

To avoid this expensive scenario, keep the following factors in mind:

The number of employees slated to work at each international location.
The activities and jobs they’ll perform.
The length of time they’ll spend at each location.
The long-term organizational plans in the region.

Ideally, each company’s HR and finance departments will continually monitor these issues and perform regular PE risk assessments.

Payroll

Managing international payrolls is no picnic, especially when dealing with regulations in numerous countries. Failure to comply can lead to penalties from local authorities – effectively a kiss of death for your global mobility strategy.

To stay compliant, companies must keep meticulous records of the following payroll information:

All employee earnings
The currency exchange rate
The business tax rate
Employee Social Security obligations
All reporting requirements

Maintaining thorough payroll records is essential for protecting the company and its employees from unintentionally violating international laws and regulations.

Global mobility services simplified

In the past, global mobility services have been expensive and complicated to implement. Companies would pay top dollar for legal consultations from disparate providers just to get to grips with the regulatory landscape in a target market. Then they’d have to pay out for a web of contracts for each relocation project. No wonder comparatively few companies have seized the growth opportunities of going global.

None of this hassle and expense is necessary anymore.

Centuro Global offers the first digital solution designed for businesses operating internationally. Our AI-powered global expansion platform brings strategic advice, case management, visa and immigration services, and company formation under one roof.

In just a few minutes, our Market Entry toolkit will give you a comprehensive guide to the rules and regulations of doing business in over 170 individual countries. You can then initiate and track immigration cases on an intuitive dashboard.

Our Compliance Calendar will save you from costly compliance headaches by keeping you abreast of significant dates and deadlines for document renewal. Behind the scenes, our dedicated on-the-ground legal teams across the globe will execute all your visa and immigration obligations for you.

Our global mobility automation services will handle all your needs, including: