The Transformation of the Mobility Landscape

The pandemic has impacted all of us. Businesses, societies, and economies worldwide have been hit hard, and as a result, countries have been forced to take significant measures to combat the virus. These measures included border closures, making international business travel nearly impossible.

The pandemic served as a catalyst for businesses worldwide, which had to react quickly in an agile and targeted manner. As a result, the priorities of advisors shifted to ensure that their clients were fully informed about available support measures, such as temporary unemployment benefits, and the actions they needed to take to maintain the well-being and resilience of their employees and the business. More specifically, with full-time remote working being new territory for many organizations, sharing strategic advice on adopting effective and sustainable remote work policies became an absolute priority.

Due to border closures and travel restrictions, projects were either prematurely interrupted, postponed, or simply never launched. In a context of ongoing uncertainty, many employees chose to work from their home countries, creating a multitude of risks for businesses, including taxation, social security, and labor law issues. As the pandemic progressed, the need to innovate and find new ways of working became increasingly critical.

For both employers and employees, digital technology provided a vital lifeline during this time, ensuring business continuity and allowing companies to remain cohesive and effective despite employees working from different locations. This geographic dispersion of teams led to new tax considerations for businesses, particularly the risk of creating a permanent establishment for the employer, as well as other tax payment and reporting obligations. As remote work is likely to persist in some form well beyond the pandemic, businesses will need to adapt their tax compliance, reporting, and HR policies to meet the needs of this new environment.

 

Reactivation and the New Norm

International mobility strategic projects will likely remain a priority for companies (for example, technical expertise may be required on-site or senior executives may be needed to lead key business transaction plans). However, more generally, the pandemic experience now provides businesses with a framework to assess the objectives of their global policies and governance. This includes analyzing mobility-related expenses, the types of options to offer employees (and the associated compensation), and the extent to which global objectives can be achieved through "virtual assignments" while travel restrictions are in place. This is an opportunity for global mobility teams to show that they can create additional value for the business, with some even considering designing a more virtual and flexible global workforce by moving work to people, rather than people to work.

In the post-Covid work environment, issues around immigration, taxation, law, and the ever-evolving regulations are forcing businesses to juggle a myriad of new rules, increased compliance, and growing complexity. In the immediate term, this may challenge the value of short-term assignments, as they may only be reserved for the development of key talent or immediate resource shortages.

So far, we have seen that, in these cases, companies have managed to adapt and successfully implement virtual assignments when travel is not easily feasible.

The long-term impact of the pandemic on international business travel and employee mobility remains uncertain, as circumstances continue to evolve rapidly. To stay agile, international mobility teams need to reflect on initiatives that will best attract and support the people the company needs to implement its global strategy. Progress-driven companies will need to adopt a flexible mindset and adapt to change by rethinking contemporary talent strategies and adjusting operational models accordingly. Naturally, the right approach is unique to each organization, and strategies will depend on location, the nature of the business, and the scope of global projects. It is essential that mobility teams proactively prepare, through scenario planning, for new waves of the virus and, subsequently, for additional lockdown periods.

Despite the many challenges that businesses and their employees have faced over the last 16 months, we believe that global mobility and international employee travel are here to stay, and they remain essential for businesses seeking to grow and expand globally. With this in mind, companies must continue to focus on the talent selection and management process for international assignments. A successful global mobility policy will provide significant added value by clarifying the assignment structure, compensation, career opportunities, and roles and responsibilities. With the spotlight on recent legislative and regulatory measures, particularly in the areas of data protection and mandatory disclosures, businesses will need to develop appropriate procedures and documentation for their international assignees. The establishment of proper policies and procedures will demonstrate an organization’s commitment to prioritizing its employees, who are its most valuable asset.

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