Understanding the COVID-19 impact for Global Mobility Turning the dial towards recovery - Deloitte
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Energy Resources & Industrials
Understanding the COVID-19
impact for Global Mobility
Turning the dial towards recovery…
The COVID-19 pandemic has hit the From an international mobility suite of short term tactical measures to
energy, resources and industrials (ER&I) perspective, this is resulting in major ease cash flow pressure and workforce
sector hard, comprising the health project disruption and significant under utilisation, ranging from contract
emergency itself combined with displacement of personnel with many term variations to availing of
demand decrease and a slide in individuals ‘stranded’ in or out of government initiatives and easements
commodity prices. Whilst an integral location for an unknown period of time. to the extent that this aligns with the
requirement for employers operating in business’ tax and broader principles.
A particular challenge for this sector is
this sector is to have robust contingency Moving beyond the initial response into
the need to manage acute travel and
plans in place to maintain operational the recovery phase, close teaming
quarantine restrictions, whilst at the
effectiveness, in the past these have between HR, Global Mobility and
same time maintaining safe minimum
often centred on dealing with more Employment Tax, in conjunction with
staffing levels on key installations, sites,
isolated cases of crisis management, business and security stakeholders will
plants and vessels. Safety of personnel
such as responding to natural disasters continue to be essential to develop and
is paramount, necessitating a keen
and local political instability. However, implement a longer term approach to
focus on increased health and safety
the sheer global scale and rapidity of stop/defer activity and staffing
measures to keep staff safe in transit.
the COVID-19 pandemic combined with requirements. Clear and proactive
Whilst liquidity levels vary significantly
the impact on commodity prices for employee communication has never
across this broad sector and from
many parts of the sector is been more important.
organisation to organisation, there is
unprecedented, requiring an equally
consistency in the focus on cost
unprecedented response from all parts
containment and the deployment of a
of the business.
THRIVE
RESPOND
Insights, findings and key observations
• COVID-19 combined with commodity price flux for the ER&I sector is resulting in major project disruption and
significant displacement of personnel.
• How can Global Mobility, wider HR and employment tax teams engage now to turn the dial beyond the initial
response phase towards recovery and ensure readiness to support the business as restrictions begin to lift?
RECOVER
• Whilst it is essential to undertake a deep dive review of all mobile employees in order to manage risks,
quantify costs and keep the business appraised, it will also be important to reflect upon lessons learned to
build out mobility programmes for future resilience.
• It remains to be seen the extent to which the pandemic will impact more broadly on sentiments towards
business travel and more specifically towards international assignments. What is clear is that the pandemic is
undoubtedly acting as a catalyst for change, with a rapid acceleration of the ‘future of work’ and a need to
THRIVE
plan now to be ready for the next normal.
© 2020 Deloitte LLP. All rights reserved.
Energy Resources & Industrials
Respond: Unprecedented times require an unprecedented response – overview of key short term measures
Operations Cos
Cost controls & Policy Rear
Talent & Reward
• Tracking employees & family. • Assessing tax/social security impact • Focus on employee engagement and
Handling physical relocations from of displaced individuals triggering tax wellbeing
individual requests to more residence in another location
• Manage short term payroll costs.
prescriptive demobilisation as • Consideration of available COVID-19 Pause hiring, reduce hours, manage
‘safe’ countries diminished governmental reliefs, where holidays
• Major displacement leading to appropriate, to ease cash flow. See
• Temporary pay/pension/benefits
scheduling & rotational Deloitte Atlas for global reliefs
cuts/freeze for all or a subset of
challenges. New assignments on • Increasing robustness & updating population e.g. executives
hold; temporary repatriation & costs projections to ensure no
delayed deployments • Step down from ‘expat allowances’
surprises occur for the business on
(e.g. COLA & hardship) &
• Ensuring payroll delivery; checking increased costs
consideration of legal aspects of
home payroll requirements as a • Unlocking ‘stuck’ tax authority variations to terms. Union
result of displacement. PE issues refunds. Control cost leakages e.g. engagement
• Assessing immigration impact for foreign tax credit claims/tax
• Impact on new hires, on-boarding &
displaced individuals. Processing equalisation/year end settlements
contractor usage
delays & new timelines. • Who will pay the costs of any
Monitoring ongoing travel & • Consideration of need for
additional expenses as a result of
quarantine restrictions. See redundancy/termination
dislocation/home working?
Deloitte COVID-19 immigration
• Policy changes/exception tracking
digital map
Recover: Building resilience in the post-lockdown period. Actions taken now will have a direct impact on the
future of the business
Whilst organisations are universally impacted COVID-19 travel, whereby individuals from give rise to complexity around the
by travel restrictions, they are some countries may be permitted to enter a individual’s tax residence status (plus
understandably at different stages in particular location, but not others. In permanent establishment and corporate tax
responding to the crisis depending on their addition, some organisations will be residence concerns in some cases where
countries of operation, size of mobility returning furloughed workers to the business home working is possible and continues on a
programme, status of projects and liquidity with a focus on re-integration, whilst others longer term basis). Additional tax and social
levels. As businesses actively monitor COVID- may face the challenges of headcount security costs may arise and a need to
19 developments, how can ER&I Global reductions. determine who will pay for these (the
Mobility, HR functions and employment tax individual, the business, the project?). As
engage now to ensure readiness to support Whilst preparations are being made for regards accompanied assignments, if the
the business as restrictions begin to lift? assignee moves later in 2020 (e.g. visa individual re-deploys, but the family chooses
applications, securing housing, schools etc.), to remain at home, this may well give rise to
given the ongoing travel and quarantine additional complexity, double taxation and
restrictions combined with governmental cost issues, together with the need for robust
processing delays for immigration policies and processes to underpin this. Re-
applications, teams will need to reset briefing some assignees will be beneficial for
processes and keep the business appraised of both the individual and the business.
changing deployment timelines. Working Deep dive review
with wider HR and Reward, there will be a
Given the fast-paced movement of this crisis,
need to assess the impact of the pandemic it is essential to undertake a deep dive review
on 2020 variable pay outturns, the approach of all mobile employees, categorising those
to 2020 bonuses and planning for 2020 share
that were displaced, worked remotely and/or
grants, together with any revised approach require a visa extension, reviewing tax
towards pension contributions, where positions taken during the COVID-19 period,
applicable. Employee engagement,
managing risks, quantifying costs and
consultation and communication will remain notifying the business accordingly. To build
Navigating a shifting landscape key.
Global Mobility teams face fresh and diverse resilience against future shocks, consider an
challenges in the short to mid-term, with a A change in sentiment? analysis of your response phase - systems,
need to manage operations in the post It remains to be seen the extent to which the data integrity, people governance processes,
COVID-19 new world order and at the same crisis will impact more broadly on sentiments vendors, policies and communications. How
time reflect upon lessons learned to build out towards business travel and more specifically did they hold up? What changes are needed
mobility programmes for future resilience. As towards international assignments. Will to be ready for future crises and which
restrictions begin to lift variously around the individuals feel safe? Will they want to operational changes should be continued
world, all Global Mobility teams will need to remain in the ‘home’ country on a longer into the next normal?
navigate the shifting landscape that is post term basis to see this crisis out? This could
© 2020 Deloitte LLP. All rights reserved.
Energy Resources & Industrials
Thrive: Acceleration of the ‘future of work’ – ready for the next normal
Looking back at the crisis, ER&I organisations business critical and development GM teams and business stakeholders will
will want to assess how well the business assignments will also remain important in the need to work closely together to determine
responded to the actions put in place and overall talent agenda. But for others, perhaps the volume of short and long term assignee
how any measures implemented have helped this crisis shows that some jobs can be done volumes needed for 2020, 2021 and
to make the business more resilient, remotely, leveraging digital capabilities,
returning to old ways of working and levels of upskilling local personnel. Businesses may
global mobility if it makes sense to do so, but want to take the opportunity now to
allowing new ways of working to flourish commence a broader workforce review,
where they better meet business needs. including a categorisation of current
expatriate roles, assessing those which can
In particular, planning for 2021 variable pay
be performed remotely on a sustainable
will need focus due to expected continued
basis and identifying the extent that
costs pressures. Looking ahead, businesses
additional training/infrastructure is needed
will want to assess how reward structures
to achieve this together with the design and
should evolve for the post COVID-19
implementation of remote working policies
environment. Will individuals place more
to complement global mobility. Permanent
value on fixed (rather than variable) pay
Establishment matters will need
given recent shocks?
consideration in due course - recent OECD
Global workforce review guidance (found here) is provided on the
The pandemic is acting as a catalyst for basis that remote-working due to the
change, with a rapid acceleration of the pandemic is ‘transitory’ in nature rather than and beyond resetting targets and challenging
‘future of work’ and a need to plan now to be longer term. where the new digital/remote era can
ready for the next normal. Without doubt, augment global mobility and make the
Post COVID-19 Global Mobility
the crisis has resulted in significant disruption location of work more cost effective.
As businesses start to re-imagine talent
and out of necessity, new working Organisations will be looking closely at ways
strategies and operating models, mobility will
arrangements and practices have rapidly to reduce business travel, leveraging
inevitably be impacted. The extent of this
evolved. For some parts of the business, connected platforms and practices (which
will, of course, vary from organisation to
there will be reduced importance as to where have grown successfully during the crisis) to
organisation, depending on operating
work is done and increased focus on how reduce both cost and carbon footprint. The
locations, the nature of work, impact on
work is done, leveraging robotics and extent to which the COVID-19 pandemic will
global projects and, for some, ongoing cost
automation, digital capabilities, connected lead to resistance to undertake global travel
containment as a result of ‘low for longer’
platforms, tools and techniques. and cross border work is unknown. It will be
commodity prices.
important for Global Mobility teams to keep
For the ER&I sector, some individuals will Global Mobility teams will need to plan for their fingers on the ‘expat pulse’ to measure
remain displaced and under-utilised in the potentially several waves of COVID-19 sentiments and where there is longer term
short term because remote working is not an restrictions and a period of ongoing ‘shocks’, reticence, consider what measures might
option and their job can only be done in a necessitating agility in order to dial up and need to be put in place to encourage
certain location. Looking forward, some dial down in response to the complex mix of individuals to undertake those assignments
assignments, due to their nature will remain COVID-19 restrictions and business needs which are essential to the business.
From insight to action
Measure Global
your workforce
response review
Some
Reimagine ongoing
talent remote
strategy working?
2021
variable pay Monitor the
plan ‘expat pulse’
Future of Resetting
reward mobility
© 2020 Deloitte LLP. All rights reserved.
Energy Resources & Industrials
Resources
Area Item Format Summary
Mobility Mobility Tax Alert / Portal In addition to our ‘Newsflashes’ that provide brief Mobility related updates on tax and
specific Newsflashes / immigration, our Tax@Hand Portal provides further COVID-19 global and regional tax
Tax@Hand news, information, and resources. Subscribe here or access the site where you can
Portal configure your preferences.
Immigration Portal Our immigration team have developed a digital interactive document that will give
global real real time impacts from a travel, social and permit perspective. Please access the site
time updates via the following: https://gowork.ges.deloitte/
Wider tax and COVID-19 Alert (where you We have collaborated with Signal AI to develop a tax-intelligent news platform that
other policy Signal Topic will have direct produces:
items Alerts control over alerts
1. Daily alerts on COVID-19 initiatives.
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To sign up to receive Signal Topic Alerts, please send your name, organization, and
email address to: signal@deloitte.com
Deloitte Tax Portal Our Atlas tool page shows reliefs and deferrals for direct, indirect and other taxes
Atlas COVID-19 along with changes in tax administration practice designed to ease compliance for tax
Tax & Fiscal payers. Similar to the GoWork map, you can view by country and tax type in the
Measures interactive map and create country comparisons.
Microsite
To request access, please complete the short online access request form found here.
Government On request The latest global summary of governments’ funding responses to COVID-19:
funding https://www2.deloitte.com/uk/en/pages/financial-advisory/articles/covid19-uk-
response to government-funding-response.html?nc=1
COVID-19
All items Deloitte Portal The latest Deloitte content in relation to COVID-19:
COVID-19 hub www.deloitte.com/COVID
Contacts
James Macpherson Debra Wardle
Global Employer Services Global Employer Services
Partner Director
+44 20 7007 8686 +44 20 7007 1805
jmacpherson@deloitte.co.uk djwardle@deloitte.co.uk
Hayley Barker Clare Fazal
Global Employer Services Global Employer Services
Director Associate Director
+44 12 2484 7385 + 44 20 7007 0284
haybarker@Deloitte.co.uk cfazal@deloitte.co.uk
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