Global mobility is an organizational trend that has become a key factor for international companies’ success. By offering employees international opportunities, businesses can attract top talent, diversify their workforce, and gain a competitive advantage amid economic uncertainty.
However, facilitating global workforce mobility involves navigating complex immigration, employment, and tax laws across multiple jurisdictions—all of which pose significant compliance risks.
In this guide, we explain what global mobility is and outline its benefits and challenges. We also walk you through the steps for creating a solid global mobility strategy.
Global mobility is a function of an organization that enables employees to relocate and work from anywhere in the world. It addresses the logistical issues of relocation, such as immigration, compliance, HR support, global compensation, and ensuring overall continuity. It also plays a role in talent development and strategic workforce planning.
An example of global mobility is when a company sends 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.
Below we outline the four primary examples of global mobility:
- Short trips to another country. These generally last three to 12 months for things like networking, contract negotiation, training, or conferences.
- Long-term assignments in another country. These typically span one to three 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 relocation 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.
Global mobility facilitates the future of work, allowing employers to offer work-from-anywhere policies for international teams while ensuring compliance across multiple jurisdictions. It also provides a strategic approach to hiring and retaining talent during economic uncertainty.
Talent today 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. Global mobility also allows employers to source employees from a broader talent pool. This opportunity enables organizations to find specialized talent with more room for salary negotiation, giving them a competitive advantage during uncertain times.
The four main advantages of global mobility are access to a broader talent pool, greater employee retention, workforce diversity, and better insight into new markets. We discuss each of these in detail below.
1. Broadens the Talent Pool
Global mobility allows you to tap into a larger talent pool to find employees with diverse skill sets, seniority levels, and life experiences. This drastically improves the quality of your hires, creates more room for salary negotiation, and improves important metrics like time-to-hire.
2. Improves Talent Retention
Talent today wants “work-from-anywhere” policies. They value the opportunity to travel abroad for work as well as the flexibility to travel for personal reasons while continuing to work. By creating learning opportunities and allowing employees to go to new places in new roles, you are more likely to attract and retain top talent.
3. Fosters Diversity, Equity, and Inclusion
Global mobility allows employers to source talent from various backgrounds and create a diverse global workforce of different nationalities and knowledge. Workforce diversity teaches employees how to respect differences among colleagues, nurturing empathy and other soft skills necessary for healthy, productive collaboration.
Additionally, research by Gartner shows that diverse and inclusive teams are more productive. Improved productivity and performance correlate with happy employees, and it also bolsters ROI and company reputation.
4. Grants Insights into New Markets
International employees offer companies unique insights into the markets where they reside. With knowledge of the local language, culture, and business practices, they are a great source of strategic insight that helps with competitor analysis, customer research, and branding.
Having employees with knowledge of the local language also eliminates the need for hiring additional talent, such as translators.
Despite the many benefits of global mobility, businesses that adopt this policy also face unique challenges related to immigration, compliance, and cultural acclimation.
With an international workforce, employers must adhere to the immigration requirements of each country where their employees reside. Employers must familiarize themselves with the immigration laws of each country, choose the proper visas, provide sponsorship, collect documentation, pay fees, complete the application process, and submit for timely renewals.
2. Employment Law and Taxes
Global companies must adhere to the local employment and tax laws of each jurisdiction where their talent resides. This means 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 you may classify your foreign workers as contractors, local regulators may classify them as employees under local labor law, leading to back pay, tax arrears, and limited business opportunities.
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 their 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.
Learn more: How to Create a Global Compensation Strategy
4. Permanent Establishment
With talent 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, this entity establishment is a lengthy and costly process that entails 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 your employees through this period is critical to their well-being and effectively reduces churn.
A global mobility strategy is a business’s 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.
To design a successful global mobility program, consider your business goals, involve key stakeholders, get ahead of tax and compliance risks, and put your employees first.
Establish Clear Goals and Expectations
Determine how global mobility aligns with your business goals and key objectives. Consider the following questions:
- What problems are you facing that global mobility can solve?
- What additional benefits will global mobility bring your company?
- Will entity establishment be a part of your strategy?
- Which employees can participate in relocation, and which ones cannot?
Answering these questions will help you mobilize your team and resources more efficiently.
Involve Key Stakeholders and Decision Makers
Your global mobility strategy involves multiple teams, such as HR, legal, and finance. Maintain open communication between all teams to ensure the strategy aligns with their capabilities and goals.
Involve high-level executives for big-picture insights, such as clarifying long-term expansion goals and plans for scaling your business in the coming years. Other teams, such as HR, legal, and finance, will handle much of the ground-level work for implementing 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, permanent establishment legislation, immigration, and employment and tax laws in each jurisdiction where your employees reside. Consult with your legal team and consider coordinating with a third-party expert to mitigate compliance risks.
Put Your Employees First
Employee well-being is an essential aspect of talent retention. It is especially important for global companies with employees working across borders.
While today’s talent wants the ability to work from anywhere, 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.
The easiest, fastest, and most flexible way to implement global mobility solutions is by partnering with an employer of record (EOR).
An EOR is a third-party organization that provides support through the entire lifecycle of international expansion, from hiring and onboarding to global payroll and ongoing HR support. An EOR eliminates the need for entity establishment while handling immigration and compliance on your behalf so that you can adopt global mobility with ease.
By partnering with an EOR, you shed the burden of global expansion so you can attract, support, and retain mobile employees worldwide.
Learn more: What Is an Employer of Record?
Navigating employment, tax, and immigration laws across multiple jurisdictions poses serious compliance risks. Eliminate the risks by partnering with Velocity Global.
Velocity Global’s integrated Global Immigration solution makes it simple to support mobile employees across more than 185 countries. Our expert team handles all immigration and compliance matters on your behalf so you can quickly build and support mobile teams worldwide.
As a part of our Global Employer of Record (EOR) solution, we also handle benefits administration, payroll, and ongoing HR support so you can expand globally without the added burden.
Contact Velocity Global today to learn how to hire, relocate, and support talent across 185+ countries with ease.