Global Mobility: Threat or Opportunity?

Global workforce mobility is no longer a future concept but a reality of the modern world. Companies are increasingly adopting new work formats, moving away from traditional business schemes.

To establish an efficient project management structure, team members no longer need to reside in the same city or country. In fact, they don’t even need to permanently reside in one location. Now, the skills, experience, and qualifications of personnel are the primary considerations.

This shift is not exclusive to large corporations. Even members of small mobile teams can easily work from different corners of the globe based on personal, rather than corporate, reasons. In other words, we have entered an era where companies can choose employees from around the world, and employees can choose employers of their preference.

The catalyst for transitioning to global teamwork was the pandemic period, which clearly demonstrated that the quality of work for many teams not only did not decline but often improved with the shift to remote work. Additionally, the number of “digital nomads” has increased in recent years due to political and economic factors.

The world has come to realize that freedom in life and movement holds significant value for many modern individuals. The new working conditions allow employees not only to travel and explore new countries and continents but also to pursue further education, consider their family’s interests, participate in local cultural projects worldwide, and choose countries with higher quality of life or lower costs and tax rates.

Moreover, talented individuals with limited opportunities and residents of regions that were previously unable to be part of international teams or major projects have now become full-fledged participants in the global labor market, where abilities, experience, and professionalism are the sole criteria for success.

WHAT IT MEANS FOR EMPLOYERS

For owners and managers of teams and business projects, the development of global workforce mobility signifies the opportunity to accumulate talent from around the world to meet their needs.

Here are the additional benefits that a company can gain by embracing new horizons in personnel management:

• New possibilities for attracting and retaining employees;
• Hiring employees from any part of the world;
• Flexible management of salary budgets;
• Access to top-notch talent for projects;
• Addressing labor shortages in specific industries;
• Facilitating the professional growth of employees;
• Rapid development of project teams;
• Increased employee engagement;
• Swift entry into new markets;
• Promoting gender equality and reducing the gender pay gap.

Furthermore, with the new approach to management, leaders themselves are no longer tied to the office, city, or even country. The company’s headquarters can be established anywhere, and the entire document workflow can be managed remotely.

RISKS OF MANAGING GLOBAL TEAMS

The significant opportunities of transitioning to managing global teams are accompanied by complexities and risks that employers undertake in this new situation.

To effectively manage a dispersed workforce across the globe, it is necessary to have a deep understanding of the legislation and intricacies of tax regulations in each country, knowledge of immigration law, familiarity with the provisions of benefits, insurance systems, and pension schemes. One must also learn to handle international payments and account for currency exchange rates.

Key aspects to consider include:

1. Local legislation;
2. Local tax systems;
3. International tax legislation;
4. Local and international insurance systems;
5. Social security systems;
6. Exchange rates;
7. International money transfer technologies;
8. New methods of compensation for employees and contractors.

The workload involved in transitioning to managing a global team is substantial. HR departments, in particular, must stay updated on legislative changes in all countries where the company’s employees work and assist with relocation while also taking on the role of tax advisors for employees.

All of this can lead to significant time and resource investments, the expansion of staff, and the need to train HR specialists, lawyers, and accountants.

MODERN BUSINESS SOLUTIONS

Undoubtedly, a company can tackle the challenges associated with managing an international team on its own. However, the decision should not become a burden for the company, a source of problems, risks, and significant costs.

It is worth noting that the demand in the international market is giving rise to more quality outsourcing options for personnel management services.

Modern services offer two types of collaboration:

• Payroll services, which cover all matters related to salary calculations and other monetary transfers;
• Employment of Record (EOR), where all aspects of human capital management are entrusted to a registered employer. This includes employment contracts, benefits, tax deductions, and employee terminations.

Typically, “employment of record” services are provided by local providers whose employees are well-versed in local legislation, tax nuances, reporting requirements, and other related matters. They hire all employees on behalf of the business entity, ensuring comprehensive document management, tax compliance, and government reporting.

Outsourcing personnel management helps save valuable time and financial resources, providing peace of mind and confidence to business owners and managers.