Global mobility management strategies for small- and medium-sized companies By Juliane Gruethner, Mercer “Our team leader is relocating to Shanghai!” is a sentence heard more frequently in large multinational companies than in small- and medium-sized enterprises (SME). However, even in SME, new projects or products, international cooperation, changing global workforce demands, and a host of other factors can trigger the need to relocate employees abroad. Therefore, having the right global mobility solutions in place is just as important for smaller businesses as it is for their larger counterparts. But how can SME proceed when they don’t have any global mobility programs, experts, or dedicated team members available to manage the move? It doesn’t matter whether the company is moving 10 or 100 employees – relying on detailed global HR knowledge, an understanding of legal requirements, managing employees’ expectations, and providing the right level of support are required, and these requirements don’t change with the size of the company. Sooner or later, SME must ask themselves: “How do I manage global mobility in the absence of dedicated internal resources?” and “What must be done, and what is optional or superfluous?” Typical workforce mobility management challenges in SME At the beginning of the internationalization process, most international assignments originate from the headquarter country. The initial assignees are managed on a case-by-case basis and individual negotiations take place. Very often the main objective is to convince the employee to accept the international assignment. However, the lack of experience from both HR and the employee, combined with time pressures and deadlines, often lead to inconsistent practices and uncertain results. The assignment is frequently viewed as an exceptional event or a novelty, but as it is actually a strategic priority for the company the negotiations tend to result in individualized and often generous terms and conditions for the employee. Internationalization steps and evolution of mobility programs, Source: Mercer As the number of assignees grows, the costs and complexities increase, and over-generous individual packages can no longer be justified by business reasons. The growing number of assignments and the lack of consistency generates new challenges to program administrators. Gaps in processes and inefficiencies become apparent. The total cost of an international assignment becomes visible only when annual reconciliation is conducted. In worst-case scenarios, compliance issues are identified and start impacting the company – with unpleasant consequences. These often result from the fact that the first assignments lasted longer than what was allowed by the host country's social security rules, or they simply lasted longer than was sensible from a business perspective. All these issues trigger multiple discussions among all parties involved in the assignments: managers, assignees, as well as legal, tax, insurance, and risk management teams. Top management will eventually decide that “something” needs to be done, and – depending on the level of internal noise, the company culture and the global mobility strategy – different steps are taken to define what “something” actually means. Common approaches to addressing talent mobility issues A majority of SME that find themselves in such a situation start designing an overarching mobility policy with the objective of standardizing and structuring compensation approaches and providing adequate support to employees. On top of that, companies also establish a tax policy to clarify the assignee’s role as well as the responsibilities of the organization and its employees in regards to expatriate tax, personal tax, and company compliance. Since there are always recurring trends related to talent mobility, many companies try to benchmark their policies as well as possible. As a result, it’s not unusual for these companies to copy parts of certain policies and practices and apply them to other assignments. In best-case scenarios, the result of this is a comprehensive document designed to inform the various stakeholders about the terms and conditions, while also clarifying organizational processes and practices. But unfortunately, such documents often end up being neither practical nor customer-focused nor effective. Once the international relocation policy has been drafted, the question of its implementation arises. Ideally, this question has already been addressed by this point in the project plan. In practice, however, this is rarely the case, and many stakeholders realize late in the process how complex talent mobility management and planning really is. As a consequence, companies usually appoint an outside resource to help coordinate all the required processes, ensure adequate compliance and manage external providers. Designing a pragmatic relocation policy At the beginning of their internationalization process, SME should try to find pragmatic and actionable solutions to manage their international assignments. But what does this mean in practice? Prioritize the essential policy elements Because of the pressure resulting from the complexities and time constraints associated with mobile workforce management, global HR teams in charge of the assignments should focus on only the essentials. For example, meeting legal requirements is mandatory in any host location and includes immigration and recruitment issues as well as tax liabilities for the employee and the company (amongst other things). Furthermore, duty of care dictates that companies thoroughly address any issues related to the social security of their assignees as well as any special health or safety considerations. Companies also need to take into account the expectations of the employees, as long as they are reasonable and in line with business requirements. Naturally, employees expect to receive a competitive, fair, and consistent support package from their employers, and market benchmarking is a good way to measure what this means in practice. However, the general policy should still always reflect the specific strategy and requirements of the company. When the strategy of the company is clear, it’s easier to determine how it should position itself and its global mobility solutions compared to market peers. Once the positioning has been determined, the next step is to establish clear guidelines that will drive international HR management in the company. All stakeholders involved in the relocation policy and practices should understand why the company has an international mobility program in the first place, then be made fully aware of the objectives of that program. In addition, these guidelines can also be used to review things that have been “heard” by or reported to your assignees in their host countries. It’s not rare to see a disconnect between what people perceive as an appropriate level of compensation or support provided by companies and what they actually receive in the host location. This is one more reason to ensure transparency and clear communication about expatriate compensation and support as early as possible. Finding the right balance in your global mobility strategy Policy segmentation should be introduced only when the company has to manage very different groups of assignees and types of assignment, and this is usually not the case at the beginning of the internationalization process. However, a company that doesn’t plan to have more than twenty assignees, for example, doesn’t need a policy covering five different types of assignments. Effort and cost considerations should be taken into account when designing a policy. It’s easy to succumb to the temptation to focus on details and lose sight of the bigger picture. This makes the implementation of the program more time-intensive and increases costs while also impacting employee satisfaction. Reaching a quick and pragmatic decision can be more effective than a long-winded and seemingly more comprehensive (yet superfluous) discussion. This allows all stakeholders to follow the Pareto Principle and focus on what really matters. Identifying similarities and trends can help design overarching principles that can be applied to cases that were not explicitly covered by the policy. Only two of the three possible paths – fast, good, and cheap – can be taken in any given situation. Any type of investment in a global mobility program should take place at the right place – but this place is not necessarily determined by what competitors, large companies, or industry sectors do. The level of support provided to employees must be determined by each company on an individual basis and be in line with its own principles. Individual global mobility needs require individualized global mobility solutions SME can design smart solutions, rules and processes that are adapted to their specific situations. This is all the more necessary because there is no one perfect model that will fit all individual situations. Questions such as “How many HR professionals do we need to manage a given number of assignees?” cannot easily be answered since mobility support tasks are usually split between different internal teams and external providers. It is therefore better to allocate resources based on what makes sense for the company than to try and follow what is perceived as a current market trend. Decision makers should not be confused by the multiple options available to them, nor should they be put off by the complexity of the tasks at hand. Even though the abundance of information and the many possibilities available can sometimes lead to headaches, a practical solution is still needed to manage a move that’s about to start or one that’s already been initiated. The greatest risk is to lose sight of the big picture and resort to excessive or overly expensive measures for what should remain a small, even if costly, number of employees. Maintaining a balance between practical mobility procedures, the realities of the global business landscape, and future expansion plans is essential. As the company’s international footprint increases, working across borders will become progressively more common, and the practice will no longer be treated as an exception. This development will also be driven by the combination of rapid globalization and the rise of non-traditional lifestyles that will prompt more and more employees to be internationally mobile. In any case, having the proper know-how, rules, and processes in place will be necessary to ensure consistency, compliance, and employee satisfaction, ensuring that SME can find their own way on their talent mobility journey. This article is a translation of the article “Selbstbewusst zu Global Mobility” originally published in Personalwirtschaft 5/2019.