In an era where companies are moving into new international markets and business locations, one of the challenges is streamlining their global mobility programs for maximum efficiency. Because of this, multinationals are looking for ways to outsource some aspects of placing employees on assignment, as a means to offer an integrated and high quality support system to their assignees.

What Does It Mean to Outsource Your Global Mobility Function?

Simply, outsourcing global mobility entails the use of third party services to take over one or more required tasks or responsibilities. These functions can include the HR, accounting and legal aspects of a foreign assignment. If outsourcing is not used, then in-house staff have to seek the resources on their own to support foreign assignments from beginning to end.

Outsourcing can be of benefit to both the employee on assignment as well as the company, and gives your global mobility program flexibility and access to experienced service providers. As global mobility programs expand and mature, reliance on seasoned outside resources may become a necessity for multinationals.

Methods of Outsourcing Global Mobility

When a company decides to outsource, their first step is to evaluate the areas where they do not have in-house resources or expertise. Those functions are the best to outsource since the alternative is to either hire new staff with the needed skill set, or go through an arduous research process to find the right resources.

For example, setting up a host country payroll can include the expense and time of establishing a local branch or subsidiary for full compliance. Outsourcing payroll would seem like a priority, yet according to one survey only 15% of companies choose this third-party solution. At the other end of the scale, outsourcing tax management is used 85% of the time.

Once the outsourced functions are identified, then third party services can be found to match the company’s outsourcing needs. There are firms that offer comprehensive outsourcing for assignments, or a more targeted strategy can be used for one or more mobility functions.

Which Elements Can Be Outsourced?

There are a few areas that lend themselves to outsourcing in global mobility, some of which may require resources and contacts in the country of destination.

Immigration Compliance: Work Permits and Visas

Facilitating all required visas for employees with local immigration authorities.

Payroll and Taxation in the Host Country

Using local payroll services for compliant withholding, reporting and tax payments.

Physical Relocation and Destination Services

Packing and moving personal and household goods from the home country to the host country. Arranging access to quality medical care, transportation and other services.

Home and School Searches

Arranging home and school selection according to the assignee’s needs and preferences, within an established budget.

Tax and Legal Advisors

Providing expertise by advisors with international experience in multiple countries.

Cultural and Language Training

Pre-departure training in the home country, and ongoing support while on assignment.

What Are the Reasons for a Company to Outsource Global Mobility?

The primary reasons to outsource in global mobility are 1) the need for assistance with the logistical complexity of an employee assignment and 2) a lack of expertise in host country regulations and compliance standards. Unless a company has legal and HR staff experienced in foreign placements, the use of local experts and resources is essential for compliance.

Benefits of Outsourcing

A company that outsources certain global mobility functions should find there are benefits to using third party providers. Those benefits can include:

Cost Savings

Although there is a fee for outsourcing, it will often be much more cost effective than a DIY approach of hiring staff to handle the relocation (assuming the expertise can be found). Using a GEO local employer record will save the expense and time of local incorporation and registration to run payroll and obtain work visas.

Compliance

Multinationals identify compliance as the number one challenge in global mobility. Having local resources is more important than ever given changing immigration and tax policies in many countries. Non-compliance can result in penalties and even loss of the right to do business in the country.

Allocation of Resources

Outsourcing global mobility functions allows a company to focus in-house resources on the business aspects of an assignment, and offer day to day management and HR support to assignees.

Resources for Outsourcing

There are companies that specialize in assisting with international relocations and employee assignments. They may be located in the home or host country, or operate from a regional office to support multiple clients. Outsourcing resources include:

Relocation and Moving Services

Language and Cultural Experts

Tax and Legal Specialists

All-in-one Outsourcing Services

Outsourcing Employment via an Employer of Record Service

The most complete outsourcing strategy in global mobility is the use of a GEO local employer of record service for assignees. Essentially, the GEO becomes the de facto local employer, handling all aspects of immigration, payroll and employment compliance on behalf of the client.

By engaging a GEO, the client will have the full support of a network of local partners that are knowledgeable in the host country’s rules and requirements for employment. This is an attractive alternative to the DIY approach requiring local incorporation and registration, and offers a quick and cost-effective means to deploy and support staff on assignment.

The GEO solution is ideal for small to mid-size companies without the resources to set up a local subsidiary, or any multinational that is exploring a new market’s business potential. In this way, there is no concern over non-compliance with local laws, and the client can be confident that employees on assignment are fully supported with in-country resources.

About Shield GEO

Shield GEO provides Employer of Record solutions in more than 90 countries around the world, ensuring legal compliance and rapid deployment of staff into any market for our corporate clients. We make international employment simple. To find out more about us, please get in touch.