Many countries have begun relaxing the restrictions imposed due to Covid-19. There has been an increase in business activity in many locations and a tentative opening of borders, thereby allowing people to enter countries again. However, as some countries and regions have been forced to reimpose restrictions, what should companies be thinking about when managing employee mobility during this period of tentative recovery and uncertainty?

Companies anticipate another year of grounded assignees
We recently published the results of a survey in which we asked participants about responses to the unfolding pandemic, and sentiment for the future. Over 370 companies took part, representing a variety of industry sectors and 38 different HQ countries. Over half of respondents, with some variations depending on the Headquarter’s location, offered their staff repatriation on account of the pandemic.

Although most expect their staff to return to their locations of work at some point, many were pessimistic about how long it would take before their assignee numbers returned to pre-outbreak levels, expecting it to take up to 12-months before all of their staff would be able to return. More positively, though, only a small minority of companies felt that their numbers of mobile employees would never return to pre-pandemic levels.

Nonetheless, even if risks in the host location have abated and business leaders would like their employees to return, consideration needs to be given to whether or not host countries have imposed restrictions to the point that it is currently impossible for employees to return. China, for example, presently prohibits foreigners, including holders of valid work permits, from entering China. Similarly, some countries where restrictions are less strict still require people to quarantine or self-isolate for a period of time upon entry.

Medical and travel insurance policies
As we’ve seen in parts of the UK with ‘local lockdowns’ triggered by surges in infection rates, fears of further waves of transmission or a re-emergence of the virus during the winter 2020-21 influenza season remain present in the absence of a coronavirus vaccine.

While it is extremely likely that countries and companies will be much better prepared for a re-emergence of the virus, the absence of a vaccine means that companies have a duty of care to ensure that their mobile employees receive support if they become infected whilst working overseas at the request of their employer. This will likely require them to revisit medical insurance policies or request that providers update policies to ensure that coverage associated with Covid-19 (or any other future pandemic) is included. Coverage may include treatment as well as precautionary evacuation. Likewise, corporate travel insurance policies should be reviewed to see whether costs associated with precautionary repatriation are covered.

Given that many companies have had employees on short-term assignments (including business travel or commuter assignments) being stranded in an assignment location during a Covid-19 lockdown, companies should review policies to ensure they cover the costs associated with accommodation, any necessary medical treatment, and other relevant costs for an employee whose return home has been made impossible by circumstances beyond their control.

Home leave – Delay, cash out or something else?
Data shows that over 90% of organisations provide some form of assistance for long-term assignees to return home periodically throughout their international assignment. However, the current pandemic has restricted many employees from being able to return home.

So, what should companies do with respect to the home leave passage? Some companies have encashed it, accepting that the employee has not or may not be able to use it during the time in which the benefit is applicable. Others have simply allowed the employee to roll it over to the next year. Both options have their merits, but any decision should account for the impact these choices may have on the taxable nature of this benefit.

As most companies tax equalise long-term assignees, converting home leave to a cash value is likely to make this benefit subject to income taxes in the host location and the company will therefore need to decide if the company or the employee is responsible for meeting the tax due on this cash value. Similarly, many jurisdictions impose a limit on the number of home leave passages per year that can be provided tax-free, so deferring home leave entitlement to the next tax year may make this a taxable benefit.

Alternatively, as countries start to agree international ‘bubbles’ or ‘travel corridors’, companies may decide to permit assignees to use their home leave passage to an alternative location, if still unable to return home. This method recalls the principle behind ‘rest and recuperation’ trips in an era where travelling back to one’s home country was not as easy as it has been in recent years. Again however, as we’ve seen with the UK, companies should be prepared for these ‘travel corridors’ to be altered at any time and with immediate effect.

Accompanying dependants
Our data shows that the happiness of accompanying dependants is often crucial in ensuring assignments are a success. In the case of long-term assignments and permanent transfers, the ability of the employee’s partner to be able to work in the host location is an important factor in the success of the relocation. As host countries grapple with the economic impact of the Covid-19 pandemic and the consequent increase in unemployment rates, the employment prospects of accompanying partners are likely to be under threat and many will be at risk of being made redundant.

We know that over 30% of companies have seen assignments terminated due to concerns associated with children’s education. The disruptive impact of the Covid-19 outbreak on children’s education has been considerable, with different countries taking varying approaches in terms of suspending and restarting classes. Parents may also have concerns about whether or not it is safe for their children to return to school. Furthermore, the emotional impact of the disruption on children’s education, particularly those who are in school years where exams have been postponed or cancelled, or who may be planning to start university this year, should not be underestimated. HR teams need to be aware of this as it may lead to an increase in requests for an early termination of the assignment and be prepared to provide some form of emotional support to expatriate employees and their families during this time.

Home commitments
A large number of long-term assignees maintain financial commitments in their home locations, particularly housing commitments such as a mortgage on a home property. How companies approach home country commitments as part of a compensation and benefits package will vary. Some companies will exclude home country housing costs from the assignment salary and if the employee chooses to retain their home country property, they will need to meet related costs themselves and often choose to lease out accommodation to do so. However, the Covid-19 pandemic has had an impact on many people’s abilities to meet rental payments, and while some countries may have facilitated mortgage holidays, many assignees could be faced with tenants who are no longer able to afford the rent. Others may not be able to lease out their property at all. Mobility managers need to be aware of how their policies could be applied to assist their assignees in such situations.

Managing commuter and short-term assignments
Popular for encouraging employee mobility as alternatives to long-term international assignments, commuter and short-term assignments saw a surge in uptake on the eve of the Covid-19 outbreak. Our data showed approximately 40% of companies had experienced an increase in short-term assignments, while 25% had seen more commuter assignments, in the last three years. Immigration restrictions put in place in response to Covid-19 have reduced the viability of these assignment types. To many, however, they remain essential: under pressure from business leaders, Hong Kong has now moved to relax business travel between the SAR and Guangdong, while the UK government has been lobbied intensively to exempt technical specialists, who need to ‘fly-in, fly-out’ on a commuter basis, from recently imposed quarantine restrictions. In what is already a fast-moving regulatory world, mobility teams will need to closely monitor relevant procedures, not least to ensure assignees can obtain permissions to travel.

Support will be crucial
The tentative process of resuming cross-border mobility of employees is likely to be long and requires considerable attention to a lot more detail than was necessary six months ago. As we step into what will undoubtedly be a changed world, it is important to bear in mind that there will be new challenges associated with managing expatriate staff, on top of those we have become used to over the years. Whether they are to do with family or financial concerns, or something else entirely, support from HR and Global Mobility teams will be crucial.