Today’s global market is challenging talent mobility experts to deliver a trend-driven trio: risk mitigation, the right talent and mobile tools.
At the dawn of the 21st century, the term globalization was used to describe the tearing down of national and organizational borders to create truly global enterprises. Today, this sea change in business is evident in many large companies, with their multicultural workforces stretching across the globe, traveling constantly, and increasingly spending more of their time in far-off outposts on key assignments.
In this environment, talent relocation has become strategic-the organization that best deploys the right talent in the right place over the right period of time gains a competitive edge. This strategic imperative is resulting in several key trends that are reshaping the services provided by global talent mobility firms. Such trends include:
- Greater attention given an employee’s suitability for a relocation assignment to a particular country over a specific span of time
- Stricter adherence to global tax, immigration, and data privacy regulations
- Increased mobility tools provided transferees
The latter two trends, in particular, are evident in the strategic relocation goals at one of the world’s largest global companies, Express Scripts, a pharmacy benefit management organization with more than $104 billion in revenue in 2013.
“We serve one out of every three Americans’ prescription needs, which makes us especially concerned about data security,” says Hazel Cormier, senior manager of talent acquisition at St. Louis-based Express Scripts. “We process 1.3 billion prescriptions a year, and with prescriptions come the person’s medical information, social security number, address, and health history. We need to be absolutely sure that our talent relocation provider-all our vendors really-have the same stringent data security protocols in place that we do. A company’s data security is only as strong as its weakest link.”
Express Script’s global mobility services provider is Rancho Santa Margarita, Calif.-based Paragon Relocation. Paragon’s President Craig Selders agrees that more clients and prospective customers seek greater assurance that their employees’ personally identifiable information is locked up and safe when they are on the move.
“The relocation process creates tremendous data security risks,” Selders explains. “When an employee is relocating, the provider is given a good deal of that person’s personal and private information. This information has to be secured, and the client needs to be confident that the data is, in fact, secured. They confront a huge number of stringent privacy laws across the world-many of them different from the others.”
When employee personal, private information is lost or stolen, the employer risks stiff regulatory fines and penalties, in addition to potentially severe reputational damage. In recent months, several well-known companies have been victims of large-scale hackings that exposed the personally identifiable information of tens of millions of consumers. Each day, this lest gets longer-Home Depot, Dairy Queen, Staples, Michael’s, Target, and Kmart joining the many other retailers hacked before them. Even major banks like JPMorgan Chase & Co. have been victims of a recent hacking, in its case one that touched more than 83 million households and businesses.
For healthcare businesses like Express Scripts, the risk of data theft is especially large. According to a March 2014 study by the Ponemon Institute, criminal cyber attacks on healthcare systems have risen a startling 100 percent since 2010. Small wonder companies are asking their relocation services provider about the scope and breadth of their data security.
“They want to be absolutely sure that our data protection standards and practices are world class,” Selders says. “Just one employee’s move touches numerous suppliers like mortgage companies and transport firms, each of them also vulnerable to an attack. A lot of this information also is exchanged among the involved parties.” To limit risk, Paragon Relocation encrypts all data and stores it in a proprietary warehouse. The company also rigorously manages the data flow among the different providers and ensures that these partnering organizations’ security measures are on par with its own.
“Clients don’t want data in the cloud unless it is in our cloud,” Selders says.
Immigration & Taxes
Regulatory compliance is not confined to data security, of course. Every country has its own rules with regard to immigration and taxation. “It is essential that both corporations and individuals are fully aware of the unique process and implications for an international assignment, especially with relocation alternatives, such as frequent business travelers, on the rise,” explains Linda Smith, chief commercial officer at SIRVA. “SIRVA is focused on providing the expertise and resources to manage the employee experience and help simplify compliance from the initial candidate assessment through repatriation. Managing the process closely allows all parties to appropriately prepare for immigration and tax matters in a way that makes sense for them.”
An employee on a relocation assignment that extends beyond a certain period of time may be considered a domiciled worker for tax purposes, whereas someone conducting work for a month or two in a country would not be in the same regulatory cross-hairs. “Every region globally has its own distinct policies with regard to what is a long-term employee relocation, an extended business trip, or shorter-term locational project work,” says Cecilia Franchi, director of global strategic consulting at MSI. “The problem in many businesses is the lack of a centralized system capturing who is where, what the purpose of their stay is, and what the host countries’ tax and immigration regulations are with respect to the length of stay.”
In the past, many countries’ regulatory authorities were unprepared to document the length of employee stays or had lax enforcement of tax laws. This is no longer the case, Franchi contends. “The rules may be all over the place, but one factor is consistent across countries-all countries all looking for sources of income,” she says. “If you violate immigration or tax reporting laws, you can expose your company to steep penalties and even be barred from doing business in the region.”
Joy Gulik, senior client service manager at Xerox Relocation and Assignment Services, agrees that countries are becoming more adept and proficient at ferreting out tax and immigration abuses. “Prior to 9/11, many countries’ immigration systems really didn’t communicate much with other government bodies; they just looked to see when someone came into the country and didn’t really have a clue as to when they left,” she says. “Now with many governments trying to drive more revenue from taxes, government agencies are talking with each other. They want to know why this foreign employee who has been in the country for more than a year hasn’t paid a single cent of tax. Then, they go to the deep pockets-the person’s employer.”
Gulik concurred that there has been a definite uptick in enforcement. “No matter where you go these days, there will be some extra tax to pay,” she explains. “The key is to be able to track the hundreds of employees that are constantly traveling and in the process of relocation. For example, an employee may be sent on a relatively short-term overseas assignment, and then that assignment is extended to the point where it creates a tax liability. Knowing when they left, where they went, if they are triggering a tax liability, and other red flags is what a good talent mobility provider must be able to do.”
Not Every Employee is Right for Relocation
As the benefits of globalization engage more and more companies, an increase in the volume of employees who are relocated is anticipated. The 2014 Workforce Mobility Survey by Weichert Workforce Mobility affirms this likelihood, finding that 92 percent of companies expect their relocation volume to increase or remain steady through the next year.
As organizations continually move their employees here and there, they need to understand that not everyone is right for every relocation assignment. “There is perhaps no more important step in the relocation process than the candidate assessment,” says Smith. “In our experience, getting involved early to help companies and individuals determine fit and preparedness increases the likelihood of a successful international assignment.”
Having an overall picture that goes beyond professional qualifications is essential. “Businesses have a tendency to look at one thing when relocating an employee-the employee’s professional credentials and technical skills,” Franchi says. “The company needs a chemist or a scientist in a certain location for a particular duration, and takes nothing else into consideration. But, not everyone has the ability to adapt to a different culture.”
Responding to this risk, MSI ahs developed a set of relocation candidate assessment tools that are customized to each client’s needs and budget. The provider follows up the assessment with in-person interviews with the assignee, and in many cases his or her family, asking questions about cross-cultural adaptability, work-life balance and flexibility, and family concerns and issues. MSI then presents its in-depth analysis to the customer’s HR leaders. “We leave it up to the comp[any to determine what’s best,” Franchi says.
Gulik from Xerox Relocation and Assignment Services presented another approach to selecting the right employee for the right relocation-a multigenerational and multicultural global talent mobility department. “It helps to have people the same age and/or from the same region of the world where the talent is going to be deployed to as a means of determining who is best suited for an assignment in a particular region,” she says.
She makes a good point, as the relocation needs of a Gen X transferee are likely to differ from those of a Millennial generation transferee. A Gen X employee, for instance, is apt to have a spouse and children and thus a desire for a house in a suburb with good schools. A Millennial, on the other hand, is probably single and looking for an apartment in a more exciting urban environment. The same desire might even be said of an empty-nesting baby boomer. Relocate each of these generations to the wrong environment and it could backfire in reduced worker productivity and a failed transfer.
To help clients in making these decisions, MSI’s own team is demographically and ethnically diverse. “It assists us perceive potential conflicts before they crop up,” Franchi says. “The goal of talent relocation always is to have the right skill sets in the right place, but the right place may be different for each transferee.”
Global talent mobility increasingly involves another type of mobility-mobile technology tools. Selders from Paragon Relocation cites the increase use of mobile applications by client employees. “People today, particularly those in the Millennial generation, expect technological proficiency from their employers,” he explains. “They don’t want to be physically signing paper documents or fielding phone calls with mortgage brokers, transit companies, and all the other vendors involved in the relocation process. They want to simply text or click.”
And they want to do it on their own time. “The ‘anywhere, anytime’ convenience of the SIRVA Connect digital platform puts companies and employees in touch with all the tools and resources they need to enhance the relocation experience,” says Smith.
Cormier from Express Scripts agrees. “We need our transferees to be able to do a lot of self-service, using their mobile devices to access reports, click here and there, and not have to always pick up the phone to ask me or Paragon what their year-to-date spend was, for instance,” she says.
Among the mobile applications assisting these needs are e-signature solutions. Paragon recently added this functionality to simplify the signing of multiple contracts. I also recently added an expense-processing tool to the solution obviating the need to collect and send paper expense receipts to accounts payable. “The transferee clicks on the app, takes a picture of the receipt, and thern all the rest happens in the background,” Selders says.
These various movements are combining to create yet another trend-a seat at the HR strategy table for relocation specialists. “Talent mobility has always been a pressure on the bottom line,” says Franchi. “The costs add up quickly and the benefits are hard to discern. This is why it is vital to partner with a provider that understands the strategic value of aligning mobility to your specific global business needs.”