ITX Insights - January 2025

A year in review: ITX Insights celebrates its anniversary

On the first anniversary of the launch of "ITX Insights", we reflect on a year filled with rich discussions and valuable perspectives into the evolving landscape of Global Employment Companies (GECs). The past twelve months have offered our readers a comprehensive examination of the myths, challenges, and transformative potential of GECs, addressing a spectrum of critical issues faced by global mobility professionals.

One of the recurring themes throughout the year was the dismantling of misconceptions surrounding GECs. From the very beginning of 2024, we tackled persistent myths, such as the notion that GECs are outdated or exclusive to specific industries, or only for organizations with large numbers of expatriates. These discussions highlighted how modern GECs continue to play a pivotal role in enhancing global workforce management. By shedding light on the strategic advantages of GECs, including their ability to streamline operations and optimize compliance, we positioned them not as relics of the past but as essential tools for navigating today’s complex global employment landscape.

A significant focus of our articles was the juxtaposition of GECs with Employer of Record (EOR) models. This exploration was critical in helping organizations determine which approach aligns best with their operational needs. The nuanced comparisons offered readers insights into the strengths and limitations of each model, particularly in terms of governance, flexibility, and cost efficiency. We also delved into hybrid strategies, illustrating how GECs and EORs can coexist to address diverse mobility scenarios effectively.

Governance, compliance, and risk management were central pillars of our coverage. The year’s content underscored the importance of meticulous planning in GEC implementation, emphasizing the consequences of neglecting these areas. From exploring the implications of permanent establishment risks to the intricacies of social security and benefits for GEC employees, our articles offered actionable guidance for mitigating potential pitfalls. The ongoing evolution of international tax policies, including the EU’s blacklist of non-cooperative jurisdictions, added further layers of complexity, reinforcing the necessity of expert oversight in GEC operations.

The choice of location emerged as a critical factor in GEC design. Several issues examined the strategic considerations behind selecting an optimal jurisdiction, balancing cost efficiency with compliance and operational effectiveness. Discussions extended to the role of GECs in managing remote employees and the adaptability required to address the diverse needs of a global workforce. These insights not only informed decision-making but also underscored the growing demand for flexibility and scalability in GEC structures.

Our 2024 articles also spotlighted the tangible benefits of well-executed GECs. Beyond cost management, we explored how GECs can elevate the overall employee experience by delivering better services to assignees and their managers. These improvements were linked to enhanced governance frameworks and clear delineations of responsibilities, which reduce administrative burdens and improve satisfaction across the board.

Equally noteworthy were the practical challenges associated with GEC implementation. Our content covered everything from employment contract transitions to the eventual dissolution of GEC arrangements. By addressing these operational intricacies, we provided readers with a roadmap to navigate the lifecycle of a GEC, from inception to conclusion. These discussions were particularly valuable for organizations considering the long-term viability of establishing multiple GECs or adapting existing structures to new strategic objectives.

As we close the book on 2024, it is clear that the role of GECs in global mobility continues to evolve. The year’s insights have reaffirmed their relevance and versatility in addressing the dynamic needs of multinational organizations. Looking ahead, we remain committed to equipping our readers with the knowledge and tools they need to succeed in this complex and ever-changing field. Thank you for being a part of this journey, and we look forward to exploring new horizons together in 2025.

If you wish to discuss whether a GEC could potentially work in your organization, please feel free to reach out to an ITX consultant for a free consultation.? You can also take the self-assessment using the QR Code below and receive a customized report in about 60 seconds.

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GEC’s Thought Leaders: Nidia Knight – International SOS

This issue of "ITX Insights" features an exclusive interview with Nidia Knight, a leading expert in Global Employment Companies (GECs), with a wealth of experience and a reputation for innovation.

Nidia?is the Group General Manager - International HR at International SOS, the world's leading medical and security services company. With over 18 years of experience in human capital and international HR, Nidia has excelled in culturally diverse locations, having lived and worked in Portugal, UAE, China, Australia, Germany, and Singapore.

As a member of the Exco team and a GMS Specialist, she leads a team of 30 International HR professionals responsible for the recruitment, staffing, and deployment of 950 employees and medical professionals, primarily in emerging markets and remote locations. Nidia is passionate about operational excellence, building effective teams, and transforming ideas into workable solutions. Her extensive expertise includes global mobility strategy and policy design, global payroll, employee benefits, global employment companies, global immigration, vendor management, and impact measurement.

Nidia's commitment to delivering high-quality services that align with organizational and business needs makes her a pivotal asset in the industry.

In this exclusive interview, Nidia delves into the integral role of the GEC in streamlining operations and improving both business outcomes and assignee satisfaction, providing valuable insights into the key factors that contribute to a GEC’s success.

Q1 - Can you please provide a high-level overview of your Global Mobility programs, in terms of number of assignees, diversity of nationalities, approximate number of host locations, and assignment types and durations?

NK: Our Global Mobility programs currently manage a population of 950 employees from 40 different nationalities, deployed across over 45 countries. We offer a variety of assignment types, including rotational, residential (long-term), and short-term assignments, along with comprehensive management of benefits. This diversity and flexibility ensure that we can meet both organizational and employee needs effectively.

Q2 – Can you please share the location of your GEC, which assignee profiles are employed by the GEC, and what is the scope of the activities managed by the GEC?

Our entity is based in Singapore, with operational management of all assignment types centrally handled from both Singapore and our offshore center in the Philippines. The GEC employs a diverse range of assignee profiles, including international assignees on rotational, short and long term assignment as well as employees with global roles.

We offer comprehensive end-to-end internal HR services, including recruitment, contracting, onboarding, payroll, talent management, business partnering, and compensation and benefits. Our business partners and recruitment teams are strategically located in our regions to ensure cultural understanding and fit, enhancing our ability to meet business and candidate needs effectively.

The scope of activities managed by the GEC includes global mobility strategy, policy design, global payroll, employee benefits, tax and immigration compliance, vendor management, and impact measurement. This comprehensive framework supports our assignees, ensuring seamless transitions and operational excellence across all locations, while aligning with our business objectives.

Q3 – What advantages does the GEC model deliver, compared to the more traditional ways of managing international assignments?

The Global Employment Company (GEC) model offers significant advantages over traditional international assignment management. It provides full control and accountability for operations and employees, ensuring consistent policy application and enhanced efficiency. By leveraging economies of scale, the GEC maximizes operational cost efficiency and reduces administrative expenses. Centralized management ensures comprehensive compliance with local and global regulations, minimizing risks. The GEC model aligns global mobility strategies with business objectives, enhancing strategic alignment. Additionally, it improves the employee experience through seamless HR services and offers scalability and flexibility to adapt to changing business needs and expand into new markets.

Q4 – In your opinion, what are the critical success factors for a GEC to operate smoothly and deliver value to both the business and the assignees?

The critical success factors for a GEC to operate smoothly and deliver value include having clear procedures and processes, along with well-defined roles and responsibilities between the team and the business. Strong controls and frequent audits are essential to ensure compliance and operational integrity. Effective leadership and a robust business partnering team are crucial for strategic alignment and informed decision-making. Additionally, full ownership of the employee lifecycle, from recruitment to offboarding, guarantees consistent and high-quality HR services. These factors collectively enhance operational efficiency, support business objectives, and provide a seamless experience for assignees.

Q5 – What advice do you have for organizations considering a transition to a GEC model?

For organizations considering a transition to a GEC model, it's crucial to evaluate several factors. First, assess the home/host country combination to ensure it makes sense from a tax and cost perspective. This analysis will help determine the financial viability of the transition. Second, consider the maturity of the organization and its readiness to centralize operations. This involves evaluating whether the organization is prepared to let go of decentralized control and embrace a centralized model. Lastly, examine the types of assignments and determine if it makes sense for all to be managed by a GEC. Not all assignments may benefit from centralization, so it's important to identify which ones will derive the most value from this model. These considerations will help ensure a smooth transition and maximize the benefits of the GEC model.

We express our sincere thanks to Nidia Knight for sharing her knowledge and insights so generously with our readers.

Learning Corner

The SHIFT model: How a GEC can align various functions and processes

One of the primary challenges faced by Global Mobility programs is the need to balance priorities that extend beyond the scope of the HR function. Deploying assignees and their families impacts various parts of an organization, including Operations, Tax, Legal, and Risk. For larger organizations, these complexities are magnified by matrix structures, which create intricate relationships between functions, geographies, and cost centers.? Global Employment Companies (GECs) are transforming how organizations manage their Global Mobility programs by integrating and streamlining processes across HR, Global Mobility, Finance, and Accounting.

In the context of a Global Employment Company, some of the HR processes traditionally managed by the “home location” often fall under the GEC's purview, since it serves as the legal employer for assignees, therefore handling key responsibilities such as employment contracts, social security arrangements, insurance, payroll, and more.? In addition to these HR processes, the GEC also manages the typically Mobility scope, focused on the deployment of assignees, and their administrative management throughout the assignment lifecycle. Furthermore, Finance and Accounting are integral parts of a GEC’s scope, because the GEC typically recharges employment costs and management fees to the overseas subsidiaries to which the assignees are deployed. For standalone GEC entities, maintaining audited accounts and producing financial reports are essential obligations.?

The SHIFT model, which stands for “Simplification for Human Resources Integrating Finance and Technology” represents a bold vision for achieving greater efficiency and performance by building upon these integrated processes.? By centralizing processes across HR, Mobility, Finance and Accounting, the GEC creates a valuable opportunity to streamline, align and integrate workflows, leveraging technology to efficiently capture and use all relevant data, thus offering a compelling solution to the complexities that often accompany cross-border assignments.

The SHIFT framework, anchored in a well-designed GEC, aims to minimize duplication of effort across departments, enhancing resource utilization, and providing a cohesive structure that simplifies otherwise fragmented workflows. For HR, Mobility and Finance teams, this means faster and more consistent support for assignees and their managers, with fewer delays in deployment timelines and project execution. The result is a streamlined approach that reduces administrative burdens and ensures a smoother experience for all stakeholders involved.

Technology plays a critical role in enabling the SHIFT transformation. In principle, the centralization implied in the GEC model allows a single ERP tool to store and process data which is relevant across functions.? For example, an ERP storing data on compensation, benefits, vendor costs and overhead costs, could greatly facilitate the generation of various documents (such as employment contracts, assignment letter, etc.), while at the same time feeding data to the international payroll and to the financial systems for the generation of internal recharges, accounts and financial reports.

Hance, at its core, the SHIFT framework is about simplification and integration, which translate into tangible advantages for both the organization and its assignees.

If you wish to discuss how a GEC could potentially improve the coordination of HR, Mobility, Finance and Accounting processes in your organization, please feel free to reach out to an ITX consultant for a free consultation.

ITX News:

ITX at the Talent Mobility Workshop in Singapore – February 10 and 11, 2025

ITX is thrilled to announce our participation in the upcoming Talent Mobility Leaders event in Singapore on February 10-11, 2025, organized by Worldwide ERC and KPMG. This exclusive workshop is designed for corporate talent mobility leaders, offering a unique opportunity to engage in insightful discussions, hands-on exercises, and focused learning sessions. Attendees will gain valuable skills in crafting compelling business cases and leading with confidence.

We extend our heartfelt thanks to the organizers, Worldwide ERC and KPMG, for hosting and facilitating this impactful event.

We look forward to connecting with industry professionals to explore together innovative strategies in talent mobility.

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ITX to Launch 2025 GEC Survey in early 2025

In the first half of this year, ITX will launch its highly anticipated 2025 Global Employment Company (GEC) survey, inviting all organizations currently utilizing a GEC model to participate. This exclusive survey, conducted every two years, provides valuable insights into the evolving trends and practices within the GEC framework.

The 2025 survey will focus on understanding how organizations are currently using the GEC model, exploring key priorities, challenges, and future projections. It will also examine how GECs are evolving in response to changes in the global workforce, technology, and talent mobility.

By participating, organizations will gain access to essential benchmarks and data that can inform strategic decision-making and help optimize their GEC operations. The insights provided will enable companies to better understand emerging trends and anticipate the future needs of their global workforce.

We invite all organizations using a GEC model to reach out to ITX as soon as possible to express interest in participating. Don't miss this opportunity to contribute to and benefit from the valuable findings of this comprehensive survey. Stay tuned for further updates as we prepare to launch the 2025 GEC survey!

?ITX to present key cost optimization initiatives at the Magellan Network in Paris, on 13 March 2025

ITX has been invited to address the Plenary Meeting of the Magellan Network’s Mobility Group. This prestigious platform brings together leading Global Mobility professionals to discuss critical trends and challenges shaping the future of our field.

On 13th March 2025, Ms. Emilie Rulland, Chief Legal Officer and Chief International Mobility Consulting Officer at ITX, will deliver a presentation, titled “Intra-group Mobility: What Are the Key Levers for Reducing and Optimizing Costs?”, exploring strategies to help organizations balance competing priorities effectively. In today’s dynamic business environment, Global Mobility leaders are expected to balance a wide variety of priorities, including compliance, employee experience, DEI, and more, all while managing the financial impact of international assignments.

Cost optimization remains a core focus for organizations navigating the challenges of cross-border mobility. ITX’s session will highlight actionable insights and practical solutions designed to empower Global Mobility professionals. By leveraging innovative approaches and best practices, the talk aims to showcase how organizations can deliver measurable value to their business while meeting the demands of a rapidly evolving global landscape.

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