What is Global Mobility (GM)?
To put it simply, Global Mobility is a Human Resources (HR) function that refers to a multinational corporation’s (MNCs) ability to move its people to offices in different countries in order to grow the business globally in terms of geographical footprint, functions and activities.
Traditionally, International assignments or transfers can be either short term (between 3 – 12 months), long term (between 2 – 5 years) or on a permanent basis (Permanent Transfers or localisations). However, in the current climate, businesses are creating innovative and creative solutions to meet their strategic needs.
Global Mobility Strategy
The business objectives of Global Mobility are driven by strategies that can be implemented for managing their international talent pool. Some of the main business objectives for mobility strategy are:
Global Mobility – The Approval Process
Prior to approving an assignment or transfer, all businesses will implement a strategy to assign their talent by following a few key steps:
Once the assignment/transfer has been approved by the business and all due diligence has been carried out (this is to make sure the assignment is fully compliant in the host country in respect of tax, social security, payroll and immigration and local regulations), the transfer can proceed.
*Businesses might also require a cost estimate/projection that details the total cost of the full assignment that the business will need to accrue for. The cost estimate will illustrate all elements of assignment policy-related entitlements and third-party vendor costs such as:
The aim of a cost estimate is to illustrate the total assignment cost so the business can forecast possible Return of Investment (ROI) at the end of the assignment. This will also provide information on all the elements of the assignment and accompanying costs so that the business can budget and manage costs accordingly.
Main considerations for a generic cost estimate (this will again depend on the company’s GM program and applicable policy framework)
The following are typical Compensation and Relocation cost elements that might appear on the cost estimate:
Cash elements and gross entitlements:
Assignment-related allowances (employer cost):
Relocation costs (employer cost):
Other third-party specialist vendor costs (employer cost):
Tax costs (employer cost):
The list above is not exhaustive and will depend on how each company’s Global Mobility program is designed and what entitlements & benefits are on offer.
**This could also depend on whether the company’s GM policy is Tax Equalised or whether they want to adopt another type of tax treatment.
The success of a GM strategy relies on the prior planning and due diligence which should be conducted pre-deployment. This will not only ensure that businesses are sending the right talent on assignments and achieving a great ROI, but it will also ensure potential risks are identified at a very early stage prior to deployment and risk mitigation processes can be put in place to reduce unexpected costs.
Potential risks to be aware of:
Failure to comply will result in failed assignments and strategy, excess costs, possible reputational damage to the company.
The Global Mobility landscape is ever-changing and the GM professional needs to be at the forefront of key decisions and strategy building.
The road to becoming that strategic partner starts from understanding the following:
In order to innovate and create, we need to adapt and be agile – “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change’’ – Charles Darwin