Advertisement

Why Retailers Need a Global Mobility Program and How to Build One

2022 continues to be a challenging year for global retailers. Inflation, a potential recession, labor shortages, supply chain disruptions and major geopolitical tensions have created significant supply and demand uncertainty. These challenges call into question the viability of “business as usual,” with retail executives needing to reevaluate the location of operations and the availability of talent.

Diversification of Supply Chains

In his recent article, Are the Risks of Global Supply Chains Starting to Outweigh the Rewards?,  Harvard professor Willy C. Shih highlights key factors that supply chain managers should consider when navigating the numerous global shocks. Companies that have less geographic diversification have faced higher risks relating to disruption in transportation, increasing costs and geopolitical instability. Shih sees the need for more flexibility, including “development of production capacity and strategic capabilities” in regional or alternative locations.

In short, companies will need to become nimbler and have the ability to quickly deploy resources globally while minimizing risks for both the organization and its employees. This sounds like the mission statement for an effective global mobility program.

The Need for a Global Mobility Program

This diversification of the supply chain will require significant financial and human capital. The organization may need to enter new locations. Knowledge transfer will require mobile employees, including one-way transfers, business travelers and temporary assignments. Without an intentional global mobility program, retailers and their employees may face serious challenges, including:

Advertisement

  • Tax and legal violations: Mobile employees can trigger tax requirements, employment and immigration law violations and reputational risks that the organization isn’t prepared to handle.
  • Talent shortages: According to one survey, an estimated 94% of retailers are worried about talent shortages. Therefore, few can afford to frustrate mobile employees. Creating appropriate policies for the types of mobile employees that are needed can help to manage costs and risks, promote equity and allow for quicker deployment of talent. Without a policy, employee duty of care may not be considered, which will lead to frustration.
  • Budgetary surprises: There can be large financial costs associated with having mobile employees. The good news is that you can plan, if you are aware of where your employees are living and working and what types of activities they are doing for your organization. Working with a mobility tax firm can help you to identify these opportunities and budget for the costs of assignments and other company-sponsored mobility.

How To Create an Effective Global Mobility Program

An effective mobility program will be critical in allowing your organization to effectively address the many challenges impacting today’s retail world. Here are some tips for building and maintaining a world-class mobility program:

Create a multifunctional team.
The best global mobility programs pull together cross-departmental teams and include input from important mobility arenas, such as HR, legal, payroll, tax, immigration and other key stakeholders. Working together to create playbooks that outline key planning and regulatory requirements for new locations can help the business enter new markets more effectively and quickly.

Identify needs and create policies.
As mentioned, there are many benefits of policy creation. It is important to create policies that are appropriate for your organization’s culture and for the type of mobile employees that will be needed. Outside tax and relocation vendors can be great resources for your organization as you consider and implement needed policies.

Build processes.
Even though it’s important to gather input from multiple departments, effective global mobility programs usually run through centralized processes. It’s best practice to designate a program leader and to establish a straightforward approval and tracking process for all travel assignments. If your processes aren’t centralized, you’re at risk of seeing departments or individual employees bypassing your system — and that heightens your company’s compliance risk.

Lean on technology.
Technology won’t solve all your global mobility problems, but it can support your policy and processes, lighten internal workloads and generate valuable business data. A mobility tax firm can help to identify technology that both supports your team and is appropriate for your culture and budget.

Retailers Should Prepare for a More Mobile Future Now

As retailers address supply chain issues and take on more international exposure, global mobility programs will only become more critical. By taking the time now to set up an effective global mobility program, retailers can stay ahead of mobility trends and avoid major tax, compliance and reputational troubles in the future.


With more than 25 years of global tax experience, Eric Loff serves as managing director of Global Tax Network (GTN). He is known for leading by example and finding the strengths in others, improving communication so all participants are engaged in a project, and serving as a bridge between a company and its expat employees. As a specialist in managing international assignment programs and the related tax, human resource and payroll matters, he serves as a frequent speaker on global mobility topics. He can be reached at eloff@gtn.com.

Feature Your Byline

Submit an Executive ViewPoints.

Featured Event

Join the retail community as we come together for three days of strategic sessions, meaningful off-site networking events and interactive learning experiences.

Advertisement

Access The Media Kit

Interests:

Access Our Editorial Calendar




If you are downloading this on behalf of a client, please provide the company name and website information below: