In today’s global business environment, companies often face sudden and complex challenges due to crises like wars, political unrest, or natural disasters. These events can disrupt operations and necessitate immediate and strategic action to ensure the safety and compliance of employees, especially when relocation is involved. This blog discusses the critical HR issues companies face during such crises and outlines effective employee relocation strategies for managing during a global crisis. If you’re interested in learning about effective relocation strategies more in depth, download our eBook, “Relocating at a Time of Crisis“.
Understanding the Impact of Crises on Global Business
The recent conflict in Ukraine has underscored how quickly urgent HR issues can arise during a crisis. Companies find themselves needing to quickly relocate employees, often across borders, while navigating the complexities of visas, legal requirements, and employee support. The war in Ukraine, for instance, led many companies to facilitate rapid relocations for their employees to safer locations, highlighting the need for robust crisis management plans, particularly effective employee relocation strategies.
Key HR Employee Relocation Strategies
Develop Quick HR Response and Support Systems
During a crisis, the immediate priority is ensuring the safety and security of employees. This often means having HR facilitate relocating employees and their families to safer countries or regions. Companies must act swiftly to provide support, which can include financial assistance, temporary housing, and other necessary resources to facilitate an effective employee relocation.
Navigating Legal and Compliance Challenges
Relocating employees in a crisis involves complex legal and compliance issues. Temporary protection measures, such as those enacted by the European Union during the war in Ukraine, can help. However, companies must still be vigilant about longer-term visa requirements, tax implications, and employment laws in the relocation countries.
Long-Term Planning and Flexibility for Where Employees Reside
While some employees may return to their home countries once the crisis subsides, others may choose to settle permanently in new locations. Companies need to plan for both scenarios, ensuring compliance with local laws and sensitivity to the personal choices of their employees. This requires a flexible approach to HR policies and an understanding of the various legal frameworks involved.
Important Considerations for HR and Payroll Compliance
Contractor to Employee Transitions After Relocation
Many individuals affected by crises may have been contractors who, prior to needing to relocate, were working under local laws that were favorable to them. Transitioning these individuals to employee status in new countries can be legally complex and may affect their net pay and benefits. Working through HR, companies need to create effective employee relocation strategies in order to manage these transitions carefully and maintain compliance and fairness.
Establishing New Operations After a Crisis
For employees relocating to countries where the company has no existing legal entity, establishing operations or partnering with local entities may be necessary for the business. This process involves understanding and managing tax obligations, particularly around the risk of triggering Permanent Establishment (PE), which can have significant legal and tax implications.
HR’s Role in Preparing for Future Crises
The unpredictable nature of global crises means that preparation is crucial—and HR’s role even more so. Companies will benefit from having HR create proactive crisis management plans that address potential relocations and include strategies for rapid deployment. Partnering with global expansion experts is a way to ensure that companies have all the necessary support and expertise to navigate these challenging situations effectively.
For a more detailed guide on managing HR challenges during global crises and to learn from real-world insights, download the full eBook “Relocating at a Time of Crisis” by HSP Group. This comprehensive resource provides valuable strategies and expert advice to help your company navigate these complex situations successfully.
HSP is an end-to-end global expansion solutions provider focused on helping companies scale their operations overseas effectively and efficiently. We are the only global expansion expert to offer growing companies a full suite of end-to-end solutions designed to help them scale to any size, in any country.
Our in-country experts have delivered the full spectrum of global expansion solutions—from EoR to entity set-up and management—across more than 100 countries (and counting). HSP brings full payroll, accounting, tax, legal, compliance and HR services to corporate teams, integrating with inhouse staff to both guide and execute across every domain. Contact us today so that we can start delivering your custom solutions.
