Who needs expats? - Tax and Legal blog

2021-11-29_11-23-13Our response to the Economist article ‘Who needs expats?’ published on 18 September 2021.

With the development of new ways of remote working in response to the COVID-19 pandemic, a recent opinion piece in the Economist journal asked whether it still makes sense to send employees on international assignments ( “Who needs expats?” 18 September 2021).

The article predicts the end of a gilded age in which multinationals fill global leadership positions with high-flying expats parachuted into far-off locations − at a high cost and with limitless perks. It suggests that instead, companies are now able to find excellent local talent and that corporate expatriate programmes are doomed.     

However, we argue against this view. Privileged global expat ‘nomads’ ceased to exist many years ago. A poll of our top clients shows that the reasons for sending employees on assignment abroad, and the length and nature of assignments, have changed considerably over the past 20 years.

As the Economist article recognises, global mobility programmes have also had to respond to the reality of COVID, and Deloitte’s Global Workforce department is helping companies with internationally mobile employees to adapt to the ’new normal’ in areas such as remote work and virtual assignments.

Initially, COVID did result in a significant reduction in new assignments, but the number is now getting back to pre-COVID levels. However, there have been changes, including an increase in assignments carried out from the employee’s home country (’virtual assignments’). These are substantially less expensive than traditional assignments and quicker to implement. An advantage of virtual assignments is that there is greater choice of individuals who are able to do assignment work, such as parents with young children, individuals with caring responsibilities for a friend or family member, and dual-career couples. However, in the current legal framework there are many challenges to such assignments in the areas of personal income tax, social security, immigration, labour law and corporate tax. Other non-regulatory matters affecting virtual assignments are time zone differences and the greater difficulty in building working relationships with remote team members.

Since the start of the pandemic, most companies have found that employees can work remotely without difficulty, attend virtual meetings, and adapt their work pattern to accommodate different global time zones. Reducing the number of traditional foreign assignments and business trips can therefore appear to be a way for companies to reduce costs and be more environmentally sustainable. An employee who does not fly and ship personal belongings automatically reduces the company’s carbon footprint as long as the move is not replaced by a multitude of business trips.

Even so, a case for expats can still be made, looking at market trends in global mobility. While technology and remote working can reduce the need to send employees abroad as expats, ongoing globalisation, the rapidly-changing environment, and the war for talent and highly specialised skills are all driving the need for an internationally mobile workforce.

To remain competitive, companies are still using global mobility programmes to develop strategic opportunities and to cultivate leaders with global experience and the right mind-set to help run their increasingly global operations.

The retirement of baby boomers, ageing workforces, and a declining interest in science and technology education are all contributing to a shortage of critical talent. To survive and thrive, companies need to attract the world’s top talent and be able to deploy it wherever it is needed.

Deloitte's view: 

So “Who needs expats?” Apparently, many companies still do, and with good reasons: to prepare for and respond to opportunities in global production; to promote research, development, and innovation; to improve customer sales and service; to develop the next generation of leaders – and to grow their business.

We think the future of global mobility is bright, offering opportunities to employees whose personal circumstances would previously have made it impossible for an assignment to work for them. Of course, organisations need to adapt and have more flexible global mobility policies that take account of the new ways of working. Deloitte’s Global Workforce team is proud to partner with organisations to help them shape their new global workforce strategies, tailored to specific business and talent objectives.

If you would like to discuss more on this topic, please do reach out to our key contacts below.

Key contacts

Richard Goodwin_110x110.2

Richard Goodwin - Partner, Global Employer Services 

Richard is a Partner within the Global Employer Services team of Deloitte in Switzerland. He is based in Geneva and specialised in Global Mobility. Richard has 20 years of experience in expatriate tax consulting with Deloitte across 5 countries. In addition he has a solid experience in leading an in-house major global mobility change project for a leading company from the Technology, Media & Telecommunications industry, including the review and implementation of the process, systems and technology required for a world class global mobility operation.

Email 

Séverine Morel 110x110

Séverine Morel - Manager, Global Employer Services 

Séverine is a Manager in our Global Employer Services practice in Geneva. She has 10 years of experience with all aspects of international tax and social security matters for employees and employers. Séverine is specialised in assisting Swiss based multi-national companies with mobility and relocation projects. She has recently joined the Global Workforce team and is now specialising in Global Workforce topics as well as on our partnership with Equus, delivering Assignment Pro implementations to Swiss based clients. Séverine has a very broad experience in cross-border environments and speaks French, English and Portuguese.

Email 

Justine Leclere

Justine Leclère - Senior Consultant, Global Employer Services 

Justine has recently joined our Global Workforce Team in Geneva. She focuses on accompanying clients in their Global Mobility function transformation, including AssignmentPro Technology implementation, (re)design of Mobility Programs and/or Processes, Project Management and Change management.
In her previous roles, Justine worked in-house and in a Consulting firm. She gained a varied 9 year-experience in Global Mobility, including (re)-designing Global Mobility Programs for clients willing to better align their Global Mobility function with their HR strategy, or undergoing a major takeover, which required Global Program alignment and roll-out.

Email 

Comments

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Comments are moderated, and will not appear until the author has approved them.