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Assessing Compliance Risk for Global Assignments 07.14.2014 | Laura Levenson

As more companies embrace global mobility as a critical tool for developing top talent and pursuing new opportunities, our Consulting desk has seen increased requests for the best models and practices to streamline the complex management of global moves.

In response, we developed a diagnostic survey tool to help companies identify areas for program optimization, and invited corporate mobility managers to use this tool to determine where to improve their programs.

Not surprising, the one area that received the most focus is tax and payroll compliance—an admittedly slippery slope for most companies. The cumulative results of our survey, which are presented here, give greater insight into how much of an issue compliance risk is to today’s companies.

  • When asked if they have an accurate record of their total global assignment costs, 33 percent said they were missing key cost elements and 10 percent said they “haven’t got a clue what we’re spending”
  • When asked about any penalties or fines their companies have paid associated with tax, visa or payroll reporting issues, 43 percent said they’ve had a few
  • When asked to describe the out-of-scope fees they are paying to their global financial and tax service providers, 30 percent said “moderate” and 7 percent said “outrageous”
  • When asked if expense reimbursements, allowances and direct payments are easy for their companies to make, track and report, 27 percent said, “sometimes; depends on the type of payment/ currency” and 17 percent said “no.”

At the end of the survey, participants were asked to assign an overall grade to their programs. Sixty-eight percent indicated that their programs “need improvement.”

Of these companies, 34 percent have considerable risk for audit and compliance issues, including lack of insight into key spending patterns and moderate to excessive “out of scope” fees because global mobility isn’t managed effectively. These compliance risks could prevent them from pursuing their growth strategies, especially if those strategies involve expansion into new markets.

The resounding message from this brief study is that many companies walk a tightrope when it comes to tax and payroll compliance issues. While many companies have the desire and mandate to track and avoid compliance risks, many lack the guiding framework or internal expertise to do so. Or they rely on a third-party tax firm that can expose them to harsh out of scope fees. Considering the risks and potential damages an organization could suffer, these issues demand serious attention from any companies with global aspirations.

If you’d like to use our diagnostic tool to identify areas of optimization in your company’s program, please email us.

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Written by Laura Levenson

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Laura Levenson is a Practice Leader in Weichert Workforce Mobility’s Advisory Services group. She has worked in management capacities for workforce mobility and Big Four firms, and is well-versed in bringing clarity to the most pressing global talent deployment challenges. She brings over 25 years of experience to her role and is a frequent speaker on the mobility conference circuit.

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