Managed solutions are an increasingly popular solution for employers dealing with several countries, large numbers of fixed term workers and a variety of employment conditions. Typically this relates to project based work or entry into new markets where there isn't the infrastructure for (or the time to establish) a fully compliant local payroll.
Key drivers for Managed Service Solutions are:
- Increased compliance coverage
- Reduced administration cost
- Increased ability to adapt to change
- Reduced complexity of vendor management
- Standardisation of services and reporting
A managed service solution means engaging a single strategic partner who takes on the payroll, tax management and immigration (if necessary) for each jurisdiction. This partner may then manage further vendor relationships with immigration attorneys, recruiters, tax advisors, accountants and payroll processing firms.
For the client this has numerous benefits:
- ease of dealing with one vendor (reduced administration)
- presentation of one invoice for all services (reduced cost and easier management of budgets)
- ability to utilise "best of breed" solutions including a full range of additional services (see figure 9 below)
- ease of enforcing compliance and performance controls (limit employer liability)
- having a specialist supplier take over the administration and compliance means your staff can focus on core revenue generating business
- opportunity to transition back to in-house service when the opportunity provides
- increased flexibility and mobility
- can structure better benefits package for employees
Managed services solutions can also have complications and special attention should be paid to:
- compliance for payroll, professional indemnity, public liability, immigration, social security, tax, occupational health & safety (OH&S), equal opportunuity employment (EEO), anti-discrimination practices, data protection, working time regulations, locally agreed workplace agreements, employee handbooks, etc
- contractual liability
- costs for additional services
- foreign exchange rates and managing fluctuations
- service level agreements
Role of Managed Services
Specialist local providers can deliver the in-country operational requirements of an effective global mobility program. In particular by providing:
- subject matter expertise in their function (either by locality or service)
- compliance with local immigration, tax and employment regulations
- awareness and response to local regulatory changes
This is well suited to supporting lines of business in meeting staffing shortages by moving workers into a site. However using a series of local providers decreases scalability due to the burden of vendor management. It also poses challenges in maintaining consistent policies, offerings and service levels across providers.
Consistency is a key component of ensuring employee engagement with international assignments
Managed Services resolve this by aggregating a number of agreed functions through one provider. Typically this is focused around the core administrative functions of global mobility but it is readily extended to incorporate:
- set service levels
- knowledge transfer
- alignment with corporate policies and strategic objectives
- employee / line of business self-service
- knowledge transfer
This empowers Global Mobility professionals to focus their efforts on high value corporate functions (see Policy & Strategy in Figure 5) whilst the Managed Service provider covers local fulfillment at the line of business and employee level (see Admin in Figure 5 above).
This delivers profound benefits to Global Mobility programs allowing them to focus on high value strategic objectives like establishing a global talent pool and building leadership skills with management ability across cultural and geographic barriers.
In addition by utilising a series of flexible components it provides a platform to empower future business changes and initiatives. Would you like to know more? Click here for Managed service solution enquiries