International HR Adviser

SPRING 2012 ISSUE 49 PRIcE £10.00

The Leading Magazine For International HR Professionals Worldwide

Advisory Panel for this issue:

Features include: London 2012 Olympic and Paralympic Games: Helping You To Overcome The HurdlesEmployment: To Boldly Go Where No Employee Has Gone Before

Relocation: What Wal-Mart Has Taught Us About Expansion Into EuropeGlobal Mobility Strategy: It Is Time To Treat Mobility Like A Business Imperative

Retaining Expatriate Staff: How To Keep Expatriates From LeavingGlobal Immigration • Global Tax Update

International HR Adviser

1CONTENTS

Spring InternatIonal Hr advIser

In This Issue

While every effort has been made to ensure accuracy of information contained in this issue of “International HR Adviser”, the publishers and Directors of Inkspell Ltd cannot accept responsibility for errors or omissions. Neither the publishers of “International HR Adviser” nor any third parties who provide information for “Expatriate Adviser” magazine, shall have any responsibility for or be liable in respect of the content or the accuracy of the information so provided, or for any errors or omissions therein. “International HR Adviser” does not endorse any products, services or company listings featured in this issue.

International HR Adviser, PO Box 921, Sutton, SM1 2WB, United KingdomPublisher • Helen Elliott +44 (0) 20 8661 0186 • Email: [email protected]

Publishing Director • Damian Porter +44 (0) 1737 551506 www.internationalhradviser.com

Cover Design by Chris Duggan

Page 2 How To Keep Expatriates From Leaving Linda Lange, BDO LLP

Page 6 London 2012 Olympic And Paralympic Games: Helping You To Overcome The Hurdles Lucy Cacchiò, SIRVA Relocation

Page 8 Global Mobility Strategy - It Is Time To Treat Mobility Like A Business Imperative Rob Hodkinson, Global Mobility Transformation, Deloitte LLP

Page 12 Emergency Evacuations - Scenarios You And Your Employees Would Rather Avoid... Dr Sneh Khemka, Bupa International

Page 14 Commuter Assignments Barry Rodin, ECA International

Page 18 Employment: To Boldly Go Where No Employee Has Gone Before Juliet Carp, Speechly Bircham LLP

Page 20 Dire Straits In International Waters: Navigating Compliant Business Travel In The 21st Century Charlotte Slocombe, Fragomen LLP

Page 22 Specialist Markets See Global Fight For Talent Mark Znowski, Eurostaff Group

Page 23 Spoil The Ship For A Hap’orth Of Tar: What Wal-Mart Has Taught Us About Expansion Into Europe Dominic Tidey, EuRA

Page 26 All Change - Where To Be Paid & Foreign Currency Issues Andrew Bailey, BDO LLP

Page 28 Global Taxation Update Andrew Bailey, BDO LLP

Page 31 Remote Working: Examining Current Trends And Organisational Practices Bradford Bell, ILR School, Cornell University

Page 34 Case Study: Setting Up A School In Doha Fergus Rose, ACS

Page 36 Global Immigration Update Fragomen LLP

Page 42 Diary Dates

Page 43 Directory

In Loving Memory of Assunta Mondello

InternatIonal Hr advIser Spring

retaining expatriate staff

The growing globalisation of industries forces organisations to employ a mobile population for the purpose of compet-ing in overseas markets and to maintain multinational knowledge and expertise.Companies invest great amounts of money in sending their employees on assignment to foreign locations. How-ever, the high turnover of expatriates and repatriates creates large losses to the organisation that needs to be addressed from a strategic point of view. Increasing amounts of research are being undertaken into the retention of mobile employees. Research covers various support activities an organisation can provide to the expa-triate and the accompanying family but the link to the organisational strategy is, for the most part, absent.

This article addresses the lack of proce-dures organisations have in place from a home country perspective. Research sug-gests on several occasions the phenom-enon of ‘out of sight, out of mind’ which usually happens to the home country once the employee has moved abroad. The lack of support for the career devel-opment of the expatriate can lead to the problems companies have when the expa-triate returns home and is positioned into an unsuitable role.

Ten Global Mobility Professionals (GMPs) working for multinationals were interviewed to understand their organisa-tional procedures dealing with outbound expatriates and why some of these organi-sations might not consider implementing such processes to avoid employees leaving the organisation.

Through the input of these profession-als, this research will present a framework that will support the expatriate through the home country while on assignment and will uphold the psychological con-tract between both parties. It is of great importance that organisations start to be aware of the damage they can do to them-selves when not spending enough atten-tion on their mobile employees. The out-come proposed by this study is a formal procedure embedded into the Human Resources strategy of an organisation.

Findings on processes in GM functionsOne aspect of the general processes in companies is the responsibility of each

global team to kick-start a new assignment which can be done by the home or the host country. Three of the ten GMPs described that their organisation operate the pro-cedure that the receiving country (host country) manages the complete process of a new assignment which includes cal-culating the costing, creating the contract or assignment letter, and making sure that the internal approval process for the assignment was followed. The other seven organisations have the opposite proce-dure in place where the costing, contract and approval process is managed by the home country HR and might involve sup-port from the host country HR depart-ment as the receiving country. Two of the interviewees who described that their host country HR departments are solely man-aging the process of a new assignment, expressed their concerns that they are not involved or even informed about this new assignment and therefore do not have the possibility or time to support the leaving employee in this process enough.

The next question in the interview identified if the GMPs organisation has a formal procedure in place to stay in con-tact with their expats who are leaving their home country while they are on assign-ment. The interviewees were asked to answer from the perspective of the home country HR responsible. Seven of the GMPs said that there is currently noth-ing in place at their organisation to stay in contact with the expatriate outbound. Two of the GMPs have a more informal way to stay in contact with the expatri-ates through sending regular emails and to check on their progress while abroad. However, it was clarified that this infor-mal way of supporting the expatriate does not have any mechanism in place and therefore is not an official procedure.

Just one organisation out of ten has a formal process in place to stay in regular contact with their expatriates when they leave the country. The GMP working for this organisation expressed that this for-mal process is ‘an absolute necessary part of our assignments’.

To stay in contact with their expatriates while on assignment, a relationship man-ager based in the Global Mobility function is assigned to a certain business line and has the responsibility to ‘touch base’ with every expat outbound from this business on a

regular basis. Throughout the assignment the expatriates have a named ‘go – to’ per-son if they have problems or questions in their professional or private life. Just at the point of repatriation, the relationship manager will give over the responsibility to the local HR Manager who will man-age the process of finding a new position for the returning expatriate.

In addition to having an assigned relationship manager, each expatriate at this organisation has a sponsor while on assignment who is responsible to manage the expatriate’s career progression dur-ing the assignment and at the moment of repatriation. This sponsor is allocated at the beginning of the assignment and is usually the Head of the business line and therefore very senior. The most important function of the sponsor is at the time of repatriation, when the sponsor will be asked to place the expatriate into a suit-able position in the business line which takes into consideration newly acquired skills and experiences.

Line management involvementThe GMPs were asked to comment on the relationship between the expatriate and the home or host line management.

Nine out of ten organisations responded that the home line manager does not have any involvement in the career progression of the expatriates while based in the host location.

“If the headcount were not on their cost centre, some of our managers would not know that these employees actually belong to their team,” was observed by one interviewee.

The only organisation that has the home line management be involved in the career development, has a very UK based com-pany structure, and while the expatriate is based in a foreign country on assignment, they will still report into the same manager as before. That means there is no host line manager in this structure and therefore the only possible manager is the line manage-ment based in the home country.

Eight out of ten organisations stated that their home and host line manager will never work together or share information on the development of the expatriate. The other two organisations have a procedure in place through the annual performance review in which the home and host line

How To Keep Expatriates From Leaving

2


3retaining expatriate staff

manager should enter into a dialogue on the current performance of the expatriate.

Formal process - necessary or not?All the interviewees were asked to com-ment if, as a Global Mobility Professional, they think that a formalised procedure to stay in contact with their expatriate outbounds on a regular basis would be beneficial. Nine out of ten interview-ees answered that a formal process built into the company procedures and culture would be beneficial for the company and the expatriate. Two of these interviewees wish that the line management would take more responsibility in this process and that HR would be able to provide them with support and written guidelines on how to manage their expatriates out-bound. Three individuals believed that the responsibility should lie more with the talent management division of the HR department, or that the mobility team would need to work more closely with the talent management team together. Most of the interviewees agreed that a formal-ised plan on how to stay more in touch with the expatriate and their career pro-gression would be beneficial first of all for the expatriate, but it has the knock on effect that decreases turnover of expa-triates while on assignment, and most importantly after their repatriation.

Just one interviewee said that a formal-ised plan would be unnecessary. The busi-ness and the company would change so rapidly that it would be impossible to pre-pare the repatriation of an expatriate so far in advance. The interviewee believes that an informal way of keeping in touch is sufficient enough to build a relationship with the employee abroad.

Reason for missing processIn comparison to this strong theme of agreement between all of the interview-ees, to understand why nine out of ten organisations do not have a formal proc-ess in place to manage the support of the expatriate population was a far more com-plicated matter. Three GMPs out of nine were thinking about creating some kind of support system in their organisation but a defined plan of implementation was missing. No actual time frames were given when the ideas would be implemented.

The other six GMPs knew that their organ-isations were not considering implementing any kind of formal procedure for their expatriate population. The reason given

by one GMP was that the company culture was not in line with the idea to give more importance to support systems for their mobility services. This seems like a con-tradiction as organisations want to use mobility as a human resources strategy for various reasons, and invest in many cases, huge amounts of money into their mobile employees. It is difficult to understand why the same organisation do not want to adjust their culture and processes to sup-port this strategy to receive the best return on investment as possible.

The other reason mentioned by two GMPs was that business changes so rap-idly in today’s environment that it is nearly impossible to plan ahead for the purpose of repatriation. These comments were given where the company business is similar to the one of the GMP who has formal structures in place to plan for the repatriation of the expatriate. It was con-firmed by an interviewee that this com-pany is successful with their formal proc-ess to plan for the career development of the expatriates even with a fast paced business to manage. It seems that every company would be able to improve their repatriation processes if they would spend the time and resources on it.

The nine interviewed GMPs would like their organisations to appreciate the importance of tackling the issue of high turnover of expatriates but it seems that this might take some more time. This research was able to find some indications through the GMPs opinions, but the real reasons of the company leaders for not addressing this issue might not be even visible to them.

Career developmentOne noticeable pattern arises out of the findings that indicates the seriousness of career development for expatriates. Sev-eral GMPs mentioned the importance for organisations to improve their services in career building of their mobile popula-tion. Most companies have a regional or even global system of career development built into their performance reviews and appraisals. Expatriates would be included in these procedures but the system does not take into consideration of the unusu-alness of their situation.

Kreng and Huang (2009) clarify that a talent management team is responsible for the career development of the home coun-try population and don’t feel responsible for employees working in a foreign country. At the same time, the person responsible for

international human resources or global mobility, will not have the capacity or knowl-edge for developing the expatriate’s career.

That means that both HR functions need to work together to tackle this issue. The danger in not giving serious thought to this matter can be the expatriate com-mitment decreasing until he or she decides to resign and look for a better career and better progression in another organisation.

Further research claims that the expecta-tions of the expatriate for his or her career development through the assignment can significantly affect the job performance during the assignment (Yan et al, 2002). Additionally, meeting of these expecta-tions by the organisation will influence the success of the repatriation and future performance of the expatriate.

Recommendations for Management PracticeThrough the findings, the message seems to be very strong that organisations still don’t take the high turnover rates of expatriates and the associated loss on their investment seriously. Given the glo-balisation of business markets in most industries these days, numbers of expa-triates and secondees increase steadily, which result in higher losses for compa-nies if retaining expatriates is not on the agenda as discussed in this paper(Scullion and Collings, 2006). It would be recom-mended for management dealing with expatriates to raise the awareness of this gap with the leadership of an organisation (McNulty et al, 2009).

Discussed by McNulty and other researchers, there is a great difficulty for managers to determine what represents an acceptable return on investment for expatri-ates. To simplify the process of presenting losses in numbers and cost to a leadership team, data available in the HR department can be helpful. Costs for hiring and train-ing an employee to replace an expatriate can be taken into consideration. Less tangible, but still important, are the loss of business and revenue a resigned expatriate might cre-ate through leaving a gap or taking valuable knowledge away from the company when leaving (Krell, 2005). All the mentioned costs would usually create a significant amount of money lost to the business. If this could be instead invested to improve procedures and services for expatriation management, retention should increase and long-term losses and costs are reduced. This justification for process improvement could clearly be presented with a satisfactory ROI.


retaining expatriate staff

looked after and give him assurance of commitment of the home country office throughout the assignment.

ConclusionsThe conclusion of this research demonstrates that tighter procedures for the support of their employees abroad would be beneficial for the organisation and their employees. The losses described demonstrate the significance it can have on the company’s reputation as an employer. The created framework shows what this could look like based on the feed-back of the ten GMPs’ opinions. To take this research to the next step the implementation of such a formal process should be intro-duced to an organisation and the changes in retention and satisfaction levels of expatria-tion analysed.

Linda Lange is currently the UK Secondment Man-ager for BDO LLP. Linda completed her Masters of HRM this year with this article summa-

rising her dissertation findings. To contact Linda Lange, please email [email protected]

For management in Human Resources to implement support systems or formal procedures, buy-in from the leadership team of the organisation needs to have been given. It is imperative that the com-pany on a global level agrees to improve services and would adhere to new proce-dures otherwise implemented processes will have gaps and fairness and consist-ency throughout the expatriate popula-tion cannot be provided.

When analysing the responses of the GMPs in regards to their ideas of support processes for expatriates, differences can be recognised. It appears that the inter-viewees have several ideas of what could work for their organisation or even in general to keep in touch with their expa-triates and support their development.

These findings give the impression that managers need to undergo a needs assessment for their own organisations and based on their professional knowl-edge decide what kind support functions would benefit the company and the expa-triate population the most.

Here is a list of all the ideas provided through the interviews which could be implemented to improve expatriate support:

Guidelines for line managers on how to •manage and develop their expatriates while on assignmentInformal process of sending an email •every couple of months Implementing a tracking system to •record expatriates skills and experience data for the purpose of building a pipe-line and succession planningCreating a formal talent programme •for expatriates together with the talent management teamImplementing a sponsor scheme by •which the sponsor is defined in the assignment contractChanging expatriate offerings to an •international pay scheme and benefits scheme to support the idea of mobile employees.

One analysis which was mentioned by several GMPs and discussed earlier is the involvement of line management in the career development of the expatriate. It seems that more responsibility should be taken by the sending manager in the home country to stay in touch with the employee and build their career on an ongoing basis. Additionally the interviewees would wish for the business line managers to set objectives and targets for the assignment. It is recommended that these assignment objectives should be followed up upon

during the assignment and might need adjustment or even significant change. The most effective way to do this would be if the home line manager would be included in the annual appraisal, or, arranges a sepa-rate appraisal with the expatriate.

The synchronised formalised process resulting out of this research will be ben-eficial for the home country office because the responsibilities are clarified and each stakeholder has to give their contribu-tion. Due to it being one process, each stakeholder group will be able to remind the other group of their responsibility, and disjointed engagement and lack of support from one stakeholder group, will be picked up and challenged by the one of the other groups. For the expatriate this process will be beneficial for the obvious reasons of support from the home country and the ongoing career development involve-ment which will show commitment of the organisation and will help the repatriation process significantly. Less obvious benefit to this one formalised process is that the expatriate will be able to use one point of contact to address concerns and prob-lems with all other stakeholder groups. It is not necessary for the expatriate to stay in contact with three different contacts to make sure everything is looked after. This will give the expatriate the feeling of being

Engagement between Home Country, Host Country and Expatriate based on Findings

4

Autumn InternatIonal Hr advIser

C

M

Y

CM

MY

CY

CMY

K

Santa_Fe_Group_Full_Page_Advert_vs1i.eps 15/11/2011 14:58:36


olympics

On your mark, get set, GO. With the London 2012 Olympic Games around the corner, it is important to begin putting contingency plans in place to ensure that your relocation programme keeps running smoothly.

With an estimated 660,000 interna-tional visitors descending on London for the Olympic Games (27 July - 12 August), and Paralympic Games (29 August - 9 September), the city will be extremely busy. In addition, the Queen’s Diamond Jubilee (2 June - 5 June) and the annual Wimbledon Tennis Tournament (25 June - 8 July) will also contribute to the disrup-tion that is expected this summer.

Many of the games and competitions will take place outside of London, and the Olympic Torch Relay, beginning on 19 May, will visit over 1,000 places on the way to the stadium. In light of this, it is expected that relocations into and across various locations throughout the UK will be affected as well.

The founder of the modern Olympics, Pierre de Coubertin, once said “…the essential thing in life is not conquering, but fighting well.” The Olympic season is an exciting time, and we want it to stay that way. The comprehensive information below will help ensure you are prepared to overcome any challenges that the Games pose for your relocation programme.

The following recommendations should be considered for any relocation

programme:Reduce non-essential assignments •during the Games period. Only move assignees if it is critical or necessary for business reasons or an assignee’s indi-vidual needsEffectively communicate challenges to •any of your foreign offices, to ensure they prepare for the changes the Olym-pics will bringIntroduce temporary policy measures. •For example, include additional days for a home finding trip to ensure that travel delays do not reduce home search time. A temporary policy will also provide the flexibility to address exceptions that may occur during the Games period.

Visa and Immigration Challenge: Delays in visa processing times for assignees moving into the UK.

The Home Office is expecting more than 380,000 athletes, officials, workers and media to require accreditation. This will include immigration, criminal record and security checks to help ensure the safety and security of the 2012 Games.

Recommendation: Apply for visas well in advance, as soon as it is possible for an assignee to do so.

Travel Challenge: As a non-Olympic traveller, it is likely that an assignee will experience significant airport delays as they arrive into London’s airports, particularly Lon-don Heathrow. Athletes, officials, broad-casters, and support staff etc., also known as the Games Family Members (GFM), will add to the UK’s inbound airport traf-fic. To address this, the UK Border Agency will set up specific Olympic lanes for the GFM, as well as training additional staff to carry out identification checks which will take around 60 seconds per person.

Recommendation: If possible, assign-ees should avoid London Heathrow Air-port and use other UK airports. Should an assignee need to fly into Heathrow or London’s surrounding airports, they should accommodate for delays in their travel plans. As an example, an assignee

booking their home finding trip during this busy period should build in extra time. Additionally, there will be a high demand on car rental, so make your res-ervations well in advance.

Temporary Accommodation Challenge: The reduced availability of accommodations and the increase in cost stay during the Olympic and Paralympic Games. The cost of temporary accommo-dation and hotels will rise due to the high demand and limited supply. For example, the London Organisation Committee of the Olympic Games (LOCOG) has been allocated 56,000 rooms in the city. The cost of serviced apartments has increased and the typical terms and conditions on length of stay have been adapted. The minimum stay in serviced apartments is typically three-, seven-, or 30 nights, however, during the Games the minimum stay period is around 90 nights. Providers may also request advanced payments for accommodations.

Recommendation: Set expectations relating to the availability of accommoda-tion, particularly in Central and East Lon-don, where most spectators will be staying. Consider turnkey properties (assignees moving into temporary accommodation on a rotational basis), although provid-ers may charge fees for each clean turn, it does give the assignee options. In addition, block booking of accommodations may reduce costs and will help ensure the avail-ability of accommodation for assignees moving to the UK.

Logistics and Transportation Challenge: Furniture rental, household goods shipments and general transpor-tation will be affected throughout the Olympic and Paralympic Games. To accommodate road events such as mara-thons, whilst maintaining London’s traffic flow and ensuring pedestrian safety, the Olympic Delivery Authority (ODA) has implemented the following initiatives:

The creation of an Olympic Route Net-•work (ORN) and a Paralympic Route Network (PRN) to provide athletes and

London 2012 Olympic And Paralympic Games: Helping You To Overcome The Hurdles

6


7olympics

officials easy access to the venuesRoad management restrictions includ-•ing changes to traffic signal timing, restricted turns, side road closures and suspension of parking and loading baysTo encourage the use of public trans-•portation, each ticketholder will receive a free public transport pass for travel within London (zones 1-9) on the day of the event. On the busiest day of the Games, 800,000 people are expected to use public transportation.

Recommendation: Ensure assignees are aware of the upcoming logistics and trans-portation disruptions. Due to congestion on the UK’s transport system, avoid travel when possible, especially for assignees new to the UK. For deliveries in and around London, SIRVA has been working with their suppliers to help support assignees. A few of these initiatives include:

Supplementary shifts on van lines as •required, providing out-of-hour deliver-ies to avoid any disruption caused by the Games. The Transport for London (TfL) will be conducting test trials to identify best practice for out-of-hours deliveries and we will take note of their findingsEnsuring additional resources are in •

place; for example, increased furniture inventory for furniture rental if tem-porary accommodation availability is reduced and an assignee has already found their home but has not yet received their shipmentObtaining exemptions from particu-•lar operating restrictions to help avoid disruption to deliveries and / or collec-tions of goodsDelivering goods to a nearby delivery •location where loading restrictions are not affected by the Games.

Useful Resources SIRVA will post regular updates on any changes and developments on http://blog.sirva.com/ as we get nearer to the event!

For further detail on travel in and around London during the Olympics, visit www.tfl.gov.uk.

Find out more about the Olympic and Paralympic Games on the official Web-site, www.london2012.com.

Any Questions?Please contact Erika Toomer, on +44 (0)

1793 606538 or by email, [email protected].

Lucy CacchiòSIRVA RelocationSIRVA is a leading worldwide provider of relocation and moving solutions, SIRVA Worldwide, Inc. (www.sirva.com) provides more

than 230,000 relocations per year to corporations, government employees, and individual consumers through its family of companies. The Company delivers the best mobility experience at the lowest total cost to relocate through complete management of the global supply chain, the world’s leading global operations, industry-leading risk management processes, and full accountability and transparency of costs. SIRVA’s family of companies includes Allied, Allied International, Allied Pickfords, Allied Special Products, DJK Residential, Global, northAmerican, northAmerican International, SIRVA Mortgage, SIRVA Relocation, SIRVA Move Management, SIRVA Global Relocation, Inc. and SIRVA Settlement.


8 InternatIonal Hr Strategy

Today’s business leaders are searching for ways to cope with two inter con-nected challenges: the drive to globali-sation and the need for global talent management. As businesses need to act more globally, companies are looking for ways to improve their ability to build and manage their global workforce - often in places they have not operated before. Many companies are seeing their global footprint shift from west to east as they pursue opportunities for accel-erated growth in emerging markets. This trend was recently highlighted in Deloitte’s Strategic moves survey. As you can see from the chart below, there has been a significant increase in focus on expanding into global and new markets – from 12% indicating this as a top stra-tegic priority in February 2009 to 33% in January 2012.

In addition to this business shift, by 2050, the global population is expected to grow by 50 percent - primarily driven by India and China. Yet 70 percent of the world’s corporate management is currently located in Europe and North America. Just as manufacturing companies have

had to learn how to manage it’s global sup-ply chain for products, today’s businesses require a fundamental shift to consider developing new capabilities for managing a global supply chain for talent.

Demographic shifts at both ends of the age spectrum are also having a big impact on talent. Many companies continue to face a mass exodus of retiring baby boom-ers, even as they struggle to deal with an influx of young workers who have differ-ent needs, skills, and expectations than their elders. This changing workforce requires new mobility management capa-bilities in areas such as leadership devel-opment, workforce planning, strategy alignment, and workforce diversity.

To thrive in this new environment, companies need to develop a Global Mobility strategy that can enable them to effectively realign their workforces with their changing global footprint.

The next frontier of mobility management: Global Mobility Transformation Putting these insights into action how-ever can be a significant challenge.

Given the critical nature of these issues, organisations have responded with a broad array of global mobility initiatives that have focused on mobility polices, technology and mobility management models. While organisations have had varied outcomes addressing these top mobility priorities, many organisations are now sorting through a patchwork of their various mobility approaches, pro-grammes, and initiatives. The near-term result is an operational headache that should be rationalised and made manage-able for the long term.

A common response to mobility gaps has been to conceive of and execute vari-ous “programmes” - such as new polices, strengthened mobility teams, enhanced technology, or modified processes. Unfor-tunately, these approaches have typically focused on what to do, not how to do it. That can place insufficient focus on the resources it will take to implement and then sustain these initiatives over the long run. Even mobility-oriented organisa-tions tend to address their mobility issues topic by topic, not within the context of an integrated mobility strategy or frame-work. Because different elements in the mobility lifecycle are closely related, this lack of a holistic view can stand in the way of achieving strategic mobility objectives. In addition, the people, processes, and technology supporting these activities often operate with minimal coordination or integration.

Organisations have invested in mobil-ity programmes based largely on intuition. Some of these investments have yielded benefits, but few organisations can quan-tity them. Many organisations focus on the investment required to implement a pro-gramme but fail to account for or moni-tor the effort to manage it over the long term. Based on these types of challenges, even organisations that have deployed satisfactory mobility management pro-grammes have found difficulty controlling the infrastructure - people, processes, and technology - to sustain them. Many are also finding they need to plan, implement, and manage mobility initiatives with an operational mindset that more closely resembles the way they address other busi-ness challenges. This heightened focus on

Global Mobility Strategy - It Is Time To Treat Mobility Like A Business Imperative


9InternatIonal Hr Strategy

the operational aspects of mobility strate-gies can be referred to as “mobility-led HR Transformation” - or Global Mobility Transformation.

Getting the execution of mobility “right” has been identified as a top pri-ority, as indicated in the recent Deloitte Strategic Moves survey where three quar-ters of organisations rated their mobility function as no better than adequate.

While HR Transformation has typi-cally focused on the more administrative aspects of HR - such as payroll, benefits, compensation, employee relations, and other high-volume transactions - organi-sations are now finding it is time to bring these same transformation principles to the realm of mobility management. Glo-bal Mobility Transformation is the appli-cation of traditional HR Transformation principles beyond the administrative aspects of HR and into the critical realm of global mobility.

Service delivery strategy: Mobility is not a HR discipline in itself, but a fusion of many interrelated disciplines - e.g., Workforce planning, Recruitment,

Performance management, Learning and development, Succession planning, Diver-sity, Incentives and Rewards. Historically, mobility programmes have evolved sepa-rately, as have the processes and depart-ments that support them. Achieving a more coherent and streamlined approach to mobility begins with establishing the service delivery framework across the entire mobility lifecycle. Typically, the first step is to understand how these pro-grammes are supported today, then iden-tify the critical interdependencies and possible redundancies that present oppor-tunities for improvement. It can also be revealing and beneficial to examine these areas from a customer perspective - as many of these processes touch the same internal customers consistently.

A service delivery strategy defines the mobility programmes that HR will deliver to the organisation, and how they will be delivered. As a start, the strategy includes:

How mobility leadership and “work” will •be organised within the organisationRoles and responsibilities, including •across:– Mobility lifecycle components

– HR, operations, managers, and employees

– Regions, countries, and sitesThe type and number of resources that •will support mobility programmesWhich programmes will be driven glo-•bally, regionally, or locally.

Process redesign: When reviewing the processes required to support mobility programmes, many organisations find significant opportu-nity for simplification and streamlining - often within specific mobility disciplines, but especially when examined across the mobility lifecycle. A process-based approach can also uncover gaps between mobility processes that can diminish the benefit of these programmes. One com-mon gap is “candidate selection” - clari-fying the processes and ownership for selecting new assignees for the organisa-tion from a 360-degree perspective. Other gaps include connection points between mobility and performance management (how do outcomes from performance management processes tie into global mobility strategies?) and mobility and

Deloitte UK screen 4:3 (19.05 cm x 25.40 cm)

© 2012 Deloitte LLP. Private and confidential.

•  Global Tax Preparation •  Compensation Compliance •  Data Security •  Core Service Provision •  Population Awareness

Compliance

Operational Stabilisation/Excellence

•  Service Delivery Model •  Streamlined Processes •  Defined Roles •  Vendor Services Management •  Technology Enablers

Compliance

•  Core Policies Aligned to Business Needs

•  Advanced Business Advisory Services •  Tailored Policies/Packages for Mass

Relocations

Policy Review/Business Alignment

Compliance

Operational Stabilisation / Excellence

•  Global Talent Alignment with Policies •  Global Talent Pool Identification and

Tracking •  Global Compensation/Rewards •  Post-Assignment Retention Strategies

Integration with Talent Strategies

Core Service Efficiency and Effectiveness

Meeting Business Objectives and Needs

Global Talent Management Risk and Liability Containment

Define

Enhance Expatriate

Global Compensation Management

Mobility Data Analytics to

Identify Transformation Opportunities

Act

Service Delivery Model and Process

Global Mobility Technology

Global Mobility Strategy

Drivers and challenges to the business are transitioning global mobility's core efforts toward providing a competitive advantage. Organisations are transforming global mobility to effectively manage their global workforce and drive their business strategies .This typically occurs in four Phases:

Deloitte’s point of view on global mobility transformation

Global Rewards and Policy Stakeholder Engagement

& Current State

Analysis

Assess

Functional Maturity

Policy Review/Business Alignment

Compliance

Operational Stabilisation / Excellence


10 InternatIonal Hr Strategy

succession planning (how does mobility become an input into leadership develop-ment and succession planning?).

Process redesign should account for which aspects of mobility manage-ment will be driven by global processes and which will be managed regionally or locally. For global programme areas, processes should clearly articulate the required steps and the roles and respon-sibilities of stakeholders from end to end. Where such process clarity does not exist, defining it can often require significant input and consensus. Even processes that will remain regional or local often require more clarity in their expectations. Lead-ers must understand how local processes may tie to global ones. For example, how do intra regional mobility programmes tie to a global succession planning pro-grammes? In short, a process-based approach can identify opportunities for streamlining and greater efficiency, as well as opportunities for greater impact of mobility programmes through clari-fied interdependencies across the mobil-ity and talent lifecycle.

Outsourcing: Historically considered only for admin-istrative HR activities, companies are increasingly finding that outsourcing may present a better and more cost-effective mobility solution. For example, expatri-ate Global Compensation Management (GCM) outsourcing is rapidly growing both for traditional long-term assignees and for all assignment types supported by mobility programmes. As demand for such services has grown, the vendor marketplace has expanded and leading firms can deliver broad service offerings. Beyond cost and quality, clients find that expatriate GCM outsourcing can provide faster solutions to emerging business needs, like total cost reporting by business line, employee or function than having to build such capa-bilities internally. As with more traditional HR outsourcing, it is critical for the client organisation to keep its focus on require-ments for their “retained organisations” — a clear plan for what activities will remain internal, who will perform them, and how such processes will interface with those that have been outsourced.

Shared services: As with outsourcing, companies have typically applied the shared services approach to administrative HR proc-esses. In more strategic areas, such as

for mobility activities, they’ve organised around Centres of Expertise. But in the process view, many activities within the mobility lifecycle have characteristics more consistent with those in shared services: high-volume, standardised, and administrative transactions. Numer-ous examples apply across virtually all aspects of the mobility lifecycle, includ-ing assignment letter generation, execu-tion of incentive compensation deci-sions, relocation vendor coordination, or maintenance of home country ben-efits. For organisations with HR shared services operations in place, performing a close review of mobility processes for potential integration into shared services can allow the organisation to perform these activities more efficiently while freeing centre of excellence professionals to focus on more value-added mobility strategy activities.

Technology: Within the past five years, mobility-specific technology solutions have taken off. This movement has been largely the result of improved capabilities provided by leading vendors - both from tradi-tional International Human Resource ERP solutions, as well as from emerging Software as a Service (SaaS) players. New and improved solutions exist across the entire mobility lifecycle, with particular attention focused on cost projections, workflow management and cross border share/incentive income tax withholding technologies. The result is that organi-sations have more tools at their disposal than ever to carry out the mobility strat-egies their organisations require. Given recent market attention, technology is clearly a highly visible component of Glo-bal Mobility Transformation. However, it is important to maintain a focus on the organisation’s business requirements, business processes, and intended service delivery model before investing in new software applications. This is particularly true in the world of SaaS. While these systems can offer numerous advantages, including reduced financial investment and faster time to deploy, the standardised nature of SaaS solutions means custom-ers have less flexibility to tailor these solu-tions to meet their needs.

Other considerations for global mobil-ity technology include:

Integration: Increasingly, organisations are finding that mobility processes are interrelated, and that the data associated

with mobility processes can have greater value when it is integrated across the entire mobility and HR lifecycle. Organisations should carefully assess potential solutions to realise this high degree of integration - if not provided within a single solution, then at minimum with solutions that are easily integrated with other tools and systems.

Analytics: Meaningful mobility data can directly improve the quality of mobil-ity strategies. Unfortunately, while most mobility technology providers claim to deliver meaningful analytics, many fall short of expectations. These deliverables tend to be historically focused “reports” as opposed to insightful data that can be used for go-forward planning and deci-sion making.

Companies exploring these solutions should place particular scrutiny in this area.

To drive integration and cost benefits, companies should thoughtfully assess the available mobility technology providers and build a strategy that matches their business requirements today and those expected for tomorrow. While new SaaS solutions can make it easier for organisa-tions to follow a “best-of-breed” approach, selecting the right solution for each differ-ent element within the mobility lifecycle, it is important for companies to weigh the benefits of greater functionality against the additional effort required to integrate across mobility modules.

Keys to Global Mobility TransformationAs organisations seek to transform their approach to mobility management through an increased focus on operations and technology, several considerations can help companies accelerate their progress:

Clarifying governance over mobility •management planning and opera-tions is a critical early step in trans-formationMoving away from ad hoc approaches to managing the mobility lifecycle means organisations will need greater day-to-day coordination, as well as more integrated decision-making over mobility priorities and investments. For most organisations, this will require not only new organisational structures, but also new ways of evaluating over-all mobility priorities and programmes and selecting where to make invest-ments. This likely means new govern-ance processes within HR, as well as clear channels to get input and assess


11InternatIonal Hr Strategy

these decisions through direct business leadership input. As organisations seek greater global approaches to mobility management, this governance will also need to account for global input and alignment.

Transforming mobility functions •includes considering the skill sets needed in the new environmentAs mobility management processes become less siloed, less administrative, and more data-driven, organisations will find that certain practitioners in their mobility centres of excellence today may not possess the strategic or analytical skills needed for the future.

Likewise, mobility strategists will be expected to bring not only innovative concepts, but also more management understanding. Mobility professionals in general need greater skills in quan-titative analysis, process design, and operations.

Organisations need a clear mobility •technology strategy aligned to their mobility management strategy With the attention the mobility tech-nology market and leading vendors are receiving at present, too many organisa-tions are deploying such solutions with-out clear requirements.

More importantly, many organisa-tions have unrealistic expectations for the impact these solutions will have. Organisations will find, as is the case with any technology, that these solutions are just tools — they won’t resolve broader mobility management objectives without requisite attention on other critical dimensions, such as service delivery design, process design, change management, and governance.

Change management is a critical pre-•requisite to Global Mobility Trans-formationThis can be especially true for an area, such as mobility management, which typically touches very senior employees in the organisation. New approaches to mobility management, whether in service delivery design, processes, or new technology, can require a high degree of stakeholder engagement, communication, and education — both for the mobility professionals who drive these proc-esses and the employees and managers who will use them. Organisations that

transform the operational infrastructure supporting their mobility strategies have the potential to see significant effi-ciency gains from clarified service deliv-ery models, streamlined processes, and the greater automation gained from mobility technology. Better allocation of mobility resources, selective use of outsourcing, and greater use of shared services for mobility-related activities can yield further efficiency and cost improvements.

While these efficiencies will please some, the real benefit of this transformation will actu-ally be improved effectiveness of the mobil-ity programmes themselves. Activities such as improving connections between compo-nents of the mobility lifecycle, clarifying glo-bal versus regional versus local approaches to mobility, and improved integration and use of data will not only improve mobility operations, but will also enhance the organi-sation’s ability to execute its mobility strat-egies and, in turn, address business needs for growth, globalisation, and global talent management.

Rob HodkinsonGlobal Mobility Transformation Practice LeaderDeloitte LLP, United Kingdom+44 20 7007 [email protected]

Andrew RobbGlobal Mobility Transformation DirectorDeloitte LLP, United Kingdom+44 20 7303 [email protected]

Deloitte EMEA Global Employer Services Client

Conference

Wednesday 27 June – Friday 29 June 2012,

Budapest

The annual Deloitte EMEA Global Employer

Services Client Conference will be held on 27-29 June

2012 in Budapest. The conference will address the global mobility and share scheme challenges faced by companies today, as

increasingly companies are “turning the compass” and managing the implications

of increased focus on emerging markets in the

South and East.

For further information on this event please contact

Ashleigh Gatward at [email protected].


HealtH12

Picture the scene, the sun is shin-ing, not a cloud in the sky. There’s a slight nip in the air as you paraglide over a beautiful, crystal-clear lake. All you can hear is the gentle ruffle of the glider's wings above you, and all you can feel is the clean, sweet air in your face. Idyllic. But for one of our mem-ber’s, this scene of tranquillity quickly descended into a nightmare when, due to the effects of the altitude, she plunged into the lake below.

This isn’t the type of emergency situa-tion many people ever have to deal with. But if it was you, what would you do? Or if she were an employee under your care working abroad, what would you do? Luckily, she had our Worldwide Medi-cal Assistance (WMA) in her insurance policy, and one phone call to the WMA Medical Centre in Copenhagen and a series of events were put into action that ensured the customer was first transported by air ambulance to a suitable hospital in the area, and later repatriated home to fully recover.

As companies grow and diversify, more and more people are working in far-flung corners of the world. Unfortunately, the healthcare systems in many places, such as Africa and parts of Asia, haven’t yet evolved to cope with these new demands and expectations. This is where WMA comes in as WMA provides access to multilingual health professionals who are able to coordi-nate medical evacuations and repatriation.

Unlike the tale above, evacuations are not always carried out in true

emergency situations. Some are for treat-ment planned in advance.

After having surgery, another customer living and working in Botswana was told that he had liver cancer. If the diagnosis was correct, he would only have months to live. The customer’s wife contacted WMA and spoke to a cancer specialist. He was able to evaluate the medical informa-tion provided by the hospital and decided that, from the tests that had been carried out, it was impossible to say whether or not he had cancer. The customer and his wife were evacuated to South Africa where more appropriate facilities were available to confirm the diagnosis. The resulting tests showed that he did not have cancer. WMA was able to offer expert medical advice, quick access to appropriate medi-cal facilities and support throughout their ordeal. Needless to say, they were both hugely relieved and extremely grateful for the care provided by WMA.

Our WMA team is made up of medical evacuation specialists and doctors. They deal with all the different parties involved in evacuations and repatriations from air ambulances to commercial flights, hospi-tals and doctors, families and employers. Using telemedicine, WMA consultants are able to discuss cases and access vital medical information from almost any loca-tion. The team are dedicated to making all medical evacuations run as comfortably and smoothly as possible, and to make a difference in people’s lives when they need it most. They are available 24 hours a day, seven days a week, 365 days a year.

So how does it work? “Hello, I’m calling from Zimbabwe, my son is very sick, there is no treatment available locally and he needs to be evacu-ated as soon as possible. We need your help!” This is a typical scenario for WMA. If a medical evacuation is needed, the customer, a relative, employer, treating doctor or any other person involved can contact our dedicated service.

A WMA doctor will evaluate the case and immediately decide which steps need to be taken. Throughout this process and for the rest of the case, everyone involved is kept updated continuously.

We all want the best for our employees and their families. This can be difficult to achieve when you’re not even in the same country. But with the WMA service, you can be sure that if the worst happens, they’re only a phone call away from emergency medical care.

For more information, visit www.bupa-intl.com

Emergency Evacuations - Scenarios You And Your Employees Would Rather Avoid...

Article submitted by Dr Sneh Khemka, Medical Director at Bupa International. At Bupa International we make it our mission to help our customers live longer, healthier,

happier lives and are dedicated to providing all the expatriate health insurance services, help and advice you need to keep yourself and your employees in the best of health. Our dedicated teams respect everyone's individuality, culture, privacy and dignity, and aim to provide a personal service you can rely on throughout your membership. In 2009, we were delighted to receive the Best International Private Medical Insurance Provider award at the UK's Health Insurance Awards, for the ninth time since 1999. It is our aim to provide individuals and companies all over the world with a healthcare insurance service that is second to none. For more information, please visit www.bupa-intl.com or call + 44 (0) 1273 718 308.


Commuter Assignments

Recruiting and retaining internationally mobile employees who can adapt effec-tively to different business environ-ments and social customs is an increas-ing challenge for international busi-ness. Additionally, companies have to consider barriers to mobility such as two career couples, dependent children at a critical stage in their education, and difficult locations. As a result, employ-ers are adopting alternative interna-tional assignment types alongside the traditional long-term approach. Among these are international com-muter assignments which according to two-thirds of the companies surveyed in ECA’s latest survey, International Commuter Assignments and Business Trips, increased over the past two years. The positive trend is anticipated to con-tinue, with nearly 60% of international employers forecasting increases in their commuter staff numbers over the next two years.

A minority practice that’s growing in popularityDespite the rise in commuter assign-ment numbers they still only account for a small proportion of a company’s entire assignee workforce. For example, the typi-cal assignee workforce in 2012 consists of 11% on commuter assignments, 23% on short-term assignment, and 66% on long-term. Furthermore, over 70% of organi-sations managing temporary commuters currently employ 20 or less. However, almost half the companies ECA surveyed anticipate commuter assignments increas-ing at a faster rate than their total assignee workforce over the next three years. In certain industries, including engineer-ing, construction and mining, the rise in commuters is significantly higher in anticipation of increased project work in emerging markets with relatively higher economic growth.

So what defines a commuter assign-ment? Typically a commuter assignment is one where the assignee’s principal resi-dence remains in their home country, they are unaccompanied, and return home at frequent intervals.

The group can be split into temporary and permanent commuters. These are chiefly differentiated by whether they have a defined length or not. The length

of a temporary commuter assignment, will be defined, although this can be greatly varied – anything from three months to three to five years in some cases. These assignments are most likely to be used for pragmatic or tactical reasons. For exam-ple, the need to fulfil project work, often at short notice, and to overcome barriers to mobility, such as dual career couples and concerns over children’s education. A permanent commuter assignment will have no fixed length and tends to be undertaken for more planned or strategic reasons including as a way of accommo-dating employees’ personal circumstances: nearly 40% of employers report that such assignments are initiated after requests from employees, who prefer this arrange-ment to relocating abroad with their part-ner and dependants.

A quick response that can remove barriers to mobility…Being able to fulfil temporary needs such as projects or mergers is by far the biggest reason for companies to send employees on temporary commuter assignments with 84% citing this. While this was the third most common reason for a permanent commuter assignment (with 31% of companies giving this as a rea-son), providing a solution to barriers to mobility is the principal reason behind these types of assignments: just under half said they used permanent commuter assignments because they facilitate inter-national mobility given employee's per-sonal circumstances.

When companies were asked what the biggest advantage was of using commuter assignments the most cited response was that they are more likely to be accepted compared with offers of traditional expa-triate assignments. A further advantage being that strong links with the assignee’s home country company are maintained. This can be beneficial to the assignee’s long-term career in the organisation, such as keeping in touch with home country company developments, including pro-motion opportunities, tax, compliancy and administration are major challenges.

Taxation and other compliance issues such as immigration and visas, complexity of administration and time lost through commuting, are cited as the top three challenges for both types of commuter

assignment. Clearly the advantages that come with being able to get an employee into a location quickly need to be bal-anced against administrative concerns. To ensure acceptable return on invest-ment, not to mention staying the right side of legal, these need to be addressed effectively. However, a common theme emerging from the survey results was that responsibility for the process of manag-ing commuter assignments was often devolved throughout the organisation - only serving to making compliancy even more challenging.

Feedback from survey participants con-firms that compliance and taxation chal-lenges can be overcome, a) if the length of the assignment is managed, taking into account job responsibilities and tax laws in the host and home countries and, b) if procedures are in place to track assignees while on assignment, including allocating responsibilities to HR teams for specific tasks and the effective use of IT software and communication tools.

Overcoming challenges: Managing assignment length and extensionsNearly three quarters of participants man-aging temporary commuter assignments were able to give information on both the minimum and maximum length of time that a commuter assignment would nor-mally be undertaken in their organisation. 50% vary the assignment length accord-ing to home/host country tax regulations – a clear demonstration of the importance of the taxation issue.

But what happens should that predefined period be extended? Nearly 60% report that they have a specified policy if the assignment is extended beyond the normal maximum length. Of these over a quarter would convert to normal expatriate terms and conditions. Where this results in a change of assignment status (e.g. from unaccompanied to accom-panied), normal practice is to review the pro-vision of benefits and calculation of specific allowances including cost of living.

A quarter apply discretion. In these instances business or personal circum-stances (e.g. taxation, progress of project, employee’s agreement) will be reviewed when determining whether to extend the assignment. This decision would also take into account any impact on costs,


14


15Commuter Assignments

including any change in home or host country tax liability.

Overcoming challenges: Tracking90% of companies track their assignees citing the need to assess taxing liability and assisting with corporate compliance as the main reasons for doing so. Deter-mining responsibility for tracking is inte-gral to the success of this already difficult activity, but for both commuter assign-ments it is almost as likely for one func-tion to be involved as another, reflecting their ad hoc nature. Tracking methods vary and include using a centralised book-ing system of travel tickets, IT software tools which record days, or asking assign-ees to keep a travel diary.

Financial and emotional costsAlthough expenses typically associ-ated with relocating a family abroad are reduced or eliminated through the use of commuter assignments, there are a number of costs that offset these sav-ings. These include higher travel costs due to frequent trips home; subsistence expenses (which cover local living costs in full, whereas cost of living adjustments included in expatriate packages com-pensate for the difference in living costs between the assignee’s home and host country); and the relatively high cost of short-term rental agreements such as for serviced apartments. This is not to

mention the less cost-effective situations that could result from a temporary assignment being extended if this is not managed properly: per diem rates for example may be a more practical arrange-ment for shorter-term commuter assign-ments, but after six months this may no longer be the case. Additionally, there is the impact on time and resources that activities related to these assignments, such as tracking, have.

The chart below gives a comparison between temporary commuter and expa-triate assignment costs for Hong Kong to Shanghai. The annual cost of a temporary commuter assignment for a single person is comparable to that for a traditional expatriate assignment over the same period of time for a couple with two chil-dren. In this example, it is clear that any savings made by not having to provide education are outweighed by subsistence and flight costs.

However, the survey suggests a gen-eral awareness of the cost traps of such assignments. Just 14% cited that com-muter assignments reduce costs com-pared with traditional assignments. Company culture and business needs will no doubt play a role in weighing up the advantage of flexibility against potentially higher costs.

And the emotional costs? On the surface a commuter assignment seems like the solution for employees to accept an assign-ment who would otherwise be deterred

to do so by factors that could disrupt the family such as their partner’s career, chil-dren’s education or family commitments. However, in terms of employee chal-lenges, the most commonly cited among employers managing temporary com-muter assignments are time lost through frequent travelling (42%), and stress and fatigue (40%).

A commuter arrangement can put con-siderable pressure on the family. Stress on assignees’ personal relationships is a con-cern for a quarter of employers managing both types of commuter assignments. There can be particular pressure for sin-gle adults on commuter assignments since they may have to maintain two homes, without any assistance in the assignee’s home country from a partner or spouse.

Management and policy of commuter assignmentsSurvey results show that it is equally likely that either the host or home country entity or corporate headquarters will request commuter assignments. This highlights the importance of creating one function with accountability to ensure consistent and cost-effective management of com-muter assignments. However, only 50% of companies have a written policy for tem-porary commuter assignments, although a further 25% are in the process of writing one. The likelihood of having a policy in place increases among organisations with larger (20+) commuter populations.

There are generally less formalised pro-cedures when managing permanent com-muter assignments. Only 30% of those using these assignments have created a policy for this assignment type. The more ad hoc or reactive basis of this type of assignment is a major reason for this.

Below is an overview of some of the main remuneration elements:

Basic payIn nearly three quarters of cases, employ-ers report that the basic pay they deliver to their temporary commuters is the same as prior to the assignment. Such practice is consistent with the fact that the vast majority of temporary commuter assign-ments are to fulfil relatively short-term projects or assist in company mergers. There is often a continuing strong link with the employee’s home country organ-isation. It should be noted that 29% do adjust the assignee’s basic pay prior to the assignment for any additional responsibil-ity as a result of the assignment.



with appreciably different living con-ditions compared with the assignee’s home country.

HousingNearly 90% of employers cover all hous-ing or hotel costs for their temporary commuter assignees. However 70% of these organisations specify ceilings to the level of rent covered. Permanent com-muter assignments follow a similar pat-tern with 73% of all employers covering housing costs. In both cases the most common housing provided is rented fur-nished accommodation, serviced apart-ments followed by hotels.

TravelThe most common pattern of travel for both commuter type assignments is to come home once a week, although a sig-nificant number reported fortnightly or monthly trips. Less frequent trips home are sometimes stipulated for longer inter-continental journeys.

TaxIn the case of temporary commuters over two thirds of companies apply tax equali-sation. A small minority apply tax protec-tion. Over 80% provide their temporary commuters with tax preparation and assistance and nearly 60% give tax brief-ings to commuters, in either the home or host country. However, only 31% report that HR teams managing commuter assignments are given advice by taxation and legal departments.

Over 80% of companies includ-ing social security/social taxes will keep assignees in the home country scheme, where reciprocal agreements between countries permit a choice of system under which commuters may be covered.

The main difference in terms of man-aging taxation for permanent commuter assignments is that although 63% apply tax equalisation, 24% provide their com-muters with no tax assistance at all.

Delivering consistent and cost-effective outcomes?Commuter assignments offer a means of providing pragmatic, practical and flex-ible support to international business. However, this can come at a cost particu-larly since their very ad hoc nature leads them exposed to the pitfalls that come with a lack of centralised coordination. If these assignments are to deliver consistent and cost-effective outcomes that comply

Practice on basic pay for permanent commuters is broadly similar to that reported for temporary commuters - even for permanent commuter assignments the employee’s dependants and the principal residence remain in the assignee’s home country. However, when the host coun-try entity is responsible for the cost of employing permanent commuters a lower proportion of employers deliver basic pay which is the same as prior to the assign-ment and a somewhat higher proportion deliver pay based on national peers in the host country.

Living costsResults show that the large majority of companies (96% and 70% of temporary and permanent commuter assignments respectively) cover the cost of essential local day-to-day living expenses. Of the 96% covering local living costs for their temporary commuter assignees, 39% pay per diem rates. Of the 70% covering local living costs for their permanent commuter assignees, 30% pay per diem rates.

Financial motivation53% pay an international mobility allowance for temporary commuter assignments and 46% for permanent, compared with 61% of organisations employing traditional expatriates. One reason for these lower figures is that some employers managing commuter assign-ments consider international mobility as an integral part of the employee’s job, with an element for mobility included in basic pay. Another argument is that there is less need to provide greater motivation since the whole family is not uprooting to live abroad.

In the case of location or hardship allowances, 42% pay this for tempo-rary commuter assignments, compared with 77% of organisations employ-ing traditional expatriates. Again, the dependant family staying in the home location can partly explain this along with the fact that these assignments are generally to/from locations in the same region so living conditions do not vary significantly.

33% of those employers managing permanent international commuters pay location or hardship allowances. How-ever, this practice is significantly greater among permanent commuters in mining, minerals, engineering, and construction companies. Many of these assignments are to developing or difficult locations

with fiscal and immigration regulations, rigorous management and co-ordination between HR and line managers responsi-ble is essential.

Advantages and Challenges of Commuter Assignments

Advantages Can be implemented quickly•Job offers more likely to be accepted •compared with traditional expatriate assignmentsStrong links are maintained with the •assignee’s home country company and social contacts.

ChallengesTime and resources required to track •commutersDetermining tax liability•Controlling costs•Complying with immigration regula-•tionsStress on family life and personal rela-•tionshipsNo integration into the local workforce, •resentment from local staffComplexity of administration •Time lost through commuting•Stress and fatigue.•

Barry Rodin, Chief Economist at ECA International reports on find-ings from ECA’s latest survey on com-muter assignments.For further information on ECA International’s International Commuter and Business Traveller Survey 2012 please email [email protected] Telephone: +44 (0) 207 351 5000E: [email protected]: www.eca-international.com

16

Autumn InternatIonal Hr advIser


legal

Global mobility is a team effort, par-ticularly when a business starts up in a new country. Multinationals are typi-cally adept at pulling together skills needed to ensure the business is set up appropriately, whether from a corpo-rate, tax or market perspective. This article focuses on things the HR team can do to help put in place effective employment arrangements for the first employee in a new location.

What sort of arrangement best meets business needs? As always, the first base will be to find out what the business requires. There may be a variety of ways to meet those needs, for example:

Employee, self-employed contractor or •commercial agency arrangements?Long-term assignment, local hire or •international commuter arrangements?

Given the key role of the first individual on the ground, the employment structure may be driven by the personal needs of the preferred candidate (and their fam-ily), as well as those of the business. It is worth bearing in mind that there are no “quick fixes” and that self-employed arrangements carry their own challenges. For example, whilst employment laws may not apply and there may be no need to put expensive host country payroll arrangements in place for a self-employed consultant, it may be harder to obtain immigration clearance and/or protect cus-tomer connections. If a “self-employed consultancy arrangement” is later found to be an employment, the cost of getting it wrong could be high. For example, it is hard to comply with local dismissal laws if the business does not consider that there is an employee to dismiss: termination of the “contractor” may be void or substan-tial compensation may be due, along with back taxes, interest and penalties.

Preliminary viability enquiriesWith the first employee it is worth ensur-ing that preliminary viability checks cover employer requirements, as well as indi-vidual (and family) immigration con-straints. So, for example, the business may need to register with a public author-ity or have premises before it can lawfully employ, whether or not the individual

needs immigration clearance. In some host countries an overseas company can-not employ at all and it may be difficult to set up a local company quickly. In that case it may still be possible to employ the first employee through an agency or local business partner. If the employee is the only candidate it would also be worth identifying and checking out any personal “show stoppers” early on, for example a requirement that the employee’s partner be able to work in the host country.

Identity of the employerDeciding on the most appropriate group employer (e.g. home or host company) and ensuring that both facts and docu-ments are consistent with that choice is normally a critical part of interna-tional assignment planning, for exam-ple, because the identity of the employer may have significant tax or social security cost implications or make a difference to whether an employee can remain in his preferred pension plan. There may be less freedom of choice with the first employee, for example, because of appointments the employee must accept to help the business function effectively.

Appointments It is common for the first employee to be given additional authority to manage the business. For example, the employee may be appointed as director, be given “powers of attorney” or be registered locally to allow a particular function to be carried out, e.g. hiring new employees. Account should be taken of the possibility that things may not go to plan. If the first employee is to be sole director of a new host country subsidi-ary, control by the parent company is likely to be less easy than if he were appointed to a three man Board. Similar issues can arise in relation to the granting of pow-ers of attorney. For example, if the first employee is the only representative who can authorise the payroll it may be helpful to think about how this would be managed if the employee fell under a bus. Some-times employment documents can be used to provide fall back arrangements, e.g. by ensuring that a director can be forced to resign or assist with the appointment of a substitute if necessary.

RoleBefore the new role is confirmed to the candidate, or any public authority, corpo-ration tax consequences should be con-sidered. For example, the preferred job title or job description may: increase the risk that a “permanent establishment” is created; or determine whether manda-tory collective agreements apply (that may for example affect the size of termi-nation payments or the ability to impose post termination restrictions), or whether immigration permission is available. Minor tweaks to the arrangements can sometimes make a significant difference to the outcome. Sometimes it can also be helpful to restrict the individual’s author-ity, for example, to conclude commercial contracts with customers, communicate with the media, hire and fire without con-sultation, or enter into significant finan-cial commitments.

Managing future people risksOften the first employee has an entrepre-neurial/autonomous approach to manage-ment. There may be a correlation between style and problems with things like dis-crimination allegations, bullying and expense management. Most multination-als will have codes of conduct for example regarding bribery. It may also be helpful to put in place more basic practical risk management strategies at an early stage, e.g. by ensuring expenses are approved by someone more senior or setting up regular host country visits or alternative channels of communication for junior staff.

Controlling the paperworkThe first employee/country manager will typically have control of paperwork, more junior host company administrators and host country lawyers. It can be difficult to access material needed to take discrete advice if a problem involving the first employee arises later on. Copies of con-tract documents, details of relevant collec-tive agreements, appointments, powers of attorney etc., kept at another more acces-sible location can be invaluable.

Protecting the businessSuppose the first employee sets up the office, hires some employees, works hard

Employment: To Boldly Go Where No Employee Has Gone Before

18


19legal

at developing the business and then leaves to join a competitor. Clearly the business needs a succession plan, but an immedi-ate priority may be to protect clients, intellectual property and/or confidential information.

Ensuring that appropriate post-ter-mination restrictions, payment in lieu of notice and garden leave clauses are included in employment documents or that terms regarding intellectual prop-erty ownership, confidential information etc., are properly documented can help. However, the appropriate arrangements will vary between locations. In some countries post-termination restrictions are subject to very strict conditions such as continued payment of remuneration and in some they are not enforceable at all. Legal advice from home and host country lawyers can be conflicting - and this problem may be exacerbated where the employee works across borders. For example, the host country may not allow enforcement by injunction and it may be most effective to specify dam-ages to be paid in the event of breach, whilst the home country may regard a fixed payment as an unenforceable pen-alty or refuse to grant an injunction on the basis that there is a financial remedy available. Sometimes, depending on the importance of the commercial interests and related costs, it makes sense to sim-ply focus on advice from the jurisdiction where enforcement is likely to be most important.

In any case the paperwork is not the end of the story. For example, it will be much easier to protect the customer base if other employees know the customers and to control confidential information if it is properly documented and stored on business facilities. Who will own the lead employee’s mobile phone number when he leaves? Are customers’ details entered on the office database or only on “Linke-dIn”? Does the second-in-command also attend meetings with customers? Has the lead employee been permitted to staff the office with loyal former colleagues? Can passwords for IT access be easily changed? Given the difficulty, expense and uncer-tainty associated with enforcing cross-border post termination restrictions prac-tical controls can have greater significance than might be the case for a domestic business leader.

Have all the bases been covered?

Sourcing advice at a reasonable cost and speed is a particularly acute issue for the first employee in a new location, because so much of the ground will be new. The following are examples of issues that may need to be addressed, but it takes some considerable skill to make sure advisers focus on the key issues:

Corporation tax•VAT •Employer registration•Immigration clearance•Social security•Income tax •Employee benefits (e.g., pension, share •plans, bonus)Data protection (including e.g., regis-•tration and cross-border data transfer requirements).

The order in which advisers should be consulted will be driven not only by apparent urgency, but by the effect their advice might have on other areas, such as the structure of the employment arrange-ments or the viability of the assignment. For example, if tax and social security costs may preju-dice the project it makes sense to seek preliminary advice before an employ-ment contract is hurriedly cobbled together to meet apparently more urgent immigra-tion deadlines.

There is a lot to think of about. Too much atten-tion to detail can stall the project, too little can cre-ate unacceptable risk. Each new project raises new challenges and requires a differ-ent balance. The reality is that none of us get it right of all of the time, but the more global mobility profes-sionals talk about their experiences the easier it will be for all of us to learn from other people’s mistakes.

Juliet Carp is a Partner and English and international employment law specialist at City law firm Speechly Bircham LLP, and author of the

leading textbook for assignment managers “Drafting Employment Documents for Expatriates”. Speechlys provides a wide range of global mobility - related services for corporate clients, for example, employment law, immigration, cross-border data protection, intellectual property, international pensions and employee benefits. For individual expatriates the firm can assist with private wealth planning, high value residential property, international wills, divorce and custody. For further information contact Juliet at [email protected].


20 IMMIGRATION

Imagine a scenario in which an employee comes to you with an urgent work-related matter which requires them to travel abroad in two weeks.

The business group registers their hearty support, and the manager sepa-rately reaches out to stress the urgency of this trip. Flights, hotels, work cover-age, IT support, client requests, personal schedules – all these issues rush to the fore in the travel frenzy, and ten days later, the employee is on a flight preparing for a 10am client proposal the next day.

But these client meetings never happen. The employee was turned away by immi-gration officials because they deemed them to be entering the country without the appropriate authorisation. The employee is sent on the next flight back, the client project dead on immigration arrival.

Capsized TravellersIn the rush to make business matters hap-pen, immigration concerns are often inad-vertently relegated to the back burner. The consequences can be catastrophic. When an individual is denied entry into a coun-try, refused a visa application or in any other way violates the terms of immigration, the upshot is usually not just a slap on the wrist for the employee. Indeed, it can reverberate all the way to the sending company.

Depending on the circumstances, the individual may be barred entry from the country of admission for a certain period of time, may lose certain visa-free travel privileges, or may otherwise be appre-hended, fined or even deported.

If a company is deemed to be sending employees abroad on false premises on a frequent basis (intentional or not), or perceived to be in systematic violation of immigration regulations, immigration authorities can take action. Some govern-ments issue fines, others instigate labour inspections, site visits, supervised recruit-ing or restriction of work permit allot-ments for foreign nationals.

Mapping the SeascapeOne of the main issues with business

travel regulations is confusion surrounding proper protocols and lack of awareness concerning country-specific regulations. Since every country has its own rules and regulations, there is no ‘one size fits all’ advice.

While some countries have very clearly defined legislation, many have no posted guidance whatsoever, leaving decision-making solely with individual immigra-tion officers deciding visa applications or permitting entry at the border.

Spain is a prime example. Oftentimes a visit to a work site in Spain, even if the purpose of travel is to attend business meetings, can be construed as a work activity. Spain is a part of the Schengen area, whose maximum allowable stay is 90 days accumulated over a six month period. However, a visa application requesting a stay of six weeks could well be rejected if the applicant did not clearly demonstrate that the stay was a bona fide business visit. A non-visa national, such as an American, could similarly be refused entry at the border for the same reason.

On the other hand, some countries in the Schengen area have a specific limi-tation on business visits. Belgium, for instance, requires a work permit for non-EEA nationals whose business trips exceed five days per calendar month.

Shifting TidesPolitical issues can also influence decision making and policy changes. In North Africa concern about migration, partly caused by high unemployment rates among local populations, has resulted in greater scrutiny levied against business travellers. Nigeria, for example, registered over 20% unemployment rates in 2011, despite having the second largest econ-omy in Africa.

Dramatic immigration policy changes designed to combat these figures can be implemented at short notice, with equally dramatic consequences for international business travel. Noncompliance, even perceived, can have a serious impact on a business’ operations abroad. In fact, there

have been cases where organisations with a history of noncompliance have had their Nigerian operations halted by the Nige-rian Immigration Service, who suddenly refused to issue new work authorisation or renew the work authorisation of for-eign nationals of that company.

Frequent changes to immigration policy also confound experienced business travel-lers who unknowingly travel on the basis of previously acceptable practices. India’s immigration rules were overhauled in 2009 in an effort to more clearly delineate the activities allowed on a business visa.

Until then practically any activity could be carried out in India so long as the stay was less than 180 days. The new rules were quickly implemented and continue to change frequently. The immigration changes resulted in a heightened compli-ance concern within the Indian business community, and many organisations were forced to re-think their immigration pol-icy altogether.

Manning the ShipOf course, most businesses which engage in international trade are aware of these issues and rarely try to intentionally cir-cumvent immigration rules. Astute HR and business managers are aware of the rules and go through the appropriate steps to ensure due diligence.

Most HR would agree that what often seems to be lacking is not so much a cul-ture of compliance, which is built into any responsible organisation’s ethos, but rather a systematic, top-to-bottom proce-dure for ensuring compliance is married with business decisions, from the employee level right through to senior management. There are several clear, straightforward steps that the business can take to ensure good-faith travel compliance without com-promising timing or profit.

First, it is important to tackle the issue at the source, with individual business units requiring international travel for their employees. Business groups can and should set robust internal policies for travel abroad, incorporating HR and Global

Dire Straits In International Waters: Navigating Compliant Business Travel In The 21st Century


21IMMIGRATION

Mobility specialists from the start. Sign-off sheets, risk assessment and compliance guidelines should be built into travel desk resources. A manager looking to send an employee across borders should have easy-to-access resources to consult when mak-ing these decisions, and HR should ideally be involved from the outset.

Second, the company should set guide-lines and protocols at a broader level, so that proper vetting is conducted by those who possess the knowledge of immigra-tion rules and compliance awareness at the corporate level.

The company of course wants to protect individual employees from risk, however, equally important is the protection of the company brand. By using standard-ised firm-wide policies and acting in line with a culture of compliance, companies can both pre-empt risk issues and protect themselves from potential violations. If individual employees fall foul of immigra-tion laws on business trips, the company is in a position to address the noncompli-ance through a reinforcement of due dili-gence policy and protect themselves from any knock-on effects.

Some simple HR policies can go a long way towards minimising risk for travel-lers. As a rule of thumb, business travel-lers should travel with return tickets and proof of accommodation, and should be prepared to answer questions about their destination, such as who is the foreign point of contact.

Furthermore, some countries – such as the US and Australia – require pre-authorisation for travel in the form of a simple online application, even for tour-ists. In gloomy economic times, business travellers are inevitably going to be subject to greater inspection and suspicion, and companies should prepare their employ-ees for international travel appropriately. It is better to address any uncertainty before the employee ever leaves the coun-try, rather than have it arise at the border, and companies should seek professional advice from immigration specialists whenever they are uncertain, to prevent exposure to risk and noncompliance.

ConclusionCompliance issues may not be prominent within a business unit which is used to impulsive decision-making, quick turna-rounds and bottom-line thinking, and it is often up to HR and Global Mobility specialists within the firm to conduct the due diligence within a rigid timeframe.

The two sides are not necessarily incompatible, however, particularly when immigration concerns are considered in tandem with business imperatives and proper visa planning is built into the deci-sion-making process at the outset. At the end of the day, companies are restricted by deadlines and motivated by profit, however, compliance and business should be viewed as two sides of the same coin.

This article was co-authored by Terrance Fedigan and Craig Griffis

Charlotte Slocombe Charlotte has been with Fragomen since 2005. She is currently the Department Head for the out-bound team, where she supervises a team of 9 professionals. The department com-prises of US Foreign Consular Practice for EMEA and South America, the other consular jurisdictions and docu-ment procurement teams for the UK and Europe. Charlotte’s role involves US complex visa inadmissabilities both immigrant and non-immigrant through to Treaty trader/investment visas and other work authorisation categories, particu larly new company set ups. She works with a wide variety of clients across allindustries, including private client. The department extends to docu ment procurement and other consular fil-ings through London, with particu lar emphasis on Indian work visas and Chinese and Russian business visas.

T +44 (0) 20 3077 5250 [email protected] www.fragomen.com

You are cordially invited to

The 2013 Corporate Relocation

Conference & Exhibition

Monday 4th February 2013at

Hotel Russell, Russell Square,

Bloomsbury, London

This successful one-day event

is aimed at International HR

professionals whose role is

to manage their company’s

or organisations Global

Mobility.

There are six free seminars

and over 40 exhibitors, so

please do put the date in

your diary, and if you would

like further information

please email helen@

internationalhradviser.com

This event is organised and sponsored by International HR Adviser



RECRUITMENT IN EUROPE

With Europe facing the spectre of a double-dip recession and sovereign debt crisis, many firms are adopting a ‘wait and see’ stance when it comes to hiring new staff. But those looking to recruit experienced professionals in finance, technology and energy are finding they have a fight on their hands.

Amidst the continued economic uncer-tainty and gloomy unemployment figures, there has been growing demand for spe-cialist skills across Europe. Rapid advances in technology and the need to upgrade infrastructure mean IT professionals continue to be highly sought after. Mean-while, regulatory change in the financial services sector and a wave of large-scale projects in the energy markets have seen strong demand for experienced profes-sionals. When coupled with a number of recent employment law changes mak-ing it more difficult to recruit from out-side of the European Union, the level of demand has meant firms need to draw from decreasing pools of available talent and face stiff competition from markets elsewhere.

Many businesses are adopting a ‘wait and see’ stance when it comes to hiring new staff. According to the Organisa-tion for Economic Co-operation and Development (OECD), the Eurozone’s unemployment rate remained at just over 10 per cent in Q1 2012, the highest rate recorded since the recession began. This reflects the rising level of unemployment in countries such as Portugal, Spain, Ire-land and the Netherlands.

But while southern Europe’s sovereign debt crisis has stifled growth, some Euro-pean economies have bucked the trend, with Germany in particular providing a fertile market. Here, there is strong demand for finance specialists – whether in accounting, controlling or audit. And it is coming not just from the traditional domain of banks and other financial insti-tutions, but also corporate, industrial and manufacturing firms, most notably those in the automotive industry.

Even in the UK, where austerity meas-ures are biting particularly hard, there have been pockets of activity, with an air of quiet confidence permeating the gloom brought about by the drop in consumer

spending. In both the UK and Germany, exports have remained strong, but firms in other nations should also be preparing for a return to growth over the longer term. Moreover, market forces dictate that most firms can only freeze recruitment pro-grammes for so long before productivity and financial performance are impacted.

Investment cycles fuel demandSo what does this mean within an interIn sectors where investment cycles tend to be longer, such as energy and manufac-turing, delays in recruitment can be felt much further out in terms of a drop in output or an inability to service increased demand. For example, with a number of major projects looming large on the hori-zon, European countries face fierce com-petition for experienced oil and gas pro-fessionals from markets such as Brazil or Indonesia. This situation is compounded by the fact there is an ageing workforce within oil and gas, meaning the availabil-ity of specialist skills and the level of expe-rience is tailing off.

Moreover, the specialist skill sets in oil and gas are just as applicable in other sec-tors such as automotive, aerospace and renewable energy meaning some talent is switching industries. With renewable energy technologies such as wind, wave and biomass promising a ‘third industrial revolution’, the market is crying out for experienced practitioners in the fields of electrical engineering, electrical and mechanical engineering and specialist structural engineering.

As it prepares for the London 2012 Olympics this year, the UK has seen strong demand for professionals skilled in IT security systems, while Germany has seen the construction of large data centres and shared services facilities rais-ing demand for skills. Given that these are situated in more remote locations in order to control costs, firms are offering higher rates of pay to recruit IT professionals with the necessary skills.

Planning for the longer term Money as a main motivator does not hold the same weight as it did before. Candi-dates now look for firms and locations

that can provide more – what is known in recruitment circles as ‘lifestyle, career and motivation’ (LCM). Even if the skill set is an exact match, the balance between life-style, career opportunities and net remu-neration has to be right.

This change in attitude demands that recruiters focus more on communicating the benefits of working for them and liv-ing in their local community. Firms must also take the time to get to know candi-dates, their partners and their families, and go the extra distance to help find local work and family support. And of course, they must look to create a more personable work environment, whether this is through flexibility in working prac-tices, the adoption of new technology or rewarding staff with well-earned down time.

The conventional approach to recruit-ment – i.e. simply casting a wide net and whittling down candidates to a shortlist – is no longer a valid strategy in today’s increasingly mobile and social media dominated environment. A more strate-gic and long-term approach to sourcing candidates and networking is required.

Experienced and innovative recruit-ers now employ a more highly-engaged model, using developments in digital technology, mobile and social media to ensure instant and continuous commu-nication with potential candidates. Tools such as Linkedin, Twitter and dedicated Facebook pages are now new cogs in an ever-growing recruitment wheel.

However, it’s key to understand how and why people use these channels and integrate them in a balanced way into the recruitment mix. Enabling candidates to search for roles using their mobile will also be huge this year, despite the fact it’s still not yet easy to apply for positions directly via a Smartphone, for example.

European firms must act now to find new ways to add value to the recruitment process and engage with potential candi-dates if they are to win what has become a truly global talent tug-of-war.

Specialist Markets See Global Fight For Talent

22

Mark Znowski Managing Director, Eurostaff Group


23relocation

The US is the world’s largest overseas investor. A recent study by the United Nations indicates that US firms are the largest foreign direct investors in the world and own as much abroad as the British and Germans combined, the next largest for-eign direct investors. Europe accounts for over half of all direct investment from the US, valued in 2010 at the $2 trillion mark. With such staggering sums in mind, it is vital that American companies get it right time after time. I have worked in corpo-rate relocation for over 15 years, and in this article I will look at how direct invest-ment in terms of corporate expansion in the retail sector has been handled by US firms coming into Europe, and what fac-tors promote success for companies open-ing up in Europe.

Corporations, no matter how large, are run by people. It is not the corporation per-se that will expand overseas, it is the people who work for it who will form the vanguard of the new enterprise. The process of being relocated to a new country ranks right up there with divorce and redundancy as a life stress. The Holmes and Rahe social read-justment scale maps out those issues that can have a serious impact on normal emo-tional functioning and the components of an international relocation rank among the highest on the scale when combined. It’s easy to forget that in any business expan-sion into a new territory, the people who will carry out the work are the absolute key to the success or failure of the project. Cor-porate expansions into new markets rely on happy and settled managers and families for their success and this is where outsourcing to the professionals is key.

The biggest failure rate for international assignments is from which country to which other? I have asked this question all over the world as part of an intercultural training ses-sion my organisation runs and mostly peo-ple figure that the more extreme the move, the less likely it is to succeed. Examples such as US to China, or Sweden to Qatar are given, with the intelligent assumption that the more extreme the cultures are, the more challenges the expat will face. But in fact the highest rate for assignment failures is for

moves between the USA and the UK, and the reason for 60% of assignment failures is attributable to an inability for the individual or family to assimilate into the host culture. So, the culture shock of coming to Europe and transferring from a US lifestyle to a European one, involves not just a dramatic change in comfort and status, but also in cultural reference. There is an expectation for American citizens of familiarity with Europe, as we have a long shared history and many common societal references such as similar political systems. But scratch just a little deeper and the commonality ends. European social democracies work with an entirely different mindset to the American self-determinist model. On a recent visit to New England, I had a very interesting dis-cussion about access to healthcare, which in Europe is seen as almost an inalienable human right, but which in the US is per-ceived as the result of hard work and taking a stake within society as a functioning eco-nomic citizen. These differences in attitude are not necessarily expected prior to a move to Europe and only increase a sense of differ-ence that had not been perceived in advance. If we are talking about a move from Europe or the US to the middle-east, we are already aware of the vast difference between the cul-tural norms and therefore don’t face such a unexpected reality check. So the more pre-pared the expat and family are, the higher the rate of success for their assignment and therefore for the whole project itself.

One of the most striking examples of cor-porate expansion failure in the retail sector in recent years was Wal-Mart’s move into Germany. Even by American standards, Wal-Mart must be considered as a success story without precedent. Forty years after its humble beginnings in 1962, when Sam Walton and his brother Bud set up their first convenience store in tiny Rogers, Arkan-sas, continuous double-digit growth rates have transformed it into the world’s larg-est retailer. Wal-Mart recently overtook General Motors and Exxon to become the world’s largest corporation in terms of rev-enue. After establishing itself as the domi-nant player in its home market, Wal-Mart decided, in the late 1980s, to embark upon

an ambitious overseas expansion plan to sustain its brisk corporate growth. The stated strategic goal was to have its foreign operations contribute a third of Wal-Mart’s total profits by 2005. In 1991, the first store outside the USA, a SAM’s Club member-ship warehouse, was opened in Polenco, a suburb of Mexico City. Continuing this aggressive expansion model, Wal-Mart set its sights on Europe and a strategy was drawn up to enter the highly competitive German retail market. In the UK, Wal-Mart has succeeded in becoming the second largest supermarket chain with its takeover of ASDA, a far less risky investment strat-egy than the doomed project drawn up for Germany.

The corporate culture of Wal-Mart is interesting. The US success formula was based on low prices due to extensive use of advanced IT in logistics and inventory man-agement, coupled with a highly motivated workforce, influenced to some degree by a quasi-religious attitude common in many US companies. Some of the statistics sur-rounding the company are quite astonish-ing. Wal-Mart is the world’s largest private sector employer with 1.4 million staff. The Retail Link system, controlling inventory is the biggest civilian database in the world. The company operate the world’s largest private satellite communication system, and their turnover is three times higher than the world’s second largest retailer, Carrefour. So how could they get expansion into one European market so wrong?

Firstly the entry-by-acquisition strategy they adopted was fundamentally flawed. Of the two existing retailers they bought, Spar and Wertkauf, Spar was considered a very weak player in Germany and perceived as very low quality. Its stores were small and in less well off inner city areas. The corporate cultures and marketing strategies just were not compatible. Coupled with this, Wal-Mart paid far too much for the ailing Spar group and could not recoup the loss.

Secondly and most crucially from a relo-cation perspective, the management clashed cultures with the existing German teams. Post merger integration is tricky at the best of times, but when this is taking place across

Spoil The Ship For A Hap’orth Of TarWhat Wal-Mart Has Taught Us About Expansion Into Europe

23


24 relocation

“Coaches with experience of working across borders in specific cultures can really help to assimilate teams. By addressing cen-tral questions with the individual manager such as, how they can find a leadership style that will be effective in gaining the trust of the team, what they need to know about the corporate and the wider culture in which they are working and the self- examina-tion of their own cultural background and how this is perceived by the team. Using this level of understanding it is then possi-ble to pinpoint which behaviour needs to be adapted and how best the manager can change his management style.”

Mike Amos is the CEO of Empathica who provide customer feedback research to retail-ers and who recently drew up a 10 point for-mula for success in international expansion:

1. Do some research firstMoney can be wasted if you plunge into a new market without researching its poten-tial first. Identify whether there’s a local appetite for your products or services by attending trade shows, researching local competitors and identifying any local trade associations that can assist you.

2. Consider cultural differences When expanding into Europe, many US companies choose the UK as their starting point. But while we share a common lan-guage, both cultures tend to have different business styles. In the US, management tend to be open to ideas being pitched by vendors, whereas in the UK, access to decision makers is more restricted, mak-ing the sales cycle considerably longer. However, once contact has been migrated up to senior levels, UK businesses tend to stay loyal to suppliers.

3. Take advantage of government support and resourcesGovernment assistance to business expan-sion comes in many shapes and sizes and it’s important to check out what’s avail-able, whether it be at a regional level, or sector-related.

4. Keep one eye on the money Make sure you raise the necessary capital to support your growth. As bank loans become more difficult to secure, busi-nesses need to investigate a variety of funding options. Also, be aware of how currency fluctuations can affect your busi-ness costs.

two very different cultures, the importance of intercultural competence in the man-agement team is key to success. Wal-Mart appointed four different CEO’s during the first four years of German operations. The first, Rob Tiarks, had supervised 200 US mega stores from the Arkansas HQ. He had never been expatriated before, spoke no German, and therefore decreed that the offi-cial language of Wal-Mart Germany would be English. His team ignored legal frame-works that governed retail operations and as a result the top three senior executives from Wertkauf resigned. After Wal-Mart bought ASDA in the UK in 1998, Tiarks was replaced by British Allan Leighton, who ran the German group from the HQ of ASDA in Leeds. Six months later he was replaced by Volker Barth, the first German to be in the CEO role and one of the remaining top executives at Wertkauf. By this time, faith in the top management team had evapo-rated and Volker failed to integrate Spar into the operation.

The third reason why Wal-Mart failed was a lack of cultural sensitivity to the retail opera-tions as a whole. US and German consum-ers are very different, and even the most basic of intercultural training programmes could at least have highlighted this fact prior to the expensive takeovers. US consumers are used to a very high level of interactivity with staff in a retail environment. High and low context cul-tures were first identified by Geert Hofstede in the 1970’s. Consumers in a high context cul-ture do not need the same levels of assistance and information given to them as consum-ers in a low context culture. The US is a low context culture and Germany, a high context one. The result was that the meet-and-greet philosophy so popular in Wal-Mart USA, was seen as intrusive and rude to the German cus-tomers, who did not want or like Wal-Mart greeters welcoming them to the store. They perceived it as patronising. One retail suc-cess in Germany is the US chain Eddie Bauer, specialists in outdoor clothing. Walk into Eddie Bauer in the US and a staff member will immediately ask if you need help. Walk into Eddie Bauer in Berlin and the staff remain at arms length until you ask for help. This is the German way and the management team at Eddie Bauer recognised this and incorporated it into their expansion planning.

It may seem counter-intuitive to look at failure as a way to promote success, but the lessons learned from the Wal-Mart expansion give very clear indicators. The retail sector in Europe is dominated by home-grown brands, but there are marked US success stories. Gap has been a huge player in the retail market

since the 1980’s, but interestingly the group has not chosen to replicate this success with its two other key brands, Old Navy and Banana Republic. However, this is about to change as the first Banana Republic is about to open in France. The first branch in the UK opened with great success in 2008. The high end clothing retailer Abercrom-bie & Fitch opened in London in 2010 to queues around the block. The UK is very often the first destination for US brands as we share a cultural similarity for how we like to shop. The same meet and greet attitude of stores such as Abercombie & Fitch and its sister brand Hollister, may not translate to Germany or Scandinavia but hopefully the lessons learned by Wal-Mart will form part of the expansion feasibility studies for other major brands. Abercrombie are about to launch in Madrid, Dusseldorf and Brussels and as long as the brand manages to keep the exclusivity that makes teens willing to pay €100 for a sweatshirt, the importance of cultural integration may be small in com-parison to Wal-Mart.

The auto-industry in the US has suf-fered terrible losses since 2008 and overseas expansion is vital to the success of manufac-turers such as GM, who are investing €9 bil-lion in updating plants producing the Opel and Vauxhall brands to strengthen Euro-pean sales. GM is a good example of a com-pany who fully understand the repercus-sions of relocating operations overseas and developed a huge company in its own right, delivering relocation services initially to GM employees being expatriated and then to the wider corporate world. GMAC became one of the largest relocation management companies in the world and now operates independently as Brookfield Mobility. This strategy has enabled GM to move seam-lessly into Europe with newer brands such as Dodge and Chevrolet now taking a size-able chunk of the market.

If things do start to fail on a manage-ment level as they did with Wal-Marts disasterous CEO appointments, there is help available from the experts. Many relocation providers also offer intercultural coaching programmes for senior executives joining an overseas team. ICUnetAG based in Berlin but operating all over Germany have a specialist team of intercultural lead-ership coaches who could potentially have identified issues and assisted the three com-panies to integrate. Kerstin Groenlund, a relocation professional with 20 years expe-rience of assisting companies moving into Germany, knows how far coaching can go at improving success;


25relocation

Dominic Tidey is the Operations Manager for EuRA, the European Relocation Assocation, who have 375 member companies in 56 countries offering professional relocation sup-port to corporate clients.EuRAPO Box 189Diss, UKIP22 1PEP: +44 (0) 8700 726 727F: +44 (0) 1379 641 940M: +44 (0) 7764 575614E: [email protected]: www.eura-relocation.com

5. Build a relationshipGoing it alone can be a lonely journey, so consider partnering with an established local business to help gain a foothold in the market. This will cut the costs of reaching the market and save a lot of time in getting started.

6. Understand the legal systemWhether it’s employment law, contract law or commercial law, it is necessary to make sure you are appropriately knowl-edgeable to deliver on the business you are contracting in the country.

7. Get to grips with employment practicesStandard employment practice varies widely from country to country and it’s important employers understand local requirements, from holiday allocation through to mater-nity and now paternity provision.

8. Consider office location You need to be in the right place to access the right resources for your business to flourish. Being in the middle of a coun-try does not necessarily mean you’re at the

centre of the action. Take advice, even if this comes at a premium.

9. Be an innovator While planning and strategy are critical, it’s a fast-changing world and businesses need to stay ahead of the curve. The dynam-ics that can make your business irrelevant come around more quickly than ever.

10. Don’t underestimate the cost All of the above factors and associated costs must be carefully considered before a final decision to expand is made. Entre-preneurs are known for taking risks, but they like to be better prepared than their less successful, cautious counterparts.

US companies coming into Europe face challenges that they may not be aware of. Working with specialists who provide advice, management consultancy and indi-vidual support for the family and manager in transition is vital to success – look at Wal-Mart, and then look at GM and decide which approach you would take. There are multiple factors in the success of US com-panies moving into Europe and before Wal-Mart many believed that product strength

was enough. However, the challenges thrown up by cultural assimilation for both the individual and the corporate body can-not be underestimated anymore.


taxatION

Recent press coverage of financial troubles within the ‘Eurozone’ had me thinking about foreign exchange rates and some of the related tax issues in the context of international assignees.This article does not pretend to have the answers but instead seeks to raise a number of points to be considered of rel-evance when sending individuals across borders or where foreign currency issues are involved.

Typical assignment scenariosIf we consider typical assignment sce-narios and payment arrangements these include:

Employed in home country, paid in •home countryEmployed in home country, paid in •host countryEmployed in home country, paid in •home & host or 3rd country Employed in host country, paid in •home countryEmployed in host country, paid in host •countryEmployed in host country, paid in •home & host or 3rd countryEmployed in 3rd country, paid in home •& host or 3rd country.

In all instances, it may be necessary to consider exchange rates and what rate to use to arrive at figures to include within tax returns. For example, do you use the exchange rate at the time of receipt, the average for the year or the rate at the time the tax is due?

General tax principlesA tax return is relatively easy when dealing with just one country and the currency of that country. However complexities start to arise when looking at foreign curren-cies and determining the exchange rate to use to convert salary and compensation data into the relevant currency for tax reporting purposes. To my knowledge, all countries want individual tax return reporting to occur in the relevant national currency. For example, a UK national on assignment working in the USA but paid wholly or partly in the UK needs to report taxable income in the USA in US dollars and not GB pounds sterling.

Typically the exchange rate used should be that at the time of receipt. The rates can be taken from, for example well known currency conversion websites or national newspapers, alternatively official rates may be published. Often, where amounts paid throughout a period are relatively consist-ent, an average exchange rate for the period may be used for regular salary payments. A spot daily rate is typically adopted for large one off payments such as stock exercises or bonuses. If questioned or audited, the key is to be able to demonstrate to the tax author-ity how the tax return figures have been derived and that there is consistency to the method of calculation across assignees.

Significant exchange rate fluctuations throughout a year, as happened with ster-ling in the last 3 years, are generally best dealt with by using the relevant daily exchange rate on each payment date. There can of course be a distinct difference, up or down, between an exchange rate over the course of a tax year.

Clearly where taxes are being paid on an ongoing basis throughout the year, fluctu-ating exchange rates may cause minimal problems but where taxes are paid in arrears variations in exchange rates can have a dra-matic impact. For example:

Scenario 1Pay throughout tax year in Country A is 100 but the individual works in Country B and is liable solely to tax in Country B. Country B does not operate a regular withholding equivalent and tax is due after submission of the tax return on issue of an assessment. The exchange rate is 1 to 1 for the tax year in question and the tax rate is a flat 25% but at the time of payment of tax the exchange rate is 1 to 1.5. The gross income received is 100 and tax is 25 but the equivalent amount due at the time of payment is a cost of 16.67 in the Country A currency. In this scenario the tax bill effectively decreases.

Scenario 2 Exactly as above, but at the time of pay-ment of tax the exchange rate is 1 to 0.5. The gross income received is 100 and tax is still 25, but the equivalent amount due at the time of payment is a cost of 50 in

the Country A currency. In this scenario the tax bill effectively increases.

This simple example shows how the cost of taxes can vary, purely through fluctuat-ing exchange rates. Tax equalisation could exacerbate the issue, as could the involve-ment of a third country or currency.

When looking at stock transactions, typically you are seeking to ascertain when costs have been incurred and mon-ies received. If a payment is made by an assignee on the acquisition of stock then the relevant exchange rate on that date usually dictates the cost of acquisition. If however, the individual is merely awarded phantom stock and pays nothing on acqui-sition for this, the taxable figure on even-tual payout is usually the fluctuation of the stock price converted at the relevant exchange rate on payout only.

Let us look at the contrasting situation of two individuals who both hold shares in their employer. These shares are owned outright by the employees. Let’s assume they both acquired 20,000 shares on the same day at a price of one pound each and both dispose of these a year later whilst they are on assignment and the share price on disposal is still one pound. As far as both employees are concerned, they have made no gain or loss. However, the impact of exchange rates can be dramatic, for example:

Scenario 3 One individual goes on assignment to a country where the exchange rate on acquisition is 1:1 but on disposal the rate has changed to 1:1.5. In this situation the individual would make a gain of 10,000 in the currency of the country of assign-ment. This gain would typically be taxed in the country of assignment.

Scenario 4The other individual goes on assignment to a different country where the exchange rate on acquisition is 1:1 but on disposal the rate has changed to 1:0.5. In this sit-uation the individual would make a loss of 10,000 in the currency of the country of assignment. This loss may be avail-able for use or offset in the country of assignment.

All Change - Where To Be Paid & Foreign Currency Issues

26


27taxatION

Andrew Bailey is national head of human capital at BDO LLP. He has over 29 years’ experience in the field of expatriate taxation. BDO

is able to provide global assistance for all your international assignments. If you would like to discuss any of the issues raised in this article or any other expatriate matters, please do not hesitate to contact Andrew Bailey on +44 (0) 20 7893 2946, email [email protected]

contributions, it makes sense to receive sufficient funds in the home country in order to cover the related costs. Similarly the individual will need sufficient funds in the host country in order to meet housing and living costs.

Payroll operation

Most payrolls can cope with making a payment to bank accounts in 2 different countries or operating separate or split pay-rolls. However, some payrolls cannot cope and equally some employers are averse to making separate payments or operating separate payrolls.

Exchange control

An additional issue to consider is that of exchange control which is enforced by some countries, for example South Africa. It is necessary to check ability to move funds freely between countries as in some instances it simply is not possible.

Immigration & labour law

Rules on immigration and labour law may dictate that a certain amount of income must be paid in a country in order to gain access or be employed there. Adher-ence to such rules will be necessary.

In theory, splitting payment between home & host countries balances exchange rate fluctuations, but this may not always be possible or desirable from the individual assignee or employer’s perspective.

Adjusting compensation for exchange ratesOnce compensation items and payment location have been agreed what happens if exchange rates vary?

This depends on the agreement reached and company policy. Many assignees are happy to agree fixed rates which may be specified within contracts. In other cases, assignment policies may specify that ele-ments of compensation may be adjusted where exchange rates fluctuate by a cer-tain percentage, typically 10% up or down. This flexibility is necessary to stop constant changes to payments with every little movement but to allow a change for bigger variations. Whatever the policy, be assured that individual assignees keep a very close eye on the impact exchange rates have on them. They will certainly let you know if they are adversely affected and will selectively choose relevant peri-ods to demonstrate this, conveniently forgetting positive impacts or rates over different periods.

From a tax perspective variations in

Naturally different countries may have different rules about taxation but it is fea-sible for a loss to be turned into a gain, or a gain into a loss, purely as a result of exchange rate fluctuations and tax is then calculated accordingly. It is a difficult situ-ation when trying to explain to an assignee that they owe taxes based on an exchange rate gain they have never enjoyed!

One welcome impending change (April 2012) affecting UK tax rules is that relat-ing to foreign currency accounts. UK rules today state that individuals receiving salary into a foreign currency bank account are potentially subject to UK capital gains tax on any exchange rate fluctuations through-out the year. This laborious calculation exercise will be rightly consigned to history from April 2012 when foreign currency bank accounts will be removed from the scope of capital gains tax.

Where to get paid?Given that exchange rates can cause the above issues, it is not surprising that we often get asked where an indi-vidual assignee should be paid. Inevita-bly this is not solely a tax question but also a combination of additional factors including: where the individual is likely to reside longer term, where their liabil-ities arise, and capabilities of the payroll function itself.

Dealing with these in turn:Taxes

When looking at employment income, in most cases liability to taxes arises pri-marily based on where the individual is working as opposed to where they are paid. As ever there are exceptions for example countries which still have a remittance basis such as the UK and Ire-land.

Residence

Inevitably individuals typically wish to retain monies in the country where they are likely to reside on a longer term basis. For example, if an individual is to go on 2 year assignment from Country A to Country B it makes sense to have only local spend-ing money in Country B and to receive the bulk of their income in Country A. This will affect the tax due in Country B as a result of exchange rates.

Liabilities

If there are continuing financial obli-gations in a home country for example, mortgage, pensions & social security

payment merely get converted into the relevant foreign currency at the rel-evant time.

Banking chargesWhere employers incur banking charges transferring or exchanging funds for employees these are typically reported as taxable income.

Financial catastropheThe impact of exchange rates can be

difficult in normal scenarios but looking again at ‘Eurozone’ troubles what could happen if financial disaster strikes and Greece pulls out of the Euro?

In theory, Greek tax liabilities derived today in Euros but payable tomorrow would still be due – in Euros presumably? If an individual assignee is paid in new sub-stantially devalued drachmas the tax liabil-ity would increase significantly in relative terms. If however, they were paid in a cur-rency other than Euros, the impact of any Euro devaluation would effectively reduce their tax bill.

Notwithstanding theoretical events, a standard currency zone does remove the chal-lenges relating to tax and exchange rates.

SummaryCountries and currencies may vary but the principles set out in this article should hold true.

Tax is already often difficult to calculate when individuals move across borders. The impact on tax and costs of exchange rate fluctuations adds another layer of complexity. The approach taken by tax authorities to foreign exchange fluctuations and the difficulties these create is in many circumstances neither logical nor sympa-thetic. Being aware of potential issues can only help.


GLOBAL tAxAtiOn

BelgiumNew government’s tax plans

Following the recent Federal Budget, many of the measures initially envisaged and aimed at higher rate tax payers have not been implemented, and consequently no wealth tax has been introduced. Addi-tionally, there is still no capital gains tax on shares sold by private individuals.

Of interest to employees are the follow-ing changes to personal income:

The benefit of free housing provided to executives will be almost doubled, and additional taxable amounts will be added for free heating and electricity.

From 1 January 2012, company car benefits will be based on 6/7 of the list price of the car, including VAT and optional accessories, multiplied by a CO2 emissions coefficient. There will be a reduction of 6% on the list price per year, up to a maximum of 70%, which will benefit users of older company cars. Commuting distances will no longer be factored into the calculation and there will be a minimum benefit in kind (EUR 1,200 for 2012).

The percentage rate used for the calcu-lation of the benefit in kind in respect of non quoted stock options has increased from 15% to 18%.

FranceSurcharge on high income earners

Whilst standard income tax bands remain unchanged, there is a new surcharge on the income of high earners. This will apply to both French residents and non-residents with income over EUR 250,000 (single, widowed or divorced individuals) or EUR 500,000 (married couples or civil partnerships).

Increase in social security

Ordinary tax payers have not been spared, with an increase in the social security levy rising from 12.3% to 13.5% via the five social security taxes, which include the Contribution Sociale Généralisée (CSG) and the Contribution au Remboursement de la Dette Sociale (CRDS).

IrelandAttracting individuals to Ireland

As part of the Irish Government’s aim to attract investment from foreign

companies it plans to introduce a “Special Assignee Relief Programme” or SARP, designed to help multi-nationals and local companies encourage key talent to move to Ireland.

Whilst the key aim is to encourage peo-ple to move to Ireland and develop and expand businesses, the new rules will apply to any employee earning over EUR 75,000.

The subsidy effectively reduces salary income between the levels of EUR 75,000 and EUR 500,000 from the charge to tax by a factor of 30 % i.e. a maximum deduction of EUR 127,500. The relief is available for a maximum of 5 years. Additionally, the relief will also allow the employee to receive tax free employer provided school fees up to a maximum of EUR 5,000 per child.

Assignees from Ireland – new relief

A new Foreign Earnings Deduction (FED) has also been introduced as an incentive for companies expanding into Brazil, Russia, India, China and South Africa (BRICS), to use Irish based employees for assignments. An effective tax deduction is available for employees who spend at least 60 qualifying days or more in BRICS countries. A qualify-ing day being 1 of at least 10 consecu-tive days spent working in the BRICS countries. The maximum deduction per annum is EUR 35,000.

NigeriaNew tax rates and other changes

Nigeria has radically changed its tax rate bands with effect from January 2012.

The minimum income tax rate of 0.5% has been increased to 1%.

It should also be noted that the Nige-rian tax filing deadline has changed from 31 March to 31 January following the year of assessment but the penalty for non-compliance has increased from NGN 50,000 to NGN 500,000.

New compliance regulations mean that Nigerian businesses will have to compute and pay PAYE for temporary and casual workers. Previously firms only needed to deduct a 5% withholding from wages to such staff.

SpainAdditional solidarity tax to apply

Austerity measures continue in another Euro zone country. Spain has opted to create an additional solidarity tax that will be charged for the years 2012 and 2013. The rate will depend on the level of taxable income, as shown in the table overleaf.

Non-resident individuals (who do not operate through a permanent estab-lishment in Spain) will see the general rate of income tax rising from 24% to 24.75%.

The wealth tax established by Spain’s pre-vious government has not been abolished. However, certain autonomous regions, such as the Balearic Islands, Valencia and Madrid have approved exemptions for tax-payers resident in their jurisdictions.

SwitzerlandEnd of lump sum taxation in sight?

Switzerland has often been regarded as a tax haven for the wealthy, however, recently there have been popular demands for the rich to pay more tax. Tax privileges for foreign millionaires have previously meant that they have only had to make a lump-sum tax payment. However, a recent left-wing led referendum in the canton of Schaffhausen was found to be in favour of abolition of the lump sum position. This should take place in 2012. Similarly in St. Gallen, while the lump sum will not be abolished, foreign millionaires will have to pay more taxes in 2012. It is likely that other cantons will reconsider the avail-ability of lump sum taxation.

Agreement with German tax authorities regarding hidden Swiss bank accounts

German investors with undeclared income in Switzerland will soon come under increased scrutiny following the signing of an agreement between Ger-many and Switzerland which whilst pro-tecting historic Swiss privacy on bank details will result in a withholding rate of 26.375% and a consent to an exchange of information.

United KingdomLate tax return filing penalties

With the filing deadline for the 2010/11

Global Taxation Update

28


29GLOBAL tAxAtiOn

UK tax year behind us, we will now see the effect of the implementation of a new range of late filing penalties which is more onerous for non-compliant individuals. This will potentially affect foreign nation-als who are unfamiliar with the UK tax system and UK nationals entering into the Self-Assessment regime for the first time.

There is a £100 late filing penalties for •returns not filed by the deadline (with no mitigation where the tax payer has paid too much tax or even the right amount of tax)If the return is not filed by 1 May a penalty •of £10 per day will be levied (up to a maximum of £900) – so a return filed after, for example, 30 July will have a penalty of £1,000A return that remains outstanding after •1 August 2012 will be subject to an additional £300 penalty and £300 more if outstanding by 1 February 2013.

Statutory residence test deferred

At the end of last summer there was a pro-posal to introduce a Statutory Residence Test (SRT) which would streamline the current residency rules but make it harder for individuals to break UK tax residence where they still maintained strong links to the UK. However, following consulta-tion, the proposal has now been delayed a further year until 6 April 2013. At the time of writing it is anticipated that the UK Budget on 21 March 2012 will announce further details.

Domicile related tax changes coming into effect in April 2012

Longer term UK residents with a non-domiciled status and the ability to keep off-shore income out of scope of UK taxa-tion will see an increase in the Remittance Basis Charge (RBC) from 6 April 2012. Under current rules the RBC was and remains GBP 30,000 for individuals who are UK tax resident for at least 7 of the last

9 UK tax years. However, if the individual remains resident for at least 12 of the last 14 tax years the RBC will now increase to GBP 50,000.

However, the good news is that remit-tance basis users will be able to remit for-eign funds without suffering UK tax if they invest funds in UK trading companies (effectively investments made in private companies) in an effort to stimulate growth and investment in smaller businesses.

Liechtenstein Disclosure Facility (LDF)

The LDF will be extended to 5 April 2016. This is because HMRC has been inun-dated with more than 2,000 disclosures exceeding their own expectations. HMRC will continue to make agreements with for-eign governments and tax authorities thus encouraging or forcing delinquent UK tax-payers to become compliant.

PAYE on shares

Changes to PAYE withholding on share based earnings received after cessation of an employment will mean that from 6 April 2012, companies will need to oper-ate code 0T on a non-cumulative basis and withhold any tax thus calculated as opposed to merely deducting at the basic rate of tax.

The change will bring share based earn-ings into line with tax deducted on other post employment income received. This is likely to result in excessive withhold-ing in many instances and will certainly encourage prompt filing by individuals to recover excess tax withheld. Do note that the requirement to operate code 0T does not apply where a code NT (nil tax) is held (because for example an individual is non-resident) immediately prior to leav-ing employment.

Modified payrolls & RTI

In advance of changes to PAYE to

introduce RTI (Real Time Information) from April 2013, HMRC has turned its attention to international assignees and modified arrangements. It is anticipated that employers currently operating a mod-ified payroll for tax equalised expatriates will be able to provide information more quickly using RTI. Draft documentation detailing the new rules and their applica-tion is currently under consideration.

United States of AmericaForeign Bank Account Reporting forms

The US has released a new form to be com-pleted on the Reporting of Foreign Bank Account and Financial Accounts (FBAR). Additionally, the IRS has made a welcome announcement that they will not charge penalties if individuals can prove a ‘reason-able cause’ for not submitting the form, for example where there is no US tax liability.

Voluntary disclosure programme

In a similar vein, the IRS has announced a Voluntary Disclosure Programme for US persons with unreported foreign income for 2012. The programme is very similar to the 2011 programme but has two distinct changes, firstly, that there is no set deadline for applying under this programme (although it can be changed or cancelled at any time) and, secondly, that the offshore penalty rate has increased from 25% to 27.5%. Reduced pen-alty rates are applicable to non-US residents and small account holders.

Circular 230

Any US federal tax advice contained in this communication is not intended to be used, or written to be used, for the purposes of avoiding penalties under the Internal Rev-enue Code, or for promoting, marketing, or recommending to another party any tax related matter.

Spain rates

Prepared by BDO LLP. For further information please contact Andrew Bailey on 020 7893 2946 or at [email protected]

reMOTe WOrK


Aetna Inc. is one of the leading provid-ers of healthcare, dental, pharmacy, life, and disability insurance in the United States. The company serves millions of customers and has over 33,000 employees. In the late 1990’s, the company decided to consolidate a number of its operational offices. The consolidation meant that some of the key talent in the company was going to have to move to new offices. The chal-lenge, however, was that many of these employees were second income earn-ers and it was unlikely that they would be able to relocate. In an effort to retain these talented employees, Aetna decided to experiment with remote work, which would allow the employ-ees to work from home and, therefore, eliminate the need for relocation. The initiative worked so well that the com-pany gradually began to identify other employees who could work remotely. A central goal of the initiative continued to be attracting and retaining top tal-ent, but over time the company saw the opportunity to use remote work to also reduce its real estate footprint. Today, almost half of Aetna’s employee popula-tion work remotely, which includes not only employees who work from home, but also employees who are mobile (e.g., sales employees) and employees who are located at customer sites.

Aetna’s story is becoming increasingly common among companies located around the globe. More and more com-panies are turning to remote work as a way to reduce costs, boost employee productiv-ity, attract and retain top talent, and help employees manage non-work demands. A recent survey conducted by WorldatWork, for example, found that the number of US employees working remotely at least one day a month doubled during the period from 2001 to 2008 (Ozias, 2011). The survey also revealed two other notewor-thy findings. First, whereas much of the initial growth in remote work was con-centrated among contract employees (i.e., self-employed individuals), the growth in recent years has been largely due to more regular (full- and part-time) employ-ees moving into remote work arrange-ments. Second, the results show that from

2008 to 2010 there was a decrease in the number of employees working remotely, which is the first decline registered in the ten years the organisation has been track-ing remote work trends. This decline may be due to the higher unemployment dur-ing this period and associated anxieties surrounding job security. Despite this recent dip in remote work, all signs point to an upward trend as we look ahead. For instance, in 2009 the Society for Human Resource Management published the results of a survey that revealed that 43% of HR professionals believe that in the next five years a larger proportion of their workforce will be working remotely (Vic-tor, 2009).

Although remote work offers a number of potential benefits, it is not without risks and challenges. Companies can find it difficult to build a culture that is accepting and supportive of remote work. It can also be difficult to track exactly who is work-ing remotely, particularly when remote work is adopted more informally, and to measure the business impact of these initi-atives. Remote workers can face a number of personal and professional challenges. For instance, they may struggle for expo-sure and access to professional opportuni-ties and there is the risk that those work-ing outside the office can become socially isolated. These issues suggest that compa-nies need to be both careful and deliberate in how they design and implement their remote work programmes. Although the academic community can help support evidence-based remote work practices, it is clear that this is an area in which prac-tice is significantly outpacing research. This is not to say that research on remote work does not exist. In fact, there are some excellent studies in this area and we have gained significant insight into some issues, such as the impact of remote work on work-life integration. However, the academic literature has little to say on other topics, such as how to best manage development and advancement opportu-nities for remote workers.

CAHRS Research Project In an effort to gain insight into these important topics, we launched a remote work research project through the Center

for Advanced Human Resource Stud-ies (CAHRS) in the ILR School at Cor-nell University. CAHRS is the world’s leading partnership between industry and academia, devoted to global human resource management. CAHRS partners represent more than 60 of the world’s premier companies. As a first step in our research, we conducted a compre-hensive review of the academic literature on remote work to identify key research themes and potentially important, yet neglected, remote work issues. We then conducted extensive interviews with nine CAHRS partner companies, including Aetna, Citigroup, Cisco Systems, General Mills, and IBM, to determine how the research themes align with what compa-nies are currently experiencing, and to identify the strategies and practices com-panies have developed to manage their remote workers. Over the past six months, we have also conducted several day-long, working groups, in which executives from our CAHRS partners companies share current challenges and best practices in managing remote work. These working groups have been attended by 23 execu-tives from 18 different CAHRS partner companies. In the sections that follow, I share some of the key findings that have emerged from this project to date.

1) There exists significant variation across companies in the penetration of remote work. In the companies we studied, remote workers (full- and part-time) comprise, on average, about half of the total employee population. However, this average value masks significant variation in the penetra-tion of remote work across different com-panies. For example, we found one com-pany in which 92% of employees work remotely and another in which only 3% of employees are classified as remote work-ers, and the remaining companies were scattered along the spectrum spanning these two extremes (Busch, Nash, & Bell, 2011). Although current rates of remote work differ widely, all of the companies reported an increase in their remote work-force in recent years and most indicated plans to continue growing this population over the next several years.

Examining Current Trends And Organisational Practices

4 31

reMOTe WOrK


2) Cultural support and acceptance are critical to success. The importance of organisational align-ment for the success of HR initiatives is well known. Although this holds true for remote work, it can be dif-ficult to achieve. One common chal-lenge to building cultural acceptance is securing senior leadership support. In one company we studied, for example, senior executives resisted remote work because the company was failing to meet key business goals. The senior leader-ship team felt that employees needed to come into the office so they could work together to solve the challenges faced by the company. In other firms we have encountered senior leaders who are hesitant to support remote work because they see face-to-face collaboration as essential to innovation and creativity, and as something that cannot be repli-cated in a virtual environment.

One strategy for gaining manage-ment support is to use small-scale pilot programmes to gather data that can be used to prove the value of remote work and to address senior leaders’ concerns. In addition, senior business leaders from multiple areas, including operations, IT, real estate, and HR, can be included on support teams for remote work initia-tives and can be relied upon to commu-nicate the initiatives to other senior lead-ers through the organisation. Finally, having senior leaders who participate in remote or flexible work initiatives and model their involvement visibly can be a powerful force for building cultural acceptance throughout an organisation.

3) Remote workers run a higher risk of personal and professional isolation. As companies continue to increase the number of employees with remote work arrangements, research suggests that feel-ings of isolation may arise for employ-ees due to their lack of interaction with others. An employee may begin to feel lonely and socially isolated due to the absence of face-to-face interactions and less frequent opportunities for personal and professional relationship building. The academic literature also suggests that whether or not remote workers experi-ence isolation is determined by a number of factors, including their managers as well as their own personal characteristics (e.g., autonomy).

The companies we studied noted several challenges they have faced in

keeping remote employees connected and discussed some of the strategies they have used to engage their distributed work-force. One challenge is that employees in remote sites often struggle for exposure and access to professional opportunities. Accordingly, it is necessary to be more purposeful in creating these opportuni-ties for remote employees. Managers need to engage in more frequent commu-nication with remote workers to under-stand their developmental needs and interests, and the remote workers should be encouraged to attend events (i.e., town hall meetings) that provide a chance to network with colleagues. Managers also need to recognise that a remote worker may not be interested in an advancement opportunity if it necessitates a return to the office. Thus, it is important to under-stand the developmental and advance-ment goals and boundaries of remote workers. Finally, work-life spillover can be a challenge for remote workers. Thus, it is important to monitor remote worker behaviour and to intervene if someone is “always on.” Managers need to set clear expectations and need to model appro-priate work behaviours themselves, and HR professionals should educate their managers and companies about the impact of overwork on employee health and productivity.

More generally, there are a number of strategies that can be used to engage remote workers, maintain their attach-ment to the organisation, and prevent isolation. These strategies include provid-ing on-site and remote mentors for work-ers, building resource sites, holding local events to bring together traditional and remote workers, and forming employee network groups. Although these efforts are often undertaken in reaction to a specific need that has arisen, companies should consider using these approaches to proactively brand and strengthen their remote and flexible work initiatives.

4) It is important to develop those who lead remote workers. Over the past decade, significant research has emphasised the importance of leader-ship in virtual work environments (Bell & Kozlowski, 2002). Leaders have an important influence on the performance of virtual teams, and remote employees who have higher quality relationships with their managers achieve higher lev-els of job performance and experience greater organisational commitment and

job satisfaction. What defines success-ful management in virtual settings is, in some respects, not all that different than in more traditional office settings. Man-agers of remote workers need to perform many of the same leadership functions as traditional managers, including estab-lishing expectations and goals, monitor-ing employee performance, and provid-ing coaching and development. Indeed, many of the companies we studied apply the same leadership competency frame-work to both their traditional and remote managers.

At the same time, managers of remote workers face unique challenges. They need to be able to assess whether a partic-ular employee is the right fit for remote work and what type of remote work arrangement (e.g., part-time telework, full-time telework, flexitime) is most appropriate given a variety of variables specific to the individual, the team, and the business. They must shift their focus from assessing employees based on how they achieve results to what they achieve. Attention should still be given to behav-iours to ensure employees are living the corporate values, but more weight needs to be placed on results and goal achieve-ment. Even in companies where results-oriented performance management processes are deeply ingrained, remote managers sometimes need to be coached to focus on results rather than employee availability and accessibility. In terms of communication, managers should engage in regular, informal check-ins with their remote employees and need to be able to effectively use a variety of virtual com-munication tools (and be able to select the right tool in the right situation). In summary, managers should be provided with training and development that pre-pares them for these and other unique challenges that arise in the context of remote work.

ConclusionAll indicators suggest that companies will continue to grow their remote workforces in the years to come. The goal of this article was to highlight several important issues for companies to consider as they seek to both leverage the benefits and mitigate the risks associated with remote work. Although I believe our research has yielded several important insights into remote work trends and practices, there clearly remains much to be learned. We need a better understanding of how

32

reMOTe WOrK


to effectively manage employees from a distance and how doing so differs from managing co-located reports. We need to learn more about how corporate culture influences the success of remote and flex-ible work initiatives as well as how these initiatives in turn shape corporate culture. Finally, it will be important to exam-ine these trends and practices at a global level so we have the evidence required to adapt remote work initiatives to different regions and cultures.

ReferencesBell, B. S., & Kozlowski, S. W. J. (2002). A typology of virtual teams: Implica-tions for effective leadership. Group and Organization Management, 27 (1), 14-49.Busch, E., Nash, J., & Bell, B. S. (2011). An examination of emerging issues surrounding remote work. Retrieved from the Center for Advanced Human Resource Studies website: http://www.ilr.cornell.edu/cahrs/research/upload/Spring2011_CAHRSRemoteWorkRe-port.pdf

Bradford Bell

Associate Professor of Human Resource Studies and Director of Executive Education in the ILR School at Cornell University. For more information about Dr. Bell and his research please visit: www.ilr.cornell.edu/directory/bb92/ For more information about the Center for Advanced Human Resource Studies at Cornell University please visit: www.ilr.cornell.edu/cahrs/ Email: [email protected] Telephone: 001 607 254 8054

Ozias, A. (2011). Telework 2011: A WorldatWork special report. Retrieved from the WorldatWork website: http://www.worldatwork.org/waw/adimLink?id=53034 Victor, J. (2009). Workforce flexibility in the 21st century: Meeting the needs of the changing workforce. Retrieved from

33

the Society for Human Resource Manage-ment website: http://www.shrm.org/Research/SurveyFindings/Articles/Docu-ments/09-0464_Workplace_Flexibility_Survey_Report_inside_FINALonline.pdf Bradford S. BellCornell University


CASE STUDY

For companies operating in international markets, the question of how, when and where to expand over-seas is a key strategic issue. And this is no different for an international school. Fergus Rose, Head of Market-ing and Admissions at ACS Interna-tional Schools, provides some useful insights following the opening of ACS Doha, Qatar last September.

In opening a Campus overseas the various processes involved are similar to those that any expanding organisation will go through, which is also similar to the process that many families experi-ence during the relocation process. From making the decision to move overseas, to finding appropriate accommodation (or in the case of a school / organisation a land plot and building), to navigating the cultural issues in the area that you are relocating to.

However, when any business or organ-isation considers expansion, whether it is at home or overseas, the starting point must always be a fundamental review of why you are embarking on expansion and importantly balancing the expansion with keeping your eye on the ball of your existing business. Critical to success is ensuring that your business model and market offering works effectively in the new region, and that it is consistent with your organisations vision.

As a family of international schools, we commits ourself to providing an educa-tion that helps students to become respon-sible contributing citizens to our global. There are a number of data sources evalu-ating the international schools market around the globe, and all of this points to

significant growth for international schools, particularly in so called develop-ing markets, including the Middle and Far East. With a globally recognised curricula and vision in place at our three existing campuses in the UK, we could see that this educational vision also lends itself to a school overseas.

Once the decision to expand is made, location is the key initial consideration. A robust market assessment will help to ascertain whether the proposition is likely to be successful in the potential locations you may be considering, and a review of the myriad of new legislation and legal requirements that operate in an area in which you are looking to expand. You also need to consider the geographi-cal and cultural issues surrounding the location to ensure that your business can operate effectively within that environ-ment and culture.

For our international schools the Gulf, and Qatar in particular, had much to offer. Extensive desk based research and then secondary ‘on the ground’ research was conducted into the fit of our educa-tion model with the area. The country has a strategic vision which seeks to diver-sify the economy and society beyond its hydrocarbon base. Qatar’s 2030 national vision places education and healthcare as primary sectors to develop. The coun-try has the highest per capita income in the world, making it financially sound location for expansion. Qatar also has a sizeable and growing expat population. And of course, there is the 2022 Football World Cup bid win, likely to increase interest in the area, and lead to the devel-opment of suitable infrastructure to

support this. We found the existing education network in Doha very support-ive and helpful in providing insight about the educational needs in Qatar and how we might meet some of those needs.

With location decided upon it was important to source the accommodation – a plot of land. In this case a brand new purpose-built property was located in the Al-Gharafa region in the Northern sub-urbs of Doha. It was important that the fit-out retained elements of our provision in terms of the latest facilities; modern classrooms with interactive whiteboards, Wi-Fi throughout and bespoke ICT labs, art studios, music rooms, science labora-tories, libraries and learning hubs; plus an external multi-purpose recreational area, modern large sports hall, and indoor swimming pool. Companies chosen to carry out fit-out work on the building comprised a mixture of existing contacts and new local contacts in Doha in order to both strengthen existing relationships and harness known expertise, as well as develop new links within the locale.

Running parallel alongside the devel-opment of the physical stamp of the school was the curriculum development, the heart of what we are about. Making sure that the educational offering was consistent with our ethos about what constitutes excellence in teaching and learning was important, but we also had to remain flexible enough to accom-modate the various requirements and circumstances in Doha. For example, while the overarching education phi-losophy remained, with a child- centred, enquiry led approach based on interna-tionally recognised programmes, flex-ible on some of the subject offerings to incorporate Arabic, Qatari history, and Islamic studies.

The school also had to take into con-sideration cultural variations, for example the working week in Doha is from Sun-day to Thursday and the day starts and finishes earlier than it does with the UK schools. It is important not to underes-timate how variations in the working week timetable and different time zones can impact on how your home-based (in our case UK) business operates with the overseas site. This needs active man-agement for personnel on both sides to recognise that meeting scheduling needs

Case Study: Setting Up A School In Doha

34


35CASE STUDY

to fit within both parties operating hours.Staffing a new site is once again a bal-

ance between your existing venture and your new expansion. At ACS Doha we were conscious to blend our existing staff to make sure that the new school was consistent in terms of our vision, but it also recruited new staff from the region to give a deeper knowledge and under-standing of the educational require-ments within Qatar. With this in mind the school opened under the leadership of Tom Lehman as Head of School, who has over twenty years’ experience work-ing within an ACS school and postponed his retirement to launch ACS Doha; and Diane Hren as Deputy Head, also moving from a leadership role at ACS Cobham.

Of course, navigating employment law in an unfamiliar country can be challeng-ing, and an area that requires extensive research. It is important that your organ-isations are aware of the issues and build them in to the staffing model and operating procedures. In Doha, for example, all of our staff required residents permits in order to live in the country and these needed to be individually sponsored.

The span of control within an organisation is critical and a bal-ance of resources to support the new venture must be met with ensuring your existing commitments are still stable and continuing to develop. ACS Doha draws on the support of the cen-tral head office in the UK, which pro-vides support in a number of areas for example HR, marketing, finance and facilities expertise, to support the man-agement team on the ground in Doha. The use of technology, including audio conferencing and technology, is utilised to ensure that communication between the campuses can take place as required.

So what has the addition of a fourth school brought to us as an organisation? There are of course attractive oppor-tunities for staff and we are expecting two way transfers of personnel between schools in coming years, but also it has brought about opportunities for cross-campus learning for our students and school community.

There many lessons that have been learnt from our own overseas expansion.

We learnt that expansion is an exciting journey but that no amount of planning can think of every eventuality, and as an organisation you need to be ready to deal with that. There is also a real skill in blending what you want to retain as your overarching company ethos and what you need to flex to accommodate what is most appropriate in your new locale. Expansion is of course a big step and it requires a dedicated resource, and any schools or organisations consider-ing the opportunity shouldn’t go into it without really understanding the size and complexity of the project.

Fergus RoseHead of Marketing and AdmissionsDirect line: +44 (0) 1932 869 [email protected]


36 Global ImmIGratIon Update

AlgeriAgovernment May require Foreign Workers to Train local Workforce(February 2, 2012)The Algerian government is expected to require foreign workers to train members of the local workforce as a condition to their work permit, and may increase the level of scrutiny that it applies to work permit applications generally.

As part of an effort to protect the coun-try’s labour force, Algeria’s Minister of Labour, Employment and Social Security announced on January 28 that the coun-try would adopt measures requiring work permit holders to pass their expertise on to local Algerian workers as a condition of their status. The announcement fol-lowed recent news indicating that 50,000 foreign national workers are now working in Algeria. The announcement may be an indication that Algerian immigration authorities will soon institute further, potentially stringent conditions to obtain a work permit.

The Ministry has not yet specified how the transfer of expertise will be effec-tuated, though the government could require employers to establish training programmes or other means of passing knowledge to Algerian workers. Details regarding the Ministry’s potential future efforts to protect the local labour market have yet to be issued. However, employ-ers who plan on hiring foreign national workers in Algeria should be prepared for additional requirements and delays. The situation in Algeria is highly fluid. BrAzilTwo-Year employment Visa extensions Are Available Once Again(February 8, 2012)The Brazilian government will once again allow foreign nationals working under a local employment contract to extend an initial two-year employment visa, provided their contract is indefinite. On November 23, 2011, the government announced it would cease granting temporary visa exten-sions and would instead require local hires to apply for a permanent visa to remain in Brazil beyond their initial two years, but this policy has now been reversed.

The new policy ends several months of

uncertainty concerning temporary visa extensions, particularly for foreign nation-als with an employment contract of limited duration. In November, after a series of court rulings that cast doubt on the valid-ity of this type of employment contract, the Ministry of Justice -- which is responsible for visa extensions and permanent residence -- took the position that foreign workers needed a permanent visa to remain in Brazil after their initial two years. However, after a mandate from the National Immigration Council, the Ministry of Justice has resumed accepting applications for two-year tempo-rary visa extensions, as long as applicants have an indefinite employment contract. After four years of temporary residence in the country, foreign nationals become eligi-ble for a permanent visa.

The government will continue to proc-ess permanent visa applications from for-eign workers, with some policy changes. Permanent visa applicants who filed before November 23 will only be eligible for a two-year conditional permanent visa that is linked to their Brazilian sponsoring employer. (Normally, permanent residents are permitted to work for any employer in Brazil.) Dependents of conditional per-manent visa holders will be authorised to work incident to their status. Foreign nationals who filed for a permanent visa after November 23 will have their cases treated as two-year temporary visa exten-sion applications; dependents will not be entitled to work authorisation.

What This Means for EmployersThe new policy will allow employers to retain foreign employees working under local contracts for an additional two years before having to begin the permanent visa process. However, the policy change will likely lead to near-term processing delays for extension applications. An extension appli-cation must be submitted at least 90 days before the expiration of an initial visa, but Fragomen recommends filing extensions seven months before expiration to minimise the consequences of processing delays.

JApAnnew resident Card launches in July, includes Changes to residency requirements(February 9, 2012)On July 9, 2012, Japan will launch a

new Resident (Zairyu) Card programme, which will replace the current Alien Reg-istration Card (ARC) system of identi-fication for foreign nationals who work or reside in Japan for more than three months. Most existing ARC holders will be able to continue using their cards until they expire.

Under the new programme, the maxi-mum stay for foreign residents will be extended to five years, the minimum stay for major work visa categories will be reduced to three months, and there will be new reporting requirements. Cardholders will be allowed to travel abroad without the need for a re-entry permit, provided they return to Japan within one year.

Implementation of the New Resident Card Programme Unless exempt, foreign nationals who will remain in Japan for more than three months will receive a Resident Card upon arrival at Japan’s four major international airports: Narita, Haneda, Chubu and Kansai. Those entering Japan at other airports will receive their Resident Card by mail after arrival. Under the current system, foreign nationals are required to obtain their ARC at their municipal office within 90 days of arrival. The new Resi-dent Card will include the holder’s name, residential address, visa type, and expira-tion date, along with other information.

The following classes of foreign nation-als will not be required to obtain a Resi-dent Card: (1) persons admitted to Japan for three months or less; (2) persons granted temporary visitor status; (3) persons granted diplomat or official sta-tus; (4) persons recognised by a Ministry of Justice ordinance as having a status equivalent to one of the three preceding statuses; (5) special permanent residents; and (6) undocumented foreign nationals.

Transitional Rules for Alien Registra-tion Card Holders Foreign nationals holding Alien Registra-tion Cards that expire before July 8, 2015 will not be required to take any action when the new programme launches. They can continue using their ARCs while valid and will be issued the new Resident Card when they renew their visa or change to a different visa category.

Foreign nationals holding ARCs that

Global Immigration Update


37Global ImmIGratIon Update

will expire on or after July 8, 2015 must obtain a Resident Card, but are free to do so at any time before July 8, 2015. Dependent children younger than 16 must obtain a Resident Card before their 16th birthday or before July 8, 2015, whichever comes first.

Periods of Stay and Other Changes to Residency Requirements The maximum period of stay for foreign residents will be extended to five years under the new system, from the current three years. The minimum period of stay for major work visa categories will be reduced to three months, from one year currently.

The new Resident Card system will modify reporting requirements and relax re-entry requirements for foreign residents. Resident Card holders will be required to report all changes to per-sonal information appearing in their Resident Cards (including change of employer or change in marital status) at their local immigration office, except for address changes which will continue to be reported to their municipal office. Cur-rently, the municipal offices handle all reporting requirements.

Under the new system, Resident Card holders may travel abroad without obtaining a re-entry permit, provided they return to Japan within one year. This policy will also apply to ARC holders pending a change-over to Resident Cards. Currently, ARC holders must obtain a re-entry permit in order to travel abroad.

Fragomen worked closely with ILS Shi-moda Office, L.P.C. in Tokyo to prepare this alert.

SAudi ArABiABusinesses Must employ a Minimum number of Saudi Workers to Obtain or extend Work Visas(February 10, 2012)Under Saudi Arabia's new Nitagat sys-tem, businesses must maintain a mini-mum percentage of Saudi nationals in their workforce, determined by their size and industry, to sponsor foreign nationals for new work visas or extend work visas for existing foreign employees. The larger the business, the more Saudi nationals it must employ to qualify for the broadest sponsorship privileges. Businesses with less than 10 employees are exempt from the system.

The Saudi government introduced the Nitagat system last year in an effort

to increase employment among Saudi nationals and reduce the ratio of foreign workers in the country from the current 31 percent to 20 percent by 2014. The system entered its final implementation stage in late 2011.

The Nitagat system classifies businesses with 10 or more employees in one of four groups – Red, Yellow, Green or Premium – based on the percentage of their work-force that are Saudi nationals.

Businesses in the Red group cannot sponsor foreign nationals for new visas or, as of November 27, 2011, renew work visas for existing foreign employees. Yel-low group businesses cannot apply for new visas, but they may extend work visas for employees that have worked in the Saudi Arabia for less than six years. Green and Premium group businesses may spon-sor foreign nationals from any part of the world for work visas and extend visas for current employees without new limita-tions. Since December 2011, Green and Premium employers can also recruit employees of Red and Yellow businesses and transfer their visas without their orig-inal employers' consent.

The required minimum percentage of Saudi workers depends on a business’s size and industry. For example, a company in the insurance and business services indus-try that employs 50 to 499 workers is assigned to the Red group if Saudi nation-als make up 0-4% of its workforce, the Yellow group if 5-19%, the Green group if 20-54% and the Premium group if 55% or more of the workforce is Saudi.

Along with the new rules on employ-ment of Saudi nationals, government offi-cials are expected to announce a number of new regulations, programmes and services for foreign workers that are expected to include new rules for recruitment agencies, a wage protection system, and multilingual emergency hotlines foreign nationals can use to file complaints about their employ-ers. It is anticipated that recruitment agen-cies will handle the hiring of foreign work-ers and become responsible for ensuring adequate wage and working conditions and other labour rights.

philippineSAlien Certificate of registration Card holders Must Carry a Valid Card to Travel Abroad(February 10, 2012)Foreign nationals in most visa categories must present a valid, dated Alien Certificate

of Registration Card (ACR I-card) upon exit and reentry when travelling abroad, the Philippine government has announced.

Foreign nationals who attempt to depart the country while their ACR I-card application is in process will not be per-mitted to exit, while those who attempt to re-enter with an expired or undated ACR I-card will be admitted as tourists and lose their work or dependent status. They would then be required to obtain a new work or dependent visa and ACR I-card in-country.

Though carrying a valid ACR I-card for international travel has been a best prac-tice for some time, the Philippine Bureau of Immigration recently made it a require-ment in a memorandum circular.

This new requirement applies to for-eign nationals in most of the visa catego-ries that require an ACR I-card. These are: 9(d); 9(g); 9(f ); 13; 47(a)(2) (Board of Investments); Special Investor’s Resi-dent Visa; and Special Visa for Employ-ment Generation. Their dependents are also subject to the requirement. Foreign nationals in these categories must also ensure their visa will remain valid for the complete duration of any trip abroad.

Several categories of foreign nationals are exempt from the new rule. The Bureau of Immigration has confirmed to Fragomen that business visitors staying for more than 59 days and Special Work Permit holders are not subject to the travel rule, though they are issued an ACR I-card. Foreign nationals in the following visa categories are not affected by the travel rule because they are not required to obtain an ACR I-card: 47(a)(2) (Philippine Export Zone Authority); Regional Operating Head-quarters; Special Resident Retiree’s Visa; and any existing or future visa types that are expressly exempted from the ACR I-card requirement.

Foreign nationals with upcoming inter-national travel plans should contact their immigration service provider for assist-ance if their ACR I-cards will expire soon or are undated, or if they have a pending card application. Note that ACR I-card applications can only be submitted from within the Philippines, and the process-ing time is up to two weeks from the date of taking biometric information.

rOMAniAromania introduces eu Blue Card(February 13, 2012)Romania has introduced its version of the



European Union Blue Card, which allows highly skilled third-country nationals to live and work temporarily in the country and ultimately acquire long-term EU resi-dence rights. The Blue Card will become available after the Romanian government finalises application procedures for the programme, which is expected to occur in near future.

To obtain the Blue Card, a non-EU national must be highly qualified, as dem-onstrated by a post-secondary educational qualification and an annual salary that is at least four times the average gross annual salary for a similar position in Romania. If the foreign national will work in a regu-lated profession, he or she must also pos-sess the relevant educational qualifications or work experience necessary for the posi-tion. The Romanian government has not yet officially defined which occupations will be considered regulated professions. No labour market search is required for Blue Card applicants.

Though application procedures have not been finalised, officials have stated that Blue Card applications will benefit from shorter processing times than typi-cal permits, with even faster processing for applicants who already hold a Blue Card issued by another EU country. Once granted, Romanian Blue Cards will be valid for up to two years -- dou-ble the validity period of Romanian resi-dence permits.

uniTed KingdOMprogramme for graduate Job Seekers to be replaced(February 14, 2012)The UK Border Agency (UKBA) will no longer accept new applications for the Tier 1 (Post-study work) programme for graduate job seekers as of April 5, 2012, though a new visa category will be created specifically for graduate entrepreneurs.

The post-study work category allows recent graduates to stay in the UK for up to two years following graduation to set-tle their affairs before departure or search for an employer to sponsor them for work authorization under the Tier 2 (General) category. The UKBA will continue to accept applications for the programme before April 5.

After April 5, foreign graduates will still be able to change from Tier 4 student sta-tus to Tier 2 (General) without the need for a labour market test, the Home Office confirmed yesterday. However, they must find an employer willing to sponsor them

for Tier 2 (General) status before their student status expires, and they will not be able to formally change status until their degree is awarded. The Home Office has yet to specify how this will work in prac-tice, but the policy will likely be challeng-ing for employers that currently rely of the programme. Fragomen is working with employers to convey to the Home Office the need for a more nuanced policy.

A limited number of foreign gradu-ates will be able to take advantage of a new graduate entrepreneur temporary visa category that will open on April 5. To qualify, foreign graduates must be identi-fied by a UK university as having world class innovative ideas or entrepreneurial skills. Participants will be granted a one-year stay initially, which can be extended for one additional year. If they qualify, participants will be able to change to the full Tier 1 (Entrepreneur) category. There will be 1,000 graduate entrepreneur visas available each year, with availability split evenly among participating universities. The UKBA is expected to provide a list of these universities in the near future.

uniTed KingdOMuKBA report names employers penalised for Violations of employment Authorisation rules(February 14, 2012)The UK Border Agency (UKBA) has pub-lished a list of employers who have been penalised for noncompliance with work authorisation rules but have failed to pay assessed fines. The list, which is divided by region, will be updated quarterly.

Employers are named if they have not started to pay their fines 28 days after the exhaustion of their appeal rights, or if they have been served with a second or further penalty. The report includes employers’ trading names and locations and detail the severity of each penalty.

A second report details by region the overall number of noncompliant employers and the total monetary value of civil penal-ties issued per quarter, but does not name individual employers. Between July 1 and September 30, 2011, the UKBA issued 342 civil penalties totalling £2,934,500.

Employers in the UK that knowingly or unknowingly employ unauthorised workers can incur civil penalties of up to £10,000 per worker. Employers are required to verify the identity and work eligibility of all new employees before their first day of work. They are also required to maintain copies

of employees’ work eligibility documents on file, and re-verify their employees’ work authorisation annually. Failure to do so may also result in civil penalties. The UKBA enforces these requirements through the use of targeted audits and enforcement visits. Employers that are sponsors under the UK’s Points Based System are also subject to ran-dom compliance audits.

The UKBA website provides guidance for employers wishing to avoid civil penal-ties for noncompliance.

AuSTrAliAgovernment to ease licensing requirements for Some permanent residence programmes(February 17, 2012)Foreign nationals applying for perma-nent residence under the Employer Nomination Scheme (ENS) or the Regional Sponsored Migration Scheme (RSMS) will not be required to hold an occupational license or registration unless all people in the occupation are required to do so under the relevant licensing or registration law. The Depart-ment of Immigration and Citizenship (DIAC) has informed Fragomen that it will announce the new rule as a trial policy in the near future.

Currently, DIAC requires all ENS and RSMS applicants to hold the registration or license that is generally required for their nominated occupation in the state in which they intend to settle, even if they would be exempt from doing so under the relevant licensing or occupational law. The trial pol-icy will help reconcile DIAC’s requirements with those laws.

As an interim measure before the trial policy begins, foreign engineers seeking permanent residence in Queensland are no longer required to be a Registered Profes-sional Engineer of Queensland (RPEQ) if they can demonstrate they will work under the supervision of a RPEQ engineer.

uniTed KingdOMgovernment Announces Creation of new independent Border Control Agency(February 22, 2012)In early March 2012, the UK will create the UK Border Force, a new agency that will assume responsibility for border con-trols and inspections services at UK ports of entry. The new agency will operate independently of the UK Border Agency (UKBA) and its operations will be subject


39Global ImmIGratIon Update

workers, and a new one-month work visa that will not require employer sponsor-ship. These changes will take effect April 6, 2012.

Minimum Salary for Tier 2 Workers Seeking Permanent Residence The new salary requirement will apply to foreign nationals who entered the UK under Tier 2 after April 6, 2011 and apply for permanent residence after April 2016. The £35,000 figure will be the absolute minimum salary for most applicants, though some may be required to earn more if they work in an occupation that has a higher salary threshold according to UK Border Agency’s (UKBA) guidelines for the occupation. The UK will begin to adjust the minimum salary figure annu-ally beginning in April 2018.

Applicants in PhD level positions and those in jobs on the Shortage Occupa-tion List will be exempt from the mini-mum salary requirement, though they will have to earn more than the salary threshold set forth in the UKBA’s guide-lines for the occupation.

Six-Year Maximum Stay for Tier 2 Workers Foreign nationals working in the general Tier 2 category as of April 6, 2011 will be limited to a maximum stay of six years. Once the six-year maximum is reached, an individual must leave the UK and will not be able to re-enter for work for twelve months.

Note that Tier 2 intracompany trans-ferees are already limited to a one-year or five-year maximum stay, depending on their Tier 2 subcategory.

New Maximum Stay for Tier 5 Interns and Domestic Workers Most Tier 5 interns will be limited to a twelve-month maximum stay, though Tier 5 workers in medical or research pro-grams will continue to able to stay in the UK for up to two years.

The Tier 5 Overseas Domestic Worker program will be terminated for private households, after which domestic work-ers will be required to enter as visitors and will be limited to stays of no more than six months per visit.

New One-Month Work Visa A new “permitted paid engagements” visa will allow certain foreign nationals to work in the UK for less than one month without employer sponsorship. This cat-egory, which will exist outside the Points

to separate governmental oversight. The UKBA will retain responsibility for the administration of immigration benefits.

The UK Border Force is expected to have a distinct enforcement mind-set compared to the UKBA, which could lead to increased scrutiny of foreign nationals arriving in the UK. However, the full impact of the new agency on business travellers, foreign work-ers and employers is unclear at this time. Fragomen will provide updates as the gov-ernment releases additional information about the UK Border Force.

The UK Border Force is being created after a widely-publicised investigation and report from the UKBA Independent Chief Inspec-tor revealed security checks were performed inconsistently or not at all at ports of entry.

BAhrAinBusiness Visitors Face increased Scrutiny When using Visa on Arrival programme(February 22, 2012)Business visitors applying for a visa on arrival in Bahrain face extra scrutiny as the Interior Ministry considers whether to limit these visas to nationals of countries that give reciprocal benefits to Bahraini nationals. To avoid entry delays, business visitors should obtain a business visa prior to travel even if they qualify for a visa on arrival.

Eligible foreign nationals can apply for an e-visa online in advance of business travel. Like visas on arrival, e-visas are available to nationals of 35 countries.

Foreign nationals who choose to seek a visa on arrival should be prepared to provide border officials with extensive documentation of their eligibility, includ-ing a letter from a host entity describing the purpose of the visit, proof of suffi-cient funds to cover their period of stay, a confirmed hotel reservation or other documentation showing where they will stay in Bahrain, and a confirmed return or onward travel reservation.

CAnAdAQuebec ends labour Market exemption for Select iT Occupations(February 23, 2012)Quebec has terminated a labour market opinion exemption for seven types of IT occupations. Applications received by March 24 will benefit from the exemp-tion as long as they are accompanied by a certificate from Quebec authorities, dated February 23, 2012 or earlier, stating that

there are no Canadian workers available to fill the position offered to the for-eign worker.

The exemption is now no longer avail-able in any Canadian province, as it expired in British Columbia on Decem-ber 31, 2011.

The seven IT occupations that qualified for the exemption were Senior Animation Effects Editors, Embedded Systems Soft-ware Designers, MIS Software Designers, Multimedia Software Developers, Software Developers (Services), Software Products Developers, and Telecommunications Soft-ware Designers.

SingApOregovernment reduces Maximum number of Foreign Workers Companies May Sponsor(February 28, 2012)The government of Singapore has announced a 5 percent reduction in the number of temporary foreign workers that can be employed by companies hold-ing S Pass and Work Permits. Specifically, S Pass employers will be limited to 20 per-cent foreign temporary workers. Limits in the Work Permit category will be 60 per-cent for manufacturers and 45 percent for service sector companies.

The lowered ratios take effect on July 1, 2012 for new S Pass and Work Permit applications. Employers will have until June 30, 2014 to meet the lowered ratios for existing workers.

There will be no changes to the ratios for Work Permits in other industries.

The S Pass is for skilled foreign nation-als who earn at least S$2,000 monthly. The Work Permit is for skilled and unskilled foreign nationals, usually working in designated industries, who earn less than S$2,000 monthly.

uniTed KingdOMhome Secretary Announces Minimum Salary for permanent residence Applicants(March 1, 2012)Beginning April 2016, foreign skilled workers in the Tier 2 temporary immi-gration category will be required to earn at least £35,000 annually to qualify for permanent residence, according to an announcement from the Home Secretary. The Secretary also announced new maxi-mum stay limits for Tier 2 workers gener-ally and for Tier 5 interns and domestic



Based System, will be narrowly defined and is intended to be used by visiting lec-turers and examiners, artists exhibiting works, authors on book tours, entertain-ers and sportspeople, and others engaged in similar activities.

The Home Office will release addi-tional details of these and other upcoming changes on March 15. In March, Frago-men will host several webinars to discuss the impact of these developments and the recently released Migration Advisory Committee report. Contact Fragomen directly for further information.

uniTed KingdOMTop government Advisors recommend no Further restrictions on Skilled Worker Visas(March 1, 2012)In a widely anticipated report, the UK’s top independent advisor on migration issues, the Migration Advisory Commit-tee (MAC), has advised the UK govern-ment to place no further restrictions on Tier 2 of the Points Based System and keep work permit quota levels at current levels for 2012-2013. The MAC also rec-ommends no increase in the minimum salary requirement for intracompany transferees, though it believes that the placement of IT intracompany transferees at third-party worksites continues to war-rant heightened scrutiny.

Last year, the UK government asked the MAC to study a variety of potential Tier 2 policy changes to further its goal of drasti-cally reducing the country’s overall migra-tion levels. The MAC’s recommendations are not binding on the UK government, but its findings are likely to have significant influence on new immigration rules and guidance that the Home Office will present to Parliament on March 15. The new rules, which are to be implemented on April 6, are expected to include a new premium process-ing program for select sponsors and changes related to the 2012 Olympics.

Recommended Tier 2 Cap for 2012-2013 The 2012-2013 cap on admissions under Tier 2 should not be reduced, but should remain at last year’s level of 20,700, according to the MAC. Maintaining the cap at current levels will be of particular importance because the 2012 Olympics may result in higher demand for Tier 2 work permits than has been seen since the quota system was introduced last year.

The content herein is provided forinformation purposes only. If you have any questions, please contact Fragomen Global Immigration.Fragomen has 39 offices in 15 countries.For further information, please contact:Global Knowledge TeamFragomen Global, LLP+1 (212) 688 8555 (direct)[email protected]

Minimum Salary Recommendations for Intracompany Transfers The MAC recommends retaining the cur-rent minimum salary of £40,000 for Tier 2 intracompany transferees entering the UK for over 12 months and continuing to allow employers to count non-salary cost of living, accommodation and other allow-ances toward the minimum salary. Mini-mum salary requirements should not be staggered to take regional salary variations into consideration, it has concluded.

The government should continue to strictly review cases where IT companies use intracompany transferees for place-ments at client sites, the MAC noted. However, the MAC declined to recom-mend policy changes for these third-party contractors. It believes that more data on their impact to the UK’s labour market are necessary.

Potential Increases to Skill Levels Requirements The MAC concludes 32 occupations would no longer qualify for Tier 2 if a proposal to raise the category’s minimum skill level were implemented.

The government asked the MAC to study the effect of limiting Tier 2 to occupations that are at level 6 or higher under the UK’s National Vocational Qualification standards (NQF6+ in the report), which typically requires a bach-elor's degree or professional certificate. Currently occupations can qualify for Tier 2 at NQF4+, which does not strictly require a degree. Roughly seven percent of the Tier 2 cases filed in 2011 would not have qualified if the minimum skill level were NQF6+.

To lessen the impact of an increase in minimum skill levels, the MAC recom-mends Tier 2 remain open to NQF4 occupations that appear on the UK’s Shortage Occupation List. In addition, the MAC suggests that the government could impose a higher salary require-ment for NQF4 occupations, rather than increasing the skill level for the category.

Recommendations on the Resident Labour Market Test According to the MAC, the UK should relax Tier 2 recruitment requirements for jobs paying between £70,000 and £150,000 annually and for Ph.D. positions, by not requiring employers to advertise these positions in Jobcentre Plus. However, the MAC recommends retaining the labour market test for these positions.

Positions with annual salaries above £150,000 are already exempt from labour market tests and advertising require-ments. The MAC was asked whether to extend these exemptions to positions offering £70,000 or more annually.

What the MAC Report Means for Employers Overall, the MAC report comes as a relief to employers concerned at the prospect of lower work permit quotas, stricter rules on salary, and increases in skill level requirements.

Fragomen is also hosting several webinars over the coming weeks to dis-cuss how employers will be affected by the MAC report and other upcoming changes. Contact Fragomen directly for further information.

SOuTh AFriCAAuthorities Are Closely inspecting Travellers’ Vaccination records, denying entry to Some(March 5, 2012)South African health authorities are closely inspecting yellow fever vaccina-tion certificates at ports of entry and have refused entry to some travellers after questioning the reliability or authenticity of their certificates, according to recent reports. In particular, Nigerian nation-als traveling directly from their home country have been subject to heightened scrutiny.

South Africa requires foreign nation-als who have travelled or intend to travel through an area where yellow fever is endemic to provide a valid vaccination certificate for the disease.

Travellers should check the validity of their vaccination records with local certif-icate-issuing authorities to reduce the risk of entry problems in South Africa.

FREESUBSCRIPTION

TO

The Leading Magazine forInternational HR Professionals Worldwide

To apply for your free subscription please either complete the enclosed subscription card or visit our website www.internationalhradviser.com and complete

the online registration

courtesy of

International HR Adviser is the leading, quarterly magazine for International HR professionals globally. It has been publishing for 11 years and covers topics such as International HR Strategy, Benefits, Tax, Global Tax, Technology, Compensation, Trends in International Assignments, Healthcare, Insurance, Surveys, Country Profiles, Immigration, Moving & Relocation, Spousal Support, Education, Property, Cross-Cultural Issues, Case Studies, and more.

For further information please call Helen Elliott on +44 (0) 208 661 0186Email: [email protected] Website: www.internationalhradviser.com

SUMMER 2011 ISSUE 46PRICE £10

International HR AdviserThe Leading Magazine For International HR Professionals Worldwide

Features include: • Think Global, Be Global • Global Corporate Immigration Trends In Diversity

Employment Policy: Europe And The Middle East • Global Taxation Update

Expatriate Tracking Technology • Localisation – A Potential Lower Cost Alternative To Expatriate Assignments

Relocation & Procurement; The Global Conundrum • The World of Expatriate Pay In TransitionAdvisory Panel for this issue

00 Front Cover_Layout 1 20/06/2011 16:56 Page 8

AUTUMN 2011 ISSUE 47 PrIcE £10.00

The Leading Magazine For International HR Professionals Worldwide

Advisory Panel for this issue:

Features include: The Global Talent Challenge: Getting New People In New Jobs In New Places

Managing Kidnap Risk • Global Taxation & Immigration Updates

Internal Fraud And Management Corruption Risks In Russia • Repatriation - The Real Costs

Resisting Intertia • Auditing And Benchmarking Your Global Mobility Programme


00 FC Autumn 2011.indd 1

3/10/11 16:31:18

42 diary dates

APRILEuRA Conference and AGM 201225th April - 27th April 2012, Clarion Hotel Sign, StockholmOur 15th International Relocation Congress will take place in Stockholm, one of the most beautiful cities in the world and the self-branded capital of Scandinavia. Our programme “Discover, Consider,Deliver” will look at how best we can service the needs of our clients; GRMC’s, corporate HR and the transferee. With increased pressure on fees and ever greater demands for service excellence, we will also examine how to continue to diversify and grow in challenging times.Full details and online bookings are on the EuRA website at www.eurarelocation.com

MAYThe London Totally Expat Show 2012 Europe14th May 2012The Business Design Centre, Islington, London, UKThis innovative event is designed with the corporate HR attendee in mind: it offers Free entry to all HR professionals, a comprehensive exhibition of respected suppliers, and free educational seminars based on case-studies of real programs, all set in a welcoming and lively environment. Anyone who is anyone in Global Mobility will be at this fun-packed event. Register today and bring your team. All in-house Global Mobility professionals can attend for free. All other Suppliers Members are welcome to attend, tickets cost £190 (+VAT) when pre-registered.To register, please visit www.totallyexpat.com or contact Andy Smailes, via email [email protected] or call +44 (0)7972 232 341

JUNE The Totally Expat Show – Mid West USA1st June 2012Sheraton Chicago Hotel & Towers, Chicago, USAwww.totallyexpat.com

Deloitte EMEA Global Employer Services Client ConferenceWednesday 27th June – Friday 29th June 2012, BudapestThe annual Deloitte EMEA Global Employer Services Client Conference will be held on 27-29 June 2012 in Budapest. The conference will address the global mobility and share scheme challenges faced by companies today, as increasingly companies are “turning the compass” and managing the implications of increased focus on emerging markets in the South and East.For further information on this event please contact Ashleigh Gatward at [email protected]

SEPTEMBER Global Mobility Summit & EMMA Gala Dinner – Americas13th & 14th September 2012JW Marriott Las Vegas Resort & Spa, Las Vegas, USAwww.totallyexpat.com

OCTOBER Global Workforce Symposium3rd to 5th October Marriot Wardman Park, Washington, DC, United States of AmericaThe leaders in global workforce mobility will be networking, strategising and sharing ideas for thriving in the global marketplace. Experience new heights in workforce mobility by attending this uniqueprogramme!Email [email protected] to be notified when registration opens or visit www.worldwideerc.org for further information.

Global Mobility Summit & EMMA Gala Dinner – Europe19th October 2012Plaza Riverbank, London, UKwww.totallyexpat.com


NOVEMBER Global Mobility Summit & EMMA Gala Dinner – Asia28th November 2012Grand Hyatt, Hong Kongwww.totallyexpat.com

SAVE THE DATEFEBRUARY 2013The Corporate Relocation Conference & Exhibition4th February 2013Hotel Russell, Russell Square, LondonThis event is free to attendThere are seminars dedicated to educating and up-dating International HR professionals on key developments and current leanings relevant to the industry, running throughout the day. The seminar programme will be announced very soon.The 2012 Conference & Exhibition saw over 700 visitors attend this not-to-be-missed event, so be sure to put the 2013 event in your diary today!For further information, please email Helen Elliott on +44 (0)208 661 0186

To advertise your Event or Conference in Diary Dates, please email

[email protected] or call Damian on +44 (0)1737 551 506


DIRECTORY

AssignmentmAnAgement services ToTal RewaRd GRoupChart House, 10 western Road, Borough Green, Kent, TN15 8aGContact: Simon RichardsonTelephone: +44 (0) 1732 780777Fax: +44 (0) 1732 668284email: [email protected]: www.totalrewardgroup.com Total Reward Group is a ‘boutique’ employee owned reward practice, providing consultancy, search, interim managers and professional training for analysts.The Global Mobility division of TRG provides both advisory services on policy development, as well as fully outsourced assignment management services, which provides a ‘virtual’ in house Global Mobility HR service.

BUsiness AssOciAtiOn J-1 visA PrOgrAmmeBRITISHaMeRICaN BuSINeSS (BaB)52 Vanderbilt avenue, 20th Floor New York, NY 10017, uSa Contact: Tamra eker Telephone: +212 661 4060 Fax: +212 661 4074 email: [email protected] website: www.babinc.org Britishamerican Business’s J-1 visa program assists companies in offering uS training and work experience to qualified employees of any nationality and from anywhere in the world, for a time period of up to 18 months. Sectors covered by our J-1 Visa designation include management, business, commerce, finance, law, industry, sciences, engineering, architecture, information media & communications. using the J-1 Visa helps companies overcome cross-cultural differences and improve communication between uS and overseas offices; enhance employee recruitment/retention efforts by offering uS assignments; and meet global mobility challenges. please call to discuss the program with our J-1 Visa program administrator.

HeALtH insUrAnceBupa INTeRNaTIoNalTelephone: + 44 (0) 1273 718304website: www.bupa-intl.com• Bupa – A name trusted by 10 million people in 190 countries• The international healthcare provider with over 35 years’ experience• Multi-lingual helpline open 24 hours• Direct currency settlement• Optional assistance cover including evacuation and repatriation.depending on the member’s requirements, Bupa International offers plans for both individuals and companies. Most of our plans include; primary care, maternity cover, home nursing, emergency dentistry, hospital treatment and accommodation, health checks, cover for chronic conditions, emergency road ambulance, cover for sports injuries.

Hr certiFicAtiOn/creDentiALs HR CeRTIFICaTIoN INSTITuTe 1800 duke Street, alexandria, Virginia, 22314, uSaTelephone: +1-703-548-3440Fax: +1-703-535-6474e-mail: [email protected] website: www.hrci.org HR Certification Institute is an internationally recognised certifying body for the HR profession. we have awarded over 100,000 credentials in over 70 countries to HR professionals who have passed rigorous exams to demonstrate their mastery and real-world application of forward- thinking HR practices, policies and principles. our certifications are a career long commitment that requires continual HR career development to maintain certification. Four certifications are offered: the professional in Human Resources (pHR®), Senior professional in Human Resources (SpHR®), Global professional in Human Resources (GpHR®), and the California state specific pHR-Ca® and SpHR-Ca®.

Hr servicesaSSoCIaTIoN oF ReloCaTIoN pRoFeSSIoNalS (aRp)po Box 189, diss, Ip22 1pe, uKContact: Tad ZurlindenTelephone: 08700 737475Fax: 01379 641940email: [email protected]: www.arp-relocation.comThe aRp is the professional association for the relocation industry in the uK. The aRp’s activities include seminars throughout the year, an annual conference, the publication of an annual directory of Members and a website, which is updated regularly.

THe euRopeaN ReloCaTIoN aSSoCaTIoN (euRa)po Box 189, diss, Norfolk, Ip22 1peTelephone +44(0)8700 726 727 Fax: +44(0)1379 641 940e-mail: [email protected]: www.eura-relocation.comeuRa is an industry body for Relocation professionals in both europe and worldwide. euRa have launched The EuRA Quality Seal, the world’s first accreditation programme for relocation providers. This pioneering initiative provides a straight forward, cost effective audit to reflect your company’s excellence in providing relocation services.

immigrAtiOnFRaGoMeN 4th Floor, Holborn Gate, 326-330 High Holborn, london, wC1V 7pp Contact: Caron pope, partner william Foster, partner david Crawford, partner Telephone: +44 (0)20 3077 5000 email: [email protected] website: www.fragomen.com

as the world's leading provider of immigration legal services and advice, Fragomen has served the immigration needs of clients ranging from individuals to the world’s leading multinational corporations for 60 years. with 36 offices in 15 countries worldwide, Fragomen has the resources and the reach to provide strategic and effective immigration solutions for over 140 countries around the globe.

insUrAnce AnD FinAnciAL servicesZuRICH INTeRNaTIoNal lIFe abbey Gardens, 4-6 abbey StreetReading, Berkshire, RG1 3BaContact: adele CoxTelephone: +44 (0) 118 952 4253Fax: + 44 (0) 118 952 4300e-mail: [email protected]: www.zurichinternational.comZurich International life is a global provider of life insurance, investment and protection products. our corporate range offers flexible, portable solutions, designed to suit multinational organisations with aninternationally mobile workforce. The International pension plan offers a cost effective, bundled retirement benefits solution comprising of trust services, investment funds and online administration. International group protection is designed to protect an employers’ most important asset – their employees – and offers a range of life and disability protection.with a local presence in key global business hubs and over 20 years experience of implementing and administering plans world wide, we’ve developed our knowledge and understanding of key markets to meet the needs of our customers and business partners.

internAtiOnAL HrcOnsULtAntsdeloITTe llpStonecutter Court, 1 Stonecutter Street,london, eC4a 4TRContact: Robert Hodkinson, partnerTelephone: +44 (0) 20 7007 1832Fax: +44 (0) 20 7007 1060e-mail: [email protected]: www.deloitte.co.ukwhether you are creating your first international mobility programme for employees or addressing fundamental changes to an existing programme, our International Human Resources team can help. deloitte provides consulting support that has an appreciation for each company’s size, background and unique cultural environment, aligning your international programme goals with corporate business strategies. our consultants have developed deep expertise in many fields based on first hand experience with many of the world’s leading organisations: international assignment policy and process design, benchmarking, service delivery modelling, improving vendor management and helping our clients become more compliant and their administration more cost-effective.

43


44 DIRECTORY

internAtiOnAL mOving dT MoVING lTd49 wates way, Mitcham,Greater london, CR4 4HRContact: Tim daniellsTelephone: +44 (0) 20 7622 4393Fax: +44 (0) 20 7720 3897email: [email protected]: www.dtmoving.comdT Moving is a world leading internationalmoving company. Founded in 1870 as davies Turner, we provide an award-winning* move management service for corporations who relocate their employees to locations all over the world. whether your employee is moving to or from europe, america, asia-pacific, africa, or simply justaround the corner, we manage the entire process. our goal is your complete satisfaction from initial contact right through to delivery. with a customer satisfaction rating of 96% for 2011, we offer unrivalled quality at competitive rates.

recrUitmentRed GRoup oF CoMpaNIeSThe Bower, langford Hall, witham Road, Maldon, essex, CM9 4STContact: Caroline Frostick-Seear and amie CuttsTelephone: 01621 840600Fax: 01621 856062email: [email protected]: www.redrecruit.comRed Recruit was founded in 2002 and specialises in the Relocation and mobility industry. we are a very professional, friendly and reputable company who have extensive knowledge within the industry.we have access to a large volume of potential candidates all seeking work in your industry all over the uK, we will be able to find you a suitable candidate to enhance your business.we personally understand the importance of finding the right calibre of staff for an organisation. By using our service we will take the pressure off you of finding a suitable candidate for your company, saving you time, money and effort, giving you the best attention at all times.

reLOcAtiOnINTeRdeaN ReloCaTIoN SeRVICeSCentral way, park Royal, london, Nw10 7XwContact: Barrie GilmourTelephone: +44 (0)208 961 4141Fax: +44 (0)208 965 4484email: [email protected]: www.interdean.com Thinking Relocation? Think Interdean. whether looking to expand into new territories or to leverage your human capital in core international markets, Interdean has the relocation service to support the needs of your business and your relocating employees. Interdean provides the full range of relocation services to support businesses with international interests. our Services: Relocation Management, Visa & Immigration, area orientation, Temporary Housing, Home Finding, School Search, Settling-in assistance, Tenancy Management, Household

Goods Moving, Intercultural & language Training, Relocation expense Management, Moving & Relocation Insurance and other services available – please ask.

scHOOLs aCS INTeRNaTIoNal SCHoolSaCS International School Heywood, portsmouth Road, Cobham,Surrey, KT11 1Bl, englandaCS International Schoollondon Road (a30), egham, Surrey, Tw20 0HS, englandaCS International School Hillingdon Court, 108 Vine lane,Hillingdon, Middlesex, uB10 0Be, englandaCS International Schoolal oyoun Street, al Gharrafa,po Box 200568, doha, QatarTelephone: 01932 869 744email: [email protected]: www.acs-schools.com Contact: dean of admissionsaCS International Schools were founded in 1967 to serve international and local communities. The schools are non-sectarian and co-educational (day and boarding), enrolling students aged 2 to 18 years. The uK based schools have over 30 years’ experience of teaching the International Baccalaureate, and aCS doha offers an international and american curriculum.

ISl GRoup oF SCHoolSTwo uK schools: old woking Road, woking, Surrey, Gu22 8HY139 Gunnersbury avenue, london, w3 8lGTel: +44 (0)1483 750409+44 (0) 20 8992 5823email: [email protected]: www.islschools.orgContact: Heather MulkeyThe ISl Schools offer an international education with an important addition: mother tongue or modern language training from an early age. academic research increasingly points to the importance for english as an additional language learners of gaining a solid language and literacy foundation in their own language. For english speakers, research supports the value of language learning in overall academic success. looking towards our students' global future, multiple language facility will become increasingly valuable. ISl london is one of the first schools to offer the IB diploma and next year celebrates its 40th anniversary.

TaSIS THe aMeRICaN SCHool IN eNGlaNdColdharbour lane, Thorpe, Surrey, Tw20 8TeContact: Karen HouseTelephone: +44 (0)1932 582316email: [email protected]: www.tasisengland.org TaSIS england offers the International Baccalaureate diploma, an american college

preparatory curriculum, and ap courses to its diverse community of coed day (3-18) and boarding (14-18) students from 50 nations. The excellent academic programme, including eSl, is taught in small classes, allowing the individualised attention needed to encourage every student to reach their potential. outstanding opportunities in art, drama, music, and athletics provide a balanced education. extensive summer opportunities are also offered. located close to london on a beautiful and historic 46-acre estate.

tAXAtiOn Bdo llp55 Baker Street, london, w1u 7euContact: andrew BaileyTelephone: 020 7893 2946Fax: 020 7893 2418e-mail: [email protected]: www.bdo.co.ukBdo llp is the award-winning, uK Member Firm of BDO International, the world's fifth largest accountancy network with more than 600 offices in 100 countries.we have a partner-led approach, which delivers the highest quality of service by using short, functional chains of communication to aid decision-making. Clients benefit from our fresh thinking, constructive challenge and practical understanding of the issues they face. developing strong, personal relationships with our clients is at the forefront of our service approach.Tax advice is just one of our award-winning services and our expatriate team give practical and direct advice, delivering solutions which suit your needs.

deloITTe llpStonecutter Court, 1 Stonecutter Street,london, eC4a 4TRContact: Robert Hodkinson, partnerTelephone: +44 (0) 20 7007 1832Fax: +44 (0) 20 7007 1060e-mail: [email protected]: www.deloitte.co.ukdeloitte’s Global employer Services is comprised of approximately 2,600 people in over 80 countries. we take a holistic approach to international assignment tax compliance and planning, ensuring that proposed strategies deliver full value to our clients and their international assignees. as well as assisting with employer core compliance, such as tax returns and year end procedures, we provide an end-to-end solution that covers a range of services from tax compliance services, payroll support and policy development, international assignment programme administration (“co-sourcing”) capabilities and global visa and immigration services. we also have a dedicated global team of GeS technology professional.

Entries in this Directory cost £175 per issue or £600 per annum.

For further details email [email protected] or telephone +44 (0) 20 8661 0186

2011 Fragomen Parliamentary Book - 210 x 297 Bleed.pdf 1 9/30/2011 6:33:53 AM