International HR Adviser Autumn 2014

Autumn 2014

ISSUE 59

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International HR Adviser The Leading Magazine For International HR Professionals Worldwide

Features Include: China: The Rise of Chinese Multinationals • Global Taxation Update Ten Steps To Setting Up An International Retirement And Savings Plan • Policy Provision For Pandemics Working Time In Europe - How Is It Defined And Is There A Growing Trend To Reduce It? Top Tips For Writing Great Global Mobility Policies Cross-Border Restrictive Covenants – Are They Worth The Paper They Are Written On? Employee Transfers In Acquisitions And Outsourcing: Is It All About The ARD? Advisory Panel for this issue:

Expatriate Adviser Summer

Autumn International HR Adviser

CONTENTS

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Taxing Issues: Social Security – A Frequently Overlooked Tax Andrew Bailey, BDO LLP Global Taxation Update Andrew Bailey, BDO LLP International HR Strategy: Global Mobility Shared Service Centres – That’s The Bottom Line Deepinder Lamba & Beth Warner, Deloitte LLP International Pensions Plans: Ten Steps To Setting Up An International Retirement And Savings Plan Stewart Allanson, Zurich Corporate Life & Pensions Policy Provision For Pandemics: Half Of Multinationals Have No Plan In Place For Dealing With A Pandemic Andrew Shaw, ECA International Leadership: How To Navigate The Landscape In Our Changing World John Stein, The Winning Formula European Working Hours: Working Time In Europe – How Is It Defined And Is There A Growing Trend To Reduce It? Ines Reis, pbbr Immigration & Cultural Training: Surprising New Immigration Requirements: Cultural Knowledge And Language Skills Peter Sewell, Crown World Mobility Education: Six Schooling Issues Which Can Contribute To International Assignment Failure Duncan Partridge, International School Move Cross-Border Competition: Cross-Border Restrictive Covenants – Are They Worth The Paper They Are Written On? Juliet Carp, Speechly Bircham LLP Global Mobility Policies: Top Tips For Writing Great Global Mobility Policies Tim Wells, Abbiss Cadres LLP Repatriation: Are You Playing For Keeps?

Helena Wennberg, Independent Global Mobility Consultant International Liability: Lessons Learned Paul Coleman, TERN Financial Group Business Transfers: Employee Transfers In Acquisitions And Outsourcing: Is It All About The ARD? Jonathan Hearn, DLA Piper China: The Rise of Chinese Multinationals Natalie Tong, Asia Pacific Properties Emerging Markets: So You Think You Understand Emerging Markets?

Amitava Chattopadhyay, INSEAD Education: Dyslexia, Learning Support And All Things Special Ronda Fogel, Moat School Diary Dates

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Directory

International HR Adviser, PO Box 921, Sutton, SM1 2WB, United Kingdom Publisher • Helen Elliott +44 (0) 20 8661 0186 • Email: helen@internationalhradviser.com Publishing Director • Damian Porter +44 (0) 1737 551506 • Email: damian@internationalhradviser.com www.internationalhradviser.com In Loving Memory of Assunta Mondello 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.

Cover Design by Chris Duggan

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Expatriate Adviser Summer

Autumn International HR Adviser

taxing issues

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Social Security - A Frequently Overlooked Tax It’s often stated that the cost of a typical assignment is somewhere between two and five times that of locally hired individual. In recent years businesses have focussed on reducing the cost of an assignment. This has been through a mixture of shorter assignments, commuter assignments, variable and usually reduced assignment packages and planning.

Planning invariably involves matters such as remuneration structuring, timing of assignments and tax planning. All too often social security planning is overlooked and may be little more than an afterthought. This can be both dangerous and an expensive mistake.

Social Security Is More Complex Than Tax For international assignees social security is in some respects more complex than tax. The primary reasons for making such a statement are as follows: • There is usually an employee as well as an employer element to social security • The aims of the employee and the employer may vary • Dual social security liabilities can arise, potentially without relief • Voluntary contributions can be made in some circumstances • Social security benefits may result from contributions made • Access to healthcare may be dependent on social security contributions.

Tax Is Easy By Comparison In most cases the above scenarios do not arise with tax: • The tax arising from employment income is the liability of the employee.

There is usually no employer element • Rarely will the aims as to the level of tax paid vary for the employer in comparison with the employee • Double or unilateral taxation relief will usually apply • Voluntary tax is relatively unheard of • Whilst all taxes ultimately fund social security benefits, entitlement to them does not usually arise from payments of tax

• Whilst taxes may ultimately fund healthcare, entitlement to treatment may not arise from payments of tax.

employee and employer in one country can be complex enough, without adding a cross border element.

Employee And Employer Elements Of Social Security

Employee At Odds With Their Employer – Cost Versus Benefit Issue

When calculating the social security liability there is usually two elements, the employee and the employer liability.

The rates of contributions between the two may be similar in some countries but can vary significantly in others. For example, in the UK the rate of National Insurance Contributions (NIC’s) is different between that of the employee and employer. For the employee, once earnings exceed a ‘lower earnings limit’ a rate of 12% generally applies through to the ‘upper earnings limit’, which once breached a lower 2% rate then applies on the excess without limitation. For the employer, once earnings exceed the ‘lower earnings limit’, a flat rate of 13.8% applies without limitation. The US again now has similar rates for employee and employer, with both paying 6.2% in 2014. The level of earnings to which these rates apply is capped at US$117,000. Additionally, Medicare contributions are payable by both employee and employer at an uncapped rate of 1.45%. Larger variations apply particularly within Europe where the employer contribution may be a multiple of the employee’s and where employer uncapped contribution rates of approximately 40% can be reached.

Complexity is further added as there is often different component elements to contributions, for example, old age pension, unemployment insurance health insurance, nursing care insurance and disability insurance to name but a few.

Different rates of contribution may apply with earnings caps varying or alternatively contributions being open ended. It is also feasible that different rates may apply depending on the specific location/ region within a country as, for example, with China and Germany or the industry sector in which the employer operates.

As readers will quickly realise from the above, determining the liability for the

Employee contributions are typically cheaper than the employers’ contributions and may be capped, whereas the employers’ contribution is often uncapped. Benefits can arise from the contributions paid, usually related to those which the employee alone pays as opposed to the employers’ portion, which more often than not is in reality simply a ‘tax’. Benefits receivable vary widely from country to country and individuals therefore consider what they are paying in comparison with what they may receive. In many cases the major benefit is a government/state pension, but other benefits may also derive from the contributions made. However, the employer may only be focussed on their cost.

This creates potential for conflict. What is best for the employee may not be best for the employer and vice versa. As the liability of the employer usually follows that of the employee, it is important to determine where the employee liability arises with any cross border move. In some instances variations to for example, the length of the assignment, the contractual employer and the place or extent of duties performed will alter where the employee liability arises and, consequently, that of the employer.

International assignment policies often state that the aim is for assignees to remain within their “home” country social security system.

How do you reconcile what your policy says with the personal views and interests of the employee? How can you truly compare current cost – employee and employer - with potential future benefits for the employee? How do you ensure that you do not face a situation where your employee may seek compensation from you on the basis that you have not provided them with the information required to make an informed choice?

When discussing tax, this potential conflict between employee and employer arises less Autumn International HR Adviser

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taxing issues frequently with the parties both generally seeking to reduce the overall tax burden.

Further Complications To The Cost/Benefit Analysis Further complexity is added to consideration of social security as it is possible in some cases for individuals to pay voluntary social security. For example, both the UK and France will accept voluntary payments. Such payments may preserve or enhance entitlement to both short and long state benefits. In the UK, payment of voluntary contributions is an employee only liability and is relatively cheap. Contributions in France are a lot more expensive by comparison but then the benefits are typically much better.

When considering potential benefits another complication that arises is that often the major benefit is the state pension which will not be paid until eventual retirement sometime in the future. It is well known that many government schemes are short on funding and are subject to change in terms of either the retirement date and/or the level of benefit to be paid. Who knows what will be payable long into the future for contributions payable now?

The availability of, and access to, healthcare is often affected by the payment location of social security contributions. Individuals and their families are sometimes very concerned to ensure they have the right of consultation and access to treatment in their home location. Whilst private medical coverage can address all concerns, this whole subject matter raises emotive issues for many international assignees.

All of these factors influence the decision as to where contributions are payable and where benefits are receivable.

Some of the potential benefits are intangible or impossible to calculate and this makes it harder to compare the relative cost and benefit of payment of contributions in different countries for international assignees.

The Unexpected Liability The advent of flexible working and employers’ perception of an ever increasing need to provide employees with choice can create unanticipated additional employment costs and compliance obligations.

For example, within the EU individuals can choose to base themselves in any jurisdiction. Remote workers could decide International HR Adviser Autumn

that the south of France is preferable to London, move there and work remotely.

A UK business still has its’ employee but they are now resident in France. Income tax has always been the employees’ ultimate responsibility and this remains the case however the position with social security will be affected as follows: • French social security is likely to apply as opposed to UK NIC. With employee rates at circa 45% this is a significant additional cost.

• Increased employer compliance obligations now arise as you now need to work out how you, as a UK based employer, go about paying French social security contributions. You may have to set up a payroll/system in France to facilitate payment even if you do not have a business entity there. This can be a time consuming and frustrating process.

How do you deal with this and had you even thought about this possibility? Do you even have any choice or say in the matter once remote working is permitted?

Social security liabilities and exposure can be unexpected and can adversely impact the employer.

The Dual Liability Issue The general rule for tax is that it is payable where you work. However, the country where an individual is tax resident will broadly tax worldwide income regardless of the working arrangements. This may lead to double taxation as two countries are taxing the same income. If there is a relevant double tax treaty this will provide clear steps as to which country has the taxing rights and how any double taxation is remedied. Otherwise, it is down to the domestic law of each location to facilitate relief with unilateral tax relief or an exemption of some description usually being available.

There are numerous double taxation agreements with constant ongoing negotiations worldwide for many more.

It is relatively rare for eventual double taxation to occur, although there may be a period where the individual is out of pocket from a cash flow perspective because of local tax withholding requirements.

Social security usually works a little differently to tax. Although the same basic rule applies in that social security is due in the country where the work is performed, social security legislation tends to override this to ensure it is only paid in one country at any one time.

This is especially true within the EU (including Switzerland which has adopted the EU social security regulations) and between countries which have signed social security agreements for the avoidance of dual contributions.

In particular, there are specific provisions within the EU regulations that deal with cross border assignments and multi state workers. These tend to place the social security liability in the home country but the necessary certificate (A1) must be applied for and approved by the relevant authorities. The same is true where countries have social security agreements. For example, social security agreements exist between the UK and the US, and with Canada & Japan etc. These typically work to ensure a liability arises in only one location.

Where interacting countries do not have a social security agreement (e.g.

The UK with Australia, Brazil, China & India), then the domestic social security legislation of each country needs to be reviewed and this can sometimes lead to a dual social security liability.

This can occur for example, with a UK national being seconded to China or India for a three year period but remaining as an employee of the UK entity throughout. In both instances a charge to UK and non UK social security arises for the first 52 weeks of the assignment with host location liabilities only payable thereafter. There is usually no scope to offset social security liabilities due in one country against that due in another. This can result in a dual liability and, invariably, the employee will look to the employer to settle this.

Choosing Where To Pay Social Security Social security liabilities will more usually only be payable in one location.

By varying aspects of the assignment it may be possible to vary the location of the payment or limit the potential for dual liabilities. For example, in the above scenario of the UK national going to India, changing the contractual employer from the UK to the Indian entity from the outset would avoid the continuing 52 week national insurance liability in the UK for both employee and employer.

Many employees sent to work in the Middle East, where typically there is no social security, change employers from a UK entity to a non UK entity for the duration of the period outside the UK

taxing issues thus legitimately avoiding employee and employer UK national insurance for the first 52 weeks, a liability which would otherwise arise with an assignment and continuing UK employment. Naturally changing the contractual employer can have a wider effect on, for example, employment rights and as indicated above on benefits/pensions. It is essential that all issues are considered.

Variations to the length of the assignment and the place or extent of duties can also impact where the employee liability arises and, consequently, that of the employer. For example, a three year assignment within the EU may result in social security liability arising in a different country than an individual on a two year assignment.

The variable social security rates and potential earnings caps applying both within the EU and beyond make it worthwhile calculating the cost and considering social security planning possibilities in conjunction with tax planning. All too often the focus is on tax, although the social security impact can far outweigh potential tax savings.

Summary In summary, social security should not be forgotten. Do remember that there may well be an impact on benefits, but effective social security planning can help both the employer and the employee. Remember also that, as with tax, the existing rules are frequently being adapted so do check with your adviser for the latest position.

Andrew Bailey is national head of human capital at BDO LLP. He has over 30 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 Andrew.bailey@bdo.co.uk

FREE TAX SEMINAR Monday 2nd February 2015 at 12.30pm

US Tax Updates And Overview Of The US/UK Tax Treaty For US Persons Residing In The UK This seminar will cover US tax updates for 2014 and any 2015, as well as interaction of the UK and US tax treaty and how this affects US persons living in the UK. Hosted by BDO LLP To reserve your place in this free seminar please email: helen@internationalhradviser.com

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GLOBAL taxation

Global Taxation Update The Netherlands Work-Related Costs Regulation Becomes Mandatory As Of 2015 The work-related costs regulation (WCR) replaces the current Dutch system of taxfree allowances and benefits in kind given to employees (i.e. employee benefits).

The WCR becomes mandatory from 1 January 2015.

The basic rule of the WCR is that every allowance or benefit in kind that the employee receives from the employer is regarded as wages. There are several exceptions to this basic rule: • Intermediary expenses • Specifically exempted benefits • Certain special benefits in kind.

Every other benefit that the employee receives from the employer is regarded as salary. Some of these benefits are mandatory taxable salary, such as fines, company cars or accommodation made available to employees.

Tax-Free Fixed Sum – Final Levy If Fixed Sum Is Exceeded All remaining employee benefits are taxfree to the extent that they do not exceed the fixed sum of 1.2% of the total fiscal wage sum on an annual basis (2015).

For the 2014 year a 1.5% fixed sum is applicable. If the fixed sum is exceeded, the employer must pay an additional final levy (a so called employer levy) of 80% over the excess. Employers and employees can choose to let the employee benefit affect the 1.2% fixed sum or tax the employee benefit through the regular payroll. Depending on the amount of the fiscal wage sum, taxing the benefit through the regular payroll can be more beneficial.

Necessity Criterion From 1 January 2015, tools, computers, mobile communications etc. are tax-free if they meet the necessity criterion. For example, if an employee requires an iPad to be able to perform his employment and uses it for his employment, the tablet can be reimbursed/provided tax-free. It is important that the costs of this iPad are not deducted from the employee’s salary or vacation hours, but are borne by the employer.

Zero-Rated Benefit / Flat-Rated Benefits Some employee benefits’ actual value will not affect the 1.2% fixed sum, but a International HR Adviser Autumn

lower or even a zero value is applicable.

For example, a flat-rate value is applicable for canteen meals and a zero-rated value is applicable for workplace related facilities.

For some employee benefits for which a zero value is applicable, from 1 January 2015, the difference in tax treatment between reimbursements, provision and putting at the disposal of employees, expires.

Intermediary Expenses One important cost category is intermediary costs. Intermediary costs are costs made by the employee on behalf of the employer. Such costs are tax-free.

Examples include: • The employee buys items that become part of the assets of the employer • Costs incurred by an employee for relations (external representation expenses, not being costs of their own lunches, drinks) • Costs regarding a company car.

Specifically Exempted Benefits Some employee benefits are exempted and can be reimbursed or provided taxfree in addition to the tax-free 1.2% fixed sum. The specific exemptions are: • Travel expenses (up to EUR 0.19 per kilometer) • Accommodation expenses (coffee/tea during business trips, business related meals, hotel accommodation) • Study expenses • Professional literature • Extra-territorial costs made by foreign employees (i.e. extra costs a foreign employee has because they are not working in their country of residence: double housing accommodation, extra costs of living etc.)

• From 1 January 2015: Company products (up to a 20% employee discount and a maximum of EUR 500 per year) • From 1 January 2015: A number of workplace related facilities.

Tax-Free Fixed Expense Allowance If the work-related costs regulation is implemented, it is still possible to pay a tax-free fixed expense allowance to employees. This net fixed expense allowance must be substantiated by nature and extent. In this respect it is necessary to conduct an investigation of three months’ worth of claims if such substantiation is not available because a new fixed expense

allowance is implemented, or the current fixed expense allowance does not have an (accurate) underlying substantiation. If not, a part of the fixed expense allowance will affect the 1.2% fixed sum.

BDO Comment From 1 January 2015, the work-related costs regulation becomes mandatory. Employers with workers based in The Netherlands should review the new rules to ensure that work related expenses and benefits are treated correctly for tax purposes.

Sweden New Ruling Regarding Swedish Expert Tax The Administrative Court of Appeal has recently published a verdict regarding an employee’s potential entitlement to tax relief for foreign experts, researchers and key personnel (so called expert tax) based on the level of remuneration in accordance with internal Swedish tax rules.

The so called “expert tax” is a tax relief that can be applied for by foreign experts, researchers and key personnel who are temporarily working in Sweden. The tax relief means that only 75 % of the gross reimbursement received for work carried out in Sweden is subject to Swedish tax on employment income, and certain benefits in kind are tax free. The employees cannot stay in Sweden for more than five years and the tax relief can only be granted during the first three years of the employees’ stay.

Furthermore, there are restrictions on an employee’s previous stay in Sweden, the employer must be a Swedish company or a foreign company with a permanent establishment in Sweden and the employee cannot be a Swedish citizen. In addition to the above, the application should be filed with the Research Workers Board within three months from the start of the employment in Sweden.

In order to be entitled to the tax relief, the foreign employee should fulfill the requirements above and receive cash salary and benefits that exceed two price base amounts per month (SEK 88,800 for income year 2014). The remuneration requirement came into force on 1 January 2012. If the employee does not fulfill the criteria based on remuneration there is the possibility to apply for expert tax with an explanation as to why the expert, researcher

global taxation or key person should be entitled to the tax relief. This is then tried by the committee at the Research Workers Board.

In the verdict published by the Court of Appeal, the employee had applied for expert tax based on the level of remuneration. However, at the time of the application the employee did not have a sufficient level of compensation.

The employment agreement did however, state that the employee would be entitled to a bigger apartment after four months of beginning their work in Sweden as the employee’s family would join the employee in Sweden. The second housing benefit made the remuneration higher than two price base amounts per month and hence, the employee would fulfill the requirement based on remuneration after the first four months of work.

The employee filed an application for tax relief at the start of his work in Sweden. The Research Workers Board denied the employee the tax relief due to the remuneration not exceeding two price base amounts per month during the first four months of work. The administrative court agreed with this approach with the clarification that the reimbursement should reach the minimum amount of reimbursement at the time the application is made to the Research Workers Board.

The Administrative Court of Appeal granted a review but denied the employee’s appeal without any additional comments.

The price base amount is adjusted per 1 January every year but it is the price base amount at the time of application that is base for the decision for tax relief.

BDO Comment The conclusion of this verdict is that in order to be entitled to the tax relief for foreign experts, researchers and key personnel based on the level of remuneration, the remuneration must exceed two price base amounts per month at the time the application for tax relief is submitted to the Research Workers Board. Therefore, the timing on the application is crucial.

UK Changes To The Taxation Of Equity Awards For Internationally Mobile Employees (IMEs) The Finance Act 2014 included legislation which will lead to a major change in the UK tax treatment of equity awards for IMEs with effect from 6 April 2015. Urgent action is required to consider the impact of this change and update internal systems.

Current Position The UK is currently out of line with many other countries in relation to the taxation of employment related equity awards for IMEs. Whereas many countries regard equity awards as being earned over the period between grant and vesting (and therefore tax the proportion of income that relates to a period of residency in their territory accordingly), the UK rules currently regard residence status at grant as the determining factor.

Under the current regime if an employee is non-UK resident when options or Restricted Stock Unit (RSU) awards are made, UK tax will typically not apply on exercise of the option or vesting of the RSU. This treatment still applies if the individual subsequently becomes resident in the UK after the award is made.

New Position In relation to gains made after 6 April 2015, there will be a UK liability and potential payroll withholding obligation if the individual had any work connection with the UK during the vesting period. The new rules apply to all outstanding awards held on this date, regardless of the individual’s residence status on the date of grant.

As an example, an employee was granted an option subject to a three year vesting period in 2013 whilst resident in Germany.

She moved to the UK in 2014 on a two year assignment after holding the option for 18 months. Under the new rules 50% of the gain will be subject to UK tax.

International Mobility Conditions Special rules will apply in calculating how much is taxable in the UK. The new legislation will apply to any individuals who meet one of the ‘international mobility conditions’. These conditions are: • The employee is resident in the UK and is taxable on the remittance basis at any time in the relevant period • The employee is not resident in the UK for the whole of a tax year within the relevant period; or • Part of the relevant period is within the overseas part of a tax year where the employee is subject to split year treatment.

For share options the ‘relevant period’ is the period between the date on which the option is granted and becomes capable of exercise.

For RSU awards it will be the vesting period.

For restricted securities the ‘relevant period’ begins on acquisition of the shares and ends with the date of the chargeable event (i.e. when the forfeiture provision lifts).

Where these rules apply the equity income is apportioned over the relevant period and the portion that relates to UK work days is subject to income tax in the UK at the time of vesting/exercise. Special rules are applied if the employee claims the remittance basis.

The legislation excludes from the charge to UK tax the remaining foreign securities income (i.e. the portion of the income which relates to non-UK duties) distinguishing between ‘chargeable’ and ‘non-chargeable’ foreign securities income.

Corporation Tax Deduction- Symmetry With Income Tax In addition to the changes for internationally mobile employees there are welcome changes to the corporation tax deduction position. Provided certain conditions are met, if an employee is employed by a company and is seconded to a host company which is either a UK company or a non-UK resident company that is within the scope of UK corporation tax, a corporation tax deduction will be available to the host company. The deduction has to be claimed and will correspond to the amount that the employee is subjected to UK income tax on the exercise of their option/vesting of their award. The current position means that a deduction is only available if the employing company themselves is within the charge to UK corporation tax at the relevant time.

Potential Changes To The Social Security Position In addition to the changes to the tax treatment, there is also a consultation currently underway to bring the National Insurance Contributions (NIC) treatment in line as far as possible and similarly apportion the income. The consultation document recognises that this will not be fully achievable due to the limitations of international social security agreements, which do not allow for apportionment of income. The intention is that the new rules would also apply from 6 April 2015, for NIC purposes.

Winners And Losers There will be winners and losers as a result of these changes. The main losers are likely to be employees granted employee awards whilst non-resident who subsequently come to work in the UK. For these individuals a UK tax saving may be achieved if options are exercised before Autumn International HR Adviser

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GLOBAL taxation 6 April 2015. Employees who were granted awards while in the UK but have since spent most of their time working overseas could save tax as a result of the changes.

What Actions Should Companies Take?

This is a significant change and should be considered in the context of increasing HMRC focus on payroll compliance on share plans generally and IMEs in particular. We recommend that companies consider the impact of these changes and take action now: • Companies should manage employee communications carefully to ensure that employees understand how they will be affected by the changes. In particular employees will not be expecting to pay UK tax on equity awards granted when they were non-resident in the UK and may direct any dissatisfaction at the HR/payroll teams • Companies should consider whether any employees may benefit by exercising vested share options prior to 6 April 2015, and if so issue an appropriate employee communication • Employers should urgently identify all relevant IMEs and implement a robust system for apportioning income between UK and non-UK source • The part of each gain which will be subject to UK tax will depend on the circumstances of each IME. UK income will depend on working days in the UK during the ‘relevant period’ and the vesting schedule for each award • Employers should consider preparing for this change by preparing draft ‘what if ’ calculations in respect of all outstanding awards held by IME and for individuals coming to the UK • The payroll, global mobility and HR teams will need to agree protocols for calculating UK tax • Companies may want to provide for additional NIC (employers social security) costs • Companies which historically transfer employers NIC may want to update agreements with employees or may decide that this is not feasible • Companies should ensure that the S.222 ‘tax on tax’ charge does not apply.

Section 222 applies if tax is not withheld from employees within 90 days of the end of the tax year of exercise/vest.

This is punitive and gives rise to additional tax and NIC cost for employee and employer • Companies should ensure that UK tax International HR Adviser Autumn

liabilities for IMEs are reported on form 42. They should note that electronic filing applies from 2014/15 and gives HMRC greater scope to review payroll and form 42 compliance • The impact on tax equalisation and tax protection policies should be reviewed • Companies will want to ensure that all relevant corporation tax relief is claimed.

BDO Comment This new legislation is helpful in bringing the UK tax treatment of equity awards in line with other countries. However, the changes mean that employers should urgently review share plans for internationally mobile employees to determine how they will be affected by the new rules and to ensure that they update compliance systems and secure corporation tax relief where possible.

Companies will need to ensure that they keep detailed records of employee movements, working history and vesting schedules. The legislation affects all gains made from 6 April 2015, and therefore awards made prior to this date are caught.

US Update On FBAR Filings The 30 June 2014 deadline to file Report of Foreign Bank and Financial Accounts (Form FinCEN 114) has come and gone.

Individuals with foreign accounts with more than U$10,000 of combined value during 2013 who have not yet filed should consider doing so as soon as possible to avoid possible civil and criminal penalties.

FinCEN (Financial Crime Enforcement Network) has ramped up prosecution in recent years for individuals who fail to file these forms and penalties have been severe (in one case, the final penalty was 150% of the balance in the foreign account). To date, the focus of FinCEN has been on those who deliberately neglected to file and where there has been non-reporting of income from the accounts. To avoid this situation, the IRS recommends individuals file the FBAR even if it is late.

According to the IRS website, if an individual has correctly reported all income earned from the foreign accounts on his/her tax return and has not been contacted by the IRS concerning the delinquent FBARs, then all that is necessary for the individual to do is to file the delinquent FBAR now, along with an explanation for why it is being submitted late. The electronic form used for submitting FBARs this year has a drop

down list of the most common reasons for a late filing and, if none of these are valid, there is an opportunity to provide your own explanation. Where there is no unreported income or related tax, the IRS has said that a penalty would not be imposed for the late filing. Given this position, the IRS has shown that it is more focused on compliance within the foreign bank account programme rather than enforcing the significant penalties that are possible with non-compliance.

One does need to be aware that if you knowingly avoid filing an FBAR, you could be subject to wilful neglect penalties.

These penalties can be onerous and may include both a hefty financial cost as well as criminal prosecution (if criminal penalties are sought as well). To avoid consideration of deliberate neglect, you should file any unsubmitted FBARs as soon as possible.

If you have unreported income and related tax to report as well, there are programmes such as the Offshore Voluntary Disclosure Programme that can help mitigate the exposure to penalties. A thorough review of your individual facts and circumstances is recommended to help determine the right course of action necessary for you.

BDO Comment All individuals who hold foreign bank accounts with a combined value of more than U$10,000 during 2013, and have not filed the relevant accounts by the deadline (30 June 2014), should consider doing so as soon as possible in order to mitigate any civil or criminal penalties.

Streamlined Programme Has Been Expanded In June 2014, the IRS changed the Streamlined Programme which originated in 2012 opening the programme to residents of the US and eliminating previous risk requirements or tax liability limitations for US taxpayers residing overseas. The other programme available to taxpayers with undisclosed foreign assets is the Offshore Voluntary Disclosure Programme (OVDP). To qualify for the Streamlined Programme the taxpayer cannot be under examination by the IRS for any taxable year or have been accepted into the OVDP. The goal of the Streamlined Programme was and continues to be to allow the taxpayer to file three years of US individual income tax returns and six years of Report of Foreign Bank Accounts (FBARs) to come back into compliance with the IRS.

global taxation This expansion now allows taxpayers to file informational returns to defer reporting and taxing the income on overseas retirement accounts that are covered by a tax treaty which was previously impossible to do outside of a private letter ruling.

The benefit of the Streamlined Programme is that it shields taxpayers from failure-to-file and failure-to-pay penalties, accuracy-related penalties, information return penalties, or FBAR penalties in addition to criminal penalties unless it is determined that the noncompliance was fraudulent or wilful.

Taxpayers Residing Outside The US (Foreign Offshore) The revised programme now allows the filing of amended returns to correctly report foreign items. To file under this programme you need to be physically residing outside the US. For US citizens or green card holders, they must have resided outside the US for at least 330 days during the three most recent tax years where the tax filing

due dates have passed.

For example: If a taxpayer moves overseas in 2012 and did not report the income from a foreign bank account in 2012 or 2013, the taxpayer will qualify for the programme since he/she lived overseas for at least 330 days during 2011, 2012 and 2013.

Non-residency for individuals who are not US citizens or green card holders means that an individual did not meet the substantial presence test during the three most recent tax returns where the due dates have passed.

For example: a German citizen was transferred to the US on 1 May 2012 for a two year assignment. The taxpayer will qualify under the programme since the tax returns open for submission are 2011, 2012 and 2013 and the taxpayer was not US resident in 2011.

for those years, but failed to report gross income from a foreign asset and may have failed to file an FBAR. The taxpayer is however, subject to a Title 26 miscellaneous offshore penalty.

This penalty is 5 percent of the highest aggregate balance of the foreign asset that wasn't disclosed on an FBAR, Form 8938, or if the income from a foreign asset was not reported during the three year return period or six year FBAR period.

This will be the only penalty unless it is determined that the noncompliance was fraudulent or deliberate.

Taxpayers Residing In The US (Domestic Offshore) Taxpayers filing under this programme need to be US resident for all three years and have filed all US income tax returns

Prepared by BDO LLP. For further information please contact Andrew Bailey on +44 (0)207 893 2946 or at andrew.bailey@bdo.co.uk

BDO Comment We recommend that advice is sought by individuals who have not fully complied with US tax filing obligations or who have failed to report foreign financial assets.

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International HR Strategy

Global Mobility Shared Service Centres - That’s The Bottom Line Most, if not all companies, are operating in an increasingly competitive market.

Many also have growth strategies targeting new and emerging markets.

In this changing global landscape, with an increased scrutiny to deliver on cost reduction objectives, organisations are evaluating how to best deliver their products and services.

With this in mind, companies are considering and implementing changes to their service delivery model and back office to drive efficiencies and lower cost.

Transforming a company’s back office to be more service focused, when planned and implemented correctly, can help organisations to deliver on these targets.

Here, we focus on the concept of the traditional captive shared service centre (SSC) where specific tasks and processes are carried out from a shared location (generally at a lower cost, in an offshore location). Given the increase in the use of talent mobility, continuing pressures to justify and manage assignment costs and a rise in the strategic focus of the global mobility professional, the establishment of an SSC for global mobility is becoming increasingly popular.

In this article, we share our perspective on why companies may consider offshoring of global mobility tasks, and how companies can manage the transition to an offshoring model given the “one size fits all approach” is unlikely to be effective in light of the complexities of global mobility.

Why Consider It? There are many triggers that influence companies to consider the implementation of a global mobility SSC, or to offshore an identified list of particular global mobility tasks. The triggers are likely to be a combination of internal and external pressures; offshoring options are aimed at delivering benefits as a response to these pressures.

Internal Triggers • Multiple Locations And Operating Units - Generally, due to growth and the increased focus on talent mobility, systems and processes develop ad hoc International HR Adviser Autumn

across multiple locations and operating units with no coherent direction or oversight. One of the reasons companies set up a global mobility SSC would be to standardise and centralise these systems and processes to drive economies of scale and process efficiencies of moving talent from one location to another.

• Inflexible Cost Structure – Whilst organisations are beginning to develop a link between talent and mobility and appreciate the importance of a having a global workforce, the cost of sending individuals on assignment is scrutinised more than ever before.

If a global mobility SSC is designed and implemented correctly, one of the key benefits is an overall reduction in mobility costs per assignment. As quoted in our Cost Optimisation article (Summer 2014), driving efficiencies within a global mobility service delivery model can result in between 5% and 10% savings of the total global mobility programme cost.

• Administration Focus – Talent mobility is becoming more critical to achieving overall business objectives which requires individuals with global mobility experience to become strategy focused and provide consultative support to the organisation. Typically, a global mobility SSC would provide support by delivering high volume, standardised transaction tasks related to global mobility, such as the production of assignment letters or preparing assignment cost projections. This frees up time for global mobility professionals within the head office or regional hubs to provide a high touch experience to the assignee and the desired strategic support to the business, thus driving an enhanced service focus for all parties.

External Triggers • Increased Focus On Controls And Compliance – As tax legislation and industry regulations have not been adapted for the complexities that surround cross border moves, it has resulted in many companies finding it difficult to manage their global compliance risks. In turn, this has led

to an increase in audits and media scrutiny for organisations by both tax authorities and industry regulators.

By consolidating and centralising the bulk of global mobility compliance administration, organisations can go one step towards reducing their compliance risk and developing a governance framework to support this.

• Globalisation – Due to the setup of international trading groups, technological advancements, and the demand for global experience within the employee talent pool, there is a requirement for the organisation to become truly globalised in all aspects of the business which equally applies to the fundamental structure of the organisation.

• Mergers And Acquisitions – With mergers and acquisitions, approaches to talent mobility can develop on an ad hoc basis (e.g. policy approaches, level of touch provided to the assignee and type and use of global mobility technology). The implementation of a global mobility SSC can help to centralise the approach to global mobility practices ensuring the approach is consistent throughout the organisation, eliminating duplication of efforts and systems.

Figure 1 (next page), illustrates the range of benefits that can result from the implementation of a global mobility SSC for the global mobility function and the business. It is no surprise that the reduction in the bottom line is cited as the most common benefit.

However, the implementation also provides an opportunity for process re-engineering and the rejuvenation of the service delivery model. By adopting a methodology based approach to process design (such as Six Sigma), processes are well thought out, documented and designed for negligible errors. This is generally considered a by-product of implementing a global mobility SSC, however, over 85% of companies surveyed identified cost reduction, process efficiencies, and effective control as the top three benefits that provide the highest positive impact to the business.

International HR Strategy Figure 1: Benefits from a global mobility SSC

Figure 2

Suggested Activities SSC Implementation

Assess – agree vision, obtain support, agree benefits specific to your organisation Design – service delivery model aligned to objectives, location analysis, scope of services Build – recruit, train, build the processes and technology and obtain sign off Implement – test, parallel operations, and roll out

Optimise – culture of continuous improvement, review and redesign © 2013 Deloitte LLP. Private and confidential.

How Would We Do It? Every organisation’s journey of setting up an SSC for global mobility will be different depending on the reasons for implementation, the resources available and the company culture. However, in our experience, there are five fundamental phases of a global mobility SSC implementation project – assess, design, build, implementation and optimise (see Figure 2).

1. Assess Firstly, there should be a clear vision regarding the key benefits that the organisation wants to achieve from implementing an SSC for the global mobility function, and determine whether the organisation aligns with the profile of an organisation that would benefit from a service delivery model transformation.

The successful implementation of a global mobility SSC will depend on

the maturity of the global mobility programme (including the number of assignees, types of moves and maturity of the global mobility programme); whether any other strategic initiatives are being planned or carried out at the same time; whether the culture of your organisation supports this change; and the level of integration between talent mobility and the overall strategic objectives of the business. Ultimately, the global mobility SSC needs to be implemented at the right time, with the appropriate support from Remember that an SSC is separated by time zone, geography and culture. This 'separation' needs to be understood, assessed and addressed upfront in the SSC journey to be able to achieve success

senior stakeholders before moving onto the next phase.

2. Design During the design phase, planning is key.

The scope of the project, including timelines, project team, and having a robust plan is a crucial first step. The global mobility service delivery model, including processes, technology, location and governance considerations, should then be designed to support the overall business strategy.

A location feasibility analysis should be carried out to determine where the global mobility SSC should be set up.

As the demand for global mobility SSCs has increased, the supply side has responded with typical countries such as India, Malaysia, Philippines, Argentina, Romania and Czech Republic now being chosen for global mobility SSC sites. Throughout the design phase, consideration needs to be placed on any culture, time, distance and talent gaps between the head office and global mobility SSC site. The size of the gap on any of these elements may not necessarily determine the chosen location for the global mobility SSC, however, these characteristics must be known in advance to ensure the implementation is effective and risks caused by these characteristics can be mitigated.

Finally, during this phase, attention needs to be placed on what is being carried out in the global mobility SSC. The key Autumn International HR Adviser

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International HR Strategy

Figure 3: Scientifically assess what should be transitioned

• • • • •

Assignee briefings Pre-assignment consultation Complex case management Policy exceptions On-going vendor assessment

• • • •

Internal customer management Policy creation / updates VIP / confidential moves Vendor portfolio management / contracting • Compliance management • Bulk moves planning • New country entry strategy

• • • • • • • • • • •

Document management Assignment letters production Vendor initiations Invoicing Cost estimates / balance sheet production Payments Data updates Query triaging Payroll instructions Compliance administration Track and chase

• • • •

Reports preparation Process updates Intranet updates Administrative communications

© 2013 Deloitte LLP. Private and confidential.

Focus on the future (2 to 5 years) rather than looking in the rear view mirror. Design with your future aspirations in mind rather than current challenges. Once the SSC design is complete, tweak it to ensure your current challenges are addressed

to getting an offshore operational model right is to transition activities that are by their very nature best suited to an offshore model – typically high volume and highly standardised to allow for economies of scale. By viewing mobility activities through a standard HR SSC assessment lense, at an initial glance, it would suggest mobility activities are not suitable for an SSC environment compared to other HR activities. For example, global mobility high risk processes and activities which typically involve more than one country with multiple stakeholders and touch points versus HR low risk processes which involve only one country with few stakeholders and touch points. As a result, the design phase is more crucial for global mobility than other business functions (such as HR, Finance etc.) due to the complex nature of global mobility tasks; International HR Adviser Autumn

e.g. cost projections which account for double taxation treaties, tax equalisation approaches, and policy components.

However, when the offshoring of global mobility tasks is considered as a standalone project (outside the offshoring of other HR activities), and those leading the initiative have detailed knowledge of the global mobility processes and tasks, the concept of task segmentation by volume and standardisation can be applied to global mobility when designing which tasks are suitable for the offshoring model (see Figure 3 above).

3. Build Before proceeding, you should ensure that processes involving the global mobility SSC are documented at all touch points throughout the assignment lifecycle. Comprehensive system tests should also be carried out and service level agreements put in place (e.g. turnaround time for drafting assignment letters and response times for assignee and business communications). Of course, the global mobility SSC also needs to be chosen and fitted out in line with the project plan.

Critically, it should be appreciated that the individuals within the global mobility SSC have one of the largest impacts on the success of the overall

implementation. The experiences of the offshore team, with their variety of backgrounds, culture and capabilities, should be seen as an opportunity rather than an obstacle to tap into a range of insights and ideas to ultimately define and achieve best practice for the organisation.

A global mobility SSC leader should be appointed who will have ultimate responsibility for the day to day running of the implementation project to ensure objectives are being met. In addition, the global mobility SSC should contain both existing and new staff where possible, with their career objectives set in alignment to the project and defined training plans in place.

Recruiting specialist global mobility professionals for the global mobility SSC can be difficult. It is generally considered that this is due to talent shortages in an area of tax which is still considered “niche”. To tackle this issue, individuals should be recruited based on their overall experience and behaviours and then trained in specific global mobility tasks.

Finally, the project team should obtain the appropriate sign off from business leaders, steering committee members and stakeholders as required before moving on to the next phase.

Enlist the SSC team in building your new endstate global mobility process. This will bring creative and diverse ideas and strengthen ownership of what is being built

4. Implementation When entering the implementation and roll out phase, a developed transition plan and mitigation strategy should be in place. Taking time to consider the transition plan and approach can make a significant difference to how the implementation is conducted and its overall success.

It is essential to test the changes made throughout the design and build phases before the implementation goes live.

Successful implementation involves running parallel operations to maintain business as usual, as well as testing the new model within a safe environment.

Whilst communication and change management is an important requirement throughout the project, managing people

International HR Strategy and change at this phase is also crucial.

Change should be communicated early to all impacted stakeholders using a variety of different communication vehicles to generate as much support and engagement as possible. Consideration should also be given to the content and style of communication required for existing assignees.

The more time you spend in testing and parallel operations or job shadowing, the less time you will spend on post go-live issues

Communication with the offshore site is as important as communication with the rest of the business. The employees within the global mobility SSC need to be seen as one team, working alongside the business towards a shared objective.

On-site visits, work shadowing and networking (both onshore and offshore) can enhance experience and increase connectivity.

Before any “go-live” date, a readiness assessment should be carried out in full, and all identified actions should be completed in order to mitigate any risks of unsuccessful implementation.

Going live with an SSC is the first stwp in the journey of continuous improvement. Scope out the next phase soon after go-live once the new SSC has stabilised

5. Optimise We speak of the implementation of a global mobility SSC as being a “project”, when in reality, this phase never really ends. During the optimisation phase, the performance of the global mobility SSC should be regularly benchmarked against competitors, the original business plan and the overall objectives for global mobility to ensure a positive global mobility brand is established and maintained. Changes should be made where objectives are not being met to drive performance. Examples include process reengineering, establishing and reviewing assignee and business satisfaction ratings, updating SLAs, utilising global mobility metrics and

reporting (such as global mobility costs, volume and attrition rates) and retraining existing personnel where required.

Individual employees working within the offshore site should be reviewed and retrained to align to changing business and global mobility SSC objectives. They should also be given opportunities to work towards professional qualifications as appropriate.

A culture that supports continuous improvement should be established.

Project teams should be fully allocated to driving further efficiencies and optimisation. There is always scope for further tasks and services to be reallocated to the global mobility SSC in the future and opportunities for enhancement should not be forgotten even when the global mobility SSC is performing well.

Once the global mobility SSC stabilises, organisations look to place higher value activities into their global mobility SSCs. For example, the global mobility SSC may take on responsibility for global mobility briefings, complex cost projections and global payroll compensation management. These processes are more challenging to reallocate which makes obtaining support and implementation much more difficult. However, we have seen extensive evidence of this being successfully achieved with the right vision and planning.

In summary, the global mobility SSC journey requires investment in terms of time, effort, skills and money. The going can be tough and persistence and resilience are crucial to overall success. If your organisation has a critical mass of assignees and transactions, and with the right tools and approach, real tangible benefits and service improvements can be realised through this transformation.

Deepinder Lamba Global Mobility Transformation Senior Manager, Deloitte LLP, United Kingdom +44 20 7007 2689 dlamba@deloitte. co.uk Beth Warner Global Mobility Transformation Manager.

Deloitte LLP, United Kingdom +44 20 7007 8643 bewarner@deloitte. co.uk

FREE SEMINAR Monday 2nd February 2015 2.15pm Short-Term Business Visitors: Staying Ahead Of The Game Any global employee is potentially a business traveller, capable of creating tax or immigration obligations in any country in an era of increased scrutiny by tax authorities around the world. For many organisations, defining the size of the population and identifying the relevant individuals is the biggest challenge. We discuss how a datadriven approach utilising the latest analytics techniques coupled with tax and immigration expertise can enable a process to identify, review and propose actions for organisations to help manage business traveller compliance risk efficiently for any size of population. Furthermore, this data also provides business and mobility leaders the opportunity to pro-actively manage business travel before an issue arises, identify cost reduction opportunities by analysing spend and evaluate adherence to an organisational travel policy.

Presented by Scott McCormick, Partner and Robin Brown, Senior Manager from Deloitte Global Employer Services This seminar is taking place at The 2015 Corporate Relocation Conference & Exhibition Hotel Russell, Russell Square, Bloomsbury, London To reserve your free place in this seminar please email: helen@internationalhradviser.com or telephone Helen Elliott on 020 8661 0186

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International Pension Plans

Ten Steps To Setting Up An International Retirement And Savings Plan In previous articles we have looked at the many pensions and savings challenges that companies face in respect of their internationally mobile employees; retaining them in home plans, local host country options and international pension plans (IPPs). As a general rule the best way forward depends upon a range of factors, such as the company’s existing pension arrangements, the nationalities and locations in question, and any local social security and compulsory pension system. In this article I’d like to jump past the arguments for and against the various options and assume that, having carried out an analysis of what is needed, you’ve identified an element of your global workforce for whom an IPP is the best solution, but you’re not at all sure of the options available and the things you need to consider to make sure that you get it right. What follows is a simple tenpoint plan that covers the main areas to consider when setting up an IPP.

1. Benefit Design You’ll no doubt be familiar with typical pension plan design, such as: • Occupational defined benefit (DB) whether funded or unfunded • Occupational defined contribution (DC) • Foundations (mainly in Europe) • Individual contracts (for example group person pensions in the UK) • Plans that integrate with social security systems • Plans that are a top-up to a generous, or perhaps ungenerous, state system.

IPPs are not hugely different, as with local pensions your first decision is DB or DC? I’m not here to argue the merits of these approaches but needless to say I’m not aware of many new DB international plans being established at the moment and in our experience most new IPPs are being established on a DC basis.

2. Plan Structure If DC is the preferred route, do you elect for a trust-based occupational plan or individual contracts? Now, here things do differ from local pension plans as providers can rarely offer you individual contracts for a globally diverse workforce. This is due to the need in most parts of the world for a provider to be appropriately licensed International HR Adviser Autumn

to sell individual pensions or savings plans in that country and, in practice, this is rarely the case. An occupational plan, however, is established by the employer, so the provider only needs to be licensed in the country in which the contract with the employer is established, or where the trust deed or foundation is established.

Many parts of the world, particularly in continental Europe, are not entirely familiar with trusts and may prefer to contract directly with the provider or to establish a foundation, so another decision is needed around this structural point.

The more traditional offshore locations for IPPs, such as the Channel Islands and Bermuda, will be more familiar with trusts, but increasingly offer foundations.

3. Selecting A Location An important aspect of setting up an international plan is to establish it in a tax-neutral location, which is to say that authorities in that location will not levy any tax on contributions, growth or encashment.

This ensures that any tax liabilities are dependent upon the personal tax position of the members and their locations, not on the plan itself, which is a cornerstone of the plan’s ability to support global mobility.

For this reason plans are usually, although not always, established in an offshore location such as the Isle of Man, Jersey or Bermuda. The Organisation for Economic Cooperation and Development identifies over 50 locations as ‘offshore financial centres’, (some of which, like Lichtenstein and Switzerland are actually land-locked), so there’s plenty of choice. However, in practice the longstanding, well governed locations, with a robust regulatory system and infrastructure are preferred. The Isle of Man, Luxembourg and Channel Islands are a good starting point.

4. Selecting A Provider There are generally two types of provider - insurance companies and third-party administrators (TPAs). Insurers will provide you with an insurance contract and you will invest in their insured investment funds, albeit these may then be managed by an external fund manager.

With unitised funds, the insurer will buy holdings in an underlying fund to match the liability, most likely a fund

domiciled in Luxembourg or Dublin. It’s important to note that neither you nor the plan member will directly own the underlying fund, as this will be owned by the insurance company. TPAs on the other hand deal on your behalf with the underlying fund manager, so you (or the trustees) will own the underlying assets.

This may sound like a purely technical point, but in practice it means that insurers can invest, disinvest and process fund switches more quickly, thereby reducing time out of the market. They can also often reduce dealing costs by matching off sales and purchases – why trade if you are both a buyer and a seller in a particular fund at the same time?

Another advantage of an insurance wrapped fund is that the insurer can be creative; supporting funds with guarantees, fixed rates of return, blends of funds, client white-labelled funds and so on. On the other hand, as the funds are owned by the insurer, it’s important to check how the insurer is structured and whether or not it is financially sound, as the insurer’s failure could impact upon the value of your IPP. The jurisdiction chosen in step three may be important here as some regulators, such as the Insurance and Pensions Authority in the Isle Of Man, require the insurer to hold the assets of an IPP in a separate, ring-fenced, longterm fund, thereby segregating them from other assets and ensuring they are safe from creditors.

5. Contributions As with any retirement savings plan, you will need to decide upon the level of employer contribution for each category of employee as well as: • Whether employees will be required to contribute themselves • Whether any matching is offered to encourage take-up • Whether you will allow additional voluntary contributions • Whether bonuses may be paid into the plan.

You may decide to have tiered contributions that are determined by seniority, length of service or, perhaps, by location.

6. Payroll Options And Locations Many companies decide to make

International Pension Plans payments into IPPs from a single location in a single currency. This is the simplest way to manage the IPP, but for some companies the cross charging across business units and locations is an issue and so the plan may need to be able to support numerous pay centres, across a number of countries or regions and in a number of different currencies.

7. Withdrawal And End Of Service Options Step seven is to determine when and how members may withdraw their benefits from the plan. Whilst many IPP’s, as with domestic pensions, have a normal retirement age and minimum age for drawing benefits, they are not bound by local legislation so you can decide on the plan design. Many plans allow benefits to be withdrawn from age 55 or on leaving service, others allow withdrawals at any time, or may specify a requirement to demonstrate hardship or illness. Benefits can normally be taken entirely as cash, but some plans insist upon some form of income. It’s worth noting that the market for international annuities is very limited.

8. Investment Choice Very few plans offer all of the funds that the provider will have available. Typically, plans will have a bespoke fund range that

includes a default fund, perhaps a lifestyle fund or a low-risk option, together with a range of funds from which the members can self-select - perhaps a range of low-cost passives covering the main asset classes and geographies. Increasingly, some means of guiding members into appropriate funds will be offered, for example, an online attitude-to-risk questionnaire that guides members into one of four or five risk-rated funds. From a governance perspective, whether or not trustees have been appointed, it may be sensible to establish an investment committee to oversee the funds that are made available. Consideration can also be given to supporting members in their self-selection, such as past performance data and charting tools, forecasting tools and general educational materials on investment.

9. Vesting Rules The lack of country-specific regulation on an IPP means that the employer can decide whether or not a member’s entitlement to contributions vests immediately, or whether the individual must remain in service for a time before they are fully entitled to the contributions – employee contributions normally vest immediately. This golden handcuffs approach is common in industries where attracting and retaining highly skilled people is a challenge.

10. Member Communications Having designed your IPP, it goes without saying that to gain maximum benefit from it for both you and your employees, you need to ensure that it is appreciated and understood. IPPs have the added communication problem of a widespread geography, so emails, webinars, online access, information sites and newsletters should all form part of a comprehensive communication plan. Your provider will have a vested interest in ensuring that the launch of your plan is a success and so will provide communication support as part of the overall proposition.

Managing employee benefit solutions for mobile employees can be tricky with no two companies looking for exactly the same solution. It’s worth considering seeking the advice and guidance of a leading employee benefits consultancy with a specialist international team who can advise you on your individual requirements.

Stewart Allanson Zurich Corporate Life & Pensions is a leading provider of International Pension Plans.

For more information, please email: stewart.allanson@zurich.com or telephone on +44 (0) 1242 664443

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POLICY PROVISION FOR PANDEMICS

Half Of Multinationals Have No Plan In Place For Dealing With A Pandemic International HR must be involved in company crisis plans if the very specific needs of expatriates and their families are to be considered, but how many companies even have a plan in place?

ECA International recently ran a survey on policy provision for pandemics.

Andrew Shaw, ECA’s Managing Director, comments on the findings.

Over the past decade we have seen a number of diseases and medical emergencies break out across geographically diverse locations.

These have included SARS, swine and avian flu, Middle East Respiratory Syndrome otherwise known as MERS and now Ebola.

With cross-border travel inevitably increasing the potential for pandemics, it is clearly in the interest of multinational organisations with mobile and expatriate workforces to be prepared for such events.

But how prepared are multinationals for crisis in reality, and just how involved are international HR in crisis planning?

To get a better idea of the provision companies currently have in place to deal with pandemics, ECA carried out a quick spot survey among global mobility managers at the beginning of August.

It is shocking to learn that of the 189 companies taking part, nearly half said that they either had no plan, or were unaware of a plan within their organisation to deal with outbreaks such as the current Ebola.

Of those companies who were aware of the existence of a business continuity plan, many were unaware of the specific provisions within in, and therefore to what extent pandemics were catered for within that plan.

The concern for those GM managers without, or unaware of, contingency plans for potential emergencies such as the Ebola outbreak, is how the difficult extra sets of issues that come with being responsible for expatriated employees can be dealt with. Knowing who is responsible for which staff, which family members are on assignment, how to reach people far from HQ or their ‘parent’ entity, knowing where the required local facilities are in potentially hundreds of locations – and possibly remote or undeveloped ones at that, are among the variables which add to the complexity of crisis management.

At the time of crisis, it pays to know as International HR Adviser Autumn

much as possible to be able to co-ordinate an effective response. Companies also need to think through when or indeed, whether, they will treat their expatriates differently from locally employed staff in different kinds of scenario.

Certainly, the best way for companies to ensure that these issues are addressed within any crisis policy is to involve and inform global mobility teams. And if there is no plan at all, global mobility teams should plan to take up the mantel for themselves. Apart from risk to business, companies need to understand their duty of care to their employees.

So where companies do make provision for outbreaks of disease, what do they involve? Clearly, the provisions have to accommodate a great number of scenarios, so specifics are rarely possible for every case. For those participants reporting some kind of business continuity policy, the most common area covered is the ongoing provision of a safe working environment (83%). This could mean providing masks, if appropriate (this was widely reported as one of the measures implemented during the SARS outbreak); introducing additional hygiene measures in the workplace; monitoring staff health; providing extra healthcare; quarantine if necessary, and ensuring everyone has the most up-to-date information on the outbreak, whatever it may be.

Companies might also consider including splitting teams and working them from separate offices, or alternating working teams in order to mitigate against the risk of an entire office going down with an infection and business continuity being lost.

Ensuring that there is a plan in place should people no longer be able to travel to work is the second most common measure adopted by survey participants, and 70% said they provide IT provision or extra support to facilitate working from home.

For expatriate staff, evacuation or repatriation may need to be considered.

Three quarters of companies who had a policy, said that it made provision for repatriation of an expatriate, if possible, and/ or their family in the event of a pandemic.

Consideration needs to be made, though,

for scenarios where travel is not possible for whatever reason, and to what extent the company will also support its local staff who are experiencing the same risks.

With regards to the Ebola crisis specifically, most of the companies we surveyed with staff in West Africa were taking a wait and see approach at the time of the survey being conducted (August), although travel restrictions were already in place amongst a number of them with 20% restricting movement in and out of the region, and 23% within the region.

Very few companies said they would increase location (hardship) allowances (4%), or provide a new exceptional allowance (5%), to their expatriates in the event of a pandemic. We would certainly suggest that a location allowance shouldn’t be used as ‘danger money’ or to compensate for one-off crises. Direct and practical response and support to any kind of crisis is a more effective and responsible approach.

For those companies unsure about their crisis policy, we would advise the following: • Engage with the business continuity team to ensure there is a plan and that it takes expatriates into consideration • E n s u r e crisis management communication protocols have been worked out - and are well understood across the business - in advance • Engage a specialist travel security provider to help with policy or at least advise on case-by-case scenarios • Champion the development of your company’s pandemic or crisis policy within the organisation, or at the very least create one for your part of the business • Monitor government warnings in hotspots and feedback from people on the ground.

Andrew Shaw is Managing Director of ECA International.

ECA is a leader in the provision of knowledge, information and technology to inform, guide and support managers handling compensation and benefits for international workers moving globally.

Telephone: +44 (0)20 7351 5000 Email: eca@eca-international.com www.eca-international.com

LEADERSHIP

How To Navigate The Landscape In Our Changing World Leadership has never been so important in any organisation, than it is today in our unpredictable, complex and changing world.

Direction and Influence are two important elements of the leadership discipline. Navigation is the third part of the behavioural trilogy and in the past it may have been overlooked in importance by many organisations.

Not Any More Steering an organisation on its unique journey is one of the biggest personal challenges facing all leaders. Although the end goal, the destination, may stay the same, the conditions experienced on the journey will be different within six months, and different again within a year.

Why? Because internal and external issues and events will constantly change the landscape in which the organisation operates in.

Navigating the landscape has become the new core requirement of the 21st century leader. To support this need, meet the challenges ahead and deliver success, a more flexible, adaptable leadership approach is needed to keep everyone connected with the organisation on track - a performance framework which adapts to changing conditions on the journey.

Navigating the landscape is a specialist skill for any leader to master. An understanding of the human performance challenges likely to be faced on the journey is needed to achieve navigational excellence.

Performance challenges can be grouped into six clearly defined areas of focus - Research, Strategy, Engagement, Motivation, Development and Ownership.

Each area is unique and requires a different navigational focus.

Research Research focuses on the size of the opportunity for everyone connected with the organisation. Navigational focus addresses four significant challenges: • Retention of people currently employed • Attraction and recruitment of new talent

• Support of suppliers, partners and other stakeholders • Clarity regarding the future direction of the organisation.

The role of the leader is to help create an inspirational journey experience and an organisation that others want to be part of. This is achieved by identifying the reasons why individuals should sign up to the journey. The response to the question ‘What’s in it for me?’ offers the leader insight on what is needed to enlist the support of others.

Popular reasons for leaders embarking on the journey include survival, new markets, growth potential and status.

Reasons for others signing up include a sense of adventure, personal growth, fulfilment and pride.

Navigating the landscape requires the production of a simple, ambitious, and compelling ‘vision’ offering a further inspirational insight into the future of the organisation and what lies ahead on the journey.

The more powerful the vision, the easier it is to attract, recruit and retain people on the journey.

Strategy Strategy focuses on the production of the route map needed to chart the right course on the journey. Navigational focus addresses four important challenges: • General understanding of the strategic plan • Alignment of the plan to each employee’s job role • Agreement of each employee’s performance expectation • Day-to-day management of their performance.

The role of the leader is to demonstrate how the vision will be realised by aligning the overall plan to each role in the organisation. Confidence in the leader and credibility in the plan are both important to navigational success.

Navigating the landscape requires the use of a simple route map – a blueprint for success – confirming the vision (the destination), the areas of focus important on the journey (critical success factors), the behaviours needed (culture and values), and the personal performance

contribution (targets or objectives) applicable to the journey.

The blueprint also offers a narrative about the future direction of the organisation, which enables individuals to understand, trust and support the leadership team.

The production of the route map is the single most important piece of work carried out by leaders on any journey.

Engagement Engagement focuses on obtaining the buy-in and commitment to the strategic plan and the route map on the journey.

Navigational focus addresses four key challenges: • Level of leadership visibility and capability • Quality of the workplace experience • Effectiveness of the communication grapevine • Need for momentum on the journey.

Levels of people engagement and business performance are inextricably linked. The role of the leader is not to generate more followers, but to create more leaders – we call them Cultural Architects.

Cultural Architects are advocates of the vision, the route map and the journey and are proud to be connected with the organisation. Operating as informal ‘leaders without authority’ they are able to guide, inspire and focus others on what is needed to support the organisation.

Navigating the landscape requires the identification, recruitment and powerful influence of the Cultural Architects and they can be found within the organisation or externally from suppliers, partners and other stakeholders.

Cultural Architects help to improve communication, trust, performance momentum and commitment from others on the journey.

Motivation Motivation focuses on the creation of the performance climate needed throughout the organisation to enable others to perform to their potential. Navigational focus addresses four crucial challenges: • Defining what high-performance looks like Autumn International HR Adviser

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LEADERSHIP • Identification of performance barriers in the workplace • Understanding personal drive • Role of the leader as a motivator of others.

On the journey, it is possible to reach a performance plateau where progress may temporarily slow down. Levels of motivation can fluctuate, resulting in costly performance variations and frustration for everyone concerned. Understanding how to overcome the peaks and troughs in performance is important to delivering organisational success.

The role of the leader is to identify what motivates and demotivates individuals and to take the appropriate action to help them perform.

Navigating the landscape requires a working environment conducive to the needs of high-performing individuals.

Regular ‘temperature checks’ and the organisation’s communication grapevine will offer the leader valuable feedback and early signs of potential performance issues in the workplace.

Development Development focuses on the protection of the systems, processes and people important to a sustainable organisation.

Navigational focus addresses four main challenges: • Loss of talent within the organisation • Potential complacency in the workplace • Ability to cope with change • Barriers to operational efficiency.

Success on any journey typically leads to more success. However, this can also place additional stress on operations. Systems and processes are put to the test; so, too, are people as their workload changes or increases.

The role of the leader is to focus everyone connected with the organisation on the need to continually improve operational efficiency.

Navigating the landscape requires a commitment to innovation, change and ‘new ways of working’. Without this, performance complacency may creep in. A fine balance is needed though, between maintaining the existing levels of good performance with the need to set new and higher standards for the future.

Understanding the unique contribution of others, unlocking the power of information, and the creative use of experience and expertise, is vital to delivering efficiency on the journey.

International HR Adviser Autumn

Ownership

Great Leaders

Ownership focuses on the maximisation of people potential throughout every area of the organisation. Navigational focus addresses four vital challenges: • Levels of trust between colleagues and others • Pride in the journey and the organisation • Ability to handle unforeseen problems, issues and events • Delivery of agreed goals and objectives.

Ownership is regarded by leaders as the ultimate cultural prize on the journey where agility, pride, trust and performance are demonstrated.

The role of the leader is to build a confident and high-performing workforce with personal accountability as a cultural norm.

The ability to handle last-minute problems, operational challenges and unforeseen circumstances, are measures of ownership effectiveness. Creative problem-solving and positive decisionmaking forms part of the ownership experience.

Navigating the landscape requires the need for collective focus. Personal accountability improves confidence, drives changes in behaviour, and culminates in the delivery of high levels of personal performance.

Ownership also contributes to the effective execution of the strategy, and ultimately success on the journey, and arrival at the desired end destination.

It is impossible to create an agile, successful and sustainable organisation without ownership.

All leaders dream of building a successful, growing and sustainable organisation.

Likewise, their teams wish to be part of the same workplace experience.

Using a leadership framework that adapts to changing conditions on the journey, enables everyone connected with the organisation to feel empowered, work with a greater sense of purpose, and share the responsibility for the overall performance of the company.

Great journeys have a clear intent, unique challenges, and a real sense of adventure.

Remember, everyone wants to be part of something special and great journeys, live long in the memory of those who participate in them.

Great leaders create great journeys and the ability to navigate an ever-changing landscape is a true testimony of a great leader.

Best wishes on your journey, wherever it may take you.

Benefits Navigating the journey through the six areas brings many benefits including: • The attraction and recruitment of talent • The alignment of strategy to operational performance • The engagement of others via the development of leadership capability • The creation of a strong workplace performance climate • The powerful use of knowledge, expertise and talent via learning • The demonstration of behaviours important to maximising the organisation’s potential.

Leaders are also able to manage their personal time and resources more effectively.

John Stein is the founder of the winning (formula)®, a champion of growth and the author of Building the Pyramid.

He is widely recognised as a leading authority on the human performance issues facing organisations on their unique journey, and has dedicated his career to working with leaders and their teams to build agile, successful and sustainable organisations.

John is an award winning practitioner, conference speaker and facilitator.

He is able to engage with individuals at all levels in any organisation, and uses a unique blend of research data, humour, pragmatism and commonsense to inspire others to maximise their potential.

John can be contacted at john@thewinning-formula.com

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European Working Hours

Working Time In Europe - How Is It Defined And Is There A Growing Trend To Reduce It? Employment partner, Inês Reis, of global employment law firm alliance Ius Laboris’ Portuguese member firm pbbr, examines European limited working hour’s legislation and the potential impact on cross-border project management.

When considering working hours in Europe, the 40-hour working week immediately springs to mind, be it either a fixed or an average 40 hour rule.

Some countries impose working hour limitations to be met every week, and others allow it to be spread over a longer period – months, in the case of Portugal, or even the year, which is the case in Spain. There are, however, some notable exceptions; France with the 35 hour working week and, at the opposite end of the spectrum the UK, with its 48 hour working week rule and a pro-employer approach, where workers may – and are expected to – opt out from it.

The 40 hour weekly limit in Iberian countries has been assumed for years, and its reduction is probably not the first issue that comes to mind if current trends and initiatives in labour and HR matters are to be considered.

In fact, although collective bargaining agreements in some countries such as Portugal and Sweden stipulate lower limits for working weeks, for example 37.5 hours or even 35 hours, the general rule in the majority of European countries is still the 40 hour working week.

With the advent of the internet and the introduction of mobile tablets, smart phones and many other ways of remote connection to the world, as well as to the workplace, the 40 hour working week faces some important challenges - and not all are aimed at reducing working time duration.

Most multi-national corporations provide employees with a range of tools and devices and support the related costs, to ensure their staff are fully equipped to respond to work matters at any time.

Local companies do not deviate that much from a similar thinking.

Workers themselves tend to be online more and more frequently and there are International HR Adviser Autumn

those who are always connected, even at weekends or during vacation.

Whether this has really caused an increase on the actual number of hours worked is still questionable, however, the result is that worker availability is different now than previously and their employers may also expect them to be so.

This has already caused some reaction from trade unions and other employee representative bodies, claiming that such availability is excessive and endangers health and safety, and are thus trying to introduce limits, invoking work-life reasons, productivity-linked motives and the protection of workers' mental health among others.

For example, in Sweden, an experiment to reduce working time to 30 hours per week has been undertaken by the city council staff in Gothenburg. The workers, although on a reduced schedule of 6 hours per day, will be receiving full pay. The results of such an experiment have not yet been made public, and there is no known plan to permanently change the time limit per week, although the Swedish Left Party has been debating the issue of reduced working hours for many years.

There are further European initiatives such as the new French Collective Bargaining Agreement that has banned the use of ‘professional electronic devices’ for workers in the digital and consultancy sectors - including the French offices of Google, Facebook, Deloitte and PwC – during the workers’ rest time. The German labour ministry also issued guidelines determining that its staff should not be penalised for switching off their mobiles or failing to pick up messages out of working hours. This initiative has also echoed across some major corporations, such as BMW or Volkswagen, the latter having stopped forwarding emails to its staff from company servers as of half an hour after the end of the working day.

Some other corporations, driven by the concern for health and safety of their staff, and at the same time the impact on company’s figures, have drawn rules on their expectation regarding employees

answering or checking work emails or messages while off-duty.

The difference in mind-set between Northern and Southern European countries is a feature that should not be ignored: in Southern Europe, and especially in the Iberian countries, this can be a tricky matter, since the mindset of local management seldom tends to link productivity to time spent at the workplace and to staff being available 24-7. This mind-set extends even to when matters are not urgent, and could probably wait until the following day or after the weekend.

Is there a rule that could effectively be applied Europe-wide regarding working time limits, and could a “burnout border” be set for everyone? Or, on the contrary, should we admit that each one of us has our own limits, as well as preferences to what relates to working a given number of hours per day, or being available at all times, but without being stuck at a desk or a fixed workplace?

It seems clear that no universal rule will ever be applicable, and that depending on the areas of activity, different rules will always apply. Nonetheless, in our opinion, this issue is also intimately linked to an employee’s notion of responsibility as well as common-sense - both from the person asking for the work and the one performing it.

In France, for example, management positions may choose the way they wish to organise their working time, provided that they guarantee a set number of days (circa 218) over a given year – the so-called “forfait-jours”.

The deep crisis that struck both Spain and Portugal, and from which both countries are trying to resurface, has also created in the minds of people a sense of the need for job security, whatever it takes to secure it, even if it means being online during free time.

For instance, the UK, which has passed the economic crisis with much lighter consequences than Portugal or Spain, has resisted approving laws that would abandon the 48 hour opt out mentioned

European Working Hours earlier. This is also very illustrative of the different ways of facing, not only working time regulations, but work relationships in general, that the UK has when compared to wider continental Europe.

This more economic approach by the UK, in contrast to the more social approach of continental Europe, may be one of the reasons why weekly working hours are longer. With the possibility of being even longer (by exercising the optout) and also why there is no short-term initiative to cut their duration.

Working time policies Although multi-national corporations are often keen on having global policies, the introduction in Europe of a global working time policy could prove to be challenging.

The differences in daily and weekly working time durations in various EU countries, alongside the different ways in which some work performance is considered overtime need to be taken into consideration. Coupled with differing rules when calculating payment, or when

granting compensatory time-off, the impossibility of unilaterally implementing such a policy, would need to be considered by corporations seeking to manage their employees’ working time in Europe.

Even in the case where a global policy containing only general guidelines and principles may exist, it is advisable to take a local approach to working time regulation. Within a multi-national corporation, where several jurisdictions may be affected, the fact that working time regulations are usually mandatory and ruled by local law, ensuring compliance with local rules would be highly recommended.

This article was supplied by Employment partner, Inês Reis, of global employment law firm alliance Ius Laboris’ Portuguese member firm pbbr. Email: ines.reis@pbbr.pt Additional European commentary was supplied by Ius Laboris member firms; Anna Sella of Lewis Silkin in the UK, Jean-Baptiste Chavialle of Capstan in France and Ulrika Runelöv of the Swedish member firm Elmzell Advokatbyrå AB.

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Immigration & Cultural Training

Surprising New Immigration Requirements: Cultural Knowledge And Language Skills As professionals working in this globally mobile world we are used to looking at immigration and employee competencies as two separate and unrelated topics. Recently, however, changes to immigration regulations have forced us to look at these issues together. Most of us know that immigration compliance requires heightened awareness of ever-changing laws, but now some countries are adding elements to their immigration requirements that are taking global mobility teams and HR professionals by surprise.

A number of governments have added linguistic skills or cultural knowledge as a requirement for entry or continued legal work status, placing responsibility for compliance squarely on both the employee and the employer. Understanding why the sands have shifted is key to managing these new requirements. It’s impossible to pinpoint one specific motive for this shift, but it is clear that for some governments the economic landscape of the past couple of decades has forced a protectionist approach to controlling the influx of skilled or non-skilled labour. For others, the drivers have been more political in nature: preservation of national heritage or, at the opposite end of the scale, fear of terrorist attacks and infiltration by terror organisations. A third reason is the generational differences in the approach to integration versus intolerance.

The Facts Behind The Change When you dig deeper into what makes governments review or impose immigration regulations, it becomes clear that you can broadly divide motivations and approaches into two categories: exclusive and inclusive. Exclusive reasons are well documented - who hasn’t bumped up against a visa/work permit ceiling when trying to get a key employee into a host country? Exclusionary tactics have historically been employed for the protection of certain skills or industries, but everything is set to change within the next two decades. Governments and International HR Adviser Autumn

businesses will have to work together to address the real talent shortages that are around the corner.

The PWC Talent Mobility 2020 report included some interesting statistics on demographic trends that will come into play, including declining birth rates in the US, one third of China’s population being over the age of 50 at a time when the country is facing significant shortages in leadership skills, and Russia facing a reduction of 20 million people in its working age population by 2030. At first glance, these trends may not seem to have an immediate impact on global mobility patterns, but such demographic shifts will mean that countries that have typically ‘controlled’ immigration will need to open their doors to fill these gaps, leaving emerging market countries ideally placed as the sources of leadership talent and skilled labour, rather than the recipients. The most common exclusive tool that we are seeing is the restriction on the spouse or partner to access the job market. We are all familiar with the direct link between family adjustment and assignment success, but there is a new link between the spouse’s adjustment and assignment acceptance.

In this age of dual career/dual income families, for many employees having their partner able to work is not just desirable, it is essential. The fallout is that mobility professionals are witnessing a constriction in the flow of talent needed to meet business goals. A spouse or partner’s inability to get a work visa becomes a barrier to employee mobility. The result is that business communities will begin to apply pressure to governments.

The New Normal Whether approaches are inclusive or exclusive, the challenge for governmental administrations regardless of political leanings, societal structure or size is to provide legislation that manages immigration without curtailing economic growth.

An example of one country’s effort to achieve this balance is the current S744

bill - also known as the Border Security, Economic Opportunity and Immigration Modernisation Act 2013 – put together by a bipartisan group in the United States.

It seeks to provide a path to citizenship for undocumented workers and contains a component to deal with the green card backlog. Although the green card ceiling stays the same, family members of foreign workers would not be included in the tally. The US House of Representatives has offered amendments but the intent remains the same - solve a social issue and an economic one at the same time.

One of the clearest examples of an inclusive approach is Italy’s Accordo di Integrazione. This ‘contract’ between the individual immigrant and the Italian government centres on the acquisition of cultural knowledge and Italian language skills to help immigrants with their integration into Italian society (in addition to compliance with the Italian Charter for Citizenship and Integration launched in 2007). Any individual (employee and accompanying family members over 16 years old) who plans to stay in Italy for more than a year is awarded sixteen credits upon signing the Accordo. They can earn extra credits by attending Staterun cultural awareness sessions (five to ten hours) and demonstrating an A2 level of language proficiency (based upon the Common European Framework).

Failure to do this can lead to credits being withdrawn. To maintain legal residency, each individual must have earned 30 credits by the end of their second year in the country.

This may not seem too difficult to achieve, but there are a couple of ‘watch outs’ for those of us in global mobility and HR. Typically, an immigration provider maintains compliance based upon key data points such as days of presence, maintenance of work visa and payment of appropriate taxes. Monitoring an employee’s linguistic competence is not something we ask of those providers or ourselves. How, then, do we manage the risk of non-compliance and a forced early return? The second ‘watch out’

Immigration & Cultural Training is the language level that the employee has to reach. The Common European Framework (CEF) is probably the most widely known language scale to measure ability. It assesses how many hours it takes for an average person to progress from one level to another; from beginner (A1) all the way to advanced (C2). For a person with no prior knowledge of Italian, the CEF indicates that it would take approximately 200 hours of language training to reach this level.

In our experience, very few companies have a language benefit within policy that provides anywhere near that number of hours for the employee, let alone the spouse or children over 16 years old.

This is a clear example of a shifting immigration requirement that will affect mobility policy benefits for language training for assignees.

Who would have ever thought that an increasing focus on immigration compliance in global mobility would include assessing our assignees’ cultural knowledge and language skills? It is an interesting shift, and one we as professionals need to monitor closely.

It’s clear that linguistic skills and language requirements have become key components of a number of countries’ immigration and integration policies and they are only likely to be become more prominent as we see global mobility increase.

Peter Sewell is a Regional Director at Crown World Mobility. Peter has a strong track record in developing global mobility policies, processes and strategies.

Peter is responsible for overseeing client programmes and service delivery, implementing group policies, working closely with expatriate tax and other suppliers. He’s also in charge of reviewing existing local practices and leading project reviews with customers.

Email: psewell@crownww.com For further information about Crown World Mobility’s services, please visit www.crownworldmobility.com

FREE SEMINAR Monday 2nd February 2015 1.30pm

Immigration Update This seminar will be a practical session providing advice on the latest Immigration developments and the implications for businesses, and will cover Immigration Policy Updates, Global Immigration Strategy and Management, Compliance and Risk Management.

This seminar will be presented by Ferguson Snell & Associates, and if you have an immigration enquiry that you would like Ferguson Snell consultants to cover on the day please email your enquiry in advance to fs@fergusonsnell.co.uk.

This seminar is taking place at The 2015 Corporate Relocation Conference & Exhibition Hotel Russell, Russell Square, Bloomsbury, London To reserve your free place in this seminar please email: helen@internationalhradviser.com or telephone Helen Elliott on 020 8661 0186

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Education

Six Schooling Issues Which Can Contribute To International Assignment Failure Education As A Factor In Assignment Failure For international assignees moving with families, schooling is one of the most important issues to be addressed in the relocation process. Parents will be keen to find a school in their new home where standards are high, where their children are happy and where they can be confident of future continuity in their education.

Families relocating to a country which shares their own native language may have the option of sending their children to a local school (when availability of places and regulations allow). However, in many cases, one of the various types of ‘international school’ that exist around the world is the only realistic educational option for parents moving to a new country.

Until fairly recently most global locations contained a limited number of schools calling themselves ‘international’.

However, in recent years there has been something of an explosion in the quantity of such institutions and currently it is estimated that there are over 6500 ‘international schools’ around the world serving 3.3 million students, with new examples opening all the time. This growth is driven, not only by the needs of an increasingly globally mobile workforce but also by the growing number of local families who regard international schools as prestigious and value the fact that English is usually the language of instruction in such institutions.

International schools come in many shapes and forms. Some are allied to domestic systems: British, American, Australian and Canadian International schools are examples of these. Franchise groups are another category; chains such as GEMS, have been joined in recent years by famous UK independent schools, such as Harrow, which lend their names to international counterparts. Some are non-profit schools, while others are privately owned businesses. International schools vary enormously in their nature and characteristics and families moving to major cities will often have no lack of choice (although it should be said that in International HR Adviser Autumn

some locations, particularly China and the Gulf states, demand for places often outstrips supply).

While the international school market is booming, there is evidence that some parents’ expectations with regards to their children’s education are not being met in these schools.

“Family and spouse/partner issues remain as critical challenges to assignment success. Like last year, the top critical family challenges identified were spouse/ partner resistance, along with family adjustment and children’s education.

Respondents indicated that the top reasons for assignment failure remained the same as last year, with family concerns far outweighing all the rest at 34%”, says International School Consultancy Group.

Global Relocation Trends Survey Report 2012, Brookfield Global Relocation Services This White Paper outlines some of the major challenges and difficulties that families may face when sending their children to an international school.

The content of the paper is based on anecdotal feedback from parents who have experienced international schooling in various contexts and also on analysis of discussions on expatriate forums.

Using these sources, a list of the most commonly occurring issues described as ‘problematic’ by international school parents has been compiled. At this stage, it should be stressed that many families in international schools have very positive experiences; however, it has been possible to identify a core of common issues which are regularly identified across a range of schools and countries and which, in some cases, have led to parents withdrawing their children and even taking the decision to repatriate.

1. Quality Control In A Booming Sector International education is a growth industry. New schools are opening around the world at a tremendous rate

and it is predicted that the market will continue to flourish as global mobility increases and local elites seek to tap into the cultural capital and English language skills that international education is seen to bestow. However, as with any industry that experiences rapid growth, there are dangers associated with this.

Entrepreneurs and investors may seek to tap into the demand without having the necessary know-how for setting up an international school. Other projects may not benefit from the levels of investment required for the establishment of a viable institution. Certainly it is the case that there are huge variations in the levels of ‘quality’ that exist in international schools around the world. In many cases, appearances can be deceptive in relation to this. Highly impressive buildings and infrastructure may mask a lack of experience, know-how and effective leadership in the school. Some schools may seek to ‘cram’ as many students into their classrooms as possible, with an inevitable impact on the ability of teachers to effectively interact with students.

Quality assurance mechanisms for international schools do exist. Schools allied to national systems may be subject to domestic inspections (as with British International Schools and OFSTED).

Bodies such as the European Council of International Schools offer rigorous evaluation procedures which lead to accreditation to their organisation.

International curriculum providers such as The International Baccalaureate Organisation and Fieldwork’s International Primary and Middle Years Curriculums require schools using their programmes to undergo authorisation and reauthorisation processes.

Accreditation and (when available) inspection and evaluation reports are useful in making judgements about a school, however, they are by no means failsafe hallmarks of quality. Similarly a trawl through the various international school internet forums that exist will give some insights into a school, but here there is a risk of a false impression, as many of

Education the parents (and teachers) who post on such sites have particular issues with a school and their views may not reflect the prevailing opinion in the community.

A visit to the school is essential in order to give parents the best possible insight into the quality of the institution. Parents should seek to talk to administrators, teachers, current parents and even students in order to gain as complete a picture as possible. Plenty of information can be gleaned from a school tour, especially if parents are prepared and know what to look out for. Moreover, it is vital that parents have a set of questions ready for the different people they will meet with; school visits can be bewildering experiences and tend to be lead by people who are experienced in ‘selling their school’ and so a set of questions that can cut through standard school PR is very important.

2. Curriculum Continuity Content And Examination Concerns A major concern for many parents when moving into the international school system is that of educational continuity.

Some of the most common worries parents have are: ‘Will there be gaps in my child’s learning when s/he moves to his/her next school?’; ’Will my child’s performance in examinations be affected by their time in an international school?’; and ‘Will my child’s university prospects be impacted?’

In theory, continuity should not be a major issue for those attending IB or IPC/IMYP schools, as these programmes were designed to facilitate a smooth transition for students moving between international schools or returning to their national systems, and it is true to say that the numbers of students experiencing difficulties when moving schools or repatriating into their own systems is relatively small. However, the problem here is often one of perception: parents are sometimes shocked by the differences between the way content is decided in international curriculum models (mainly school defined) and national curriculum models (mainly state defined), and are concerned that this will cause their children problems in the future.

These concerns become more focused when the ‘exam factor’ is thrown in.

Unlike in many national curriculum models, students from the age of 3 to 16 do not have to take mandatory, externally

moderated examinations in either the IB or the IPC/IMYC programmes.

For parents accustomed to high profile nationally mandated assessments, this can be something of a culture shock and although international schools will usually develop their own comprehensive and informative assessment systems, parents can often equate an absence of ‘proper tests’ with a lack of rigour.

Many international schools are associated with particular countries and as such their programmes are supposed to reflect the national curricula of those states. However, even in these cases, parents can become disillusioned with the way the way the programmes are delivered in practice. Local statutory regulations and restrictions often mean that a school has no option but to modify their programme in order to comply with requirements. Likewise, an international school may lack access to the support and guidance often given to schools in the home country, meaning that they are not always able to keep up with the rapid pace of change typical of national curriculum models around the world. All this means schools often end up offering programmes which are ‘influenced by’ rather than ‘guided by’ national requirements. In such situations, parents may become concerned when they talk to friends and family with children in schools in their home country and make negative comparisons with the way the programme is being delivered in their children’s own school.

As mentioned previously, experience demonstrates that it is actually the exception rather than the rule for children to have problems when moving between international schools or back to their home system. In fact, many repatriated parents are convinced that experience in the international system has a positive impact on their children’s educational performance when they return home.

Despite this, there does remain a problem of perception in this area and to avoid this leading to potential assignment failure, it is important for those managing global mobility of employees to provide parents with authoritative information and support before the assignment, and to respond quickly to concerns if they arise during it.

3. Differing Educational Philosophies And Teaching Styles Education is an emotive subject. Parents

often hold passionate views about schooling and have clear ideas about the type of academic environment they believe is best for their children to succeed and thrive in.

This can be thrown into sharp focus by an international relocation. Curriculum models common in international schools, such as the IB, are often committed to a particular educational philosophy and advocate certain teaching styles. These can be inconsistent with the pedagogical approaches inherent in some national systems and in some cases, may run contrary to what parents believe to be ‘good teaching’. Indeed, there are many examples of parents taking the decision to repatriate their family due to dissatisfaction with the type and style of education on offer in international schools.

Avoidance of such scenarios is again connected to the need for preparedness and access to reliable information. Parents should be aware of the educational approach and teaching styles on offer in international schools before they commit to one school or another. Moreover, they should be given the opportunity to reflect on their beliefs about education in the light of research and encouraged to make schooling decisions based on available data rather than pre-conceived notions.

4. Social Issues: ‘My Child Just Can’t Fit In’ Adjustment issues are a common feature of any international assignment and these can often centre around children and their ability to settle in their new school environment. Much has been written about the phases of culture shock and children will often move fairly quickly beyond an initial stage of feelings of loss and homesickness into one of coping and adaptation to their new environment.

Having said this, unhappy children tend to have a significant impact on the whole family unit and there are many cases of assignments coming to a premature conclusion due to particular difficulties children have settling in to school.

This type of adjustment challenge can be exacerbated by the issue of language.

A majority of international schools have English as their main language of instruction. For children entering such an environment with limited or no access to English, the challenges of accessing the curriculum and making friends are great, and can make the already difficult task of adjustment even more problematic. This picture is further Autumn International HR Adviser

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Education complicated in international schools with a high percentage of non-English host country students. In these cases, even though English is the ‘official language’ of the school, the reality is that the ‘social’ language of the playground tends to reflect that of the host country, meaning that those students without immediate access to that language can be left feeling isolated. Many international schools recognise the vital importance of doing everything they can to facilitate a smooth settling in experience for new students and there are some highly impressive induction programmes available around the world. However, there is a great deal of variation in the quality of such programmes; some schools offer very little in the way of formal induction, while other schools’ programmes don’t always do ‘what it says on the tin’. It is important for parents to gain as much pre-assignment knowledge as they can about, not only what schools claim to offer, but also about the reality of their provision.

5. The Home Language Factor The last section alluded to the role that language can play in school-related social problems during international assignments. Language is also central to another common area of concern for globally mobile parents.

The multiplicity of languages typically present in an international school setting often leads to worries that can be summed up in the following question: ‘Will my child’s ability to communicate, read and write in his or her native language be diminished by his or her time in an international school?’ This type of question may emanate from parents of English speaking children who attend an English medium school but where the majority of students actually have English as a second language; or from parents of children whose mother tongue is not the same as the school’s language of instruction.

Language development is a hugely complex area and there are a myriad of research studies on factors that enhance or inhibit native language development in multilingual school settings, many of which reach differing conclusions.

Despite this, parents responses are often instinctive and an understandable desire to ensure their children’s native language skills are maintained can lead to a decision to withdraw them from the international school system without necessarily having considered all the relevant evidence or taken properly into account the language policy International HR Adviser Autumn

and philosophy of the school they are in.

6. Special Educational Needs Ensuring a child with special educational needs receives appropriate educational provision and support is complex enough at the best of times, but the challenges and obstacles are even greater in the context of international schooling. Parents of children with SEN sometimes make the mistake of thinking an international move will offer the chance of a ‘fresh start’ and this can lead to them withholding information regarding their child’s educational history from a receiving international school, often with problematic consequences for the family, child and school. On the other hand, not all international schools have well established learning support departments and even in those that do, the extent and quality of the actual provision can be varied. In other cases, parents are sometimes asked to pay extra fees to cover the cost of additional support and where this cost is not covered by employers it can lead to families having to take a decision to return home.

Navigating a potential international relocation when children with special educational needs are involved is a delicate and complicated procedure. There are plenty of examples of families who have had to return home early because the full extent of the nature of the challenge was not recognised or catered for in the school search and selection process, leading to a poor match between a child’s needs and the chosen school’s capacity to provide for these. In any international school search there is a need to use all available information to ensure there is a ‘best fit’ between family and school; in the case of families with children with SEN, this takes on an even greater importance.

A recently formed group of international schools called ‘Next Frontier: Inclusion’ includes the following amongst its key beliefs: “We need to redefine international education to be inclusive of students who learn differently or at different rates. Parents who travel overseas should not have to leave some of their children behind or divide their families between schools.”

The very fact that there is a need for such a group to exist demonstrates the complexity of the current situation with regards to international schooling and SEN provision. It is important that parents of children with SEN considering an international relocation, enter into a decision making process that is both fully informed and realistic.

Duncan Partridge is Lead Consultant at International School Move, an educational consultancy offering independent expert support services to globally mobile families.

Duncan’s involvement in international education has taken him all over the world and he has held the position of Principal in three renowned international schools.

Currently completing an MA in International Education, Duncan brings extensive experience and insight to the individually tailored and independent advice he offers families. Duncan is also a father and believes his children have benefitted enormously from their international experiences. He is committed to helping parents make the best choice for their children as they embark on their own international adventure.

FREE SEMINAR Monday 2nd February 2015 - 10.30am

Raising Internationally Mobile Children: Understanding and Nurturing the Third Culture Kid Experience A significant reason for failure of international assignments revolves around the ‘soft’ issues - the adaptability of families and children. For the majority, when properly understood and managed, the benefits of growing up abroad can far outweigh the challenges.

This session for parents and professionals who are working with internationallymobile families will share research-based insights into how a global experience can enhance future educational and career opportunities for children, and how to manage the stumbling blocks encountered along the way. While parents naturally worry about how moving away from the home culture and language will impact their children, when approached with knowledge and optimism, it can be an enriching lifechanging experience.

Hosted by Mary Langford This seminar is taking place at The 2015 Corporate Relocation Conference & Exhibition To reserve your free place in this seminar please email: helen@internationalhradviser.com

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CROSS-BORDER COMPETITION

Cross-Border Restrictive Covenants Are They Worth The Paper They Are Written On? Employment Partner Juliet Carp of Speechly Bircham LLP looks at the practical reality of protecting a multinational business when employees leave.

Drafting cross-border restrictive covenants is notoriously complicated.

Different countries have different rules and, even with the help of good lawyers from all relevant jurisdictions, it is difficult to produce wording that employers can be confident will “work” in every jurisdiction. What “works” in one place will often be unsuitable in another.

Legal Constraints For example, the key remedy for breach of an English post termination restrictive covenant is an interim Court order (injunction) to stop the employee (or third party) from doing whatever it is that they should not be doing. To obtain an interim order in England the business usually needs to demonstrate that damages (i.e. a cash remedy) would not be sufficient.

So an English employment contract will rarely specify a financial remedy for breach of an employee obligation.

In other countries a pre-determined financial payment is the normal method of enforcement and injunction may not be a realistic alternative. Provision for fixed cash payments as a remedy can not only create problems with the availability of interim orders in the UK but may, depending on how they are formulated, also be regarded as unenforceable “penalty” clauses. In some countries enforcement of post termination restrictions is not possible at all, regardless of the remedy specified in the contract.

Even where relevant jurisdictions take a similar approach to enforcement, or a compromise can be reached, wording the restriction properly can still be a challenge. For example, tight drafting may be appropriate in one country but protect less of the business than might have been possible in another. The employer may feel that an opportunity has been lost.

Covenants that are too “loose” or too long may be cut down to size by the Courts in International HR Adviser Autumn

some countries. In others a loose or long covenant may be struck out altogether, so that employers who require too much are left with nothing. In some countries a regular monthly payment (for example, a percentage of the earlier salary) must be paid for the duration of the covenant. In others covenants set out in a mandatory collective agreement must be observed.

Enforcement So, where to begin? As with any knotty problem the best place to start is usually to focus on the preferred outcome and then work out how to get there. If a need to enforce in Court or by threat of legal action is a real possibility, and the financial consequences of breach are likely to be significant, then the business is likely to commit more time and money to finding the right legal formula. If the covenants are intended to deter but it is accepted that enforcement may be difficult in practice then a different approach might be taken. For example, whilst legally focused employers might think about complicated links to incentive plans or parallel covenant deeds to apply in different jurisdictions, others might conclude that simple standard covenants with listed competitor organisations would be a more effective deterrent. It is worth bearing in mind that a covenant that is obviously unenforceable is unlikely to deter employees or prospective new employers from prohibited activity.

Sometimes less is more: it is worth thinking about where the employee is most likely to seek legal advice and whether a potential new employer is likely to be discouraged by (or even see) proposed restrictions.

It is also prudent to think about where enforcement is likely to take place. So, for example, in the EU if a covenant is to be enforced against an individual under an EU-wide regulation, the individual must be sued by his employer in his country of domicile. Of course the business may also anticipate suing another commercial organisation, perhaps a new employer, based in another jurisdiction.

Which Lawyers Should Draft The Covenants?

Having narrowed down the relevant jurisdictions it makes sense to seek advice from lawyers qualified in those places.

Practically, it also makes sense to think about language before deciding which country’s lawyers will take the lead.

One coherent explanation of what is needed commercially can be very helpful for those trying to find the best legal solution.

What is it exactly that the business wishes to protect and why? For example, customer connections may be very important for a salesman. For others protecting the workforce or financial information or marketing plans may be a bigger issue.

How long does the business really need the protection for? Focusing on needs at an early stage is not only likely to lead to more accurate drafting but should help cut the costs of managing piecemeal questions.

Governing Law Choice of “governing law” for the covenants should be confirmed in the contract. This is a different thing from jurisdiction (i.e. which country’s courts can hear a legal claim). Governing laws normally affect the way contracts should be interpreted.

However, mandatory rules designed to protect employees from oppressive restrictions (think slavery) are also likely to flow from that choice. If the chosen governing laws are different from the jurisdiction where the claim is heard, or the jurisdiction where the legal decision needs to be enforced against an employee, the employer may well have to jump double or triple hurdles of protection. So, for example, if a New York Court decides that covenants governed by New York law should be enforced against an employee domiciled in London, the employer may need to satisfy both English and US protective rules.

Choice of governing laws is lawyer territory and frankly not worth worrying about in abstract: the key take away for business is that choosing head office governing laws and pro forma documents is not always the best option for employees working wholly or partly in another country.

CROSS-BORDER COMPETITION Lateral Thinking

Continuity

Whilst the lawyers are wrestling over wording and choice of laws, it is also worth thinking laterally. Given the difficulty and expense associated with enforcing covenants, there may be easier ways to protect the business either in addition to, or instead of, the traditional legal approach. For example, in a country where covenants are not enforceable there may still be a strong tradition of protecting confidential information in other ways – and time might be better spent on identifying what exactly is confidential and communicating that clearly to the individual in writing.

Forward thinking businesses, particularly those who use technology such as “LinkedIn” extensively, may also think about whether it is simpler and more effective to promote replacements than restrict departing employees.

Where a period of “garden leave” is possible in the local jurisdiction, this may be far more effective to protect the business than enforcing covenants and a reasonable handover period may be very helpful. Where practical, garden leave, and the option to pay in lieu of notice, should be included in the employment documentation.

Old Fashioned Housekeeping

Carrot Or Stick?

Old fashioned housekeeping, like ensuring client details, are properly entered on office databases; that more than one individual develops relationships with key clients; and that access to premises, telephones, databases and IT equipment is managed when employees leave, can make a much bigger impact when employees are internationally mobile or located in remote offices.

And as with other aspects of employee relations, for most individuals the HR carrot will be more effective than the legal stick. The desire to maintain good relationships with a former employer and be viewed as professional may be stronger in a market where the expatriate population is small and close, or where there is a limited number of market players who may employ in future.

Funding a personal visit by a senior member of staff to the overseas location and taking time to help with employees’ personal issues related to job hunting, housing, schooling or whatever may concern them, may be more effective than getting the paperwork right - and a lot cheaper than cross-border litigation.

Juliet Carp Partner, Speechly Bircham LLP. Juliet is an English employment law specialist with a particular interest in global mobility.

Email juliet.carp@speechlys.com, call +44 (0)20 7427 6412 or visit www.speechlys.com

FREE SEMINAR Monday 2nd February 2015 at 3.30pm

Employment Disputes And How To Avoid Them This seminar will take a practical look at things assignment managers (and expatriates) can do to reduce the risk of employment disputes.

The discussion will focus on: Common Flashpoints Managing Expectations, Where Paperwork Can Help (And Where It Can’t) Practical Steps To Avoid Claims Why Expatriate Claims Are Different Dispute Resolution Strategies & Things You Could Do Now To Avoid Disputes Later.

Presented byJuliet Carp, Employment Partner, Speechly Bircham LLP This seminar is taking place at The 2015 Corporate Relocation Conference & Exhibition Hotel Russell, Russell Square, Bloomsbury, London To reserve your free place in this seminar please email: helen@internationalhradviser.com Autumn International HR Adviser

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GLOBAL MOBILITY POLICIES

Top Tips For Writing Great Global Mobility Policies Whether you are a large multinational looking to review well established global mobility policies, or an organisation starting to branch out internationally for the first time, having a structured policy and approach to globally mobility not only helps to ensure consistency, but also mitigates a range of compliance risks.

Helping clients to develop their global mobility policies has provided me with some practical insight in to how organisations use these programmes to move their employees around the globe. What is immediately apparent is that mobility is used in a wide variety of ways and for an array of different purposes. This knowledge reconfirms to me that writing or updating a global mobility policy is about more than just benchmarking provisions against what other companies in your industry are offering (as important as that remains), it is about making it relevant to the specific business to help it achieve its strategic goals.

Below I have outlined my 8 top tips for writing global mobility policies.

1. Benchmark Within Your Industry And Against Companies Of A Similar Size To See What They Typically Offer In Their Policies There have been a lot of changes to the way companies move their employees around the globe over the last 5 years and consequently many have updated their global mobility policies to keep pace.

It makes sense to keep abreast of these changes to stay competitive. Considering what companies in your particular market are offering is key to attracting the right people to (i) undertake a temporary international assignment or (ii) relocate internationally to take up a new position in your organisation. It is also sensible to check to see whether your intended policy offerings are more generous than the market norms and therefore provide an opportunity to realise some cost-savings.

2. Speak To The Business To See What They Require From International HR Adviser Autumn

A GM Programme And How They Wish To Use Mobility To Achieve Their Strategic Objectives Up until about 8 years ago, companies generally offered the standard trilogy of policies: long-term assignments policies, short-term assignment policies and a permanent transfer policy. However, over recent years companies have begun implementing a much wider array of mobility policies as their needs have changed and the approach employees take to international relocation has evolved, with many more seeing it as a good opportunity for career development.

Consequently companies have many more approaches to global mobility than in the past and therefore input and clarity should be sought from the business as to how and why they are looking to move employees internationally. Only then can you design appropriate policies to support this.

Examples of additional policy-types include commuter assignments, talent development policies and “lite” and “plus” versions of the more traditional relocation types.

3. Have You Considered How You Are Going To Manage The Three Cs - Capacity, Capability And Cost?

Organisations generally want to offer their employees a comprehensive range of policy provisions when they relocate overseas to make the move attractive and to support their talent. However, the three Cs need to be comprehensively considered before having any policies approved, as ignoring these can lead to policies being difficult to implement in practice. Ensure that those responsible for international relocations within your team have capacity to administer the policy in addition to any other responsibilities they may have. See what additional training and support may be required for them to fill any gaps in global mobility knowledge that could lead to compliance risks or inefficient planning of assignments.

Finally, run some cost estimates based on hypothetical scenarios so that the business knows how and what they may need to budget for prior to buying-in to the policies.

4. Consider Tax Compliance Matters And Opportunities For Effective Tax Planning Assignment provisions are generally delivered to employees in a variety of ways. It may be that some benefits are delivered as cash allowances via payroll (gross or net of tax), some are paid directly to third party suppliers, and some are to be reclaimed by the employee via expenses. By outlining how relocation support is to be delivered and paid for in your policies, you are helping the employee and stakeholders in the business (e.g. payroll, finance and internal tax teams) to take the appropriate action to ensure that the costs and taxes are delivered and tracked for tax year-end compliance activities, as well as for internal budgeting purposes.

Developing a process by which you can track total assignment cost is key. It supports the wider tax compliance work you may be engaging a third party tax advisor to help with. If you apply a tax equalisation methodology you should detail the terms of this either in your main policy document as an appendix, or, more commonly, as a separate policy document. From a corporate tax perspective, there are permanent establishment considerations that need to be factored in to how international assignments are structured.

5. Consider Employment Law Matters For The Validity Of Your Assignment Documentation Obtaining input to global mobility policies and accompanying documentation from an employment law perspective is key to ensuring that the terms of an assignment are valid and enforceable. I often see documentation that states that the home country employment law will govern the assignment, but in reality this is not always going to be the case, for example, some host locations have statutory legislation that covers anyone working in that jurisdiction, including assignees. It is important to review wording in your policy about applicable laws to ensure it is appropriate for the country combinations you see in your programme.

GLOBAL MOBILITY POLICIES 6. Look At How A New Global Mobility Policy Fits With Other HR Policies Currently In Place Consider whether they share the same structure, format and terminology if appropriate. It is important to assign a policy owner and how often it should be reviewed.

7. Read Your New Policy From An Employee’s Perspective Do the terms make sense? Are there any acronyms that require a definition?

Employees new to global mobility should be able to understand all of the terms in a global mobility policy.

8. You Should Consider A Review Of How You Educate Line Management On The Implications Of An Assignment Choice And Help Them Understand What Policy Alternatives They Have At Their Disposal I often prepare a policy ‘decision tree’

for line managers, along with a onepage summary document (per policy) which managers can utilise to effectively select the appropriate policy based on their business rational and budget for the assignment.

In summary, there are a number of considerations when reviewing a global mobility policy or developing one from scratch. The most important fall in to

three main categories: deciding which relocation provisions to offer, determining any compliance considerations necessary in order for them to be enforceable, and checking that the policy will work from an operational perspective.

If you would like to discuss any of the above or require support to develop your global mobility policies, please contact me at tim.wells@abbisscadres.com.

Tim Wells is a Partner and Head of Global Mobility Consulting at Abbiss Cadres LLP, a multi-disciplinary HR consulting firm based in London. He has a wide range of experience in the global mobility industry through his roles working both in-house at large multi-national organisations and as an external consultant, across a variety of industries. Now as a consultant, he offers fully integrated advice, combining the strategic, operational and compliance perspectives of mobility.

His clients range from large multi-nationals looking to restructure their global mobility programmes, through to small but fast-growing ventures, looking to branch out internationally for the first time. Tim also sits on the judging panel for the Association of Relocation Professionals Awards.

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REPATRIATION

Repatriation - Are You Playing For Keeps?

Repatriation issues have been on the agenda for global mobility professionals for decades, but how to successfully repatriate assignees still remains an elusive holy grail for many multinational organisations. In many ways, repatriation still remains the ‘forgotten’ phase of the expatriation cycle as the emphasis for expatriate support is generally limited to immediately prior to and during the international assignment experience. Companies often state that the intended value of international assignments primarily is global leadership development and global knowledge transfer. Following this line of reasoning, then any international assignment where the returning assignee does not continue his/her career path within the organisation as intended should in fact be labelled unsuccessful.

One explanatory factor to repatriation being so tricky to handle for global mobility professionals lies in the traditionally transactional and administrative role that corporate global mobility functions have played within organisations. Strategic implications of poor re-integration of a returning expatriate has historically been overlooked, as most corporate mobility functions are not involved in the decision making process regarding next career move for assignees. The disconnect between corporate global mobility functions and existing talent management and deployment strategies in many organisations thus makes repatriation one of the hardest phases of the expatriation life cycle to manage successfully.

While highly skilled and globally minded employees today are in even greater demand, it is all too common that high potential employees sent on international assignments choose to seek other employment relatively soon after they’ve returned from their assignment.

Findings from Ernst & Young’s 2013 Global Mobility Effectiveness Survey found that 16% of employees bolted within the first two years after a global assignment ended, up from 11% in 2012.

That organisations are not able to retain these talented expatriates upon return is indeed wasteful of money, time and human capital.

Any organisation with an overall talent strategy characterised by a strong internal International HR Adviser Autumn

”Build” focus will inevitably feel a loss if too many of their high potential employees makes the choice to leave shortly after completion of a strategic international assignment. However, a growing number of employers show interest in handling repatriation in a more professional and strategic manner. In Brookfield’s 2013 trend study, 24% of the employers surveyed said they have linked a formal repatriation strategy to career management and retention, up from 16% in 2012.

Academic research regarding repatriate retention has had predominately two perspectives: a traditional one, which suggests that the main determinant of repatriate retention is the availability of repatriation support programmes; and an emerging one, which focuses on individual career activism in a changing employment context. Personally, I believe that repatriate retention is not about one or the other. Repatriate retention will only result from repatriation support programmes and career management activities (at both the organisational and individual level) that are aligned with the strategic talent management strategies of the organisation.

The global mobility landscape has changed over the last few years and the number of direct international hires, local plus assignments and various types of project based assignments the world over is steadily increasing. Some of these new types of international assignments are typically tied to a ”Buy” Talent Strategy, and the focus might simply be to fill empty positions with qualified workers for a set time period.

For many of these assignees the main focus is therefore generally not what happens after the assignment, but rather whether or not the assignment as such, is attractive. Maybe organisations are right in stating that repatriation support does not have to be in focus for these types of international assignments. But on the other hand, if repatriation support is not offered and repatriation difficulties in the future continue to be experienced by even larger number of returning expatriates, will that not negatively impact the productivity levels of these individuals? If they spend time both while on assignment worrying about what will come next for them and their

accompanying dependents, surely their effectiveness on assignment will suffer.

Mobility programmes of the future need to be closely linked to overall talent management processes. When international assignments were better tied to overall strategic talent management practices, early discussions regarding next career moves will be more natural and will not be done last minute with the repatriated employee more or less standing in the doorway. It is good business for any organisation to gather data and metrics regarding their global talent pool. But collected data also needs to be analysed and acted upon if it is to add any real value. Companies that know what their talent pools looks like, why talents leave the organisation, know what gaps might exist, as well as which types of strategic talent that need to be found either internally or externally in both short and long-term, will have a competitive advantage.

Regardless of international assignment type, your repatriation activities will require proper attention and resources, but the approach towards repatriation support might differ depending on whether your organisation has chosen a Buy or a Build Talent Strategy. However, ensuring that all repatriating assignees are able to apply the knowledge and experiences gained while on their international assignments upon return to new corporate roles, is key to both getting the most out of the investment made, and reducing repatriate turnover through keeping these global talents motivated and engaged.

Helena Wennberg, GMS, HRMP, HCS is currently an independent Global Mobility consultant and researcher. She has been a Global Mobility Research Associate at King’s College London and also served on the Worldwide ERC EMEA Leadership Board 2010-2012. Since 2007 she has held in-house Global Mobility specialist roles within Statoil, Sandvik Tooling and Maersk Oil, as well as been the Nordic & Eastern Europe Mobility Lead within the Talent Business at Mercer.

INTERNATIONAL LIABILITY INSURANCE

International Liability: Lessons Learned International Liability Insurance’s Day In The Spotlight Is Long Overdue Although some headway has been made in recent years, an alarming number of international assignees are thrust into foreign environments without liability insurance befitting their circumstances. International assignees are routinely exposed to elevated and aggravated risk factors that merit closer attention and a coherent strategic risk management response on the part of industry professionals.

Unlike property insurance which pays the policyholder for loss or damage by insured perils to property, liability insurance pays third parties damages for loss or injury arising as a result of the negligence of the policyholder/ insured as awarded by the courts, or as negotiated in out-of-court settlements.

So why is it then, that international assignees are the poster children for international liability risks?

Fish Out Of Water Try as everyone may to sensitise international assignees and their families to cultural disparities, and cultivate among them a natural awareness to regional nuances, the simple fact is that individuals thrust into an alien environment where they find themselves unaccustomed to foreign social conventions, local laws, regional traditions and values, and indigenous cultures, might be more inclined to transgress invisible boundaries, cause third party damage and ultimately bring legal action upon themselves, deserved or not. From a strategic legal perspective, professional legal advisors might further suggest that being a foreign defendant associated with a foreign multinational may not be an ideal starting point in an unsympathetic overseas court.

Sex And Drugs And Rock N’ Roll International employee assistance programme (EAP) providers will be the first to tell you that the emotionally taxing roller-coaster that is the expatriate experience means that when compared to their domestic counterparts, international assignees can exhibit elevated levels of substance and alcohol abuse, infidelity,

anxiety and depression approaching levels one might expect to see at say, a relocation and mobility trade show. Scary stuff.

At any rate, these psychological challenges can and do lead to anti-social behaviours that impact third parties and ultimately give rise to the aforementioned lawsuits, legal expenses or out-of court settlements.

All Aboard The Gravy Train Certain, shall we say, opportunistic individuals endowed with a lower-thanaverage compliment of integrity and character have been known to target international assignees as a means of tapping into the ostensibly bottomless pit of overseas goodwill funding and reputational risk financing.

Just as casinos and cruise lines seem to be subject to a statistically aberrant and mathematically insupportable number of slip and fall neck injury claims in low traffic corridors at odd hours when witnesses are in short supply, it is not unprecedented that international assignees in the employ of deep pocketed, globally recognised, multi-billion dollar multinationals might be targeted and exploited for questionable and frivolous law suits by unscrupulous litigants.

So how is it then that something of such critical importance repeatedly fails to register on the radar of industry professionals and senior executive management to the extent that many assignees find themselves with no protection at all?

Don’t Forget To… During vital planning stages when checklists are formulated, the seemingly logical and natural thing to do is to chronologically replicate the series of tasks and activities that were performed when establishing a household in the country of origin: engaging utilities, procuring appliances, executing service contracts etc.

And it all makes sense right up until you get to the part about insurance. Why? Because the vast majority of people have never actively contemplated the purchase of standalone liability insurance in the first place. The highly evolved and competitive nature of the domestic insurance market has

rendered it an entirely inappropriate template for international risks and daily life.

Decades ago, in the course of rabid, unbridled pursuit of commoditised market share, domestic property insurers tried to distinguish their homeowners’ insurance offerings by introducing various sweeteners, add-ons, bells and whistles, and systematically bundled enhanced coverage features such as personal liability insurance into their property policies to attract new applicants. After years of competitive jockeying, million-dollar personal liability limits have become ingrained as standard coverage integrated into domestic homeowners policies.

Given the prolonged environment of passive, detached procurement of liability insurance, and the pitiful state of financial and insurance literacy, many otherwise intelligent people have no idea they even have any domestic liability insurance to begin with, let alone that it stops at the border. Worse still, is when international assignees know only enough to be dangerous and assume that the domestic liability coverage will provide them protection when overseas, which couldn’t be further from the truth.

Where the disconnect is exacerbated is that typically, international assignees migrate from homeowners on the domestic front to tenants overseas, and in doing so, at best, might downgrade to a tenant’s policy with very restricted local cover primarily in respect of the rented premises. Unbelievably, many assignees embark on assignment entirely bare in terms of liability insurance.

From A To B, And Then What…?

Ironically and inexplicably, the relocation industry is falling all over itself to ensure that there is coverage in place for household goods in transit and storage. However, pervasive myopia and widespread linear thinking means that tragically few people inquire as to how these items might best be covered once they arrive in the host country. Which is quite ironic in light of the fact that the goods are in transit for mere days and overseas for years.

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INTERNATIONAL LIABILITY INSURANCE domestic market is so often bundled with property cover, the oversight tends to drag the liability coverage component out of site lines along with it.

The ‘Company’ Has This Covered….Right?

There is no shortage of rationalised excuses as to why international liability insurance is overlooked, but none greater than the comforting assumption all parties cling to that someone, somewhere high up the chain of command, is proactively managing the situation.

Not so much. In the vast majority of cases, the truth shatters that myth with a deafening crash.

Multinationals will typically have a considerable self-insured retention (excess/deducible) before transferring risk to insurance carriers in exchange for premium. A million dollars or more would not be uncommon. Below this self-insured level threshold corporate risk managers divide the world into things they have control over and things they don’t. Insurance, loss control engineering, training and education, avoidance, segregation and all sorts of other devices are employed to manage risk over elements where the company has a degree of care, custody and/or control.

All of this adds up to millions of dollars of expense and premium exchanging hands to support a fragile enterprise-wide risk management programme handled with a reverence more befitting a Faberge egg.

Multinationals form highly collaborative and transparent partnerships with insurers so that when a true crisis strikes (worldwide product recall, and natural disaster, for example), insurers will respond.

These strategies have an operational emphasis and focus on the commercial activities of the company. They do not contemplate the personal exposures of international assignees.

So, when an international assignee gets sued for negligence only to discover that her or she has no insurance, one of two things typically happens: 1) The lawsuit is below the company’s deductible and as such does not trigger coverage; 2) The lawsuit is of a magnitude where insurance comes into play, however, executive management isn’t prepared to file a multimillion dollar claim that would sour relations with insurers who never dreamed they’d be on the hook for the perhaps dodgy actions of expatriate International HR Adviser Autumn

employees outside the scope of their work, offsite, after hours, and not under the direction of their superiors. There is simply no organisational will to pursue an insurance claim of this nature.

In both cases what this invariably leads to is an extremely lonely walk down the mahogany corridors of the corporate executive wing to ask the CEO to cut a multi-million dollar cheque.

Everyone knows how much CEO’s love surprises. Such a bold career move could hypothetically have a negative impact on one’s professional advancement and bonus compensation.

It is nothing less than dumbfounding that corporations far too often react to expatriate liability situations in the lessthan-optimal post claims environment, rather than adopting a proactive and costeffect strategy beforehand.

When it hits the fan Being the subject of third party litigation doesn’t necessarily mean any given assignee is a bad person. Accidents can and do happen, despite best efforts to be a generally good citizen. One might innocently knock a pot of geraniums off a balcony during a particularly enthusiastic sunrise salutation and conk some poor soul on the head several stories below.

On the other hand, certain assignees do indeed behave inappropriately and their actions can land them in front of a judge. Overtures that might be received as commonplace, playful and harmless in the country of origin can register as nothing less than a personal assault in a host country.

Although markedly different, in the courts both scenarios can be labelled negligence, and entail substantive legal fees and judgments awarding damages or out-of-court settlements.

When it comes to liability claims, the empirical evidence and accumulated experience suggest that there are two predominant categories of international assignees.

In the first instance, something transpires whereby the assignees, to their great horror, find themselves subject of a lawsuit in a foreign jurisdiction. Recall our squeaky-clean yoga practitioner and the now-infamous pot of geraniums.

The assignee’s first instinct is to discreetly contact legal advisors and insurance brokers back in the home country to set wheels in motion to make the problem go quietly away, and

hope desperately and silently that their employer remains forever blissfully unaware that anything happened.

Their horror is magnified considerably when they come to learn that they have no overseas cover or means of funding legal representation whatsoever. These once timid employees evolve into hostile adversaries rather quickly, and the company’s policies and management are brought under a microscope as counterparties point fingers and shift blame.

The second situation is altogether different, but ironically engenders a similar outcome.

In this scenario the assignee may saunter blithely into the office one day and cavalierly toss a subpoena towards an unsuspecting superior and quip...’you’ll need take care of this’.

Aghast, the superior might futilely sputter out a laundry list of reasons why this shouldn’t touch the company, however, from certain assignees’ perspective, accurate or not, the portion of each day in which they expect to fall under the auspices and protection of their employer is twenty-four hours while on assignment. This belief is adhered to whether they are in the bottom of an open pit mine wearing a hard hat, typing madly on a laptop in an airport lounge, or bellied up to the bar at a local watering hole on the wrong side of town. Needless to say, behaviours in each respective environment can differ dramatically.

At the end of the day what matters is that the line of demarcation between home and work is, in relative terms, clearly established in the domestic environment and entirely open to interpretation in the context of foreign assignments. It is unlikely that many multinationals would willfully volunteer to be the precedent test case against an employee for whom they made no arrangements for personal liability insurance in the pre-departure environment, funded or not.

The awkward fact that many employers now provide 24-hour non-occupational extended healthcare coverage to certain assignees, but no liability cover, might be difficult to reconcile before a judge or jury.

Meanwhile, in an ever globalising world, it’s practically a given that where an international assignee is the subject of a lawsuit, that the company will be named as a defendant as well. A strategy that endeavours to distance the corporation from an assignee in legal distress pales in comparison to a proactive and effective

INTERNATIONAL LIABILITY INSURANCE risk management stance beforehand.

But yet so few organisations have integrated a mandatory personal liability insurance requirement into their international mobility policies and procedures.

Beware Some providers have rushed to market with watered down, ‘quasi ‘international liability products that are at best grossly inadequate, and at worst, borderline fraudulent. Be on vigilant lookout for policies that exclude cover during home leave, or that exclude particularly litigious nations by name.

In an extreme and distressing example, “Exotic nation” liability coverage is now on offer. Such programmes offer no cover in the developed world, and cover only emerging markets and developing nations. Yet somehow, these policies are priced at rates higher than those of a well-crafted global policy.

In fact, emerging markets are the very legal jurisdictions, domiciles and venues where civil trespasses are the least costly. For perhaps a brief period before the impact of globalisation has reached every corner, the lesser developed and more exotic a region is, the more likely it is that civil disputes

might be settled with some element of simple compensation on par with the actual injury sustained by the claimant.

Legal systems overburdened with frivolous, nuisance lawsuits, guerrilla litigators, and punctuated with landmark punitive damage awards and skyhigh out of court settlements, are the hallmarks of the capitalised, developed and industrialised northern hemisphere, western economies.

Fortunately, there are abundant viable solutions available from a select roster of reputable providers.

A forward-thinking employer might consider requiring that assignees procure international personal insurance out of a relocation allowance. Alternatively it may elect to be yet more proactive by aggregating and bringing to bear the collective purchasing power of a company’s assignee population against the market as an effective means of achieving preferred terms and optimal pricing.

Likewise, Global Relocation Management Companies would be wise to seek out partners and assert their role of industry aggregator and vendor

manager, while DSPs may want to consider querying assignee households about liability insurance and having go-to solutions specifically designed for assignees readily at hand through a simple partnership arrangement.

Paul Coleman President and CEO, TERN Financial Group Inc. Paul has spent his entire career working within the global finance and insurance industry accumulating experience and expertise both from the perspective of service provider/intermediary as well as that of client/buyer.

TERN Financial Group Inc. has developed an array of novel solutions, innovative products and improved processes that respond to the unique needs of expatriates, relocation industry vendors and their corporate clients to the ultimate benefit of transferees and their dependents. Email paul@terngrp.com www.terngrp.com

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BUSINESS TRANSFERS

Employee Transfers In Acquisitions And Outsourcing: Is It All About The ARD? Of course, it's great to have a thorough and detailed workforce plan for any international bid, project or transaction.

But sometimes, the wide variety of transfer laws in countries around the world, can cause unexpected challenges.

In any cross-border business acquisition or disposal any outsourcing, any bid to deliver outsourced services, and any insourcing, it is essential to focus early upon how local employee transfer laws will apply, in the affected jurisdictions. An employer may be keen to receive employees to enable it to continue to operate the business satisfactorily or deliver the outsourced services. Or an employer might prefer to receive none of the existing workforce because the work will be relocated, performed in a radically different way, or needs significant cost savings. Either way, in some countries these aims are simple to achieve, but in others highly complex.

The European Union's Acquired Rights Directive (ARD) is the best known example of a set of principles for the automatic transfer of employees.

Yet even when considering transfers in different EU jurisdictions, there are key differences in how national governments have implemented it. For example: • In the UK, the local law of "TUPE" adds a whole new type of employee transfer, unique to the UK. It is known as a "service provision change". As a result, I estimate that up to 30% more situations fall within the UK's employee transfer laws, than elsewhere in the EU. These arise when a service is outsourced by a customer, or there is a change of service provider, or a customer takes services in-house. So sometimes in an outsourcing project across the EU, the only people whose employment transfers are the employees in the UK • Another EU country whose employee transfer laws contain some surprises is Germany. Both employers are jointly liable for issues arising before the transfer, and for one year afterwards.

Affected employees must be given thorough details of aspects of the transaction, and can object within the following month; if the data has errors or omissions, that deadline runs until much later. There are complex rules about collective bargaining agreements International HR Adviser Autumn

and works agreements, whether these continue, whether the transferee can replace them with its own existing arrangements, or whether they get subsumed into individuals' employment contracts. Many outsourcings will not trigger Germany's transfer laws; and a merger, splitting a company, or spinning off part of it, is more likely to trigger transfer laws than in some other EU countries. Finally, Germany's Works Council Constitution Act can give works councils the power to delay a business transfer, if the employers fail to consult and inform them correctly • Another EU country with some surprises is The Netherlands. The transferor and transferee generally have to consult the works council, early enough for it to be able to influence the decision on whether and how to proceed with the transaction. This involves at least one meeting with the works council, providing follow-up information, and considering the points it makes. If the works council is against the transfer, the transfer must be delayed by at least a month. The works council can also apply to the Enterprise Chamber, which can rule against the transaction going ahead • In France, the sanctions for breaching consultation rules are criminal as well as civil. The criminal sanction is usually a fine, though theoretically it can be a year's prison sentence - and the transaction may be put on hold until consultation is completed. Both employers' works councils must be informed and consulted on the proposed transfer, and this process must be completed before any decision is made or any binding document is signed. Consultation runs for at least 15 days (though often collective agreements specify longer), then each works council has up to one month to issue its response.

So works councils can delay, but not veto, any employee transfer. Health & Safety committees may need to be consulted, and sometimes prior authorisation of the Labour Inspector is needed. Employees unlawfully dismissed as part of a transfer can achieve reinstatement as well as financial awards, and both employers can be held liable

• Finally, throughout the EU, treatment of pensions issues varies widely.

Outside the EU, some countries have their own employee transfer laws - and there is great variety in how these operate. Like the ARD, they might be triggered by the acquisition of a business, an outsourcing, a change of outsource provider, or an insourcing.

Some countries have closely shadowed Europe's ARD, others have introduced something which has similarities but radical differences too.

Although most countries have no transfer laws, this creates its own problems when a purchaser or a new service provider needs competent labour in place from day one. If there are no employee transfer laws, the new provider or owner has to recruit people - with unpredictable results. For example, some people would rather stay with their old employer, or wait to be dismissed and trigger a redundancy package.

Here are some summary examples of transfer rules outside the EU: • In Singapore, the protection given to junior employees by the Employment Act has recently been extended and applies to many managerial and executive level staff too. These people have automatic transfer rights, similar to the ARD, so it's essential to work out who's covered, and who will not transfer and might therefore need to be recruited instead - perhaps receiving a contractual severance payment too. In some ways, transfer laws are tougher on employers than in many EU countries, as the Commissioner of Labour can delay or prohibit a transfer, or can set conditions; and unlawful dismissals can lead to reinstatement, as well as compensation • South African law is similar to the ARD, unlawful dismissals can lead to reinstatement, and both employers have joint and several liabilities for a year after the transfer, and for events before the transfer. Consultation requirements are relatively mild, unless the employers want to agree a departure from the standard transfer laws • Mexican law uses the concept of a voluntary 'employer substitution letter' signed by the employee, or a procedure

BUSINESS TRANSFERS before the country's Labour Board, to achieve employee transfer. This applies in asset sales, but not outsourcings. The employers share liability for six months after the transfer • In the US, there are no ARD-style transfer laws, so termination and re-hire is the method for the new owner in an asset purchase, or the new provider of outsourced services, to retain any of the workforce. But other laws might be triggered, such as those on notifying employees, unions and/or government about a mass layoff or business closure. It is also common for employment liabilities to pass to the purchaser of assets or stock, and collective bargaining agreements may pass too. Plus, there may be more cost issues to negotiate between employers.

These are brief summary indications

of some transfer laws. Above all, don’t assume that: • The ARD is the same throughout the EU • Outside the EU, there's nothing like the ARD; and • Being free to use termination and rehire will always make life easier.

The reality is far more complex. The ARD has lots of variety, and there are some similar laws elsewhere. Where there are no transfer laws, employers may use termination and re-hire, but this brings its own uncertainties, and the challenge of getting a good workforce in place, on day one.

Jonathan Hearn is a senior member of the Employment Group of DLA Piper, the global law firm. Jonathan is based in the firm's London office, as Legal Director, and advises on the employment law aspects of UK and global outsourcing projects and acquisitions.

This article briefly sets out broad principles; for detail on the issues raised, and to discuss specific projects, Jonathan can be contacted on +44 (0)20 7796 6637 or jonathan.hearn@dlapiper.com Jonathan can also provide copies of DLA Piper's Global Employment Guide to Business Transfers, which expands on these issues for 23 jurisdictions across America, Asia, Pacific, Europe, the Middle East and Africa. It is prepared by experts from across the firm's Employment Group worldwide.

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Expatriate Adviser Summer

Autumn International HR Adviser

CHINA

The Rise Of Chinese Multinationals Known as the factory of world, China’s export sector make it the second biggest economy globally. This economic miracle lifted millions out of poverty and gave way to the creation of the world’s largest consumer market. Two decades of continuous trade surpluses helped built USD3.7 trillion in foreign exchange reserve and made it a soughtafter investor.

No longer content as just an export reliant economy, Chinese companies are now hungry to transform themselves into global conglomerates through mergers and acquisitions and investment opportunities.

The Success Of 请进来,走出去” (‘Please Come In, Then Go Out’) Policy When China reopened its doors to the world, the first phase of economic reform saw the government inviting foreign companies and investment into China.

• As of 2012, 18% of all global FDIs (Foreign Direct Investment) are invested in China and represent USD 253 billion (source: OECD’s “FDI in Figures) • China has posted an average GDP of 10% over the last 30 years, overtaking Japan as the world’s second largest economy in 2011 • The Forbes 2013 Fortune Global 500 List included 89 Chinese companies, up from 34 in 2008, making China second only to the US.

Implementation Of The Go Global Policy The success of attracting foreign investment helped carve out China’s plan going into the next stage of economic development – building its own transnational corporations and brands through its “go-global” policy.

The Chinese Government first introduced a “go global” policy in 1999 during its unveiling of the ODI (Outward Direct Investment) vehicle in the 10th Five-Year Plan (2001-2006). Chinese companies took this directive and acted steadfastly on it.

The 2008 global financial crisis presented Chinese companies with a widespread buying opportunity when Western companies became cash strapped.

The ‘Go Global’ policy under the

new leadership of President Xi Jin Ping was reinforced as his cabinet moved to liberalise financial markets, secure funding to assist Chinese companies and reform policies that to nurture these opportunities.

These efforts are reaping spectacular results as on almost a daily basis now, we see Chinese companies making headlines on some kind of an acquisition or investment. They see acquisitions and investments of this nature as the opportunity to speed-up the process in helping them gain imminence into the global business arena.

• Chinese companies made a record 298 international acquisitions in 2009 (source: The Economist Intelligence Unit - EIU) • China accounted for 11.6% of global GDP and 6.7% of global ODIs in 2012 – those numbers were 5% and 1.3% respectively in 2005 (source: EIU) • According to the 2013 UNCTAD report, China is presently the third largest ODI country (after the US and Japan) and has invested USD 85 billion abroad, mainly state-owned enterprises in natural resources, energy and infrastructure • China – African trade volumes have increased 20-fold to reach USD 200 billion annually. These investments have changed the face of Africa, with new townships and infrastructures emerging through government and corporate loans. There are currently more than 2,000 Chinese companies and

over a million Chinese nationals residing across the continent.

The EIU ‘Chinese Going Global Investment Index’ benchmarks countries that are perceived by Chinese companies as attractive investment targets. The US came up at the top of the list despite being considered as the toughest market to enter. Its characteristics of innovation nimbleness, owning valuable brands and intellectual properties and a strong domestic market are deemed as attractive qualities for the Chinese.

Singapore and Hong Kong rank as No. 2 and 3 respectively as these ‘Chinese’ city-states provide Chinese companies the access to regional and global markets. It is worth noting that overseas Chinese were the first FDIs that entered China in the 1980s and likewise play a significant role with ODIs as well.

The Race To Innovation Capitalising on knowledge gained, and relationships built, through FDIs as OEM producers, Chinese companies are now keen to enhance their value by climbing the ladder to innovation and crafting their own technological armor.

The Batelle Memorial Institute concludes that “China R & D spending is likely to reach USD 284 billion this year, up 22% from 2012. That compares with just 4% growth forecast in the US to USD 465 billion during the same period.”

• Geely, at the time a relatively small Chinese auto manufacturer, purchased Volvo from Ford in 2010. The transaction gave the Chinese access to the technology know-hows of the automobile industry, relative strong brand equity and an international distribution network • Haier, one of China’s largest manufacturers of consumer electronics and household appliances, re-invests 3 to 5% of its yearly revenues into Research & Development. Today the company has ten R&D centres in China, Japan, Germany and the US • The Chinese internet company, Tencent, currently has 300 million users on its ‘Wechat’ messaging service platform. Wechat has been identified as a possible vehicle with which to crack into the US market, and Tencent has Autumn International HR Adviser

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CHINA already established a presence in Silicon Valley to pursue this potential • Fuzhou Rockship Electronics and Allwinner, who achieved success in the low-end smart phone and tablet devices market in China, are looking for ways to enter the mobile processor chip and other specialised technology sectors, where US companies continue to dominate. The China Government is setting up a USD 5 billion fund to assist local Chinese companies to create a local microchip industry.

The Chinese International Assignee The rapid expansion of Chinese companies created a new wave of Chinese nationals moving globally to take on international assignments for their companies.

• One Chinese company confirmed that it is sending more than 10,000 Chinese employees to work in their overseas operations • Hong Kong, who introduced an admission scheme for mainland talents and professionals in 2003, has admitted 57,126 Chinese as of 2012, many of which are intra-company transfers from China to their Hong Kong subsidiaries • A report issued by the Provincial Government of Sichuan reported that 19,419 Chinese left the country to work abroad in 2012, an increase of 17.63% from 2011 • A project manager working for a Chinese ICT company in Africa noted that the company has literally built a living township that includes housing, shops selling Chinese groceries, as well as bringing in cooks and teachers to help support their thousands of employees working there.

Having been a popular career choice amongst college graduates since the 1980s, the Financial Service sector has benefitted from Chinese educated in the West. Attracted by the opportunity to build international work experience and higher salaries, college graduates are hired to train ‘at home’ then are transferred to Hong Kong, Singapore or Shanghai, where their language, cultural and relationship-building advantages can be fully deployed.

An HR professional who works for a US-based investment bank cited how her organisation is adopting various long-term strategies to access different international talent pools. It has invested in an IT development centre in Shanghai International HR Adviser Autumn

to help develop proprietary trading systems and software. The centre hires top software developers from top Chinese universities across the country as trainees, puts them through a systematic rotation programmeme to familiarise them with all aspects of the front-to-back office system, then transfers them out of China to work on trading floors in Hong Kong, Singapore, London and New York.

The Challenges In 30 years, Chinese companies have had to face many challenges shifting from state-owned enterprises to profit driven business entities that are able to compete internationally. This growth created a need for the organisations to review corporate culture and policies, hiring and keeping of talent at all levels and mapping out longterm corporate growth strategies.

At present, many Chinese companies are still working towards the development of a global employee management policy that could support global expansion and achieve the long-term goals for them.

The EIU’s recent study “The Climate for Chinese M&A Abroad” surveyed 110 Chinese companies. 82% and 63% respectively identified the first two issues (listed below) as their key challenges.

• Mobility policies: While western multinationals have structured mobility policies in place, Chinese multinationals have yet to develop programmemes that would best suit their requirements. One relocation management expert comments: ‘We have seen the increase in outbound assignments from Chinese companies and many of these companies do not have any policies in terms of candidate selection on international assignments. The success rate of these assignments are hit-and-miss, as they grapple with language difficulty, unfamiliarity with destination countries, not having adequate support from head office as packages are given to them, are built on inaccurate data, and the lack of preparation and training’ • Clash in corporate cultures: As with all cross-border endeavours there is inevitably a deep-seated cultural difference between how things are run in the West compared to China. While the West celebrates individualism and the pursuit to independence, Chinese perpetuates harmonious collectivism where questioning a manager’s instruction is highly frowned upon. The major hurdle in the Lenovo-IBM acquisition was bridging the corporate cultural gap

• Chinese Talent with global experience: Wang Hui Yao, Director-General of the Center for China and Globalization, estimates that China needs 75,000 executive managers with an international background but there are only 3,000 to 5,000 in the local market that can meet this criteria (source: China Daily, November 2013).

While Chinese assignees that are relocated to different countries by western firms are usually picked because of their western education and Chinese background, those who work for Chinese companies tend to have very little exposure to living outside of China. The perception of an international assignment is also viewed very differently by Western and Chinese employees.

Western International Assignment • Viewed as an opportunity for career advancement • Family relocates with Assignee • Relocation Package that covers all basic living expenses and may provide additional benefits (i.e. private school education, club memberships, home leave) • May have cultural awareness to enjoy the benefits of international living and travel.

Chinese International Assignment • Families left at home • Fluency in a second language (English) integral to transitioning into new city • Unaware that ‘things are done differently’ than they are back home and lack experience to breach the cultural gap with local community • The perception therefore created is that the Chinese like to keep to themselves with locals typecasting them as unfriendly and even hostile (often aggravated by negative media coverage labelling Chinese companies as spies and a threat to national security).

Overcoming Challenges The Chinese multinational are refining their strategies and learning about international corporate cultures and practices. Having learned from early failed investments and painful integration issues, which often resulted from making reckless acquisitions, they have become progressively sophisticated in pursuing deals that focus on a common vision and are complementary to their existing business.

CHINA • Training and cultivating the international talent pool has been identified as an important way to succeed overseas. When Air China invested into Cathay Pacific, the company put in place an exchange programmeme for mid-level managers (Source: EIU) with the objective of providing Air China staff a platform from which to understand a global airline’s standard operating procedures • Hiring western executives with a proven track record is another strategy.

Xiaomi, the mobile company that outsells Apple products in China, announced recently that Hugo Barra, who was responsible for developing Google’s Android platform, has joined them as Head of Global Business. Their first non-Chinese senior executive, they are banking on his knowledge and extensive network to strategically position them as a global player.

Given the relatively short timeframe during which this economic growth has occurred, it is only a matter of time before the Chinese multinational overcome these challenges and put themselves in

a position to compete on a level playing field. Perhaps it will be even less of a wait before a Chinese company is listed on the Forbes’ World’s Most Innovative Companies roster.

Natalie Tong For more information about this article please kindly contact Natalie Tong at natalie.tong@asiapacificproperties.com or +852 2281 7822 About Asia Pacific Properties Asia Pacific Properties (APP) is a premier real-estate company representing corporations in tenant representation, commercial and industrial real estate acquisitions and leases. Pioneer of relocation and mobility programmemes in China and Asia. Its mobility division has assisted thousands of families from over 60 of the top Fortune 200 multinationals over the years.

Headquartered in Hong Kong with key offices across China, APP provides services throughout China. Notable in the industry for delivering customised integrated programmemes that emphasises comprehensive relocation and real estate programmes; APP provides a full spectrum of relocation services that includes home search, education assistance, visa and immigration support, cross-cultural business training, tenancy and expense management.

As one of the first company relocation companies to be granted a business license by the Chinese government in 1995, APP has managed thousands of relocations into and out of China, and has seen the relocation industry flourish from its days of hosting just families of foreign diplomats to now being home to thousands of professionals globally.

The 2015 Corporate Relocation Conference & Exhibition is taking place on

Monday 2nd February 2015 from 10am-5pm and will be held at Hotel Russell, Russell Square, Bloomsbury, London, WC1B 5BE There will be seven free seminars and over 35 exhibitors with products and services that support International HR professionals and their assignees This event is FREE to attend

For further information or to reserve your place, please email: helen@internationalhradviser.com or call Helen Elliott on +44 (0) 208 661 0186

Autumn International HR Adviser

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Emerging markets

So You Think You Understand Emerging Markets?

HR’s Role In Executing A Market Entry Strategy Given the immense diversity and complexity of countries like India, it’s better to approach them as continents.

Traditional assumptions about product development and segmentation should be left at the door.

Edible oils constitute one of the most important components of food expenditure in Indian households. Used mainly for cooking and frying, India is the world’s third largest consumer, accounting for 16 percent of the country’s imports.

The myriad of different uses of edible oil in India also reflects a multitude of different regional preferences and habits.

For example, soybean oil is mainly used in Northern and central parts of India due to the availability of soybeans locally.

Mustard oil is mainly consumed in Northeastern and Eastern regions of India as its pungency is desired, particularly for seafood. Palm oil dominates Southern India due to the warmer climate, and sunflower oil is popular amongst the affluent classes.

In addition to regional preferences, the volume of consumption also differs markedly. In the North, food preparation is more elaborate during the weekends and oil consumption is heavier, especially in winter. In the West, due to a mixture of oily/heavy items as well as simple items, oil consumption is moderate, while in the East, primarily rice diets mean less consumption compared to the North. In the South, main meals are also less oildependent. Adding the vast differences in income across all regions and the multitude of castes, language, dress, forms of worship and kinship and mixture of rural and urban residents, the market is complex to say the least.

Imagine being a provider of edible oils in such a country!

Greasy Business In a recent case study based on the experiences of a global food and agriculture company, which we’ll call Healthy Oils, we International HR Adviser Autumn

can see the kind of considerations business leaders have to make in approaching emerging markets such as India.

Healthy Oils is no minnow. Ranking among the world’s top 100 companies, Healthy Oils is an international producer and marketer of food and related products with over 100,000 people located in over 50 countries. It started out selling packaged vegetable oil in India in the 1990s. By 2011, Healthy Oils had a portfolio of four packaged oils as well as other products.

But the company was at a crossroads in 2012. Rehaan Roy, chief marketing officer of Healthy Oils India, had commissioned a study to see how it was faring in the Indian consumer market, but the report did not paint an encouraging picture. While Healthy Oils’ four offerings in the market were recognised by consumers looking for cooking oil, they were not in the top five in terms of brand awareness, nor were they top choice in the “most often used” category. Having spent a considerable amount acquiring a suite of edible oils from other market players and with the multi-brand strategy being to move from a bulk business to a consumer-facing retail business, Healthy Oils products remained second-tier consumer offerings.

Roy had a lot of questions to consider, such as who were the target consumers for each of their brands? In which category did Healthy Oils’ strength lie? What would drive them to the Healthy Oils categories? And what should the brand promise and marketing strategy be?

Leave Your Assumptions At The Door As I will soon be teaching a new executive development programme at INSEAD, Market Entry Strategy for India, such conundrums require a new framework of consideration. Executives can often apply tried and tested models and assumptions,

or at least some assumptions, when expanding across borders. But the complexity of entering India is akin to entering a continent, not just a country.

Even edible oil is not homogenous.

Cereal brand Kellogg’s learned this lesson to its peril in 1995 when its products were made available nationally after first entering the market in Mumbai in 1994. Kellogg’s initial offerings in India included cornflakes, wheat flakes and basmati rice flakes. But despite a whirlwind of public relations activity and the full backing of its management, the products failed to make a dent in the Indian market. Indians weren’t used to the packaged and processed offerings.

They also had a traditional habit of boiling milk and consuming it warm, which gave Kellogg flakes an odd taste.

Consumers were also extremely price sensitive and Kellogg’s was up against the wide availability of low-priced traditional breakfasts. Negative media coverage about the taste of the products also stung Kellogg’s and sales stagnated.

Much like Healthy Oils, Kellogg’s hadn’t thought about segmentation and it made the mistake of focusing only on the premium and mid-level retail stores.

With 80 percent of Indians living in villages outside of the big cities, it was missing a huge opportunity.

Only after Kellogg’s introduced multiple products and put out a wider array of packaging sizes to cater to different consumer groups did it start to make progress. It also made its packaging less elaborate which allowed it to bring down price, another consumer purchase hurdle.

Product adherence can be one of the biggest challenges in the Indian market, as one humourous HSBC advertisement shows with a drinks vendor mixing lassi in a washing machine.

Framing The Challenge There is no one-size-fits-all solution to

Emerging markets adapting your products or services to emerging markets like India. But the following steps can at least help to frame the problem, and hopefully, the solution.

1. Awareness – Adapt communication means to local conditions and tastes, such as using street theatre, radio drama, or health camps to capture the attention of the target group and provide an interesting way for them to get information and gain knowledge.

Consider leveraging local partners to create awareness.

2. Appeal – Make the product acceptable to the target market by understanding the living conditions and constraints faced by them on a daily basis, including the group’s beliefs, habits, social norms and cultural traditions; and adapting the product to meet the low-income consumer’s requirements or infrastructure constraints like lack of clean water, for example, in terms of formulation, size and packaging.

3. Affordability – Adjust pricing to make products affordable to low-income consumers or make available financing mechanisms to the target group through micro-finance etc…

4. Availability – Make the product physically available close to the target consumer by working with local partners or taking advantage of existing distribution channels of partners for the “last mile” of distribution; and more importantly, make sure the consumer gets the right product through proper training of staff.

5. Alliances – Work with partners in private and public sectors (locals, regulators, NGOs) that can help deepen understanding of the market, facilitate operations, build awareness, enable availability by opening up distribution channels, and help with affordability by providing financing options.

6. Adherence – Make compliance easy, in the case of pharmaceutical companies, as too complicated a drug regime can make it difficult for low-income consumers to adhere to medicine-taking, for example, too many times a day, too many pills to take etc. due to lack of education or lack of facilities like clean water.

HR’s Role In Executing A Market Entry Strategy Beyond products, HR also plays a key role in a company’s market entry success. Newmarket initiatives for complex countries like India – which must incorporate out-of-the-box thinking and different evaluation metrics, among other elements – need support from top management to succeed, which can often only be secured by senior HR leaders.

For example, when Novartis implemented the Novartis Arogya Parivar initiative in India, the concept itself originated with Novartis’ board in Switzerland and had the support of the leadership team at the time, including then Chairman & CEO Dr. Daniel Vasella, Dr. Paul Choffat (then President of Novartis Consumer Health), Dr. Joe Jimenez (then President of Novartis Pharmaceuticals), Dr. Jürgen Brokatzky-Geiger (then Member of the Executive Committee and Head of Human Resources) and Dr. Udit Batra (then Global Head of Corporate Strategic Planning).

MNCs very often rely on their international executives to lead newmarket initiatives, and HR must ensure their market leaders are equipped to make the right decisions. Often, these senior global executives have a terrific record in the developed-world contexts where they have typically operated, but lack the local context and understanding to take an initiative forward in emerging markets and among consumers who are totally different from the ones they have encountered. Thus it becomes extremely important to choose someone with requisite knowledge and experience to lead the initiative.

It is also worth keeping the new initiative separate from the parent operation to ensure speed and flexibility.

Arogya Parivar is an independent initiative with the flexibility to think and act outside the box without being weighed down by the processes and history of Novartis, while still being able to meet the strict ethical and regulatory compliance needs of the organisation.

It is therefore no surprise that HR policies also need to be crafted specifically for the local operation and initiative, as opposed to simply lifting the existing policies of the parent organisation. The kinds of people available for specific roles in emerging markets could be very different from those at home. For

instance, due to local cultural factors, it is difficult to find adquate numbers of female employees for front-line roles that involve travel away from their home base, as Novartis discovered.

Likewise, due to local attitudes towards work, it can be difficult to find the kind of middle and uppermiddle-class staff that would normally fill certain roles in more developed markets. This was a challenge faced by a new entrant in the beauty space when looking for sales staff to man beauty counters in department stores.

Thus, close on-the-ground involvement of HR is important and in the case of Novartis, the direct oversight of Dr. Jürgen Brokatzky-Geiger’s was key. Oversight through the regular complicated channels that would have existed for a new project within a large and complex MNC may have impacted the success of the Arogya Parivar initiative.

When making both marketing and HR decisions, my ultimate advice is to get to know the market and the consumer up close – not on a spreadsheet or a PowerPoint deck. I take my executive students to have tea with consumers in their homes and to get to know distributors and legal and research firms, so that they can understand not just the complexity of India, but also the constraints consumers face and how you can unlock their potential loyalty. Being present is only half the battle – being engaged is the rest.

Professor Amitava Chattopadhyay Amitava is The GlaxoSmithKline Chaired Professor in Corporate Innovation at INSEAD and the founder and programme director of the Market Entry Strategy for India executive development programme at the school.

Amitava is the author of The New Emerging Market Multinationals: Four Strategies for Disrupting Markets and Building Brands.

You can follow him on Twitter @AmitavaChats.

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education

Dyslexia, Learning Support And All Things Special…

We all dream of our children excelling at school – in maths, English, sport or music, but for some children, just getting through the normal school day can be challenging enough, and this can add extra stress to families considering, or already in the process of an international assignment.

With a bit of luck, a pupil’s school will flag up any learning difficulties around Year 2 and suggest an assessment, although many children with specific learning difficulties (SpLD) can remain undiagnosed for much longer. Parents may have suspected their child was not keeping up even though his or her intelligence appeared ‘normal’ otherwise it could come as a bolt out of the blue. It is at this stage that parents usually wonder what they should be doing.

A good school will probably recommend an educational psychologist (EP) and this will be the next step to finding out what the difficulties are and how serious. You can access a good list of EPs through the BDA. An EP will assess the child by performing a series of tests designed to calculate verbal and non-verbal reasoning as well as general cognitive ability. Parents will receive a report with the results of the administered tests and a recommendation on how to address the child's needs.

The sort of difficulties identified by an educational psychologist cover a broad range from Dyslexia, Dyspraxia, Discalcula, Aspergers or ADHD/ ADD (Attention Deficit Hyperactivity Disorder/Attention Deficit Disorder), all on the Specific Learning Difficulty (SpLD) spectrum.

There are many independent schools that offer specialist teaching outside of the classroom, but for children with moderate to severe difficulties this minimal intervention is like “papering over the cracks”. In many cases, there are children unable to cope in a mainstream school environment and who need something more specialist. For parents in the expat community this will be a particular concern, not only will their child have to cope with a completely new home environment and new friends, but also a new school. If confidence levels are low due to previous poor achievement, International HR Adviser Autumn

then this will add to the family's anxieties at an already stressful time.

Much of the difficult part of the transition can be avoided by transferring a child to a school that specialises in the teaching of children who require more individual learning support. This is where the child will get a complete an individual programme of the help they need including occupational and speech and language therapy, as well as counselling where necessary, all incorporated into their school day.

Specialist schools provide children diagnosed with a SpLD the opportunity of receiving an academic education in a safe and supportive learning environment up to GCSE for children between the ages of 11 to 16 years. CReSTeD produces a useful handbook and their website gives a list of accredited schools.

It comes as no surprise to parents that their children often possess extraordinary talents and creativity and it is an important goal for these schools to identify and foster this by providing additional courses in non-traditional subjects such as creative and performing arts, food technology, computer technology, art and design, media studies and design technology. Pupils will need individual timetables that address their needs and classes must be small with a high teacher/ pupil ratio. Look for a school that offers an enrichment programme that enhances the pupil's skills academically, emotionally and socially.

It is well known that progress of pupils at these type of holistic specialist schools are typically outstanding. This reinforces the belief that, given the opportunity and resources at the right age, despite their difficulties, these children can make meaningful improvements to the quality of their lives and their contributions to society.

Helping parents find their way through the minefield of special education is not easy, but follow these steps and you could put them on the right track: 1.Do some research, this will pay enormous dividends 2.Get free advice from the numerous agencies there to help. In the UK this will be the British Dyslexia Association, CReSTeD, and the Helen Arkell centre

3.Make sure there is an up to date assessment of the child's special needs 4.Encourage research in possible schools in the country the families are relocating to 5.Speak to professionals such as educational psychologists, therapists and specialist tutors 6. Consider an educational consultant who will know and understand schools in the destination area of relocation and who will be able to follow a particular brief. Especially useful if there is no time for research.

There are many alternative therapies and treatments around, but it is the view of many professionals that repetitive and intensive teaching from qualified teachers experienced in the teaching of children with SpLD pays the best educational dividends. With proper diagnosis and tailored educational practises, children with SpLD can go on to achieve academically, reach their full potential and have successful careers and future lives.

Ronda Fogel Executive Director www.moatschool.org.uk T: 020 7610 9018 E: office@ moatschool. org.uk Ronda is the last remaining founding Director and Trustee on the Board of the Moat School. She set-up the charity, The Constable Educational Trust, in 1994 to establish London’s first secondary school for Dyslexic children. She has spent the last three years as a Project Director setting up and opening two Free Schools in challenging inner city areas of London with the aim of improving life chances of all children. As a flagship Government initiative, it is her aim to expand the Trust to a small group of London based primary schools where CETPS can have the most impact. Ronda’s early career began as a retail buyer and she worked for major multiples including WH Smith, Debenhams, Tesco and Marks & Spencer. She is also a business mentor working with young entrepreneurs in London.

The 2015 Corporate Relocation Conference & Exhibition Monday 2nd February 2015 from 10.00am - 5.00pm Hotel Russell, Russell Square, Bloomsbury, London, WC1B 5BE

FREE SEMINAR PROGRAMME 10.30am - Raising Internationally Mobile Children: Understanding and Nurturing the Third Culture Kid Experience

A significant reason for failure of international assignments revolves around the ‘soft’ issues - the adaptability of families and children. For the majority, when properly understood and managed, the benefits of growing up abroad can far outweigh the challenges. This session for parents and professionals who are working with internationally-mobile families will share research-based insights into how a global experience can enhance future educational and career opportunities for children, and how to manage the stumbling blocks encountered along the way. While parents naturally worry about how moving away from the home culture and language will impact their children, when approached with knowledge and optimism, it can be an enriching life-changing experience.

Presented by Mary Langford whose own international journey began at the age of two, and who has worked with international schools and families as an educator, researcher, writer, speaker, independent consultant and trainer for over 34 years. She is currently Director of Admissions for Dwight London School.

11.30am - Did My Identity Get Lost In The Move?

Once the practicalities of moving are in place, spouses and partners often experience a loss of identity. This can have a serious impact on their personal confidence and daily routine. Helping them with their career search and with building their network can get them on the right path to their new life so they no longer say “Who am I?” Join FOCUS as they explore the key factors that contribute to a successful establishment of a spouse or partner’s new identity.

Presented by FOCUS.

12.30pm - US Tax Updates & Overview Of The US/UK Tax Treaty For US Persons Residing In The UK This seminar will cover tax updates for 2014 and any for 2015, and interaction of the UK and US tax treaty and how this affects US persons living in the UK. Presented by BDO LLP.

1.30pm - Immigration Update

This seminar will be a practical session providing advice on the latest Immigration developments and the implications for businesses, and will cover Immigration Policy Updates, Global Immigration Strategy and Management, Compliance and Risk Management.

Presented by Ferguson Snell & Associates, and if you have an immigration enquiry that you would like Ferguson Snell consultants to cover on the day please email your enquiry in advance to fs@fergusonsnell.co.uk.

2.15pm - Short-Term Business Visitors: Staying Ahead Of The Game

Any global employee is potentially a business traveller, capable of creating tax or immigration obligations in any country in an era of increased scrutiny by tax authorities around the world. For many organisations, defining the size of the population and identifying the relevant individuals is the biggest challenge. We discuss how a data-driven approach utilising the latest analytics techniques coupled with tax and immigration expertise can enable a process to identify, review and propose actions for organisations to help manage business traveller compliance risk efficiently for any size of population.

Furthermore, this data also provides business and mobility leaders the opportunity to pro-actively manage business travel before an issue arises, identify cost reduction opportunities by analysing spend and evaluate adherence to an organisational travel policy.

Presented by Scott McCormick, Partner and Robin Brown, Senior Manager from Deloitte Global Employer Services.

3.30pm - Employment Disputes And How To Avoid Them

This seminar will take a practical look at things assignment managers (and expatriates) can do to reduce the risk of employment disputes.

The discussion will focus on: Common Flashpoints, Managing Expectations, Where Paperwork Can Help (And Where It Can’t), Practical Steps To Avoid Claims, Why Expatriate Claims Are Different, Dispute Resolution Strategies & Things You Could Do Now To Avoid Disputes Later.

Presented by Juliet Carp, Employment Partner, Speechly Bircham LLP.

4.15pm - Expatriate Costs Simplified

The seminar will cover not only how much an expatriate should be paid, but also how much this will cost the business, and also how it should be delivered.

Presented by Total Rewards Group.

If you would like to register for any or all of these free seminars, please email helen@internationalhradviser.com with the times of the seminars you would like to attend.

We look forward to seeing you there!

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DIARY DATES OCTOBER 2014 Worldwide ERC®: Global Workforce Symposium 2014 October 8-10, 2014 The Hilton Chicago, Chicago, Illinois, United States of America The leaders in global talent mobility will be networking, strategising and sharing ideas for thriving in the global marketplace. Experience new heights in workforce mobility, and join in the celebrations of Worldwide ERC®’s 50th Anniversary in the city of its birthplace! If you are a corporate HR professional attending the Symposium for the first time, we invite you to be our guest and experience the outstanding opportunities for education, benchmarking and networking at no cost to register. Learn more and register at www.worldwideerc.org/Events/ Pages/gws14.aspx

The APAC Global Mobility Summit October 14, 2014 Orchard Hotel, Singapore Make your international assignees experiences the best they can be and attend our 2014 APAC Global Mobility Summit. Hundreds of global mobility professionals from across Asia will gather for this one day conference and exhibition, benefitting from a cutting edge conference programme featuring top global mobility experts, the opportunity to network with leading suppliers to learn about the latest innovations expatriate management, plus the opportunity to meet, network and share best practice with industry peers.

If you want to gain the knowledge, contacts and skills needed to ensure every assignment is productive, efficient and cost-effective, register your place now (in-house HR/global mobility professionals attend free)!

For more information, please contact Iyla MacIntyre on +44(0) 20 7943 8027 or email iyla.macintyre@centaur.co.uk In-House Corporate HR Professionals attend free – book your place at: http://totallyexpat.com/apac-summit-2014/

NOVEMBER The EMEA Global Mobility Summit November 7, 2014 Lancaster Hotel, London As FEM’s flagship event, the EMEA Global Mobility Summit is a fantastic opportunity for industry professionals from far and wide to unite with peers, specialists, consultants and service providers at an event designed for networking. Learn from the experts, stay up to date, discuss and discover new opportunities in the constantly evolving world of expatriate management at this one-day conference and networking exhibition.

For more information, please contact Iyla MacIntyre on +44(0) 20 7943 8027 or email iyla.macintyre@centaur.co.uk In-House/HR Global Mobility Professionals attend free – book your place at: http://totallyexpat.com/emea-summit-2014/

HR Inspired November 20, 2014 The May Fair Hotel, London, UK After the success of HR Inspired at Ascot Racecourse, we announce that the next date is on Thursday 20th November at The May Fair Hotel, London. This central location will see 150 senior HR professionals come together to discuss Employee Engagement and Talent Management over the course of an action packed day. This conference is complimentary if you are a senior corporate end user.

For more information or to register please visit www.cibexmedia.com

K2 – Connecting The Extraordinary November 20, 2014 – 6pm-10pm Home House, London Connecting the Extraordinary will allow our guests to continue International HR Adviser Autumn

the mobility discussions raised at our quarterly networking events and specialist roundtable meetings. Our November event will allow mobility professionals to discuss best practice and current trends with an emphasis on women in business and mobility in Africa.

Please contact eric.pengelly@k2corporatemobility.com

FEBRUARY 2015 The Corporate Relocation Conference & Exhibition 2rd February 2015 Hotel Russell, Russell Square, London www.internationalhradviser.com There 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 2014 Conference & Exhibition saw over 700 visitors attend this not-to-be-missed event.

Seminar Programme is as follows: 10.30am - Raising Internationally Mobile Children: Understanding and Nurturing the Third Culture Kid Experience Presented by Mary Langford whose own international journey began at the age of two, and who has worked with international schools and families as an educator, researcher, writer, speaker, independent consultant and trainer for over 34 years. She is currently Director of Admissions for Dwight London School.

11.30am - Did My Identity Get Lost In The Move?

Presented by FOCUS. 12.30pm - US Tax Updates & Overview Of The US/UK Tax Treaty For US Persons Residing In The UK Presented by BDO LLP. 1.30pm - Immigration Update Presented by Ferguson Snell & Associates, and if you have an immigration enquiry that you would like Ferguson Snell consultants to cover on the day please email your enquiry in advance to fs@fergusonsnell.co.uk.

2.15pm - Short-Term Business Visitors: Staying Ahead Of The Game Presented by Scott McCormick, Partner and Robin Brown, Senior Manager from Deloitte Global Employer Services 3.30pm - Employment Disputes And How To Avoid Them Presented by Juliet Carp, Employment Partner, Speechly Bircham LLP. 4.15pm - Expatriate Costs Simplified Presented by Total Rewards Group.

These seminars are FREE to attend. To reserve your place in any or all of these seminars or for further information on attending or exhibiting please call Helen Elliott on +44 (0)208 661 0186 or email helen@internationalhradviser.com

The Houston Totally Expat Show February 12, 2015 Hyatt Regency, Houston The Houston Totally Expat Show brings together dedicated global mobility professionals, providers, consultants and industry professionals from across America. The show is a great opportunity for industry professionals to learn from experts, meet with key suppliers and share best practice with peers. The Totally Expat Show Series is a dedicated forum to unite global mobility professionals in their overall best practice in managing expatriates.

For more information, please contact Iyla MacIntyre on +44(0) 20 7943 8027 or email iyla.macintyre@centaur.co.uk. In-House Corporate HR Professionals attend free – book your place at: www.totallyexpat.com

If you would like to advertise a conference or exhibition on our Diary Dates and on www.internationalhradviser.com please email damian@internationalhradviser.com

DIRECTORY Assignment Management services Total Reward Group Chart House, 10 western Road, Borough Green, Kent, TN15 8aG Contact: Simon Richardson Telephone: +44 (0) 1732 780777 Fax: +44 (0) 1732 668284 email: simon.richardson@totalrewardgroup.com website: 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 PROGRAMME BRITISHAMERICAN BUSINESS (BAB) 52 Vanderbilt Avenue, 20th Floor New York, NY 10017, USA Contact: Tamra Eker Telephone: +212 661 4060 Fax: +212 661 4074 Email: teker@babinc.org Website: www.babinc.org BritishAmerican Business’s J-1 visa programme 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 programme with our J-1 Visa Programme Administrator.

INSURANCE AND FINANCIAL SERVICES ZURICH INTERNATIONAL LIFE Abbey Gardens, 4-6 Abbey Street Reading, Berkshire, RG1 3BA Contact: Adele Cox Telephone: +44 (0) 118 952 4253 Fax: + 44 (0) 118 952 4300 E-mail: adele.cox@zurich.com Website: www.zurichinternational.com Zurich 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 an internationally 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 EMPLOYEE BENEFITS Willis Employee Benefits Limited 51 Lime Street, London EC3M 7DQ Contact: Chris Metz Telephone: +44 (0)203 124 8897 Email: webl@willis.com Website: www.willisemployeebenefits.co.uk Twitter: @WillisGroup LinkedIn: www.linkedin.com/company/willis Our global footprint and local presence in over 120 countries means you can depend on us to provide high quality compliant responses to the complicated issues of having a population dispersed throughout a number of countries – whether it’s your business travellers, global hires, short term or long term assignees. Willis can advise on and place a range of healthcare, disability, life and retirement solutions that fit the needs of your highly valued and demanding workforce.

INTERNATIONAL HR CONSULTANTS DELOITTE LLP Stonecutter Court, 1 Stonecutter Street, London, EC4A 4TR Contact: Robert Hodkinson, Partner Telephone: +44 (0) 20 7007 1832 Fax: +44 (0) 20 7007 1060 E-mail: rhodkinson@deloitte.co.uk Website: www.deloitte.co.uk Whether 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.

INTERNATIONAL MOVING DT MOVING LTD 49 Wates Way, Mitcham, Greater London, CR4 4HR Contact: Tim Daniells Telephone: +44 (0) 20 7622 4393

Fax: +44 (0) 20 7720 3897 Email: london@dtmoving.com Website: www.dtmoving.com DT Moving is a world leading international moving company. Founded in 1870, we serve corporate customers all over the globe with an award-winning* move management and destination service programme. Through our London and Paris headquarters and worldwide network of global partners, we help clients achieve their workforce mobility goals.

Every employee we relocate receives a dedicated DT Moving team member as a central point of coordination, support and advice to ensure every part of their relocation runs smoothly.

Our goal is your complete satisfaction, and with a 96% customer rating for 2013, we offer unrivalled quality at competitive rates. *Awarded six global relocation awards since 2010.

RELOCATION HCR Relocation UK Head office - Belvedere House Basing View, Basingstoke, RG21 4HG, UK Contact: Sally Kelly - HCR Business Development Manager, EMEA. Telephone: +44(0)1256 313780 Email: skelly@hcr.co.uk Website: www.hcr.co.uk Twitter: @relochatter LinkedIn: http://www.linkedin.com/ company/hcr-group-limited We look after people, your people. We have a dedicated, high performing and professional team to deliver our award winning relocation service.

Our knowledge, experience and empathy ensures that each of your relocating employees and their families are carefully managed and that their specific needs are considered. HCR has a true ‘one point of contact’ philosophy; One dedicated, cross trained Account Manager and Lead Relocation Consultant who will manage, co-ordinate, deliver and provide comprehensive support for every relocation case.

INTERDEAN RELOCATION SERVICES Central Way, Park Royal, London, NW10 7XW Contact: Mark Rising Telephone: +44 (0)208 961 4141 Fax: +44 (0)208 965 4484 Email: London@interdean.com Website: 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. We make it easy. Our Services: Relocation Management, Visa & Immigration, Area Orientation, Temporary Housing, Home Finding, School Search, Settlingin Assistance, Tenancy Management, Household Goods Moving, Intercultural & Language Training, Relocation Expense Management, Moving & Relocation Insurance and other services available – please ask.

Autumn International HR Adviser

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DIRECTORY UniGroup Relocation One Worldwide Drive St. Louis, MO 63026, USA Contact: Mario M. Amato Tel: + 1 636 349 2718 Fax: + 44 (0) 208 181 4945 Mobile: + 44 (0) 7513 061 536 mario_amato@unigroup.com www.UniGroupRelocation.com/hradvisor UniGroup Relocation is a global mobility network serving nearly 1,200 locations in more than 180 countries across six continents, making it one of the largest owner managed relocation networks in the world. Our broad range of pre-assignment, transportation and destination services will guide transferees along every step of the journey, from beginning to end. A common voice, a consistent standard of quality and unsurpassed local knowledge set UniGroup apart, giving our customers support and peace of mind as they settle in to their new international locations.

3-18yrs. ICS has a diverse community with 45 different nationalities, and boasts a strong tradition of working with students in a highly personalised tuition framework thus enabling every student to reach their maximum potential in a rigorous but supportive environment. For students needing English Language Support we offer our unique Preparation Programme that allows students to study mainstream academic subjects alongside the language tuition. We also welcome & provide outstanding support to children with Special Educational Needs.

Students at ICS benefit from a wide ranging sports & activity programme during term time and also during school holidays.

We have outdoor education centres at Chorleywood and Bawdsey, Suffolk and offer educational trips abroad as part of our Travel & Learn Programme. This year ICS is proud to be celebrating 35 years of offering international education.

RELOCATION ASSOCIATIONS

ISL Group of Schools ISL Surrey Old Woking Road, Woking, Surrey GU22 8HY Contact: Claudine Hakim Telephone: +44 (0)1483 750 409 ISL London 139 Gunnersbury Avenue, London W3 8LG Contact: Yoel Gordon Telephone: +44 (0)20 8992 5823 ISL Qatar PO Box 18511, North Duhail, Qatar Contact: Nivin El Aawar Telephone: +974 4433 8600 Website: www.islschools.org Email: hmulkey@islschools.org The International School of London (ISL) Group has schools in London, Surrey, and Qatar. The internationally recognised primary and secondary curricula have embedded language programmes (mother tongue, English as an Additional Language, and second language) which continue throughout the student’s stay in the school.

A team of experienced and qualified teachers and administrators provides every student with the opportunity to grow and learn in an environment that respects diversity and promotes identity, understanding, and a passion for learning.

ASSOCIATION OF RELO CATION PROFESSIONALS (ARP) PO Box 189, Diss, IP22 1PE , UK Contact: Tad Zurlinden Telephone: 08700 737475 Fax: 01379 641940 Email: enquiries@arp-relocation.com Website: www.arp-relocation.com The 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 EUROPEA N RELO CATION ASSOCATION (EURA) PO Box 189, Diss, Norfolk, IP22 1PE Telephone +44(0)8700 726 727 Fax: +44(0)1379 641 940 E-mail: enquiries@eura-relocation.com Website: www.eura-relocation.com EuRA 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.

SCHOOLS International Community School 21 Star Street, London, W2 1QB Contact: Laura Thompson, Director of Marketing and Secondary Admissions Tel: +44 (0) 20 7402 0416 Web: www.icschool.co.uk Email: admissions@ics.uk.net An international day school located in 3 sites in the centre of London. We offer all three International Baccalaurate Programmes (PYP, MYP, and Diploma) to children aged International HR Adviser Autumn

MARYMOUNT INTERNATIONAL SCHOOL LONDON Address: George Road, Kingston upon Thames, KT2 7PE Contact: Mrs Cheryl Eysele Telephone: +44 (0)20 8949 0571 Email: admissions@marymountlondon.com Website: www.marymountlondon.com With an outstanding record teaching the respected International Baccalaureate for over 30 years, Marymount offers day and boarding to girls aged 11-18 who gain places at the world’s best universities.

Consistently ranked within the top 5% globally, Marymount also offers the pre-IB

Middle Years Programme; this stretches students without the need for incessant testing. The nurturing, supportive Catholic Community welcomes all faiths and achieves a shared purpose for girls of more than 40 nationalities.

NEWLAND COLLEGE Newland Park, Chalfont St Giles Buckinghamshire HP8 4AD Registrar: Sophia Haig Website: www.newlandcollege.co.uk Email: info@newlandcollege.co.uk Newland College is set in 100 acres of parkland in the heart of the Chilterns, 45 mins from central London.

We are co-ed, with entry points at 11 and 13 years of age. We provide the International Baccalaureate curriculum. Boarding and day options are available. Email info@ newlandcollege.co.uk to arrange a visit.

TASIS THE AMERICAN SCHOOL IN ENGLAND Coldharbour Lane, Thorpe, Surrey, TW20 8TE Contact: Karen House Telephone: +44 (0)1932 582316 Email: ukadmissions@tasisengland.org Website: 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 LLP 55 Baker Street, London, W1U 7EU Contact: Andrew Bailey Telephone: 020 7893 2946 Fax: 020 7893 2418 E-mail: andrew.bailey@bdo.co.uk Website: www.bdo.co.uk BDO 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.

For entries in this Directory email helen@internationalhradviser.com