The Future of Global Mobility in a Post-COVID-19 World Part 2: Supply Chain Diversification

October 2020

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The coronavirus pandemic has ushered in a “new normal” in how business is conducted across the globe, and mobility managers have had to adapt quickly in this volatile environment as companies revise and rationalize their business operations. One area of business operations that has been particularly hard hit by the pandemic is the supply chain. Disruptions up and down the entire supply chain—shortages of materials and finished goods, business shutdowns, employee absenteeism due to illness, travel restrictions and border closures affecting the availability of labor and transportation, and changes in consumer behavior—have led many companies to rethink and adjust their supply chain processes. These actions include diversifying supply chains and making them more robust by building relationships with new suppliers, strategic sourcing, and making other changes to ensure a resilient supply chain for the future.

This three-part series reviews the impact of three factors on global mobility: remote work, diversified supply chains, and the need for reducing overhead and general business costs. In the first piece in this series, we touched on the impact of remote work, including access to talent and the tax implications for both individuals and companies. This article shifts the focus to the impact of diversification of supply chains on mobility programs.

Based on the BDO European Survey: Combatting the Crisis with Business Resilience, which reviews the responses of 244 business leaders in eight European countries (i.e., Belgium, Denmark, France, Germany, Italy, Spain and the United Kingdom), just under half of the leaders believe that the pandemic has exposed more vulnerabilities in their supply chains than previously thought, and more than 50% of the businesses intend to diversify their supply chain so that if an important supplier becomes insolvent or is unable to fulfill orders, another part of the supply chain can step in; some businesses also are exploring onshoring certain business processes that historically have been outsourced to third parties.
 

Impact of Diversifying the Supply Chain on Global Mobility

While at first glance a company’s plan to diversify its supply chain may not have an obvious impact on a global mobility program, such changes do play a role in the operation and effectiveness of a mobility strategy. A program manager needs to be aware of and prepared for these changes and be able to proactively adjust operational practices based on changes in the company’s direction to ensure that the global mobility function is properly aligned with the overall business strategy.

To understand the impact of supply chain diversification on a global mobility program, it is important to understand the current state of a company’s actual supply chain, which will differ depending on the industry. For a manufacturing company, this would include determining where the inventory of parts comes from and guaranteeing an adequate supply, and for a services organization, determining where employees are located and the projects to which they are assigned.

With respect to inventory, you may say: “Global mobility is about people, not parts.” While that is true, where a company sources its parts affects its people. For example, if a company operates a widget-producing plant in China and decides to diversify its supply chain and open a similar factory in Brazil, the company likely will start sending staff to both China and Brazil instead of just China. The global mobility program manager must be forward- thinking and equipped to respond to any challenges that arise with seconding employees to the new country, such as immigration procedures, housing, taxation, on-boarding, etc., and in the context of the global pandemic, any health, safety, travel or stay-at-home restrictions imposed by the country. And if any employees in the facility in China need to be relocated to Brazil, the mobility manager will need to be poised to successfully and safely manage the transfer. Knowing and understanding where the company is looking to move next will help a mobility manager be proactive, help the organization to move quickly once it is ready, and provide strategic insight into any post-pandemic planning and/or workforce reconfigurations. Learn more about supply chain strategies to mitigate disruption.

Similarly, a service company whose main revenue is generated by sending people to work on projects may need to consider where it hires from. For example, a company may have a team of engineers in India that are sent on projects in Germany or the United States on an as-needed basis. A mobility manager will need policies, processes, contingency plans and solutions in place to address the challenges that arise if the engineers are unable to travel due to travel restrictions such as those put in place during the coronavirus pandemic, or conversely if the engineers become trapped in Germany or the United States because borders have closed.

In the example above, where the service company predominantly sources its employees from a single location, should the company consider hiring a pool of professionals from another location or more than one location in order to meet the demands of clients? Such an approach will come with new complications that the mobility manager will need to tackle, such as whether current policies will be flexible enough to apply in a new hiring location, whether travel policies need to be modified, whether it is necessary for employees to be seconded or whether some jobs can be done remotely, whether the current allowance structure will need to be modified to ensure tax effectiveness. Again, having an understanding of the direction of the company and being armed with the right information will allow a program manager to be proactive and a strategic partner to the conversations.

The role of a mobility manager has been trending away from the tactical aspects with a greater focus on the strategic. Never has this been more true than now. As businesses continue to navigate the pandemic and begin to plan for a post-COVID world, now is the time for global mobility program managers to identify potential issues, start asking probing questions of their company leaders and arm themselves with the information necessary to tackle whatever may come next.
 
 

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