Top Tips For Writing Great Global Mobility Policies

2 December 2014 | Bina Gayadien

Whether you are a large multinational looking to review well established global mobility policies, or an organisation starting to branch out internationally for the first time, having a structured policy and approach to globally mobility not only helps to ensure consistency, but also mitigates a range of compliance risks.  Helping clients to develop their global mobility policies has provided me with some practical insight in to how organisations use these programmes to move their employees around the globe. What is immediately apparent is that mobility is used in a wide variety of ways and for an array of different purposes. This knowledge reconfirms to me that writing or updating a global mobility policy is about more than just benchmarking provisions against what other companies in your industry are offering (as important as that remains),  it is about making it relevant to the specific business to help it achieve its strategic goals.

Below I have outlined my 8 top tips for writing global mobility policies.

  1. Benchmark within your industry and against companies of a similar size to see what they typically offer in their policies

There have been a lot of changes to the way companies move their employees around the globe over the last 5 years and consequently many have updated their global mobility policies to keep pace. It makes sense to keep abreast of these changes to stay competitive. Considering what companies in your particular market are offering is key to attracting the right people to (i) undertake a temporary international assignment or (ii) relocate internationally to take up a new position in your organisation.  It is also sensible to check to see whether your intended policy offerings are more generous than the market norms and therefore provide an opportunity to realise some cost-savings.

  1. Speak to the business to see what they require from a GM programme and how they wish to use mobility to achieve their strategic objectives.

Up until about 8 years ago, companies generally offered the standard trilogy of policies: long-term assignments policies, short-term assignment policies and a permanent transfer policy.  However, over recent years companies have begun implementing a much wider array of mobility policies as their needs have changed and the approach employees take to international relocation has evolved, with many more seeing it as a good opportunity for career development. Consequently companies have many more approaches to global mobility than in the past and therefore input and clarity should be sought from the business as to how and why they are looking to move employees internationally.  Only then can you design appropriate policies to support this. Examples of additional policy-types include commuter assignments, talent development policies and “lite” and “plus” versions of the more traditional relocation types.

  1. Have you considered how you are going to manage the three Cs?  Capacity, capability and cost. 

Organisations generally want to offer their employees a comprehensive range of policy provisions when they relocate overseas to make the move attractive and to support their talent.  However, the three Cs need to be comprehensively considered before having any policies approved, as ignoring these can lead to policies being difficult to implement in practice.  Ensure that those responsible for international relocations within your team have capacity to administer the policy in addition to any other responsibilities they may have.  See what additional training and support may be required for them to fill any gaps in global mobility knowledge that could lead to compliance risks or inefficient planning of assignments.  Finally, run some cost estimates based on hypothetical scenarios so that the business knows how and what they may need to budget for prior to buying-in to the policies.

  1. Consider tax compliance matters and opportunities for effective tax planning

Assignment provisions are generally delivered to employees in a variety of ways.  It may be that some benefits are delivered as cash allowances via payroll (gross or net of tax), some are paid directly to third party suppliers and some are to be reclaimed by the employee via expenses.  By outlining how relocation support is to be delivered and paid for in your policies, you are helping the employee and stakeholders in the business (e.g. payroll, finance and internal tax teams) to take the appropriate action to ensure that the costs and taxes are delivered and tracked for tax year-end compliance activities, as well as for internal budgeting purposes.  Developing a process by which you can track total assignment cost is key. It supports the wider tax compliance work you may be engaging a third party tax advisor to help with.  If you apply a tax equalisation methodology you should detail the terms of this either in your main policy document as an appendix, or, more commonly, as a separate policy document.  From a corporate tax perspective, there are permanent establishment considerations that need to be factored in to how international assignments are structured.

  1. Consider employment law matters for the validity of your assignment documentation.

Obtaining input to global mobility policies and accompanying documentation from an employment law perspective is key to ensuring that the terms of an assignment are valid and enforceable.I often see documentation that states that the home country employment law will govern the assignment, but in reality this is not always going to be the case, for example, some host locations have statutory legislation that covers anyone working in that jurisdiction, including assignees.It is important to review wording in your policy about applicable laws to ensure it is appropriate for the country combinations you see in your programme.

  1. Look at how a new global mobility policy fits with other HR policies currently in place.

Consider whether they share the same structure, format and terminology if appropriate.It is important to assign a policy owner and how often it should be reviewed.

  1. Read your new policy from an employee’s perspective.

Do the terms make sense?Are there any acronyms that require a definition?Employees new to global mobility should be able to understand all of the terms in a global mobility policy.

  1. You should consider a review of how you educate line management on the implications of an assignment choice and help them understand what policy alternatives they have at their disposal.  I often prepare a policy ‘decision tree’ for line managers, along with a one-page summary document (per policy) which managers can utilise to effectively select the appropriate policy based on their business rational and budget for the assignment.

In summary, there are a number of considerations when reviewing a global mobility policy or developing one from scratch. The most important fall in to three main categories: deciding which relocation provisions to offer, determining any compliance considerations necessary in order for them to be enforceable and checking that the policy will work from an operational perspective.

If you would like to discuss any of the above or require support to develop your global mobility policies, please get in touch.

The author

Bina Gayadien
Partner
International Assignments
Global Mobility
D: +44 (0) 207 036 8383
T: +44 (0) 203 051 5711
F: +44 (0) 203 051 5712

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