EY Human Capital Conference 2012: Global Employee Mobility - policy trends around the world 2012

2012 Human Capital Conference23–26 October

Policy trends around th ldthe world

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► The views expressed by panelists in this session are not necessarily those of Ernst & Young LLP

Policy trends around the worldPage 2

those of Ernst & Young LLP.

Presenters

► Chris Debner ► Raffaela Donnelly► Ernst & Young Ltd.► [email protected]

y► Ernst & Young LLP► [email protected]


Agenda – policy trends around the world

► Global trends: ► Shortening of review cycles/linking talent management to global mobility► Increase in localizations/Generation Y/flexibility and alignment

► Asia-Pacific: ► Increase in the Asia-Pacific outbound assignments► A shift toward global policies versus Asia Pacific/country specific policies► A shift toward global policies versus Asia-Pacific/country-specific policies► Focus on the improvement of mobility function

► Americas: ► Balancing between business and individual needs► Balancing between business and individual needs► Increase in focus on tax and immigration compliance ► Renewed focus by the U.S. Department of Justice (DOJ) on the Foreign Corrupt Practices Act

(FCPA) ► Europe:

► Increase in strategic outbound assignments into emerging markets► Tracking of exceptions and total costs

U i bilit li i t t th ll t i bilit t t


► Using mobility policies to support the overall sustainability strategy

Global trends

► Shortening of review cycles► Shortening of review cycles► Linking mobility to talent management► Increasing localization of ultra long-term expatriates► Increasing localization of ultra long term expatriates► Aligning policies with the expectations of Generation Y► Ongoing attempts to make mobility programs more► Ongoing attempts to make mobility programs more

flexible and to align them with business needs


Alignment leads to flexibility

Results

Efficient processes facilitating rapid

deploymentLabor dynamics • • •

Business needs • • •

Strategy

Improved financial results and cost

transparencyEmerging markets • • •

Competition • • •

Strategy

Risk minimization/protecting the brand

g g

Economic environment • • •

Globallymobile

workforceStructureProcess

Alternative mobility models to promote

flexibility and

Legislative developments • • •

Regulatory scrutiny • • •Policy

yagility

Public perception • • •


Trends in Asia-Pacific

► Increase in the Asia-Pacific outbound assignments:► Increase in the Asia Pacific outbound assignments:► Increase in the number of Chinese nationals inbound assignees

from multinationals globally

► A shift toward global policies:► Move away from Asia-Pacific/country-specific policies

F h i f bili f i► Focus on the improvement of mobility function:► Lack of global mobility for professional talent


Trends in Americas

► Balancing between business and individual needs:► Aligning policy terms with workforce deployment strategy► Cost effectiveness analysis of policies; introduction of flex programs► Nontraditional assignments such as commuters extended business► Nontraditional assignments such as commuters, extended business

travelers and rotators due to dual career families and assignees juggling children and elderly parents

Increased foc s on compliance dialing for dollars► Increased focus on compliance – dialing for dollars:► Tightening up of language around tax and immigration requirements

and consequences for noncompliance► Renewed focus by the DOJ on the Foreign Corrupt Practices

Act (FCPA):► Review of code of conduct with references to FCPA and the► Review of code of conduct with references to FCPA and the

UK Bribery Act


Trends in Europe

► Increase in strategic outbound assignments into emerging► Increase in strategic outbound assignments into emerging markets:► Companies are looking for new markets to sustain growth

► Tracking of exceptions and total costs:► Introduction of new reporting processes and tools

► Using mobility policies to support sustainability strategy:► Promoting globally consistent assignment conditions, international

development career opportunities and diversity managementdevelopment, career opportunities and diversity management


Split of policies – introduction

Full localization/ Host-based policies:

Local plus policies: Assignment light policies:

Assignment policies:Host based policies:

► Employee-initiated permanent transfers

► Cross-border

► Developmental long-term and short-term assignments

► Company-initiated

p

► Developmental long-term and short-term

► Knowledge sharing

► Strategic long-term and short-term assignments

► Commuters (e gcommuters

► Weekly commuters

► Company-initiated permanent transfers

► Foreign local hires► Localizations

► Routine/ technical assignments

► Commuters (e.g., project driven)

► Rotators (hardship locations)

Only compliance-related benefits

Flexible light assignment/transfer benefits Traditional/rich assignment benefits

Host country base:► Host salary structure► Host taxation► Host payroll

Home country base:► Home salary structure, cost of living adjusted► Tax equalized to home country► Often split payrollp y p p y

Developmental Strategic


Low cost High cost

Case study 1 Split into four business casesp

► Home-based assignments:g► Home based salary► Cost of living allowance/per diems► Tax equalization► Home social security and pension, if possible

Short termBusiness case/ DevelopShort-term projectspackage

defined benefits

Develop-mental Technical Strategic

Core benefits

Home-based assignments


Case study 2 Split into eight business casesp g

Commuter Short-term Long-term Employee driven

Assignment platformH t h

Transfer platform H t t h

Assignment platform Transfer platform

Home country approach Host country approach

► Home country approach► Tax equalization

H i l it d

p► Host country approach► Host taxation► Host or home social security► Home social security and

pension, if possible► Host or home social security

and pension


Case study 3Country combination defined assignment packages – maxing out host-based approaches

DE/FR DE/NL FR/DE FR/NL NL/DE NL/FRFrom/ToC it i DE/FR DE/NL FR/DE FR/NL NL/DE NL/FR

Immigration

Base salary

Criteria

Income tax

Social security tax

Company pension planSocial security benefits

Hardship

Cost of living

Final localization option

Local plusLocalization/local package

Localization not possible/home-based assignment policy applies


Case study 4Policy configurator – future of policies y g p

► Chose policy elements step by stepp y p y p► Exemplary set-up:

► Home/host approachpp► Compliance package► Family package► Hardship package► Upgrade package – Silver► Upgrade package – Gold► Upgrade package – Gold

► Cost calculation by the side► Clear selection/eligibility criteria at each level► Clear selection/eligibility criteria at each level


Questions
