Global mobility is how businesses manage the relocation of employees across international borders for work purposes. It involves handling immigration, tax compliance, and logistical support to ensure smooth transitions for employees moving between countries.
What does global mobility encompass?
Global mobility encompasses the entire process of moving and managing a global workforce. This can include everything from businesses with a few international employees to multinational corporations with satellite offices around the globe. From deploying a mobile workforce for the first time to supporting seasoned expatriate employees, global mobility can span a wide range of considerations, including all of the following and more.
Business travel
Business travel is an essential part of global mobility where employees frequently move between their home country and a host country for short-term work purposes, meetings, and business deals.
Short-term assignments
Short-term assignments involve international assignments that typically last between three months and a year, allowing employees to work abroad without fully relocating.
Long-term assignments
In a long-term assignment, an employee might move internationally for anywhere from one to five years. In this case, the assignee takes on a role that requires deeper cultural integration and significant personal commitment.
Permanent relocation
Permanent relocation is when companies provide support for employee relocation across borders, helping provide everything relocating employees need to make a smooth transition when they move to a new country for a long-term or permanent position.
Remote work
With the rise of remote work, global mobility also includes managing mobile employees who work outside of their home country but don’t require relocation. This can include digital nomads, who might frequently work from new locations thanks to technology that allows them to do their work remotely from anywhere.
Pros and cons of global mobility
Pros of global mobility
Cons of global mobility
Increased employee retention: Offering international opportunities increases employee satisfaction and loyalty, reducing turnover rates
Compliance challenges: Navigating different employment laws across countries can be challenging and risky, and other complexities can arise in managing compliance in areas like income tax regulations for employees living and working abroad
Better access to global talent pools: Attracts and retains top global talent, fostering a more diverse and innovative workforce, and allows companies to expand into new markets by having staff on the ground with local knowledge
Cost of living: Differences in cost of living can lead to high relocation expenses and additional compensation for employees
Opportunities for career development: Helps employees gain valuable international experience and growth opportunities for career development
Added costs: Global mobility programs can be costly due to relocation support, housing, and travel for international employees
Cost savings: Sometimes more cost-effective than hiring new local talent, as existing employees are familiar with the company’s values and processes
Why do businesses need a global mobility strategy?
Businesses need a global mobility strategy to effectively manage and mitigate risks when operating in different countries. A well-structured global mobility policy helps ensure compliance in new jurisdictions, while also addressing the complexities of the relocation process for employees.
To minimize their compliance risk when operating in foreign countries
Having a global mobility strategy helps businesses avoid unnecessary compliance liabilities. When managing a global workforce, there are many compliance considerations to face, including:
- Local immigration laws, like making sure employees working across borders have the correct visas and work permits
- Tax and payroll regulations, like making the right withholdings, paying local Social Security taxes, and paying corporate income taxes if required
- Employee benefits, including knowing which benefits are mandatory in different jurisdictions
To manage permanent establishment risk
Without proper planning, companies could trigger permanent establishment in a foreign country, leading to additional tax liabilities. A global mobility strategy can help manage this risk by ensuring compliance with local regulations, especially for businesses with remote workers rather than established local presences in new countries.
How to create a global mobility program
Follow the steps below to create a global mobility program that supports your company's international workforce and aligns with your long-term goals.
Step 1: Define your business objectives
Your first step is to align the global mobility program with your company’s overall business objectives. Determine why and how the mobility program will benefit the company, whether through market expansion, access to global talent, or employee development.
Step 2: Assess immigration requirements
During this step, it may be helpful to work with a mobility consulting service. Your company’s HR professionals need a thorough understanding of the local immigration requirements in each country where your international workforce will go, so they can start planning relocations and building a strategy to manage your employees’ needs.
Step 3: Develop your global mobility strategy
When you develop your policy, it should be comprehensive, covering all aspects of the relocation process—from moving employees to different countries to managing their social security, taxes, and benefits. Define the locations where your employees will work and calculate the costs associated with each one, taking into consideration factors like tax rates, cost of living, the local real estate market, and more.
Step 4: Involve key stakeholders
As you work on your policy, collaborate with stakeholders from different departments, including human resources, finance, and legal, to design a program that addresses the needs of the entire company and its employees. You might also consider engaging with a mobility consulting service to help streamline this process.
Step 5: Implement employee support initiatives
When employees transition to new countries, it’s up to you to help them succeed. Provide support for their relocation, including housing and family needs. Make sure they understand their employee benefits and other resources that are available to them during and after their transition.
To make the transition easier and more streamlined, you might consider using an employer of record (EOR). EORs help companies with global hiring by taking on the manual, administrative parts of the employment process, like payroll processing, tax compliance, employment contracts, benefits administration, and other HR processes. They handle time-consuming employment-related work, and also many of the compliance-related tasks associated with overseas hiring. This frees up your team’s time and resources to focus on strategic, value-adding work.
Frequently asked questions about global mobility
How does global mobility impact tax obligations for employees and employers?
Global mobility can affect both employee and employer tax obligations depending on the duration of assignments, the foreign country involved, and local income tax laws. Employers need to stay compliant with employment law, tax treaties, and social security agreements to avoid double taxation.
What role does technology play in global mobility programs?
Businesses can streamline many of the tasks associated with global mobility and managing a global workforce by using an EOR, a service provider that automates many manual HR tasks.
Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.