April 28, 2017
Mobility in its place!

More important today than ever, International Assignments are a recognised part of many organisations and are frequently utilized by talent management.  Global Mobility teams provide the invaluable capability to manage the myriad of complex issues that surround International Assignments. Moving an employee across international boundaries results in many questions being raised: these include residency and work legal requirements at the destination, travel, healthcare and education for the assignee’s family, and the maze of tax laws of both the destination and home nations.  Most International Assignments include compensation and services that do not usually apply to local employees. These additional elements are required to ensure candidates are both willing and productive in their new position.  Global Mobility teams were created to offer in-house expertise on these issues arising from the complex nature of International Assignments.  Because of these variables, International Assignments are costly and most end up with a unique cost profile.  This makes budgeting, tracking, and analysing the benefits of mobility decisions difficult for most organizations to assess.

We can just send them on Assignment… Right?

The processes used to send employees on assignment are varied.  Processes and costs are often varied from destination to destination, project to project, and even assignment to assignment.  Variables such as location, duration, scope of project, family size and services required need to be considered when planning for an International Assignment.  During planning, global mobility professionals deal with relocation companies, immigration offices, tax advisors and many other organizations.  These interactions accumulate services fees and other expenses throughout the process, which adds to the overall cost of the assignment.  All too often there is little to no advance costs projections available, obscuring the understanding of the eventual cost of the assignment being considered by the business.

Assignment Cost… a rough guess will (not) do!

It is a common fact an International Assignment overall cost can run into millions; although being aware that an International Assignment is going to cost 10 million instead of 3 million may be a fundamental tipping point in the decision-making process.  Many Global Mobility teams have minimal tools available to them to predict the cost of an International Assignment.  Getting precise cost information on a proposed International Assignment scenario is complicated and time consuming when you consider the sheer number of variables and providers involved.  In addition, the tax calculations needed are not available in a way which is economical in terms of both time and cost.  As a result, a business is left with an unreliable estimate of the proposed cost.  This estimate inevitability is vastly different from the actual cost of the International Assignment proposed – in effect rendering this projection useless to the business.  Deciding on a proposed International Assignment where the ‘projected cost’ is never anywhere near the actual costs is a waste of precious time and resources.  A fast, easy, and accurate cost estimate is what all Global Mobility teams need to provide maximum value to the larger business.

Cost Estimates: How do we do this right?

Being able to produce cost estimates for the business is a vital role for Global Mobility.  A cost estimate should be detailed, structured per costs types, and include not only the on-assignment costs but pre-assignment and post-assignment costs as well.  This can be achieved by direct connections to the vendors (immigration, relocation, tax, etc.) so results from specific scenario queries can be returned in seconds.  A reliable and effective cost estimate should have all the tax information for the International Assignment included, so all the tax liabilities are clear from the start of the process.

Key Elements in a useful Cost Estimate…

·         Comprehensive – All the information needed is present: including tax calculations, policies, allowances, and vendor costs are all factored in.

·         Relevant – Specific costs relating to this scenario should be reflected, not generic templates used.

·         Accessible – Displayed in a logical and easy to read format. But also, available in Excel and easily distributed to relevant parties.

·         Concise – Details are important, but having a summary which gives the overview is essential.

Reliable and effective Cost Estimates should be comprehensive, relevant, accessible, and concise. They should aid the business in their decision-making process resulting is minimal surprises as International Assignment progresses. 

We at Polaris Global Mobility can help you produce accurate, fast, and effective cost estimates using our solution.  We support 104 Destinations in terms of Tax logic, including home, host, hypothetical, social, and other tax considerations. 

If you would like to know more, please feel free to reach out to me via andy.smailes@polarisgm.com or use the ‘Request a Demo’ button above to book a special guided tour of our solution.

 

Andy Smailes - Polaris Global Mobility

 

Image by Morio - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=5794297

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