New policy brings proper governance to patchy approach to overseas transfers
I helped a large international business address historic problems in its approach to international mobility and managed the potential fallout from disgruntled senior people.
Legacy issues
To help retain senior staff who wanted to relocate from London to New York and vice versa, directors in the company were in the habit of authorising relocation packages on an ad hoc basis. They did this with no reference to HR, which did not have the capability to manage international mobility.
The problems came to light following a complaint by an employee over maternity entitlements she would have been eligible for in the UK, but wasn’t in her base in the US. In particular, it emerged that the company didn’t have a policy that clearly differentiated between temporary secondments and permanent local hires. This had implications for tax, NI and pension arrangements. It also affected the relationship between the company and the individuals, who had come to expect the best of both worlds; they thought they could simply choose which tax, holiday and pension arrangements suited them best and were unaware of the financial or legal implications. The costs to the company were unknown and unmanaged.
Action was urgently needed to remedy the legacy situation and avoid future confusion.
Clarifying policy and managing expectations
I led development of a new international mobility policy to set out clearly the rights and obligations of the company and individuals.
The work began with a review of data going back many years to uncover the extent of the problem, the circumstances of all those affected and any outstanding tax and NI liabilities. It also meant building a clear and detailed understanding of the legal and financial issues in both jurisdictions.
The new policy covered issues such as:
- where a case would be heard if an individual was to lodge a complaint over terms of employment
- which employing entity would serve notice if the company were to terminate the employment.
In parallel, and calling on advice from the company’s accountants, we discussed all the cases in question with the tax authorities in the UK and US and arranged to pay outstanding tax and NI.
At the same time, it was important to manage the relationship with individuals who, in many cases, were being told they could no longer enjoy entitlements they had become accustomed to. I took the lead in this work, mainly through sensitively handled one-to-one conversations.
A sticky situation resolved
It was challenging to work through these complex technical issues. But with patience and persistence, we resolved the situation and at the same time equipped the HR function to manage international mobility with confidence. It was no longer something done piecemeal by individual directors but became a strategic HR lever for aiding retention – in a realistic, cost-effective way.