United Tax Network – The smarter choice

United Tax Network – The Smarter Choice

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COVID-19 – The beginning of a new era in Global Mobility?

COVID-19 – The beginning of a new era in Global Mobility?

You have read various newsletters on how to deal with expat employees and the measures taken by governments in this COVID-19 era. But have you also noticed that changes that were previously not considered feasible are possible if there is an urgent need for it? For example, working remotely from home has become common while it was often considered not possible. Have you considered what this means for Global Mobility? Will it be business as usual or do we see the need to evaluate and reorganize this aspect of businesses?
We know the complexity, the administration and the costs for external providers associated with global mobility like no other. It’s also a well-known fact that HR spend a majority of time on a relatively small group of expat employees, including coordination of the activities with various external parties. At this stage, we are not even talking about the explosive increase in salary costs for employees on assignment.
Considering the above, isn’t it time to take a closer look at the current expat policy? What were the reasons to draw up such a policy and what arguments have been decisive in including the provisions in the policy? Below a few considerations in the new formal to be considered in connection with the compensation and appraisal policies, to determine whether an international assignment is really necessary.

  • Equity compensation. That the CEO can retire early after excising stock options is different from a local manager working in a foreign branch who can retire earlier for the same reason. Such a risk of losing know-how locally was often limited by assigning employees to such foreign branches. But why not granting equity compensation based on foreign regions as well, as an alternative?
  • People’s skills. An important aspect in management and motivating coworkers, whether or not linked to courses to develop these skills. But isn’t it time to educate managers and technicians skills on remote management and knowledge sharing and to include this aspect as part of their appraisals?
  • Personal development. It is important to understand the local culture, work ethics, habits and customs of a country in which a foreign branch is established and is considered part of personal development of employees assigned to these locations. However, can’t these aspects be learned in a different manner and the gained knowledge be used to manage local employees remotely? If necessary, this can be combined with business travels or a less large number of expats.

In short, COVID-19 allows changes that were previously not considered feasible. To make your organization more resilient in the new normal and from a costs aspect as well, it may be necessary to evaluate your assignment policy.

If you would like to discuss this further, please feel free to contact your local specialist directly through our website.

Siegfried R. Jagga
President UTN Worldwide