Should Global Mobility Services Be Centralized?

Author:
Warren Heaps – Birches Group LLC

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.

More About Warren

Warren Heaps

Warren on LinkedIn

Developing Markets Compensation and Benefits Group in LinkedIn

Email Warren

Birches Group

17 responses to “Should Global Mobility Services Be Centralized?

  1. Warren,

    Great Article!!

    Remember back to the days at Colgate NY!

    This is the right approach for handling Expats!

    Regards,

    Alvaro

  2. Hi – I thought this was a great article. One additional item I’d like to point out about the regional approach that I have seen from my experience, is not only the support it provides the assignee’s, but by having regional contacts, support is also provided to local HR and business unit/line leader managers. Many times decisions are made quickly regarding international relocation without regard to impact to the organization. By having regional expertise on hand, local HR and business unit managers can discuss all of aspects of the assignment and ensure they are making the best decision for the organization as well as the employee.

    • Excellent point, Nellie. Thanks for your feedback. Anything that improves the ability of mobility professionals to be better aligned with the business, and at the same time, improve customer service, is a win-win.

  3. Great points Warren, it is good to see that new technology tools are being introduced. Tax firms push their technology tools but all have huge gaps outside comp & expenses, RMC’s often have old technology that has large gaps in comp information. It’s about time that someone came up with a way to accept feeds from various providers. Concerning short term assignments we offer a short term assignment relocation product that can be downloaded at http://www.linkedin.com/in/donaldrankin ,Regards Don Rankin

  4. Guna Segar ramasamy

    Regional approach is an important factor in centralization . While the processes can be a global process, some countries will need additional policies, guidelines and support. My experience working for MNCs which rolled out centralized shared service globally was they later learned that there are regional issues that cannot be managed from HQ and needs regional expertise. Secondly, cost is a factor. Global vendors can be costly. It would be cheaper to get a service in the region than paying american dollars and euros because of global contracts. The managers in the region may not want to pay because its a centralized contract. Most of the time global vendors are using local staff and expertise which can be available much cheaper in local price rather than paying so much more because it has to be paid in USD or Euros as its a global contract. Recognizing this is important for acceptance of global processes and vendors. Otherwise, the regional managers will look at other ‘options’ locally.

  5. Guna,

    Thanks for your valuable insights. I agree there are many advantages to the regional model, especially the chance to tap into local expertise. We keep hearing the world is getting smaller, and it surely is, but the virtual world will never be a substitute for on-the-ground resources with local knowledge.

    Global suppliers often try to set prices in “hard” currency, as you state, but frequently use local providers as part of their network. Not only can you sometimes hire the same providers cheaper locally, often these same global suppliers hire the network members locally as well (in local currency). The benefits of a global supplier, though, are also from the integration of services and consolidation of information about an assignment in one place. So sometimes, even though the price might be slightly higher, you can reap benefits which more than compensate for the higher cost. The key is to manage all of this closely, and understand what’s available in the market, and at what cost.

    Warren

  6. The regional approach is daily gaining more approval from HR Mobility Managers. And it makes sense. It allows comprehensive tracking of movement, immigration and expense management. (If the vendor has the right technology) Regional managers can feel confident that a one-point-of-contact vendor approach is sustainable and manageable. Giants like Siemens have known this for a while now.

  7. Based on my experiences, I vote YES, and I would like to put it this way: International assignment services MAY be centralized. At minimum, no harm is done to expatriates; at maximum, the efficiency goes up quite a bit.
    A case in point: one of my biggest clients, a chemical company, outsourced all expatriate services (and some other services too). Now I have a direct Contract with this outsorcing giant, based in Florida, and see first-hand that they have a very clear responsibilities structure and are more efficient in sending authorizations & paying invoices to me and other vendors. Note: I annually send the Agreggated Reports both to them and to the HR contact who is responsible of managing the expatriates on the company side–so everybody wins.

  8. Hi

    Fully agree, the function should be part of a centralised HR organisation. However there is still a confusion regarding its real place : within HR shared Services as a transactional process or being a Total REWARDS component should be with the C&B or Reward manager?

    Your thoughts are highly appreciated

    Regards
    Hind

    • Hind,

      Thanks for your comment, and you raise an excellent dilemma about where mobility services should report. I have seen it work both ways (part of a general shared services group, and part of the C&B function). I think each organization really needs to decide based on internal factors, rather than so-called best practices.

      For example, is the program very large, with many standardized transactions? That would seem appropriate for a shared service center. Is the program highly ‘customized’ rather than standardized? This would be managed better by C&B. But I do believe that mobility services are much more difficult to manage through shared services call center models than other HR transactional functions.

      This is primarily due to the cross-functional aspects of mobility and the knowledge and judgment required to manage it. Most “Level I” call center reps work strictly from scripts and knowledge bases, and that model is challenged by the diversity which mobility transactions present.

      On the other hand, the call center model of tracking calls as cases, for example, allows for multiple individuals to track and work on each case efficiently. Such models, and the associated technology, would be a valuable addition to any mobility department, whether a shared service or traditional model. Some of the assignment management software solutions include such tools as part of their offering.

      Cheers,
      Warren

  9. I think that a common Policy is a milestone each group should have, also taking into account the appropriate flexibility to comply with local rules. A regional approach could be a good way but need a good expertise of HR Mobility Managers in particular understanding some key issues such as Tax, Social security & Immigration. The expertise does not mean to know each country’s laws but to know what to consider in each assignment (even short ones).

  10. Warren, you have started another excellent discussion thread. The shape of a business, and the shape it feels is right for its IA management, vary massively. Some get it right, many get it wrong. There are all the parties concerned: the organisation hosting the assignee, the organisation providing the assignee, corporate or head office, JV partners, assignee, assignee partner, children and relatives, suppliers. Before all that an organisation needs to decide how it should be structured. To do that, it may need to go back to basics first: Do they understand the importance of what they are doing from a business perspective, do they have a true way of measuring the real value of the assignments and the factors that have to be considered to properly value it, how will they ensure they get a proper return from their investment in it, and which are the smart processes to manage the risk. Many organisations review how they deliver – without first understanding the basics. By then it is too late to alter the shape of what they have and there are a limited number of tools that measure all the key metrics to get the structures right initially. If organisations looked at these questions first, then roles and responsibilities, organisational structure and systems, they would end up with something more aligned to business needs.

  11. Great discussion, Warren.

    I am surprised, though, that there has not been more consideration of the structure of the business (es) being supported by the program. For example, it is challenging to use a centralized expat/mobility admin model with a decentralized business (like the global accounting and consulting firms) or a business that involves a lot of joint ventures, subsidiaries, and other assorted entities. Sean’s comment above is in the right direction; I think you really need to look at how the businesses are structured, where the decisions are made, and perhaps most importantly, where the bills are being paid, before you can implement any model.

    • Good points, Tim. Obviously you should not decide a structure without considering the business structure as well.

      On the other hand, I think that oftentimes, the design and structure for mobility is an after thought — and there is the real opportunity. Not only should mobility services be structured and aligned to the business, so too should the mobility approach in general. The best mobility strategy is one which is aligned and supports the key strategic business objectives.

  12. Dear Warren, I am enjoying this open flow of knowledge, as I have had discussions internally for many years with colleagues at the big-4–what works and doesnt work in expatriate managment structures at our clients.

    Now I am working on the software side of global mobility and wanted to bring another potential relocation software provider to the table. Equus Software also provides a very affordable full-scope, web-based expatriate management software that corporations can use globally to manage all sides of global mobility (move mgmt, expense tracking, compensation, cost projections, reporting, etc).

  13. I’m helping a client look at Global Mobility technology.

    I’ve looked at Atlas, KPMG, Equus, ECA, viaExpat.

    Suggestions on others? Any good source on product reviews and comparisons?

    Thanks

  14. I came to this article late (obviously!), but would add my two cents based on my experience. The key question,I believe, as was alluded to by many, is the size and scope of the program. Centralization in HQ was my experience in a previous role and overall the advantages of that approach seemed to outwiegh the disadvantages for our program (about 140 assignees in 7 locations). We worked closely with local HR on the day-to-day support issues, but strategy, policy development, vendor management, etc. were driven corporately. I’m not sure where the “line” is, in terms of size and scope, when this beceomes unmanageble. I think – as was indiciated – that much of that depends on company culture, technology, staff support, etc.