This article is based on predictions that professionals from KPMG firms’ Global Mobility Services (GMS) practices from around the world have made in relation to how global mobility function may evolve in the years to come. By their very nature as predictions, they are not intended to provide any guarantees to future outcomes.
As organizations move into the recovery stage of the pandemic, new demands on global talent mobility teams are ramping up. Employees want more flexible remote work options. Technology and virtual work are influencing new talent mobility options. Tax and regulatory risks from business travel are rising as governments and societies demand more data and accountability about a business’s activities and contributions. Companies are looking to reduce costs, go digital and refocus their teams on delivering value.
Amid the disruption and uncertainty of recent times, it may be difficult to know how these demands are influencing the corporate global mobility functions of tomorrow. The following are 10 predictions on how global mobility functions may evolve over the next few years.
After the initial shock of the pandemic-driven shift to working from home offices, many knowledge workers found that they prefer remote work and many businesses were surprised at its success in maintaining continuity and productivity. As the pandemic wore on, work-from-anywhere arrangements allowed many city-dwelling workers to move further way from their employers’ locations, both within their home countries and, for some, internationally. It’s widely predicted that many workers, especially those in professional services, will still favor working remotely at least part of the time as local restrictions ease and businesses are opening their doors again. According to the 2021 KPMG CEO Outlook survey, CEOs are focused on providing increased flexibility for their workforce. Global executives are looking to implement a hybrid working model for their staff with 51 percent of CEOS investing in shared workspaces and 37 percent looking to have most employees working remotely at least two or more days a week.
This trend may present significant challenges for global talent mobility and HR teams as they work to keep their talent satisfied and productive, while also managing global tax, social security, immigration, and other regulatory compliance issues that remote work brings. For example, when an employee works some or all the time in a different international jurisdiction than that of their employer, risks can arise for the employee due to tax residency rules for individuals, as well as income tax and payroll reporting requirements. Employers can face tax obligations stemming from corporate permanent establishment determinations, transfer pricing policies and corporate residency rules.
In the US, these risks can also arise at the state level. For example, state tax and payroll reporting obligations can arise if an employee works in a different state from their employer. While these risks are not new, they may multiply as more employees opt for remote working options and these arrangements become a point of negotiation with potential recruits. If a company decides to continue with some level of remote workforce, global talent mobility teams will need to establish clear policies with firm guardrails to determine employee eligibility, manage the risks arising from employee movements (often supported through technology), as well as implement mechanisms to document for authorities and other stakeholders that employees adhere to these policies in practice under compliant remote work arrangements.
In addition to the compliance considerations, companies with work-from-anywhere programs are solving other issues. Most people have experienced how important ‘watercooler’ interactions with co-workers are. These random meetings often serve as an informal exchange of ideas and exchange of information. How can these interactions happen in a virtual environment? And while it’s great to gain some extra time by not commuting, people are social creatures who depends on social and in-person interaction for their well-being. These and other topics will need to be looked at and resolved to make “working from anywhere” a successful tool for talent acquisition, employee engagement and productivity, and retention.
Manager, Global Mobility Services
KPMG in Germany
Over the past several years, evolving business models and the war for talent have led to the development of an array of new talent mobility types. Pandemic-related complications have led to more innovation and more reliance on some of these options as organizations sought to accommodate diverse talent needs through various types of work opportunities abroad.
As borders reopen and lockdowns ease, we fully expect business travel to resume, albeit with less frequency and shorter trips. It would be difficult to match the level of intercultural and global business skills development, team building, networking and cross-pollination of ideas that comes with in-person interaction over time. For global organizations, curtailing mobility could hamper efforts to recruit talent, especially among younger generations who may be more mobile and aspire to obtain international work experience as part of their careers. Further, it could deny opportunities for organizations to improve the overall diversity and social consciousness of their workforces through the cultural immersion of employees living and working in foreign locales.
As employees get better at working virtually, staffing models will become less local and more projects will be completed with a mix of in-person and virtual collaboration. For example, rather than sending a subject matter expert from New York to London for a six-month project, that person could take part through a couple of shorter business trips and contribute remotely for the rest of the time.
As with work-from-anywhere arrangements, mobility teams will need to establish clear policies and processes for governing and administering all the various business travel alternatives. This enhanced structure is needed to manage the tax and other compliance risks that can arise from extended business trips. It is also important for ensuring that business travel programs are in line with the company’s corporate and HR talent strategies, and that different employee groups are treated consistently and equitably.
Where talent mobility is concerned, we expect many companies to broaden their programs to include more diverse arrangements like virtual/in-person hybrids, extended business trips (e.g. three months), short-term international assignments (e.g. less than one year), indefinite country-to-country transfers and cross-border commuting arrangements.
According to the 2021 KPMG Global Assignment Policies and Practices (GAPP) Survey report, 22 percent of respondents said they expect the use of their policy for long-term international assignments (i.e. one to five years) would decrease over the next five years, while 37 percent expect their policy on these assignments to remain unchanged. In contrast, 67 percent expect to see an increase in assignments under 12 months, and 42 percent expect an increase in commuter arrangements (both fly-in fly-out and cross-border).
Senior Manager, Global Mobility Services
KPMG in the US
As the risks of climate change have grown more apparent, the past few years have seen rising consensus globally over the situation’s urgency — across businesses, governments, and communities. While the COVID-19 pandemic took center stage temporarily, many governments are expected to encourage recovery and growth through measures to encourage a greener, more sustainable economy. This is promoting a movement toward greater ESG across global companies, and global talent mobility teams may be called on to contribute positively to improved company performance on ESG goals.
As has been seen, Diversity, Equity and Inclusion (DEI) is one dimension of ESG where global talent mobility teams can make a difference, for example, by opening global work opportunities to broader candidate pools and understanding the unique supports that diverse international assignee talent may need.
Contributing to good governance is also vital for global talent mobility teams. As business travel returns and varied talent mobility types evolve, companies need to have clear, well-communicated policies for managing their mounting tax, regulatory and financial risks, as well as systems and processes for monitoring and reporting on their ESG effectiveness to internal stakeholders and external authorities.
These mobility policies can also help guide better environmental performance, for example, by bringing attention to reducing or offsetting the carbon footprints of business travelers and international assignees. These policies could involve:
- Setting guidelines for determining when virtual meetings are preferred over in-person meetings that require travel.
- Enabling virtual secondments, where the work is done remotely from the employee’s home location.
- Supporting longer-term business travel, where an employee stays in a host location for a longer term instead of more frequent trips back and forth to get a project done.
- Calculating employee carbon footprints and including carbon offsets in global talent mobility policies and practices.
There is pent-up demand for international moves that have been paused due to COVID-19 and companies are now restarting international moves and business trips. However, they are more carefully considering the risks and consequences and taking steps to monitor and control employee mobility, as well as actively manage compliance obligations and ESG implications.
In a KPMG survey on ESG Considerations for Global Mobility and Reward Programs, nearly half of the respondents said their sustainability agenda would affect their return to business travel and about 40 percent of respondents expect to implement a new approach to sustainable travel after the pandemic. Some respondents also said ESG considerations may lead their companies to become more selective about international assignments, and some said they intend to source more talent locally.
As the focus on ESG performance intensifies, global talent mobility teams will need to bring a new mindset toward aligning their programs and operating models in ways that help make their companies more sustainable, socially responsible, and accountable.
Head of Global Mobility Services
Just as lockdowns and stay-at-home orders spurred the move to remote work, these measures also interrupted many international assignments that were planned or in progress when the pandemic began.
As COVID-19 infection rates fluctuated from one country to another, some international assignees were given the option to return home or stay at their host country location or temporarily move to another country to continue their assignments remotely.
In concept, conducting cross-border assignments virtually has some obvious advantages in reducing the administration and disruption involved in a temporary international move, as well as eliminating the need for relocation support and ongoing housing and living allowances.
Employees have become used to utilizing technology to effectively work cross-team without the need for in-person meetings. In the future, if a comparable business objective can be achieved without sending an employee abroad, companies could lean toward a virtual assignment option rather than a traditional expat assignment, as it could be significantly cheaper to administer.
Virtual assignments still create some notable tax and compliance obligations, and while this area continues to evolve, there is a heightened risk of unforeseen tax liabilities and non-compliance. Immigration and labor laws, corporate tax risks, employee cost charging, and payroll reporting obligations also need to be addressed.
As certainty increases in travel and organizations become more experienced in leveraging virtual assignments, the creation and application of a clear and comprehensive policy to structure such arrangements and mitigate the related risks will be vital.
While virtual assignments are likely here to stay, there are experiential and intangible benefits of physical international assignments/transfers which a virtual assignment will never replicate. As a result, we expect virtual assignments will simply be an additional armament for organizations to leverage in the war for talent.
Director, People Services
With increasingly mobile, virtually connected workforces creating risk in areas such as tax, social security, immigration, and employment laws, managing compliance will be even more challenging and the stakes will be higher for organizations to ensure global compliance.
During the pandemic, many tax authorities took a lenient approach to residency and other tax issues created by remote workers. As governments turn their attention to the recovery and restoring their treasuries, tax authorities may well enhance their approach to compliance, especially as temporary emergency remote work situations evolve into more formal arrangements. It’s also possible that tax authorities could introduce new tax reporting rules to deal directly with organizations and employees in remote work situations.
In addition to financial risks, non-compliance could bear more reputational risk. In the years before 2020, social attitudes toward tax responsibility were already changing, with rising calls for companies to be more transparent about their tax strategies. After the pandemic, we expect there will be even more scrutiny of how companies manage their tax obligations and the extent of their contributions to the communities they operate in.
During the recovery and beyond, it will be crucial for talent mobility teams to monitor the local laws and keep up with any changes in their interpretation by tax and other regulatory authorities. They can then help their companies understand the compliance risks and set clear policies for employee movements, supported with clear guidance on the dos and don’ts for avoiding exposures.
National Principal-in-Charge, Global Mobility Services
KPMG in the US
As global talent mobility teams confront rising complexity and risk, they also face demands from their own management, finance departments, business units, tax authorities, and other regulators — all requesting more information with tighter turnaround times. This new reality requires a future-focused approach to managing both internal risks across the organization and external risks from local, domestic, and international regulators. To do so, more and more companies are looking to advancing technology to provide a comprehensive data management solution that acts as a 'single source of truth' that spans the whole spectrum of mobility.
As part of this focus on digital transformation, many global talent mobility teams are evaluating how to bring further innovations to their business models and how technology can augment their human workforce and expand mobility’s strategic abilities. According to the results of KPMG’s GAPP Survey report, participants are particularly interested in solutions for automating assignment initiations, producing assignment cost projections, and creating assignment documents.
Introducing artificial intelligence and robotics for repetitive tasks can bring in more efficiency and reduce operating costs. More importantly, it can also help shift mobility teams to higher value tasks, providing more rewarding challenges and helping with employee retention. Mobility teams can also use automation to speed up administrative and transactional processes and to deliver a better experience for assignees and employees who are training, onboarding, and collaborating with colleagues in other locations.
However, KPMG’s 2021 GAPP Survey report also shows that many mobility teams are not yet realizing the benefits of these advances. Sixty-three percent of respondents said their global talent mobility teams do not have a strategic vision for automation and robotics, while 65 percent are not using automation to streamline portions of the global mobility process.
Regardless, technology is leading the way. KPMG predicts that within five years, global talent mobility teams will focus more on supporting higher value talent mobility objectives, including development and retention objectives across employment lifecycles versus administrative processes and transactions that will benefit from increased automation and artificial intelligence.
Frederic Le Gall
Global Mobility Services Partner, Head of Technology
KPMG in Switzerland
As companies invest in digital transformation, they can gain easier access to higher-quality data across the organization. In fact, global mobility sits at a unique crossroads within the organization, bridging HR, finance, and tax. Therefore, global mobility often has access to a more complete data than other parts of the business. For global mobility, this rich mine of current and historical data can enable powerful predictive workforce analytics to support program success and measure assignee experiences. This helps enable evidence-based decisions and ensure that global mobility, talent, and human capital are aligned with broader organizational goals.
Thirty-two percent of KPMG’s 2021 GAPP Survey respondents reported that they are using analytics to guide their global mobility policy and decision-making. Supporting the strategic partnership between global mobility and the business is the primary value that participants believe mobility analytics can bring to the organization, while also providing a foundation for policy and process decisions. Of the various mobility analytics metrics, assignment costs (91 percent), employee satisfaction (64 percent) and budget versus actual costs (62 percent) are the top three metrics (operational or assignment related) that respondents believe bring the most value to internal stakeholders currently.
As digital transformation continues and mobility teams grow more adept in their use of analytic techniques to predict wider patterns, trends, and irregularities, we believe they will be able to contribute significantly more value by delivering strategic insights into areas such as:
- Operational effectiveness across multiple business units
- Assignment spend, cost control and budgeting
- Root cause analysis of rising costs
- Employee attrition statistics and outliers (for both internal and assignee-based analytics)
- Post-repatriation retention and attrition
- Business traveler and equity compensation exposure analysis
- Career mobility and business unit success
These types of insights can promote higher-quality, strategic business decisions and help elevate the profile of global mobility teams across organizations as strategic business partners who create value.
Senior Manager, Global Mobility Services
KPMG in the US
Many global organizations are pursuing strategies to improve employee DEI. We expect global mobility teams will provide increasing support in this area given their shared objectives. DEI and mobility leaders are each looking to attract the best talent and critical new skills for the future; fill talent gaps temporarily or permanently; and provide innovative opportunities to engage, develop and retain their most valuable employees.
DEI provides equal opportunities for all employees and promotes acceptance, understanding and the value of enabling the best organization for everyone. A formal DEI initiative embedded in an organization’s values and culture can also create an innovative, productive environment that’s better positioned to meet organizational goals. Diverse workplaces produce diverse thinking, ideas, and skills – all of which are crucial in an environment of disruption, uncertainty, and opportunity.
Where global mobility is concerned, companies have much to gain by aligning mobility programs with their DEI agenda. With strategies that address both mobility and broader talent management needs, mobility teams can help turn challenges into talent and business development opportunities. Competitive advantages can be achieved, for example, by reviewing program demographics, designing strategies for broader talent pools, and creating broader educational and communication plans for audience expansion and penetration.
Diversifying global mobility policies and programs for wider applications can help keep key DEI objectives front and center. Seeking out and valuing diversity in all its forms can help ensure that all talents are utilized and aligned with the organization’s talent, culture, brand and business development goals, with the aim of creating an organization that embraces the full spectrum and power of diversity.
Some leading practices for embedding DEI into global mobility programs include:
- Linking the company’s general recruitment strategy to the selection of prospective global mobility candidates
- Using diverse candidate slates for international assignments
- Visibly targeting diverse groups for international assignment opportunities, including women, racial and ethnic minorities, and LGBTQ candidates
- Factoring in more lead times for diverse talent assignees, as they may require more time for pre-assignment activities
The clear overlap between DEI and global mobility creates strong synergies for formally aligning international assignment programs with the broader DEI agenda. Global mobility leaders can contribute significant insights, knowledge and experience in mobilizing and supporting the growth, development, and retention of a diverse pool of talent.
Partner, Global Mobility Services
KPMG in the US
Companies are taking a more purposeful approach to mobilizing talent globally by strengthening the connections between talent management and talent mobility. Even during 2021, 93 percent of 2021 KPMG GAPP Survey participants still ranked supporting overall business and talent development objectives as a top program goal for their international assignments.
In a world where employees can be hired from and work anywhere, attracting and retaining the right people will be more important than ever. Before the rise of remote work, it was a well-known fact that being able to retain people that build the organizational culture and focus on employee morale promoted retention and organizational growth. As virtual working practices are becoming more prominent, increased training on emotional intelligence (EQ) and building virtual teams will be top of mind for many organizations. Being able to identify and measure these skills in the performance management process and determining their value in compensation discussions will be important for business success.
In addition to EQ and team building, trust in the virtual work environment is going to be more important than ever. Managerial styles and approaches will need to be assessed and measured, with mechanisms for upward feedback becoming increasingly more important. Knowing you are hiring and retaining employees and leaders that you can trust with the professional development and emotional well-being of their teams will be a primary talent management objective.
As both talent management and global mobility become leaner, more strategic, and more aligned with broader organizational strategy, their talent planning and workforce building activities will become more integrated. Uniting the two teams within a comprehensive “talent mobility” function may be the logical next step. By joining forces, the new team can be better placed to view talent through a global lens and to collaborate on building the best possible experience for their employees while delivering value and maintaining global compliance.
Partner, Global Mobility Services
KPMG in the UK
With fewer traditional relocations, more assignment flexibility and an emphasis on cost savings, many companies may look to outsource more of their global mobility and payroll programs. As business travel and international assignments return, this could be especially true for companies that were forced to downsize their internal teams for the pandemic’s duration.
KPMG predicts a greater focus on talent, not transactions. Fast-moving companies do not want to be bogged down in transactions and typically outsource high-volume complex transactions like tax, payroll, compensation, equity, and business traveler activity so they can focus on providing a superb employee experience, participate in talent planning and workforce shaping with HR, and demonstrate a return on investment for the company on mobility spend.
In fact, one of the key benefits of managed services is the ability to rely on the provider to adjust resources up and down in pace with mobility service demands.
Other key reasons why companies may opt for managed services models include:
- Opportunities to streamline global mobility activities and tasks to achieve system and process efficiencies, often via technology enhancements available through third-party service providers
- Lower head counts
- Less need to invest in developing and maintaining homegrown mobility software solutions
- Improved processes that eliminate redundant efforts and enhance the use of technology interfaces between vendor and company systems
- Access to the global resources, leading practices, and proven know-how of the vendor organizations.
From immigration and logistical relocation support to compensation/payroll to assignee tax reimbursements and compliance, companies can choose to outsource some or all the tactical functions of global mobility while retaining ownership and accountability for the program. In KPMG’s 2021 GAPP Survey, tax preparation services (90 percent), immigration services (92 percent), and relocation management services (84 percent) were the activities most commonly outsourced to support mobility logistics and global compliance.
Along with the potential for securing greater program cost efficiencies, and faster and more consistent service delivery, engaging third-party providers can help create a more satisfying environment for leaner and more strategically-focused mobility teams, with less routine and more work that delivers challenge, variety and intellectual reward. Rather than spending time on day-to-day administration, talent mobility teams will be freed to play a more strategic role in supporting core business initiatives.
Principal, Global Mobility Services
KPMG in the US
In summary, companies and businesses may want to reimagine how they view their mobility and talent functions as they merge into nimble talent mobility teams in a complex environment rife with risk, compliance, and regulatory challenges. At the same time, we anticipate they’ll apply new processes, technologies, and skills to support the business with more efficiency and use data-driven insights to deliver value. Based on the transformations already seen in progress, we believe the future will see talent mobility functions that are digitized, leaner, more focused on talent, more inclusive, and more integrated as true strategic partners with the business.
Throughout this [document/film/release/website], “we”, “KPMG”, “us” and “our” refers to the global organization or to one or more of the member firms of KPMG International Limited (“KPMG International”), each of which is a separate legal entity.
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Head of Global Mobility Services,
KPMG International and Partner,
KPMG in the UK
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