Introduction to Global Mobility and Its Impact on Talent Management
Sept 13, 2023
In today’s global talent crisis, businesses must fight harder than ever to attract and retain the right people with the right skills at the right time. According to Manpower Group, the war for talent reached a 17-year high in 2023, with nearly four in five employers struggling to recruit the people they need.
As the skills shortage bites across regions and industries, employers increasingly rely on workforce mobility to fill the gaps. Manpower found more than half (55%) of those businesses polled say they are willing to hire internationally, and 57% plan to offer more flexibility in where employees work as talent scarcity grows. Another survey by EY revealed three in four employers consider mobility crucial for business continuity, and 93% of employees say working internationally would be life-changing.
What is Global Mobility?
Global mobility is a function of an organisation that enables employees to move from one location to another for work. Historically, it’s primarily been concerned with the logistical issues of relocation, such as legal and tax compliance, support for dependents, and ensuring continuity. But in recent years, those working in mobility are playing a much more strategic role in tandem with HR and talent management. In short, it’s becoming a business-critical function – those organisations that can mobilise talent effectively are more competitive, resilient to change, and efficient than those that can’t.
In this blog, we’ll discuss the benefits of global mobility at every stage of the talent lifecycle, some compliance and tax obligations to be aware of, and how to create a truly global management strategy that will support an organisation’s growth now and in the future.
The Inextricable Link Between Global Mobility and Talent Management
A robust talent mobility strategy should be closely aligned with a company’s business goals, values and plans for talent management. Yet that’s not always the case. KPMG’s Future of HR report found just over a third of global mobility programmes are aligned versus 63% which are not.
That is starting to change. The pandemic has accelerated a shift in global talent trends and practices, as has an uncertain economic climate. More than ever, global mobility teams must balance the cost of their work with the more comprehensive organisational benefits, particularly around recruitment and retention. Ultimately, the goal is to create an agile talent ecosystem designed around the skills the business needs now and in the future. Global mobility moves beyond a siloed, reactive, operational service to strategically drive organisational value.
Mobility teams can help determine how many new hires are needed how many will come from abroad, advise on costs, and predict the timeline for recruits to start in a new location. They can also help identify the right talent for international roles and assess the suitability of different opportunities. Likewise, HR managers will need to understand the impact of global mobility on the employee experience and the evolution of the wider business. The most competitive organisations will combine the two in the future, creating one talent mobility team.
Why Global Mobility Matters
Business leaders want to hire the best talent, regardless of where that talent is located. But done right, global mobility has a wide range of benefits. For the employee, it can improve job satisfaction, develop their skills and cultural awareness, and widen their professional network. International postings often encourage employees to develop unique perspectives, increasing innovation and resilience. And there may be progression opportunities beyond the international placement, too. Multinational organisations often need those in leadership positions with international experience and insight to manage their global interests effectively.
For businesses, global mobility can reduce employee turnover, boost diversity and inclusion and fill talent gaps by acting as an attractive recruitment tool. Exposure to new geographies, mainly if it’s somewhere the organisation is expanding to, boosts cultural understanding and leads to a more astute connection with local customers. EY’s survey found almost two-thirds (61%) of organisations say global mobility has enabled development and succession opportunities for under-represented groups.
That’s good for an organisation’s bottom line and the employees. Analysis by McKinsey revealed companies with ethnically and gender-diverse teams are more profitable than those without. Diversity and inclusion reduce groupthink, boost innovation, and lead to better company cultures with lower turnover.
The Talent Lifecycle and Global Mobility
The benefits of global mobility can be felt at every stage of the talent management lifecycle – from attracting talent and upskilling to succession planning and retirement.
There are generally considered to be six stages in the talent management lifecycle:
Stage 1: Sourcing and recruiting
The lifecycle begins with talent acquisition. Global mobility can be essential in building an attractive employee value proposition (EVP) for prospective employees. That’s particularly true for those from younger generations who are often more mobile. According to Gartner, 65% of candidates have discontinued the hiring process due to an unattractive EVP. Advertising benefits and perks such as travel allowances, relocation packages, and international progression opportunities can also boost a company’s reputation, meaning the talent will come to you.
Stage 2: Hiring and onboarding
The second stage is between the time a candidate accepts an offer and their first few months in the job. Employers should regularly check in with new hires, mainly if the recruit has been posted abroad. They may need extra assistance to settle in, make new connections or learn the language, and should have a mentor appointed to help address any early pain points. Surveys can also be a helpful tool to gain feedback and ensure the process works more smoothly in the future.
Stage 3: Performance management
Once an employee has been in their role for a reasonable amount of time, the priority becomes managing their performance and that of their wider department or the organisation as a whole. Are the right processes and people in place to meet the business’s goals? If someone has been strategically placed in a new location to address a skills gap, for example, has this ambition been realised? Are they able to make a tangible difference? If not, why not?
Stage 4: Employee development
The development phase is an opportunity for employees to develop new soft or hard skills. Global mobility can provide lots of upskilling moments, providing they’re harnessed in the right way. Organisations should prioritise development goals that align with the skills the business needs and the direction the employee wants to take in their career. Make a learning and development budget available so there are opportunities for self-directed learning or local training courses, which can also widen the employee’s professional network in a new country.
Stage 5: Retention
Global mobility can be a strategic tool for retaining talent in a competitive business environment, but it requires planning, communication and support. International opportunities can be a real draw for ambitious employees. Still, there needs to be a good fit in terms of their skills and competencies and their personal and family situation. Employees will also need training, coaching and mentoring to help prepare them for their new challenge.
Stage 6: Succession planning
Repatriation is a tricky and often overlooked part of the global mobility process. The end of an assignment should be planned and communicated well in advance. Employees should feel happy returning to a meaningful, rewarding role that makes the most of their international experience. There should be time to hand over to the next person and reintegration support as the employee gets used to returning to their home country (preventing reverse culture shock).
Harnessing Global Mobility for Robust Talent Acquisition
It’s never easy to find and recruit the right people. Here’s how global mobility can help:
Expanding Your Talent Pool Through Global Initiatives
When talent is scarce, initiatives that widen the pool of suitable candidates will be welcomed. Global mobility gives employers access to a larger talent pool by opening up different countries and regions, as well as specialised skills and knowledge that may not be available in a local market. Almost nine in 10 (88%) HR professionals from the EY 2023 Mobility Reimagined Survey said employers consider mobility to address global talent shortages, and 90% plan to sustain or increase the organisation’s scope of mobility over the next three years.
Opportunities to work internationally are also attractive to candidates and should be part of the recruitment strategy. Younger generations are often more mobile and open to international work experience than previous generations. According to PwC, 71% of millennials, for example, expect and want an overseas assignment at some point during their career. As a group, they are expected to comprise 75% of the workforce by 2025.
The COVID-19 pandemic has opened up the possibilities for remote work and meant businesses are no longer restricted to a talent pool within striking distance of the office. It’s about who has the right skill set, regardless of location. Some employees have taken the opportunity to move out of cities, and countries are opening their borders to some 35 million digital nomads working remotely worldwide. Talent is becoming much more fluid across borders.
Compliance and Legal Frameworks in International Hiring
Although the focus of global mobility teams has become more strategic, logistical challenges still exist. Every business placing an employee internationally must comply with local visa and work permit regulations. For those that don’t, the consequences can be grave. Employees could be fined, deported or imprisoned, and businesses could be fined or even prosecuted for hiring someone without the right to work.
Global mobility teams must work closely with the legal team to list all the necessary work and residency permits for the countries employees will work from. If you’re moving talent to a country where you don’t already have a local presence, you may want to work with an Employer of Record (EOR) service to employ talent on your behalf. Research by KPMG found the increasingly strategic role of global mobility means businesses are outsourcing traditional aspects of the role, such as tax consulting (91%), tax return preparation (89%), immigration (84%), relocation management services (82%), destination services (70%) to focus instead on ensuring excellence in employee experience and strategic workforce planning.
Specialists in international business expansion, like Centuro Global, can help organisations navigate unfamiliar employment laws and advise on best practices around onboarding, payroll and benefits in compliance with evolving local regulations. Centuro Global’s Centuro Connect platform has accurate, up-to-date costs-per-visa in 170 countries.
In Portugal, for example, specialised digital nomad visas allow people to live and work within the country for up to one year. These were introduced in 2022 and intended to appeal to a new generation of international workers happy to work from anywhere. Alternatively, if a short-term placement, a business visa may be more appropriate – although the permitted length of stay can vary from country to country. There are also work permits, which tend to be granted for extended periods, and other relevant visas, such as the golden visa in Spain.
As well as compliance with employment law, global mobility teams must consider more logistical relocation support. This might include travel assistance, searching for schools for dependents, household goods transport, global banking, and housing (which often has to be organised within a short timeframe. Relocation programmes should be flexible and consider an employee’s family dynamics and compatibility with the host country, including single-parent employees, spouse or partner re-employment, and LGBTQ+ relationships.
Business leaders may also need to consider how compensation will be structured – particularly around the cost of living, housing and schooling costs, relocation packages, and any promotions or pay rises associated with the new international role.
Global Mobility as a Tool for Unparalleled Talent Retention
Although often overlooked, retention is just as necessary as recruitment. Here’s how global mobility can keep your current employees happy.
Fostering Employee Engagement Through International Opportunities
Global mobility can be an unparalleled tool when it comes to employee retention. Two in five people say they plan to leave a job within the next year, with the majority saying it’s because of a lack of available career prospects. Such turnover could cost the UK economy up to £17bn, not to mention the cost and upheaval at an organisational level. It’s estimated the cost of replacing an employee is between six and nine months’ salary, in addition to costs around the time it takes them to get up to speed.
One of the critical benefits of global mobility lies in its potential to boost employee retention rates. Talented employees are actively searching for opportunities to further their careers. They want regular chances to upskill and learn. And they’re keen to challenge themselves by working in diverse locations, immersed in other cultures. International opportunities can also make employees feel a stronger sense of belonging through a commitment to diversity.
Organisations that use global mobility to enrich employees’ career progression can protect key talent by deploying them to more active markets and ensuring the right leadership talent pipeline is in place. Overseas assignments offer future leadership candidates the benefit of international perspective and understanding, which is critical at a senior level.
It’s not a strategy without risks. Moving to a new country can be incredibly stressful for the whole family. Businesses should be aware of issues and challenges around employee acclimatisation and offer well-being support accordingly. This might include complimentary language lessons if an employee doesn’t speak the local language, connecting employees with contacts the business already has in the host country, and/or adding a travel stipend so employees can visit their home country regularly.
Navigating the Complexity of International Taxation for Talent Retention
Like questions around immigration, tax considerations can be complex. Policies vary between countries for different reasons, so organisations should seek professional assistance. Deploying international staff can leave organisations vulnerable to paying corporate income tax in a host country if handled appropriately.
Here are some questions to consider:
Personal income tax
Will employees be liable for income tax across the multiple countries they work in? As the employer, are you required to withhold taxes in home and remote working countries?
Will the company pay double social security costs for both employer and employee? There are usually far fewer reciprocal agreements than tax treaties.
Have you considered tax treatment for employee and employer home country contributions in the new location? Does the host country require a pension to be established? Can the funds be withdrawn or transferred once the placement has concluded?
Deductions for other benefits, such as stock-based compensation, may also need to change depending on the package and host country rules.
Often, organisations will set up a shadow payroll, which doesn’t physically pay the employee in the host country. Still, it allows the employer to meet local payroll tax payments and reporting obligations by replicating the home payroll compensation reporting. Working with a global mobility expert such as Centuro Global can help businesses quickly navigate this.
Case Study: Transforming Talent Strategies Through Global Mobility
When A-Gas, a prominent global supplier of refrigerants and environmental services, sought to solidify its presence in the competitive UK market, Centuro Global was able to assist.
A-Gas must ensure the smooth relocation of key personnel from various countries to the UK and devise tailored immigration to facilitate its expansion goals.
Centuro helped the company identify the employees requiring relocation and assessed the most suitable visa categories based on their circumstances. Centuro experts handled all aspects of the visa application process. They advised the company on compliance matters around immigration regulations to ensure a smooth transition for all employees moving to the UK.
With Centuro’s support, A-Gas was empowered to amplify its market position and expand its offerings within a significantly reduced timeframe. The organisation was even able to successfully acquire a UK-based refrigerant distribution company months ahead of schedule. A-Gas also achieved substantial cost savings and a reduction in immigration-related expenses.
The Roadmap to a Global Talent Management Strategy
Developing an effective global talent management strategy is the marker of a competitive company that can meet the shifting needs of today’s workforce while achieving its objectives. By aligning that strategy to the company’s overall goals and vision, it is possible to realise global mobility’s wider business benefits around talent recruitment and retention, diversity, and developing an impressive leadership talent pipeline.
It doesn’t have to be expensive, either. With the right experts who can assist with identifying the right individuals to move or hire, advice on immigration and tax affairs, and help with logistical considerations, it is possible to design a cost-saving global talent management strategy.
Companies that embrace global mobility have the world’s talent at their fingertips. Given the proper support, they can expand more quickly into international markets, become more profitable and see an uplift in talent recruitment and retention.
Ready to talk more about creating your global talent management strategy? Contact us to discuss the custom support we can provide.