We currently have a black swan moment that comes with a massive loss of predictability and control.
No surprise that travel restrictions and social distancing measures have especially impacted Talent Mobility programmes around the world.
They do not only face challenges to which answers need to be found, but also some new dilemmas that are not easy to resolve.
My constant interaction and recent discussions with players in the Talent Mobility market, but especially a virtual networking session with the Heads of Mobility of the Swiss SMI (Swiss Market Index) companies on April 3rd 2020, gave my some valuable insights worth sharing, that might help you to prepare yourself for decisions to be made and give you more confidence and comfort on decisions you already took.
You will also learn about some new perspectives around some current dilemmas for Talent Mobility.
Finally we will look on what the current crisis likely means in the long run, when it comes hopefully soon to an end.
There are basically no differences between industries (all are effected in the same way) with the exception of the so-called system-relevant industries, such as pharma, medical supplies, food and supply chain etc.. While for them some exceptions from the travel restrictions are available, they are also far from business as usual.
Different mobile employee groups at different stages of their travel or relocations were impacted by the wide-spread travel bans and immigration restrictions.
The issues arose mainly in the following cases:
- Postponed or cancelled assignments
- Foreign local hires
- Stranded Business travelers
- Cross-border workforce / daily commuters
- Home office abroad employees
It is interesting to see, that currently Talent Mobility is getting involved in situations that they did not necessarily deal with before, such as home office situations of local employees, daily commuters and business travelers.
HR is turning to Mobility to find answers to their questions in this situation.
Talent Mobility challenges
Let’s look at some of the challenges encountered with these employee groups:
- Compliance: taxation, social security, immigration (border closures), permanent establishment risk and medical support and insurance (duty of care)
- The early repatriation of assignees, while there are travel restrictions and lack of flights pose a challenge. Though one that most have already accomplished by now.
- Especially in Europe you will face situations where the employees choose to work from a home office in another country, maybe their home country, but sometimes also from their holiday homes abroad. The first task is to identify these cases, because when they simply work online it is not apparent for their employer where they work from. The awareness for the accompanying compliance issues (see list above) of such virtual work from abroad is very low among the business and employees and currently not on top of their agenda. It becomes the role of Talent Mobility to inform and advise the business and effected employees about the consequences and to develop approaches to deal with it.
- Stranded business travelers, who could not return to their home country before travel restrictions came into place, create compliance worries about tax, social security, medical insurance and even immigration and permanent establishment issues.
- A subsequent challenge is the question if employees who chose to work in another country from their home office or business travelers who stranded abroad should be tax equalized or protected. The majority of companies I spoke with choose not to tax equalize or tax protect. But a case by case assessment and exceptions are likely needed depending on the duration of the current situation.
- Is it possible to bring in foreign local hires with closed borders? How would an employee on-boarding of them take place, when they would start in a home office, potentially even in their home country? What would be the compliance consequences? Think taxation and medical insurance e.g..For this case, leading practice is to discuss with your recruiting function or HR leadership, what their crisis strategy is towards recruiting and to follow their advice.
- In the case of cancelled assignments, the assignees may already have terminated their home housing and else and support should be provided for them. Also all preparations and temporary apartment bookings and provider initiations in the destination need to be taken care of.
- Some assignees are stuck in temporary housing and cannot move into their new homes, due to the current restrictions. Companies need to look to avoid costs by looking into the postponement of leases.
- A lot of countries have started to pass new legislation with new regulations on compliance that are considering the special situation of some cross-border situations. My personal favorite one is Portugal, where the government granted immediate residence status for foreigners stuck in the country to give them access to their health system. Especially immigration is an area of massive changes, where some countries have taken different measures to stop issuing visas and others differentiate the treatment of their daily cross-border workforce. Taxation and social security issues are as well already addressed by some states, but the situation is far from clear and evolving daily.
- This triggers for the Talent Mobility function a lot of case by case management, which makes it hard to use existing or creating new standardized processes. While Talent Mobility leaders are used to make many decisions on a daily basis, there is even more demanded from them while in crisis-mode.
One reasonable activity that is wide-spread is to obtain an overview and tracking of all cases that are currently in planned or unplanned cross-border situations. The tracking of all cases helps to generate an overview, which supports decisions and facilitates a more consistent treatment during a need for many case by case decisions.
In addition, the pandemic has highlighted some dilemmas that Talent Mobility faces. A dilemma is defined as situation in which difficult choices need to be made, which especially are often equally undesirable.
Talent Mobility dilemmas
The compliance dilemma
While more and more states pass new legislation for tax, immigration and social security to adapt to the extraordinary situation and to ease the compliance burden, the question is if compliance measures about e.g. taxability of stranded business travelers should be taken up or if one should hope for legislation to change. Most are tracking these cases and decide on a case by case basis which compliance cases are addressed and resolved with their compliance providers. So, the dilemma is to choose between a wait & see strategy or to follow (today’s) rules. Wait & see comes with the least effort and highest risk and following the rules comes with an admin effort and costs, especially when laws are passed down the line which make it necessary to revert some of these efforts.
The Repatriation dilemma
Decision making about repatriations has to consider business continuity, duty of care and especially the individual situation and preference of the assignee. Typically, their situation and preference trumps the other factors in a situation like the one we face. And when you have someone deciding not to repatriate, but to work from home in the destination country, you still face the duty of care requirements and the provision of medical support. Do you force employees for their own good versus the good of the company or do you bear the consequences of the employees choice and fulfill your duty of care and compliance requirements?
The local employee vs assignees dilemma
This is not necessary a new discussion, but it always gains prominence in crisis situations. Should during a crisis assignees be treated differently from the local workforce in the destination country? If we look back the at the Fukushima nuclear reactor disaster in Japan 2011, some companies were facing the choice of evacuating all their foreign assignees from Japan or to show solidarity with their local workforce. It should be clear that as an employer you have a duty of care responsibility towards all of your workforce.
Expectations about the future
In times where the planning horizon is clouded with uncertainty, it is probably best to rely only some careful hypothesis rather than assumptions how this may effect Talent Mobility after the crisis.
- The meaning of compliance for business travel likely became more clear to many during the crisis due to a lot off stranded business travelers (among them top management of some companies). This could mean that Talent Mobility programs that have so far shied off from taking business travel compliance responsibility, might have to start to deal with it after the crisis. Tracking of your cross-border employees will get more attention. This might become easier, because we can expect that the business travel volume will likely not to return immediately to pre-crisis levels (slow openings, economic / cost pressure, flight availability). One reason why it might never return to pre-crisis levels is how the workforce across all hierarchies is learning and getting used to the feasibility of virtual work.
- Business cases for assignments will potentially see more scrutiny from a cost perspective, but also project assignments, which could be potentially done by virtual teams, might be in decline.
- Keeping an eye on your providers and their economic situation. Some of the smaller providers might be harmed by the crisis and not in a position to deliver their services when everyone is ramping up their programs again.
- Assignee expectations for after the crisis will certainly focus more on evacuation and medical support benefits. When you already have them in place, its now the time to start communicating them better.
- The willingness of employees and their families to relocate might be compromised in some cases.
- When the above-mentioned challenges and dilemmas are addressed and less assignment initiations are happening, many will use the time to evaluate and implement technologies, work on their policies or business traveler programme – to the degree that this is feasible during the crisis. Technology demos have always been mostly a virtual affair. So the time gained by less assignment traffic could be used wisely to upgrade your program with technology.
If you ever asked yourself, what agility means, this is exactly what you need to practice in this situation. You face an unprecedented situation and have to deal with new challenges and dilemmas.
This is also an opportunity to demonstrate the strategic contribution of Talent Mobility to the business and a subsequently a chance to deal not only with the urgent and important tasks, but also the important and not urgent ones.
There is always a blessing in a challenging situation.
Be well, stay safe – and do what’s in your hands that the assignees and employees you are dealing with will also stay safe.
Wishing you my best.