In an organization, global mobility refers to facilitating and managing everything that’s involved with moving employees across international borders. This function includes temporary or permanent employee relocation to different countries to meet business objectives like supporting business growth and employee development.
Examples of global mobility
An example of global mobility is sending an employee on a short-term assignment to a branch office in a foreign country to train local staff in a particular skill or practice. Other examples include sending talent abroad for long-term assignments or permanent relocation.
There are four primary types of global mobility:
- Short trips to another country. These generally last 3-12 months for networking, contract negotiation, training, or conferences.
- Long-term assignments in another country. These typically span 1-3 years and involve expanding into new markets or opening new facilities abroad.
- Permanent assignments in another country. This mobility type refers to one-way employee transfers to a foreign country for an indefinite period where the employee takes up residency in the host country. These employees are typically called expatriate employees.
- Worldwide travel as a digital nomad. This mobility type refers to an employee who works remotely from anywhere in the world without a fixed work location for an indefinite period.
What is the importance of global mobility?
Global workforce mobility represents the future of work. It allows employers to offer “work-from-anywhere” policies for international teams while ensuring compliance across multiple jurisdictions. Global mobility also provides a strategic approach to hiring and retaining talent during economic uncertainty. Note that global mobility differs from domestic workforce mobility, which refers to employee movement and relocations within one country.
Today’s talent seeks international opportunities to boost their resume and foster personal development. These demands have shifted the world of work and pushed it beyond borders, making global mobility a vital strategy for attracting and retaining top talent worldwide.
3 Benefits of global mobility
A company that encourages global mobility of its employees may reap several benefits, including greater employee retention, better decision-making, and fresh insights into new markets.
1. Employee retention
Global workforce mobility has evolved beyond traditional expatriate assignments to become a talent retention strategy. Organizations offering comprehensive mobility programs—encompassing international assignments, cross-border remote work, and flexible location policies—can better retain top-tier talent. According to a 2023 study by Localyze, a global move can improve employee retention by almost 40%.
2. Better decision-making
Teams with geographically diverse members are better at making decisions, according to research by Cloverpop. Increased diversity can cause friction amongst teammates, but Cloverpop researchers found that “Inclusive decision making not only drives better decisions but also overcomes the increased operational friction of diversity by including wider perspectives every step of the way.”
3. Local knowledge
Employees on assignment in other countries can provide their organization with insights into regional consumer behaviors, cultural nuances, and the local competitive landscape. Their newly acquired cultural and linguistic capabilities may also reduce the company’s reliance on third parties for services like translation and market research.
5 Challenges of global mobility
Despite the many benefits of global mobility, businesses that adopt this policy also face unique challenges related to immigration, compliance, and cultural acclimation.
1. Immigration
With an international workforce, employers must adhere to the immigration requirements of each country where their employees reside. Employers must familiarize themselves with the country’s immigration laws, choose the proper visas, provide visa sponsorship, collect documentation, pay fees, complete the application process, and submit it for timely renewals.
2. Employment law and taxes
Global companies must also adhere to each jurisdiction’s local employment and tax laws where their talent lives. This requires setting up compliant work agreements and navigating minimum wage laws, income taxes, statutory benefits, and reporting requirements across multiple jurisdictions.
Inadvertently overlooking tax obligations and employment law in the host country often leads to hefty noncompliance penalties. For example, while a company may classify its foreign workers as contractors, local regulators may classify them as employees under local labor law. Such misclassification may result in back pay and tax arrears, limiting business opportunities.
3. Compensation
Global employers must take extra steps to ensure they offer fair and compliant compensation across multiple jurisdictions.
This means offering base salaries that account for the minimum wage, living costs, and pay equity laws of each market where employees reside. Employers should also consider offering locally tailored global employee benefits to gain a competitive edge and ensure their talent feels valued and supported.
4. Permanent establishment
When talent is located worldwide, global companies risk creating a permanent establishment (PE) in a host country and triggering a local corporate tax liability. PE laws vary worldwide, but even sending employees abroad for short-term work assignments, such as contract negotiations, indicates PE in many jurisdictions.
To insulate the parent company from foreign tax liability, some companies establish a local entity in countries where they plan to regularly do business. However, entity establishment is a lengthy and costly process that requires significant long-term investments.
5. Cultural acclimation
During relocation, employees and their families often struggle to adjust to cultural differences, such as new languages, time zones, and cultural norms in the host country. Supporting employees through this period is critical to their well-being and reduces churn.
What is a global mobility strategy?
A global mobility strategy is a business plan for seamlessly transitioning employees across borders while avoiding noncompliance and ensuring continuity in business operations. It facilitates “work-from-anywhere” policies and manages the logistics of sending employees on international business assignments.
A global mobility strategy must account for global payroll, benefits, immigration, compliance, and ongoing HR support for talent across multiple jurisdictions.
How to create a successful global mobility program
To design a successful global mobility program, consider business goals, involve key stakeholders, get ahead of tax and compliance risks, and put employees first.
Establish clear goals and expectations
Determine how global mobility aligns with the organization’s business goals and key objectives. Consider the following questions:
- What problems does the company face that global mobility can solve?
- What additional benefits will global mobility bring the company?
- Will entity establishment be a part of the strategy?
- Which employees can participate in relocation, and which ones cannot?
Answering these questions will help mobilize employees and resources more efficiently.
Involve key stakeholders and decision-makers
A global mobility strategy involves multiple teams, such as HR, legal, and finance. Organizations must maintain open communication between all teams to ensure strategies align with capabilities and goals. But this open communication is difficult to achieve, according to a 2024 survey by KPMG. Only 27% of respondents felt that their “global mobility strategy has been widely communicated and understood by stakeholders.”
Involve high-level executives for big-picture insights, such as clarifying long-term expansion goals and plans for scaling the business in the coming years. Other teams, such as HR, legal, and finance, will handle much of the ground-level work needed to implement the strategy. Consult with each team to ensure they have the resources to scale and achieve each goal.
Get ahead of potential tax and compliance risks
Clarify social security obligations, PE legislation, immigration, and employment and tax laws in each jurisdiction where employees reside. Consult a legal team and consider coordinating with a third-party expert to mitigate compliance risks.
Put employees first
Employee well-being is an essential aspect of talent retention. It is especially important for global companies with employees working across borders. For example, Microsoft offers employees global assignments to support skill-sharing and leadership development in emerging markets. “Our mobility program is not just about moving people from point A to point B,” Juan Carlos González, Senior Director for Global Mobility at Microsoft, shared. “It’s about creating meaningful experiences, placing people at the center, fostering diversity and inclusion, and ultimately, driving business success.”
While today’s talent wants the ability to work from anywhere without geographical discrimination, relocation is a stressful endeavor. To support employees during relocation, consider offering expat employee benefits, such as additional rest days, flexible scheduling, access to mental health services, and opportunities to connect with colleagues or other expats in the host country.
Simplify talent relocation with an employer of record (EOR)
The easiest, fastest, and most flexible way to implement global mobility solutions is by partnering with an EOR.
An EOR is a third-party organization that provides support throughout the entire lifecycle of international expansion, from hiring and onboarding to global payroll and ongoing HR support. Partnering with an EOR solution also eliminates the need for entity establishment.
As an EOR with deep expertise, Velocity Global will navigate employment, tax, and immigration laws across multiple jurisdictions to manage compliance risks. As a part of our Global Employer of Record solution, we also handle benefits administration, payroll, and ongoing HR support so businesses can expand globally.
Velocity Global’s integrated Global Immigration solution simplifies supporting mobile employees in more than 185 countries. Our expert team handles all immigration and compliance matters on a company’s behalf, enabling it to focus on quickly building and supporting mobile teams worldwide.
Contact Velocity Global today to learn how to hire, relocate, and support talent across 185+ countries with ease.
