International Tax: A Rise in Global Mobility

The rise in global mobility increases complexity and pressure for professionals and employers.

Global mobility is a prevalent area of service in the international tax arena, concerning the two key areas of taxation worldwide – cross-border employment taxes and cross-border personal taxes. Increasingly, with the rise of cross-border remote working – someone employed in one country but living and working in another – corporate taxation is becoming a routine part of the risks that need to be advised upon and managed.

This usually involves the HR, compensation, benefits and/or reward departments, but it can also involve the finance and tax teams. This activity is usually organised in a central or global team that could be co-located or sit in different time zones but deliver a global process and policy.

Together with research partners Santa Fe relocation and Expatise Academy, Crowe UK reviewed the current state of pressure and complexity for those managing mobility, uncovering the causes and suggesting a way forward in the joint research piece: ‘Taking care of global mobility professionals’.

What was unique about this research was that it was survey-based, supplemented by live in-person workshops which allowed the proposed way to be shaped and tested by almost 400 in-house professionals. The result is a practical model for professionals to apply to their personal, team and enterprise stakeholders both internally and externally.

The pressures of global mobility

The ‘Taking care of global mobility professionals’ research evaluated the increasing complexity and pressures that global mobility and international HR professionals face. Its primary goals were to:

• Understand challenges: Examine how global mobility professionals manage cross-border remote work, compliance issues and growing operational pressures.
• Explore trends: Analyse the implications of emerging work patterns, such as hybrid work, business travel and international assignments.
• Propose solutions: Provide actionable recommendations to reduce pressures on global mobility teams and optimise their contributions to business strategy.

Key findings

1. Increased complexity and pressure

Complexity drivers: 88% of respondents reported a rise in complexity, largely attributed to evolving regulations, cross-border remote working and the need to manage cases across jurisdictions.

Pressure points: Two-thirds of respondents experienced increased workload pressures over the past two years, with major areas of challenges being: supporting HR, employees and line managers; addressing immigration and compliance issues; and reporting to leadership and managing data systems.

2. Cross-border remote work

70% of respondents anticipated growth in cross-border remote working, reflecting a shift toward flexible international work arrangements. However, 77% highlighted a lack of awareness and tracking mechanisms for cross-border remote work among organisational stakeholders.

3. Visibility and influence

Global mobility professionals are continuing to focus their energies on getting a ‘seat at the table’, with 65% expressing a desire to spend more time engaging with senior leadership. Many teams were perceived as ‘compliance enforcers’, rather than strategic business partners.

4. Operational inefficiencies

A significant portion of respondents relied on outdated tools like Excel, complicating data management and reporting. External suppliers were another area of focus, consuming valuable time and resources that could otherwise be spent in other value add areas.

5. Impact of global trends:

Ever increasing focus on compliance with regulations, such as the EU’s Posted Worker Directive, have heightened the need for compliance expertise and process. Increased reliance on remote and hybrid work arrangements has introduced new risks and obligations that are inherently complex to manage.

A suggested way forward

The many hours of in-person engagement with hundreds of mobility professionals in workshops were invaluable in uncovering, road-testing and refining approaches that could solve the fundamental problem.

This fundamental problem was that professionals were directly dealing with the increased pressure and complexity created, because of ineffective education in two areas:

• educating the business on the consequences of undertaking global mobility; and
• educating the business on how to best engage with the global mobility team or function.

The paradigm they were faced with was the difficulty that too often professionals were dealing with the consequences of this problem and had little energy and time to then make advances on the required education – a classic ‘Catch 22’ situation.

Having researched global best practice and functional effectiveness in departmental teams and functions serving businesses across different industries and speciality areas, the research proposed a change maturity model that would enable professionals to address the ‘Catch 22’ scenario.

There are three different stages of maturity of function which can be applied to global mobility professionals and the teams in which they deliver:

• Tactical/administrative: This is largely focused on process, procedure and getting data and forms to the correct experts at the right time.
• Risk and cost management: This involves more specific focus on quantitative aspects such as risk and cost management, focusing on the capture, management and reduction of risk and cost.
• Advisory business partner: This function operationally delivers support and reduction in cost and risk but is also seen as a true advisory partner working and directly influencing decision making and strategy in the business.

To move between the three stages, there are four key enablers/change journeys:

• Choice: There must be an active choice to change the status quo, focus on reducing complexity and pressure rather than accepting and managing it.
• Mindset: A substantive change in mindset is required to move from an internally orientated reactive execution approach to a strategic customer-centric approach focused on both internal and external partnerships.
• Operations: A step change is required from manual and siloed stakeholder management and operations approach to being able to deliver unified global operations and real-time analytics to support and improve decision making.
• Skills: This involves developing from a focus on operational proficiency and solving routine problems to targeting ongoing continuous evolution and improvement.

The journey is what matters

The research authors developed a structured journey plan across the above stages in a single document. Two of the three core authors know London very well, so they took inspiration from the London Underground Tube map to create a visual of the journey. This helps professionals to consider the context of their role, team and relationship(s) with other key stakeholders. The engagement with the model has been very positive.

What this means for advisors and accountants

Global mobility is not unlike other areas of the business that need support from accountants and tax advisors. The research’s key findings are likely not unique to global mobility HR teams – the pressure and complexity of having to do more with less resources at a time when regulation is increasing applies to many different functions that accountants and tax advisors support.

The research clarifies the importance of the customer experience focus and the importance of outside-in thinking. Services are technical, and that advisors have the right technical expertise is usually a given, an expectation. The advisors who will make the most difference to their clients (internal and external) and drive the most value will be those who deliver their support in a way that reduces pressure and complexity.

 

Author bio

Dino Jangra is a Partner in the Workforce Advisory team at Crowe UK.