Global Mobility Effectiveness Survey 2013
Mobility challenge: compliance risks
Mobility professionals are well aware of the significant and growing risks posed by the potential failure to comply with tax, payroll and immigration rules. This is a particularly complex issue to address in emerging markets and other jurisdictions where laws are constantly in flux.
Many organizations admitted that they do not have adequate procedures in place to track those risks. Some 40% of respondents reported that they did not have a formal risk control framework to monitor payroll tax and social security compliance, with 64% reporting they incurred avoidable penalties for non-compliance in 2012.
Another 31% of the respondents reported that they have had to engage outside consultants or firms (lawyers or accountants) to address those violations, while only half of companies are tracking trailing liabilities.
Mobility professionals are well aware of the significant and growing risks posed by the potential failure to comply with tax, payroll and immigration rules.
Even more than tax, many mobility teams encountered significant challenges keeping up with immigration laws, particularly in rapid-growth countries where mobility’s knowledge regarding laws and processes may be more limited than in more established countries. In addition, these laws change frequently, once again raising the risk of non-compliance.
In discussions with mobility leaders, we have heard widespread frustration with the fact that many businesses did not want to address the task of minimizing and pre-empting risk. Too often, there is a tendency to wait or be aware of a tangible negative consequence before deciding to act.
Educating the business units outside of mobility to recognize the risks is a key first step, but it remains an enormous challenge.
The unanticipated risks created by "business travelers" are also a growing cause for concern. Few global mobility teams monitor business travelers, with 73% saying that business travelers were not part of the global mobility team’s responsibility. Those not on formal assignment are flying under the radar and — often unknowingly — generating huge problems for their employers.
Technology can vastly improve the situation and drastically decrease these risks. However, we see that 73% of respondents are not using technology (e.g., GPS/ mobile applications) to track their people’s activities and, more worryingly, only 30% had a system in place for tracking business travelers who were not on a formal assignment.
This area is likely to become an even greater challenge going forward as we see more flexible working arrangements, increased travel outside of traditional expatriate assignments and the increasing recognition of cross-border telecommuters.
Many organizations are still deciding who should be responsible for implementing policies regarding telecommuters and those with other flexible working arrangements. On the one hand, mobility professionals have the knowledge and expertise to set effective policies.
On the other hand, most mobility teams lack the resources or responsibility to tackle this additional burden, particularly with 50% of the organization claiming that their mobility team is currently understaffed. Ultimately, when problems do occur, business leaders will undoubtedly come knocking on the mobility team’s door.