Managing the risks of employing a global workforce

Many international companies operate with employees deployed across the world. They function across networks of offices in different countries, client sites, distribution channels and alliances. Nicholas Robertson and Elizabeth Espín Stern discuss some of the risks associated with this.

Having a global workforce carries a progressively greater risk for an international organisation, as security and economic interests have led world governments to impose controls with aggressive penalties which can undermine a company’s revenues and reputation.

The emergence of new economies where the rule of law is sometimes still developing, has also created new types of risk. The mobile global workforce is equally affected by regulations governing: hiring; employment; remuneration and termination of international workers; management of data; control of technology and exports; social responsibility; and anti-corruption. A company’s ability to manage risk in this environment requires a transformation in its HR management.

Employers should be aware of the following major trends and key challenges.

Global workforce trend one: governance and culture

Global mobility departments must interact with HR, particularly in the countries of destination of their mobile workers, but they will also maintain their own mandate and accountability within the organisation. These departments are a specialised type of shared global administration and have the dual responsibility for creating ease of mobility – critical to achieving accelerated business needs – and meeting the company’s compliance and policy protocols.

One critical aspect is the movement of personnel into emerging markets, where the rule of law is not yet mature or stable. This creates a number of risk issues, from corruption issues potentially permeating visa filings, to data protection issues because jurisdictions mandate privacy differently. Global mobility and HR departments may be immersed in assignment administration, relocation facilitation and mobility support. However, both teams still need to actively drive a culture of compliance, and reflect host countries’ regulations in assignment preparation and post-placement integration processes.

Global workforce trend two: prevention and preparedness

Having clear lines of decision making and a culture of compliance is essential to managing risk. In today’s high-enforcement environment, it is also important to include preventative processes that the company can use to demonstrate compliance and good faith.

Best practices begin with having a well-documented policy for mobility decision making, which includes reasonable parameters for identifying when individuals are engaged in productive employment. This typically requires a work-authorised permit and temporary residency visa. It is also important to know when tax obligations are triggered and when host country employment protections will apply.

Given the current high numbers of business travellers, a diagnostic tool to assess when travel activities or length of stay could compromise entry as a pure visitor is an important way of demonstrating a commitment to getting this issue right. Likewise, periodic audits of travel records, as well as training sessions for high-volume travel business units, are important.

Another key practice is for company teams to conduct ongoing audits of workplaces to ensure that foreign workers are permitted to work in the host country and have a status that permits the work that they are doing. If
a government inspector shows up for a shop floor audit or a more aggressive investigation, the company’s ability to cite its regular monitoring of these issues will go a long way to protect it from penalties.

Preparing for the inevitable government visit – a shop-floor audit or dawn raid – needs to be made a priority. Increasingly, there are cases of government officials approaching administrative personnel or business managers during these unannounced inspections. Neither are likely to be schooled in what data is available or what is an appropriate response.

Without a clear protocol for escalating such questions and replying appropriately, companies can provide misinformation that could augment their risk even when compliance is largely met. In many countries, this type of lapse has led to criminal penalties, hefty civil fines and damage to the company record.

Global workforce trend three: transparency and real time data

As noted above, the acceleration of rapidly changing, short-term “mobility” has led many companies to establish global mobility departments that manage the monitoring and relocation of individuals, visas, work authorisations, and cross-cultural preparation and training. Having an effective line of sight into who is moving where and for how long, in real time, remains a challenge for many companies.

The process begins with having an accepted framework for reporting assignments and travel, with resilient automated systems that are accessible and easy to navigate. Equally important is the understanding, for both management and HR, that the immediacy of the data is paramount.

To achieve true transparency, companies need to obtain buy-in from key stakeholders – country managers and business unit leaders – and facilitate data sharing. If global mobility departments can partner with local HR teams to make the mobility process easier, managers are more likely to share data as a reciprocal practice. But it will be important to ensure that it is clear to everyone when, and by what means, data is to be provided and that the rules relating to such data provision are well understood, accepted and easy to implement.

HR reinvention

Global mobility is part and parcel of the way we conduct business. The virtual pull of business is evident across industries, as is the rigour of regulation and risk of penalty inherent in increased travel.

To navigate effectively in this environment, companies require a committed management team that incorporates both the legal risk prevention and HR service administration elements of the workplace in one framework.

Companies also need to recognise the costs of failing to manage mobility actively and continuously. With a better approach, they can optimise the flow of movement, help ease the impact on the employees in transit and focus on productivity in their global projects. They can also ensure that they stay ahead of the pack when it comes to making the most of the international opportunities that are being chased by so many organisations.


About Nicholas Robertson and Elizabeth Espín Stern

Nicholas Robertson is a global firm practice leader of Mayer Brown’s employment and benefits group and head of the employment group in London. Elizabeth Espín Stern is head of the global mobility and migration team, based in Washington DC.
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