Managing complex mobility through Global Employment Structures

In an increasingly competitive global business environment the need to deploy skilled employees into the right roles, in the right locations and at the right cost has never been more important. Managing an increasingly complex global talent mobility programme and the related costs and risks is becoming more and more challenging, but when planned and managed effectively, this can be a clear differentiator for an organisation.

Managing through GES


Getting the best out of your existing global employment structure:

Health check

The creation of a Global Employment Company (“GEC”) can be a complex process. The many stakeholders and operational responsibilities need careful ongoing management. In light of recent changes in the tax and political landscape, how comfortable are you that your GEC is still fit for purpose?


Here are some of the issues we would consider as part of our review:

Political and legislative changes

Political and legislative changes

Given Brexit and recent European tax judgements – have you thought through the implications for your GEC workforce and operations?

Substance

The Base Erosion and Profit Shifting (“BEPS”) Action Plan has put a spotlight on ensuring corporate structures have substance. Are you comfortable your GEC aligns profits and value creating activities and that intercompany documentation supports this? Are internal stakeholders working collaboratively to manage Permanent Establishment and other risks? Are you comfortable that management functions are performed by the GEC and not other group entities?

Substance
Managing talent

Managing talent

Do you still have the right employees in your GEC? Is your GEC allowing you to manage the talent and development needs of your globally mobile population? Are policies and reward harmonised? Are employees having a positive experience?

Changing mobility

Has your assignee population shifted? Are you seeing increased volumes, a move towards commuters/short term business visitors or increasingly more junior staff working internationally? Is a GEC still the most cost effective way to manage the modern forms of mobility?

Changing mobility
Post-implementation governance

Post-implementation governance

Are you confident that you still have the governance and processes in place to manage the GEC’s activities. Are your systems and technology keeping up with your changing needs?

Compliance

As rules change and territories move towards real time reporting, are you meeting your tax, social security and immigration compliance obligations for your GEC employees?

Compliance
Administration

Administration

Are you managing your GEC administration needs (payroll, recruitment, performance management etc), efficiently and in a timely manner?

Implementing a Global Employment Company (GEC)

Mobility is evolving, driven by changing technology, new and more flexible ways of working and a fundamental shift in the regulatory environment due to the Base Erosion and Profit Shifting (BEPS) regulations. More people are moving internationally and in more fluid ways, bringing new complexities and risk.

Many organisations are struggling with managing the risks, compliance obligations and costs associated with complex modern mobility and are looking at how to deal with these challenges going forward.

A global employment company (GEC) is a potential solution which may help and we have outlined here why organisations might use a GEC, and our approach to feasibility reviews and implementation.

Why do companies use GECs?

There is a clear shift in the mobility challenges driving the desire to implement a GEC, with almost half of those considering a GEC stating management of PE risk as a key driver, but for many it’s still a crucial part of their effective operating model to tap into the benefits a centralised function can bring when dealing with the challenges and nuances a globally mobile population can pose.

Why do companies use GECs?
The benefits

The benefits

A GEC provides a centralised structure and process for HR support, payroll, accounting and tax.
This helps to manage the increasing complexity and address business issues arising from globally mobile employees, but can also drive cost savings.

A GEC can help you manage PE risk, mitigate employment law issues and immigration risks and help to ensure compliance from a personal tax and social security perspective.


GEC drivers

Strategy

  • Is your business undergoing rapid change or expansion?
  • Are you looking to operate in new locations?
  • Do you have difficulties attracting talent?
  • Do you have a need for cost reduction?

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Mobility

  • Are you adapting to rapid changes in mobility e.g. new assignment types?
  • Does you want to improve administrative efficiencies, global coordination of specific groups and/or assignee experience?

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Managing risks

  • Do you experience issues with PE risk, immigration, income tax, social security and/or employment law?

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How we can help

GECs are complicated structures and projects involve considering multiple different issues including corporate tax, transfer pricing, permanent establishment risk, employment law, HR management, immigration, personal tax, social security and corporate governance.

PwC has a global team of specialists able to address all of these areas, coordinated by our GEC centre of excellence in London offering a single source solution. We have extensive experience in managing GEC projects across the full end-to-end process; from helping organisations determine their strategic vision and business needs to implementing the entity itself.

How we can help?

Contact us

Graham Wyllie
Partner
Tel: +44 (0)20 7212 6445
Email

Sarah Mullen
Senior manager
Tel: +44 (0)118 938 3112
Email

Samuel Cranmer
Global Mobility Manager
Tel: +44 (0)20 7213 4774
Email

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