As organizations continue to look for the best way to manage their globally mobile employees (expats), one of the most common issues to address is the best organizational structure to provide the necessary services and support to this group. What is the optimal structure – centralized or decentralized – and how does an organization decide which approach is best for them?
Back to Basics
Expat management is a cross-functional discipline made up of several different areas of expertise, each highly technical in their own right, including relocation, compensation, tax, payroll and immigration. To be effective, one must become familiar with all of these areas, and master at least a few of them.
In addition, customer service and vendor management are critical, especially given the preponderance of outsourcing to third-party providers. Finally, all Global Mobility departments need a link back to the global talent management strategy in their company.
In my opinion, few companies, and few individuals in those companies, are really truly experts in all the aspects of Global Mobility. Therefore, it makes a lot of sense to centralize mobility services, and invest in and develop the few staff that do have the capacity and experience to become experts. Depending on the size of your assignee population, this could be at the corporate or HQ level, or in organizations with larger assignee groups, at the regional level.
The Regional Model
One of the most common structures used by many organizations today is the regional one, typically Americas, Europe-Middle East-Africa (EMEA), and Asia-Pacific. Under this approach, a designated regional center coordinates all of the assignment management for the region. The reality is that all organizations are at least partially outsourced, so much of the work is handled by third-party providers, and the role of the internal staff also includes the management of these outsourced processes.
A regional structure helps to ensure consistency across a broad range of countries, and develops deep knowledge of local practices, to provide the highest possible level of support to assignees. In many cases, regional suppliers are engaged, based on their local market knowledge and performance in the region.
The Global Model
Some organizations choose to centralize services at headquarters. This model ensures the highest level of consistency, since one group is responsible for all service delivery. With smaller programs, this approach can work; as programs get larger, however, the regional model quickly emerges as a more practical solution.
Under a global model, there are often opportunities to ensure high levels of tax compliance and identify tax planning opportunities effectively. These decisions require input from corporate tax and finance as well as human resources, and are best managed jointly at the headquarters level of the organization.
Another added advantage of the global model is the selection of outside providers, which would tend to be more global as well. Realize, however, that few service providers can really provide services everywhere – they all rely on partner organizations to supplement their own resources.
The Decentralized Approach
There are some companies which continue to manage their mobile employees through a network of local offices, without any centralized support at the regional or global level. This is a challenging way to operate for all but the very smallest programs, and may give rise to missed opportunities in areas such as vendor consolidation, tax planning and the general efficiency of the program. Even under a decentralized approach, however, a standard international assignment policy should be developed and distributed, ensuring a minimum level of consistency.
Tools to Help Manage Your Program
Another factor to consider is the level of automation available to your organization. Without a technology tool for assignment management that is accessible globally, decentralization is not realistic. These days, there are hosted (SaaS) solutions which are affordable and very powerful, and integrate easily with your global ERP solution. Whether you work with a specialized vendor, such as Atlas or MoveOne, or rely on your accounting or relocation firm, deploying a robust assignment management software solution goes a long way to simplifying your expat administration and helps eliminate redundant and inefficient processes.
Ask yourself a simple question – how many expats do you have in your company today? If you cannot answer this question with confidence, you need a better tool to manage your program.
Don’t overlook short-term assignees, commuter assignments and short-term business travelers. Each of these assignees require tax, relocation and immigration services, and if poorly managed, can result in unexpected costs. You should be able to capture all types of assignees in your assignment management system.
Moving Your Program Forward
Now that I’ve got you thinking about how your expat administration is being managed, take a careful look at your organization structure. What kinds of changes might be beneficial? Where are you biggest “sore spots”?
Post some comments about your specific challenges, and we can try to address them.
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