About 40% of international assignments end in failure.
Considering it can cost anywhere between US $20,000 and US $100,000 to relocate an employee, those are some costly failures.
So, why do 50% of organizations surveyed by Atlas expect an increase in relocations in 2023? And why, then, did 68% of companies allocate more money and time to enable global mobility for their staff last year?
The truth is that employee relocation can come with some significant benefits for companies and employees alike. You can attract top talent, develop global leadership, gain access to international markets, and increase diversity in your workplace.
Not only that, global mobility programs have become a mainstay for many organizations looking to offer their staff more flexibility.
While global relocation dipped in 2020 due to the pandemic and in 2021 due to global conflicts, the numbers are creeping back up and employee relocation is trending in 2023. Employees want to move for higher salaries and greater flexibility. Employers are looking to direct their top talent where they are most needed.
Amid the ongoing economic, regulatory, and political shifts, many organizations are adjusting their global mobility policies to fit the new normal. If you are looking to build an effective global mobility program for your staff, then this guide is for you.
What Is Global Mobility?
Global mobility refers to the strategic movement of local or international employees from one location to another to fulfill business needs. It’s not just about sending expats to different countries. Global mobility may involve a variety of employee travel, such as frequent visits to other locations, temporary assignments abroad, and even permanent moves.
However, global mobility isn’t just about moving staff. It's a strategic tool that enables companies to tap into new talent pools, expand operations, and foster cultural diversity. More recently, it’s also a way to keep up with digital and remote workplace trends, enabling greater flexibility for employees’ lifestyles.
Types of Employee Relocation
There are several primary types of employee relocation that companies typically engage in.
- Short-Term Assignments: Brief relocations can serve specific projects or training purposes. They offer employees a chance to gain new experiences and skills while maintaining ties to their home base.
- Long-Term Assignments: These are in-depth placements that involve an extended stay, usually lasting one to five years. This type of relocation allows employees to immerse themselves in a new culture and contribute significantly to overseas operations.
- Permanent Transfers: This is a complete relocation to a new country, often involving a change in employment terms. Permanent transfers help businesses establish a long-term presence in a different market.
Some employees also travel frequently to other offices or markets. This may or may not factor into a company's global mobility policy.
Benefits of Global Mobility for Your Business
Companies have good reason to move their staff around. There are crucial benefits to having mobile, globalized teams in today’s increasingly international market.
Attracting and Retaining Top Talent
One of the main reasons companies move employees is to attract and retain top talent. 31% of Atlas survey respondents said they turned to relocation because they couldn’t find qualified top talent locally. So, sometimes, it’s about bringing talent to the places where you need it most.
On the other hand, global mobility can be a significant perk for employees looking for new experiences and learning opportunities. Offering staff the option to work out of different global locations can entice those experiencing wanderlust.
In addition to this, it’s easier to attract top talent if your company offers different work locations for employees to choose from. This opens your search to a broader pool of talent. Once onboarded, it can help retain workers who are excited about growth and new, global possibilities.
Developing Global Leaders
Having access to a range of perspectives improves leadership skills. By working in different locations, your employees gain access to knowledge they wouldn’t be able to tap into at home. They can learn from different people, situations, and cultures, making your team more resilient and agile.
In fact, about 40% of employees who are willing to relocate do so for higher pay and professional growth. They want to develop their leadership skills on a global scale, making relocation essential in their professional journey.
Once they return to their home post, you’ll have access to their newly learned skills and perspectives, adding exceptional value both at home and abroad.
Enhancing Cultural Diversity and Inclusion
Diversity and inclusion is one of the growing concerns and requirements for companies globally. However, as organizations bring on talent from different backgrounds and cultures, they may face challenges in integrating their teams.
Effective global mobility policies can help companies tackle this challenge. By creating the space and time for your diverse staff to work alongside one another, you’ll build rapport and better cultural awareness. Also, being flexible with where your employees reside will give you access to more diverse talent.
Strengthening Employee Loyalty and Engagement
Relocation can be a great pathway for professional growth and acquiring new skills. Offering employees new experiences can be a significant boost to engagement and loyalty and help to combat stagnation and loss in worker motivation
For shorter assignments like cross-border training, knowledge sharing can be a significant incentive for your staff. It can boost the morale of both employees going abroad and those in other offices receiving learning and development opportunities.
Challenges and Pitfalls to Avoid
Despite its many benefits, employee relocation often fails. When not managed properly, sending your staff elsewhere can be an expensive failure that demoralizes your team and can potentially result in talent loss. So, here are some pitfalls your organization should avoid when it comes to global mobility.
Inadequate Preparation and Support
Moving to a different country or even city is a cumbersome undertaking. Your staff have families, homes, friends, and many obligations back home. It’s crucial for companies to provide the right type of support packages to help employees seamlessly transition into their new lives abroad.
Mismanaged Expectations
Transparency is critical in employee relocation. Arriving elsewhere for a new job post after uprooting your life and finding a completely different scenario to the one you expected can be taxing. So, it’s important to be clear and honest about the conditions of life and employment for your staff who are relocating.
Cultural Misunderstandings and Communication Gaps
38% of companies find cultural differences difficult to manage on cross-border teams. It’s not a secret that cross-cultural communication and collaboration can be significant challenges affecting team performance. As such, organizations moving employees across borders should consider cultural awareness training and preparation prior to deployment.
Compliance and Legal Issues
When you move an employee across borders, they will require visas and work permits in their new place of employment. They typically become tax residents in a new country, so their contracts, payroll, benefits, and so on need to comply with local laws and regulations. Employment laws abroad can be challenging to navigate, but are crucial to avoid hefty legal fees and penalties.
Essential Considerations for Employers
Now you have a general idea of why global mobility is essential for many organizations and how to avoid some major headaches. But, how do you plan a successful global mobility program? Here are some tips.
Strategic Planning for Global Mobility
Like most good HR practices, successful global mobility starts with good planning. A thorough global mobility strategy can go a long way in ensuring a smooth relocation process for your international workforce.
Aligning Mobility with Business Goals
First, you need to consider what your objectives are when it comes to relocating employees. Are you looking to enhance knowledge sharing? Do you need to fill skill gaps in certain offices? Is it a way to encourage engagement and offer perks to employees? Something else?
Begin by aligning your global mobility strategy with the needs and goals of your organization.
Identifying Key Roles for Relocation
Once you identify the reason for wanting to relocate employees, your global mobility team should think of who will be eligible and the reason for their selection. Relocation is not a cheap undertaking, so it’s important to consider whether you can hire someone locally instead. Also, think about what roles you need filled and which of your employees will be excited to go abroad.
Legal and Regulatory Factors
Next, think about the legal aspects of employee relocation. You’ll need to understand and comply with the laws in every foreign country you send employees to.
Visa and Work Permit Requirements
Your employees will most likely need a visa and work permit to reside and work abroad. Make sure to arrange for these ahead of time as such processes can take months.
Tax Implications for Employees and the Company
Your employees will also likely change their tax residency when they move abroad. This will not apply to short-term assignments. But, if your employees will spend the majority of their time living elsewhere, then there will be tax compliance implications in the host country.
Having employees abroad can also pose implications for the corporate taxes that you pay. Having staff operating in other countries comes with the risk of permanent establishment which shouldn’t be overlooked.
Cultural and Social Factors
Beyond the legalities of international mobility, your team members will need to adapt to new cultural realities in their new country of residence. If you are transferring people to leadership positions, they’ll also need to learn how to lead a team abroad.
Cross-Cultural Training and Integration
Your global mobility strategy should include cross-cultural training as a crucial step in employee preparation. Skipping this part can very well result in failure. Cultural adaptation can be extremely challenging amid a global move and undertaking the professional responsibilities of a new post. So, preparing your teams for the cultural shock and adaptation is key to success.
Family and Spousal Considerations
Also, remember that your employees don’t exist in a vacuum. Most people willing to relocate are aged 25 to 44, making them millennials. A lot of them are currently raising children while caring for aging parents. Make sure to talk to your employees to understand their specific needs.
If they are relocating with a partner, your global mobility solutions will need to include spousal benefits. If they have kids, then child care assistance is essential. Plus, they might have elderly parents back home, so they may need extra leave to assist and care for them back home as well.
Compensation and Benefits
Finally, your relocation strategy needs to consider compensation and benefits for your global workforce. Most global mobility services include a range of benefits and allowances to help employees settle in a new place.
Cost-of-Living Adjustments
Relocations often come with a title and salary bump. But beyond a simple salary increase, companies need to consider the cost of living in the employee’s new location. Is it more expensive than their home base? If so, you’ll need to calculate the adjustment accordingly.
Housing and Allowances
Depending on the length of their assignment, your staff may either need to sell or rent their current home. They may also need to buy or rent a place in their new location.
Typically, long-term assignments come with a housing stipend for employees to comfortably rent a home. Meanwhile, permanent relocations may need to consider support for buying a home, such as an allowance for legal and closing fees.
Other allowances should include travel to and from their new work location, as well as home leave. Then, there is the cost of shipping the person’s belongings, legal fees for work permits, and private health insurance – to name a few.
In-Country Support
You’ve sorted the legalities, provided cultural training, offered fair compensation, and your employee is ready to go. The next step in your global mobility solution is to offer in-country support.
Support for Employees and Their Families
Once again, remember that many employees don’t relocate alone. Make sure that you assign someone to the new office or hire a global mobility consultant to manage and assist your employees with the intricacies of arriving in a new country. If there is a language barrier, then you’ll also need a translator.
Your employee will need support with a few important things:
- Finding a new home
- Navigating legal residency processes
- Understanding local taxes
- Adapting to the new culture
- Learning the local language (if applicable)
- Finding a school for their kids
- Building a local community
Monitoring and Performance Evaluation
On the professional side of things, make sure to monitor your relocated employee’s performance. Check-in regularly at the start of the global assignment to make sure everything is going smoothly. If they need extra support, then it’s best to identify issues early and tackle them head-on.
Repatriation
Coming back home will be as difficult as the initial relocation was. Reverse culture shock is a real thing and many relocated employees will have built a vibrant life abroad during their assignments. Your company should be prepared to assist with potential repatriation efforts to help ease your employees back into the rhythm of work in their home country.
Transitioning Employees Back to Their Home Location
Similarly to when they transitioned to their new post, you’ll need to support employees in transitioning back. They and their families will need help reinstating their local homes, health insurance, tax payments, banking, and more. They’ll also need help in adapting culturally.
Leveraging Skills Gained During the Assignment
Of course, it’s also important to capitalize on the know-how that your employees gained during their time abroad. Make sure to discuss and adopt a knowledge-sharing program for returnees.
Allow your employees to use the skills that they learned in their new workplace. This may be through training, mentorship, leadership, or other opportunities.
Ease into Global Mobility with Borderless
Global expansion can be both exciting and challenging. Speak with our experts on global mobility solutions to find the best way to build an international team.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
