In an ever more globalised marketplace, international mobility can improve FS firms’ ability to reach into fast growth markets and forge the global mindset needed by today’s business leaders. In a sector battling limited availability of skills as a threat to growth prospects, the ability to move talent to where demand is greatest is a huge advantage.
Yet upheaval in the political and regulatory global environments and shifts in workforce expectations present strategic and operational challenges for financial service organisations’ global mobility programmes.
End of EU free movement
Free movement rules will remain in place until the end of the transition period, 31st December 2020, but employers are urged to plan now for the inevitable impact on international recruitment strategies of the end of EU free movement and a new UK immigration system.
Following Brexit, financial services firms in the UK will become ‘third country firms’, which means they will not be firms with an automatic right to access markets in Member States across the EEA under the passporting regimes of the various European Union single market Directives. As such, if firms wish to continue to provide their services across the EEA post-Brexit, they will need to consider the methods which will allow them to do so. In the absence of any explicit prohibition or permission on undertaking an activity, it is left to the national regimes of each Member State as to the extent to which they permit third country business in their jurisdiction.
FS organisations are, for example, exploring ways personnel can remain in London and continue to be able to conduct activities in the EEA without breaching the regulatory perimeter, as well as developing more agile and flexible global mobility programmes to support delivery of services against restricted movement between the UK and the EU.
Examples include UK-based individuals being seconded to an entity already authorised elsewhere in the EEA to conduct activities on an occasional or regular basis. The rest of the time the individuals would provide services from the UK. Or UK-based individuals fly in to EEA jurisdictions and conduct activities under the supervision of an authorised firm. This may be a convenient option as risks to consumers are minimised and therefore from a policy perspective, no authorisation ought to be required.
Clients in EEA jurisdictions could look to solicit the services of the UK-based firm without any marketing by the UK firm to elicit the client’s approach. However, different Member States interpret the concept in different ways, and approach what is acceptable to different degrees. This is not especially helpful when directly facing an arm’s-length EU client base but may be helpful in facilitating back-to-back booking or service models.
An entity authorised in the EEA could look to establish a branch in the UK, and uses its UK-based employees to provide services back into the EEA under its EEA authorisation. Currently, however, there is no EEA-wide harmonisation regarding how individuals may be able to provide services on behalf of third-country businesses.
Diversity & inclusion in mobile workforce
Fostering assignee diversity is allowing companies to tap into new pool of talent and is becoming a significant advantage in the global talent war.
With women making up only 20% of the internationally mobile population across all sectors, creating a more inclusive approach to the selection and management of international assignments could provide a huge boost to talent availability.
However, managing a diverse assignee talent pool when doing business in destinations where diversity might not be welcome is a challenge. From practical questions about sending non-married couples to destinations when non-married couples are not tolerated, to serious concerns linked to the ethnicity, nationality, gender or sexual preferences of the assignees, the risks and potential barriers to mobility are numerous. Employees might sometimes be willing “to take a chance” but companies have a duty of care and cannot allow this. Sometimes facilitation, cultural training and careful planning can help but in any case issues need to be openly discussed and anticipated.
Extended business travel & commuting
Ten years ago, not all companies were able to track their short-term assignments accurately. As more companies have become better at it, the focus is moving to extended business trips, commuters, and frequent travelers. These types of moves present a host of challenges for companies from compliance, tax, emigration, and security perspective to cost issues, and coordination issues (across teams and geographies), technology limitations (no system available or lack of integration of the different systems) and siloed teams (tax, immigration, and HR) are also limiting the efficiency of the tracking processes.
It is in the interest of the company to facilitate smooth processes. In the new global mobility landscape, international assignment management should be seen as a continuum ranging from extended business trips to long-term and localisation and should cover different types of moves that were not traditionally considered as part of global mobility.
Refusal to relocate
Any bespoke relocation strategy and policy will have to deal with the refusal of talent to relocate and the reallocation or redundancy of such talent. As part of persuading talent to relocate, a company will have to develop attractive compensation packages and an effective information communication program setting out the benefits and terms of relocation to employees.
A relocation strategy will have to deal with such packages, the required communication strategy and an awareness of the potential redundancy costs and the costs of hiring new talent in the chosen location.
DavidsonMorris are established advisers to the financial services sector. As employment solutions lawyers, we work with financial services companies to support with their full people requirements including global mobility & human resource consultancy, immigration & employment legal advice. We understand the commercial and legal challenges facing businesses in the sector, and work to support our clients in meeting their people management and planning needs while reducing legal risk exposure. Contact our finance sector specialists today.
Last updated: 2nd January 2020