For several decades, people in the field of international human resource management (IHRM) have focused on the crucial subject of how multinational corporations staff their global operations. It is commonly acknowledged that successful global staffing is essential to multinational businesses’ ability to meet their strategic goals. But in recent decades, the global staffing landscape has changed significantly, giving rise to a much more complicated global mobility landscape.
Because every assignment and secondment is different, each one needs to be reviewed separately to ensure compliance with international law. Because regulations are not uniform, it is necessary to be ready to delegate global mobility to a specialist in order to make sure that everything is handled. For a firm that wants to focus solely on essential worldwide expansion, it might not be a viable operation because it demands experience, skills, and committed resources.
The usefulness of a skill determines its worth. By keeping your resources too close to the vest, you risk depriving them of what they deserve. Give them the opportunity to broaden their horizons and live abroad. The company benefits from global mobility just as much as the employees do.
Here are some common challenges that expatriate employees face:
- Uncertainties in immigration policies: Employees have to obtain the appropriate visas and work permits to enter and work in the host country, which can be a complex and time-consuming process. They also have to keep track of the changes and updates in the immigration policies, which can be unpredictable and inconsistent. They may face delays, denials, or revocations of their visas and work permits, which can affect their mobility and security.
- Financial planning and cost of living: Employees have to manage their finances and budget in the host country, considering the differences in currency, exchange rates, inflation, and taxation. They also have to cope with the variations in the cost of living, such as housing, transportation, food, and utilities. They may face challenges in opening bank accounts, transferring money, and accessing credit in the host country.
- Tax return filings, double taxation, certificate of coverage: Employees have to comply with the tax obligations in both the home and host countries, which can be complicated and burdensome. They have to file tax returns and pay taxes in both countries to avoid any penalties or audits that might arise from non-compliance. They also have to deal with the risk of double taxation, which is the situation where the same income is taxed twice by different jurisdictions. They may need to obtain a certificate of coverage, which is a document that proves that they are covered by the social security system of one country and exempt from the other.
- Trailing compensation and liabilities: Employees have to consider the impact of their global mobility on their compensation and benefits, such as salary, bonus, stock options, pension, and insurance. They may face issues such as currency fluctuations, tax implications, and vesting periods. They also have to be aware of the liabilities that they may incur in the host country, such as contracts, debts, and lawsuits.
- Spouse and kids’ relocation: Employees have to balance their personal and professional lives and support their spouse and kids in the host country. They have to find suitable housing, schooling, and childcare for their family and help them adjust to the new culture, language, and environment. They may face challenges such as spousal unemployment, family separation, and cultural shock.
Organizational operations are changing as a result of global mobility, which offers managers and leaders both benefits and challenges. To prosper in this environment, employers can offer remote work policies, encourage cross-cultural leadership, and use data-driven tactics. By putting employee well-being first and encouraging diversity, companies can unleash the full potential of their diverse global workforce.
You can learn more about global mobility challenges in our webinar recording. Contact us if you need to know more!