International HR Adviser Autumn 2017 by International HR Adviser

AUTUMN 2017

ISSUE 70

FREE SUBSCRIPTION OFFER INSIDE

International HR Adviser The Leading Magazine For International HR Professionals Worldwide

FEATURES INCLUDE: International HR Strategy: Diary Of A (Compliant) Time Traveller • Impact Of A Changeful Immigration Landscape Taxation: The Language Of Payroll • The Evolving Role Of Global Mobility • Global Immigration – Global Hotspots The Difference Between ‘The Probable’ & ‘The Possible’ & ‘Doing The Right Thing’ In A Socially Responsible World Immigration – United Kingdom: Brexit And The Great British Immigration Debate Global Taxation Update • Strategic Communication – A Key Expectation From A Global Mobility Leader Re-engineer International Resourcing ADVISORY PANEL FOR THIS ISSUE:

CONTENTS

In This Issue 2 6 10 13 16 18 21

International HR Strategy: Diary Of A (Compliant) Time Traveller … Danny Taggart & Clare Allen, Deloitte LLP

Global HR Practices Research Summary: Building A Business Case For Global Expansion Eynat Guez, Papaya Global, partnered with Ben Eubanks, Lighthouse Research & Advisory

Taxation: The Language Of Payroll Andrew Bailey, BDO LLP

Global Taxation Update Andrew Bailey, BDO LLP

Re-engineer International Resourcing Steve Asher, Gateley Plc

2017 Global Mobility Survey: Impact Of Digital On Global Mobility Santa Fe Relocation

Health & Safety: The Difference Between ‘The Probable’ And ‘The Possible’ And ‘Doing The Right Thing’ In A Socially Responsible World Jo Layton, The Apartment Service

24 27

Immigration – United Kingdom: Brexit And The Great British Immigration Debate Ben Sheldrick, Magrath Sheldrick LLP

International Schools: Identifying Quality: Finding The Best International School For Expatriate Children Colin Bell, Council of British International Schools (COBIS)

31 32

34 35 36

HR Impact Of A Changeful Immigration Landscape Arden Ng, Blueback Global

Global Immigration – Global Hotspots Ben Sheldrick, Magrath Sheldrick LLP

Strategic Communication – A Key Expectation From A Global Mobility Leader Dharmesh Kothari, Global Talent Mobility Leader, Genpact

The Transformational Effects Of True Engagement Stefan Wissenbach, Engagement Multiplier

The Evolving Role Of Global Mobility Emma Holder, Expat Academy Ltd

Diary Dates

Directory www.internationalhradviser.com HELEN ELLIOTT • Publisher • T: +44 (0) 20 8661 0186 • E: helen@internationalhradviser.com DAMIAN PORTER • Publishing Director • T: +44 (0) 1737 551506 • E: damian@internationalhradviser.com International HR Adviser, PO Box 921, Sutton, SM1 2WB, UK Cover Design by Chris Duggan 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.

INTERNATIONAL HR ADVISER AUTUMN

Diary Of A (Compliant) Time Traveller…

We often overlook just how much technological change has impacted our lives and affected our behaviours. The drive towards mobile, selfservice, and easy accessibility to knowledge ‘on tap’ has permeated pretty much every aspect of our work and personal lives. The area of travel is a great example of this. How we plan, book and experience our travel has changed markedly in recent years. With greater numbers of the global workforce being required to travel internationally for business more frequently, employers are keen to ensure that their employees have a positive end-to-end experience of companyrequested travel. They also need to ensure that travel doesn’t breach compliance rules for either their travellers or the corporate entity; internally, ensuring that travel policies are adhered to, and externally implementing compliance checks for employees alerting where business travel might trigger potential tax, social security or immigration exposure. Employees themselves have a key role in this ever-changing picture too. Personal experience of social and commercial technology influences the expectations of corporate capability. It needs to be easy, it needs to be mobile and it needs to provide tangible value for the user. To illustrate how these changes have affected business travel let’s consider the personal experience of a fictional executive, Jo Dervan, Marketing Director at KippaxKlean based in

Middlesex, UK. Jo is excited about being asked to undertake a whistle-stop business trip visiting North, Central and South America. To really appreciate the difference however, we’ve slipped through a ‘time portal’ and can hear about Jo’s contrasting experience as it happened ten years ago, and in the present day. Over to you Jo… “Right, I must get this business trip sorted… I’m looking forward to going back to the US again – feels like a home from home the amount of times I’ve been there this year! Will be nice to visit Atlanta this time though. Maybe I can catch up with Patti if time at the conference allows? She always know the best spots to eat… The most exciting thing about this trip though is that I am going to experience Costa Rica and Argentina too, both countries are on my ‘bucket list’ for travel. Okay, it is a work trip, but I should get a good feel for both places. Tick! Tick! Two continents and three countries in 12 days is a big ask, and is going to be exhausting, but it can be done. So much work to pack in too, a number of important meetings, the conference in Atlanta and of course interviewing the final three candidates for the new Latin American marketing lead position.” As we can see from Jo’s contrasting experiences on the next page, new technology continues to drive service and influence behaviour in the travel space, taking

what was once an often cumbersome, paperbased and manual process and enabling a much more structured, mobile, personal and self-sufficient traveller experience. We are all familiar with how technology has revolutionised the booking and validation elements of air travel, as well as the sourcing of ancillary aspects such as accommodation and local transport; more freedom, more choice, more flexibility. If we examine Jo’s experience in the present day, her Smartphone really supported the vast majority of her travel movements – from booking and paying for her taxi to the airport, checking-in for her flight, informing her of her flight status and scanning her boarding pass through security. No doubt it was also used for a few purchases in the airport shopping area too! Before her day of departure, technology also supported numerous processes involved in the planning and booking of her trip. Moreover it supported her companies travel policy for managing business travel compliance. She recalled using a gamified on-line training resource to identify the steps in the process that she was required to be aware of, and also used on-line and mobile services to check her travel compliance and initiate workflows directly to KippaxKlean’s tax and immigration service providers. The compliance assessment that Jo undertook in just a few minutes was carried out on her phone and was computed using underlying immigration and tax logic. This logic, combined with the data the company held on Jo (nationality, home location,

INTERNATIONAL HR STRATEGY

INTERNATIONAL HR ADVISER AUTUMN

passport, business travel history etc.), and the information she entered (dates and locations of her proposed travel, and the ‘purpose of travel’, selected from a simple pick-list of activities) – resulted in a real-time assessment. It also enabled her employer, who has visibility to this assessment, as well as those for other company travellers, to be aware in advance of any potential compliance challenges and therefore any immediate or potential downstream actions required. Following the result of the assessment, at a touch of a button Jo was able to initiate a workflow to an immigration or HR representative for a quick telephone consultation. Alternative results would enable her to initiate an immigration case for a Business Visa or a Work Permit, or simply initiate the booking of her travel. Contrast this to the experience in the other ‘time zone’ ten years earlier. If employers were focussed on the compliance aspects of business travel at all it involved numerous manual, or at best email-driven steps and required the traveller, or their trusty assistant, to navigate the myriad individuals involved in supporting the process. It wasn’t that organisations were less concerned about business travel compliance ten years ago, certainly not where immigration was concerned, but awareness of tax and social security exposures have historically been somewhat hazy, unquantified and crucially, often unowned within organisations (you wouldn’t necessarily expect Jo to know anything about tax compliance, but she did question whether it had been addressed). Additionally obtaining the data points required to make a considered assessment of immigration, tax and social security compliance would have been a significant challenge in itself for busy in-house HR or mobility teams. Data often being tracked in several diverse systems with data consequently being difficult to access, interrogate and aggregate. As with Jo’s shift from the plane’s selection of available entertainment in 2007, to her wholly personalised entertainment on her own devices today, it has taken a paradigm shift in technology to enable these new data-based capabilities to free organisations and travellers alike from laborious manual processes with little audit capability. One other important aspect in this ‘time lapse’ analysis are personal and societal changes. Yes, technology clearly plays a role in shaping what we do and how we do it, but a lot of this change also comes from evolving human behaviours, often driven by the generational influences that shape us. We typically think of the millennial generation being at the forefront of this change, and there is certainly some truth in that – new ways of thinking, working and interacting have permeated the workplace as this generation first entered the workforce, and is now starting to take up senior positions. However, they are

not the only ones to embrace or benefit from it. By birth Jo is actually part of ‘Generation X’, but closely identifies as ‘Generation C’. Generation C is not defined by the year of your birth, rather it is a mind-set meaning that anyone can be a member. Typically those within this profile like to be empowered by technology, have an on-line presence and are comfortable being ‘connected’ the majority of the time. We saw from Jo’s present day experience that she was very happy to use mobile technology services throughout. She communicated in numerous ways utilising various platforms – email, instant messenger, mobile Apps, social media etc. Her way of working is best described as agile; she worked in the office, at home, on the plane and probably in the cab and in the airport lounge too! This willingness to be available online and to continually interact reflects a change in our culture; technology is the enabler. Note also that Jo took time to relax on her journey which is hugely important. Frequent business travellers often have to show great physical and mental resilience, therefore management of mind and body is critical in attaining the right balance to support peak performance.

We’ve seen from Jo’s ‘time travel’ experience how much has changed in the last ten years, and we can only wonder at the technological advances and innovations that will come along in the next decade. As organisations deviate from traditional international deployment models to more fluid approaches to mobility, greater numbers of the global workforce will be required to move locations for short periods. Technology will continue to evolve and support remote intercountry virtual communications, which may well result in the rate of increase of business

travel tailing off a little over time. Regardless, for the foreseeable future business travel will continue unabated and technology will continue to enhance agility, improve employee experience and enable real-time compliance in this area. We’ve seen from Jo’s ‘time travel’ experience how much has changed in the last ten years, and we can only wonder at the technological advances and innovations that will come along in the next decade. Thousands of employees will be planning or taking their next business trip as you read this article, perhaps you are planning a trip yourself? Let’s hope that they, and you, have as enriching and compliant a travel experience as Jo did! If you would like more information on Deloitte’s Business Travel Services, including PreTravel Assessment capability, Deloitte Passport (gamified business travel learning), or our wider Global Workforce offering please contact us.

DANNY TAGGART

Danny is a Director in the Deloitte Global Workforce practice, based in London. Danny specialises in Mobility Analytics, Business Travel Services and Technology Advisory Services. Danny Taggart, Director 2 New Street Square, London, EC4A 3BZ D: +44 (0)20 7007 1447 M: +44 (0)7900 886400 dtaggart@deloitte.co.uk www.deloitte.com/globalworkforce

CLARE ALLEN

Clare is a Consultant in the Deloitte Global Workforce practice, based in London. She specialises in mobility transformation, including the design and facilitation of Mobility Labs, an innovative and interactive way of addressing global mobility challenges. Clare Allen, Consultant 2 New Street Square, London, EC4A 3BZ D: +44 (0)20 7007 1447 claallen@deloitte.co.uk www.deloitte.com/globalworkforce

INTERNATIONAL HR ADVISER AUTUMN

Building A Business Case For Global Expansion In a recent Lighthouse Research study backed by Papaya Global, we explored some of the key aspects of global human resources practices, such as compliance, payroll, and scalability. The April 2017 pulse survey reached more than 125 employers that are either currently using or planning to hire workers outside the headquarters country. The research uncovered some actionable findings that can help HR, talent, and business leaders at firms with international operations to improve performance and mitigate risk.

Key Findings:

• Seven in ten employers are not fully confident in their knowledge of foreign compliance and employment requirements, creating risk and potential hurdles to success • The direction of expansion is driven primarily by the need to have a footprint in key target markets, opening the door for HR to drive business impact • 40% of employers are spending more than four hours per month, per employee, to onboard, pay, and communicate with global workers. This has the potential to hamper efficiency and performance.

Compliance Risk Mitigation Strategies Are Required

Compliance has always been a hot topic for HR leaders. As the organisational function is saddled with making sure the company stays out of legal trouble, there is incredible pressure to stay on top of issues and maintain operations without impacting business performance. Yet, the research shows us that for many companies, issues with compliance are not a matter of “if,” they are a matter of “when.” In the study, just 33% of global employers said they are aware of no gaps in general knowledge of foreign HR/labour compliance requirements, the foundation required to operate in international markets. That leaves nearly seven in ten employers that have knowledge gaps, whether small or large, that contribute to greater risk. One of those risks is basic payroll. According to one report from PwC [1], one of the biggest obstacles to ensuring compliance with

payroll requirements is determining taxes on a country-by-country basis. That same study pointed out that payroll errors cost the average company on the FTSE 100 Index between $12M and $38M per year. In addition, the biggest headaches come from local employment laws, which can be difficult to navigate for those unfamiliar with local customs and requirements.

Figure 1: Global Operational Challenges Local employment laws

48%

Lack of reporting or insight into operations

32%

Cultural differences

13%

Language barriers

Source: 2017 Lighthouse Research Global HR Practices Pulse Survey (n=128)

We can see that despite nearly a third of employers saying they have a handle on

We can see that despite nearly a third of employers saying they have a handle on compliance requirements, local employment laws are still a challenge for nearly half of international employers.

compliance requirements, local employment laws are still a challenge for nearly half of international employers. This includes employee terminations as well. Termination is a legal hotspot for employers that can often bring painful consequences, and just three in ten employers have high confidence in their termination process as a legally compliant practice. The clear answer here is a need for a risk mitigation and management strategy. HR and business leaders need to work together to identify where risks and gaps occur and how they might be best resolved. For instance, if the termination process presents significant risk, then hiring a local PEO to manage employees may offer a significant reduction in associated risk. PEOs, or professional employer organisations, allow global employers to outsource the transactional processes around hiring and managing workers while still retaining day-to-day control over their activities. One way to begin this analysis is with a premortem. Described in a Harvard Business Review [2] article on project management, a premortem is a valuable tool for identifying performance gaps. A premortem is the hypothetical opposite of a postmortem. A postmortem in a medical setting allows health professionals and the family to learn what caused a patient’s death. Everyone benefits except, of course, the patient. A premortem in a business setting comes at the beginning of a project rather than the end, so that the project can be improved rather than autopsied. Unlike a typical critiquing session, in which project team members are asked what might go wrong, the premortem operates on the assumption that the “patient” has died, and so asks what did go wrong. The team members’ task is to generate plausible reasons for the project’s failure. Completing a premortem gives the HR team an opportunity to find any opportunities for improvement so weaknesses can be shored up before they cause issues with the business. For many organisational leaders, compliance simply isn’t an exciting topic. However, when something does go wrong, it’s comforting to know that a blend of internal knowledge and external expertise is there as a cushion to prevent unforeseen problems and issues from crippling key business processes and outcomes.

GLOBAL HR PRACTICES RESEARCH SUMMARY Customers Are A Key Growth Driver

HR leaders must understand and support the needs of the business. While this seems like common sense, the concept has only recently taken root in human resources competency models, such as that released by the Society for Human Resources Management [3]. One of the key elements of a great HR leader is business acumen. In order to grow and expand the business on an international level, HR leaders must understand the organisation’s goals, products or services, and its customers, because customers are the biggest driver of where firms expand.

Figure 2: The Primary Purpose of a Global Workforce We’re growing quickly and 17% need more talent to scale We’re trying to diversify 17% and expand our talent base We’re not able to find affordable, qualified local talent

17%

We need a global footprint to be closer to our target market

50%

Source: 2017 Lighthouse Research Global HR Practices Pulse Survey (n=128)

Overwhelmingly, the biggest reason people use global workers is to create a global footprint closer to target markets. While each of the other reasons is relatively important, they fail to reach the level of connecting with and serving customers as a priority. Additionally, while talent has inherent value for the business, it is seen as having the most impact when it enables presence in key global markets.

Figure 3: The Value of a Global Workforce They enable us to be present in critical global markets They help us meet customer demands

it’s common to perceive HR as serving only internal customers. However, research has shown that human resources practices can not only impact common measures like satisfaction and retention, but also more concrete business metrics like revenue [4] and customer satisfaction [5]. Our new research reinforces this fact, pointing to a global talent presence as a critical link to customers.

Greater Efficiency Enables Scalability

Scalability is a key focal point for firms looking to expand globally. Without the proper infrastructure, scaling to meet customer needs is virtually impossible. In other words, imagine trying to manage a workforce twice as large with the existing processes, suppliers, and resources: this would restrict growth and success for virtually any company.

Scalability is a key focal point for firms looking to expand globally. Without the proper infrastructure, scaling to meet customer needs is virtually impossible.

63% 50%

They enable us to deliver even greater value to our customers

46%

They are a cost-effective way to support labour needs

29%

Source: 2017 Lighthouse Research Global HR Practices Pulse Survey (n=128)

The lesson here is that HR needs to have as much customer insight and connectivity as possible. Historically HR has been distanced from customers and their needs. In fact,

Efficiency is one of the best ways to lay a foundation for scaling the business. Nearly half of companies in the study said that efficiency was a challenging aspect of leveraging a global workforce, saying that they have people spending time on onboarding, managing, and paying global workers when they could be doing other high-value tasks. The data bears this out: 40% of companies are spending more than four hours a month, per employee, to manage, communicate, and onboard global workers. This is unsustainable. Consider this example of a company with 500 employees. If the firm has 10% of its staff working outside the home country as

global employees, it would require at least 200 hours to manage those workers each month (50 workers multiplied by a minimum of four hours each). That’s the equivalent of one full-time staff member solely dedicated to managing those 50 employees. In addition, there’s low confidence for many companies in their current payroll solution. More than 70% of employers say there are gaps or confidence issues in their existing global payroll solution. It goes without saying, but paying workers is not optional. A payroll solution that can’t grow with your business is a liability to the business. This may be due in part to the percentage of firms attempting to manage the complexities of the global workforce by solely relying on in-house resources.

Figure 4: Resourcing and Outsourcing Practices We’re managing everything 54% in-house We have 1-3 service providers helping us We have 4 or more service providers helping us

38%

Source: 2017 Lighthouse Research Global HR Practices Pulse Survey (n=128)

While some large firms may have the necessary resources and expertise to manage this process internally, the complex requirements of payroll, compliance, employee relations, and other relevant factors make this an incredible risk for smaller firms. When a small business has these errors processing their own payroll, the time to correct the issue takes away from running their company. - Carl Peterson, Vice President, the American Institute of CPAs [6]. While companies need external help to make the leap, the truth is that attempting to grow and bring on service providers, partners, and other firms can breed its own challenges. More than half of survey respondents said that transparency is a challenge in managing their global workforce because they do not have good insights into vendor and partner performance. Additionally, a lack of reporting and insight into local operations was identified as a key issue for one-third of companies in the study, falling only behind local employment laws as a challenge of international business operations.

Opportunities Abound In Global Markets

Despite the complexities, there has never been a better time to explore global expansion. In years past, it would have been incredibly challenging for smaller employers

INTERNATIONAL HR ADVISER AUTUMN

and those without country-specific expertise to grow outside their own borders. Increasing globalisation, talent shortages in key locations, and an increase in technology solutions all contribute to the opportunity for employers to seek out new markets to compete in. With new suppliers, legislation, and talent coming into the market every day, this can contribute to a more complex landscape. Thankfully, new technology solutions are enabling businesses to effectively manage the tangled web of compliance needs and vendor partners. Companies like Papaya Global are enabling employers to focus on running the business, prioritising high-value tasks through the use of technology to scale and manage a network of talent across the globe. In addition, the key concepts explored in this report can help HR leaders to become even greater contributors to the business and the bottom line, ultimately enhancing credibility and driving value for executives, customers, and employees.

In addition, the key concepts explored in this report can help HR leaders to become even greater contributors to the business and the bottom line, ultimately enhancing credibility and driving value for executives, customers, and employees. 8

Key Takeaways

• Companies should create a risk mitigation strategy to help ensure that any compliancerelated competency or knowledge gaps are covered, relying on external subject matter experts when possible to ensure quality. Additionally, finding good PEO partners can offload risk while allowing the employer to maintain connectivity with and direction of the workers themselves • HR and talent leaders must become more familiar with the customer landscape. Understanding how staff can best serve customers will help to align HR practices with business objectives. This practice connects key activities like recruiting, training, and employee relations to the underlying business needs, creating value and results • Employers must examine the new technology solutions in the market to ascertain the value they can bring to this global growth. Finding the right technology partner can make or break an employer’s long-term success in the global marketplace, and it’s too complex to navigate alone. Although global workers account for only 40% of the typical company’s workforce, the unique complexities of these workers require expert guidance, defined workflows, and standardised practices. Companies need to make sure they are in touch with the needs of their global workforce and have experts to manage this with a mix of global perspective and local compliance considerations.

Companies need to make sure they are in touch with the needs of their global workforce. References: [1] http://pwc.blogs.com/press_room/2015/11/ payroll-mistakes-cost-ftse100-businesses10m-30m-per-year-each-.html [2] https://hbr.org/2007/09/performing-aproject-premortem [3] www.shrm.org/certification/Documents/ SHRM-BoCK-FINAL.pdf [4] www.haygroup.com/downloads/ca/ hay_group_employee_engagement_are_ you_missing_something.pdf [5] www.aon.com/attachments/humancapital-consulting/2015-Trends-in-GlobalEmployee-Engagement-Report.pdf [6] www.americanexpress.com/us/small-business/ openforum/articles/payroll-mistakes-smallbusiness-owners-make-can-cost/

Research conducted by Eynat Guez, CEO of Papaya Global, partnered with Ben Eubanks, Principal Analyst, Lighthouse Research & Advisory.

Eynat has 15 years of experience in global HR and Employment. She founded Relocation Source in 2008 in Israel and Expert Source in 2014 in Asia; providing services to multinational companies to expand globally. Prior to that, Eynat was a COO at LR Group, global holdings group with extensive operations in developing countries. Papaya Global simplifies complex global challenges concerning growth, expansion, and workforce management. Combining long time expertise with innovative technology, Papaya provides a seamless, automated platform that is hassle-free, time efficient and ensures zero mistakes. Visit papayaglobal.com

Ben Eubanks is the Principal Analyst at Lighthouse Research & Advisory, a human capital management firm focused on cutting edge research and competitive practices in talent, technology, and innovation. Prior to joining Lighthouse, Ben worked as a practitioner for nearly ten years, culminating in a role leading HR at a fast-growing global technology startup.

INTERNATIONAL HR ADVISER AUTUMN

The Language Of Payroll When dealing with international assignees invariably a myriad of international payroll compliance issues also arise alongside the personal tax and social security issues, regardless of the size of businesses involved. There is no such thing as a typical international payroll and this could range from a relatively small business, which is employing an overseas resident for the first time, through to large multi-nationals who have acquired new employees through a recent acquisition and also the more traditional expatriate scenario with companies who are seconding employees to work overseas on a short or longer-term basis. In recent years the range of countries we have been asked about has also changed significantly with expansion beyond our European neighbours and familiar destinations such as USA and Australia, into the BRICS countries and destinations anywhere from Canada to the Ascension Islands on to Cambodia and everything in between. It is not surprising therefore that the language of payroll can vary dramatically from country to country and whilst we are very lucky that English tends to be the common international language used around the world, it is none the less necessary to test the understanding of the terminology we use on a regular basis. More than one contact has confessed to us in the past that they didn’t understand the practical application of a particular word or phrase but that they had sat through so many conversations where it was taken for granted that they knew what the words meant that it was rather difficult now to put their hand up and ask the question. Hopefully this article can provide a useful crib sheet for some of the payroll terminology which we use on a regular basis and can easily take for granted. NATIONAL INSURANCE CONTRIBUTIONS (NICs) is simply the UK name for social security contributions. When corresponding with those in overseas locations we typically revert to using the term social security but for businesses with a UK liability it is helpful if they are familiar with the way in which NICs are paid and the different categories which apply to earnings. Primary Class 1 NIC is an employee contribution, Secondary Class 1

is an employer contribution and we also have Class 1A for employer contributions on non-cash benefits, together with Class 1B which is collected when an employer meets an employee liability via a PAYE Settlement Agreement (PSA). Typically in the UK we will pay NICs at the same time as we pay employment taxes in one joint payment to HM Revenue & Customs (HMRC). Although practices vary from country to country, some locations such as Spain will not only pay the taxes and social security in separate payments but also at different intervals with the former being paid on a quarterly basis whilst the latter is paid monthly. SOCIAL SECURITY conversely is the name most countries use when talking about what we more commonly and usually refer to national insurance (NICs). Typically with social security or NIC’s when advising employers and assignees most focus and advice is on the contributions payable and not on potential benefits from any social security system as a result of the payment of such contributions. The challenge in seeking to advise on social security benefits, notably pensions, is that generally the rules (will) change significantly over time and the life of the assignee and you also are touching on investment decisions and personal planning for which most are not authorised or qualified. TAXES you may think are more straightforward although, whilst in the UK we think of social security payments/ NIC’s as a liability which is separate and distinct from tax, in some countries they will refer to social taxes. It is important to clarify whether the country in question has a personal tax withholding obligation for employees, rather than taxes being collected direct from the employee on a personal reporting basis. Another issue which should be clarified at an early stage when setting up a payroll in a new country is the question of who will be responsible for paying over the taxes and can they be paid from an overseas bank account. Whilst HMRC will accept overseas payments they do provide an alternative account number to which payments should be directed, but many countries such as Turkey will insist on payments being made from a local bank account. In the UK you will find that an additional charge will arise if a payroll business is able to offer payment solutions such as: BACS – Bankers Automated Clearing Services for making payments direct from one UK bank account to another.

CHAPS – Clearing House Automated Payment which is a UK system for same day payments, and other countries might recognise this as an RTGS – Real Time Gross Settlement system another example of which would be Canada’s LVTS – Large Value Transfer System. We think we are all familiar with the terms GROSS and NET pay but it is easy to become confused when people start talking about GROSS TO NET or NET TO GROSS. The majority of employees are paid based on a gross salary. That is the amount they will receive before the deduction of taxes and social security contributions. A job role is therefore generally advertised based on a gross salary but the net that the employee will receive will reflect their personal circumstances and the tax and social security/NIC rates applying. Typically we carry out a GROSS TO NET forecast based on a standard amount of tax free allowances to help an international employer understand what the likely net figure will be that is delivered to an employee. Often though, in an international payroll scenario, an employer will have a pre-defined net salary that they want to deliver to an employee and then a calculation to give the estimated gross salary will be necessary to achieve the desired result - a NET TO GROSS calculation. This is frequently the case for tax equalised individuals. The most frequent misconception we come across from an employer who is taking on an overseas employee for the first time, be it a secondment or a local hire is “It’s ok we are going to pay them through the UK payroll so don’t need to worry about local tax withholding”. Whilst occasionally a country will operate on a self-assessment basis for the employee, particularly if the company has no other presence in the country, it is rarely that matters are that simple! Whilst it is perfectly acceptable to pay an employee through the UK payroll whilst they are working abroad, it is by no means certain that this will be the end of your obligations, as many countries will require you to register locally as an employer, operate a ‘local payroll’ and withhold taxes and/or social security contributions in that country. This brings us to the confusing world of SHADOW, GHOST, MIRROR and SPLIT payrolls. A SHADOW payroll is a key component in maintaining compliance for an expatriate employee. Typically an employee may be paid from their home country payroll but will need a shadow payroll to be run in the host country to ensure payroll compliance obligations are met.

TAXATION In addition to SHADOW payrolls you may also come across references to either a GHOST or MIRROR payroll. In essence though, these terms are all used to denote that it is a secondary payroll, run in the background, it is not the payroll which delivers the actual net salary to the employee. Instead, this secondary payroll may reflect the salary paid in the home country, but with deductions for tax and social security based on host country regulations. Alternatively, these terms may also be used where the employee is paid via the host country payroll but a secondary payroll is required in the home country, perhaps to ensure continued contributions in the home country social security scheme or to maintain participation in a company pension scheme. To complicate matters you may find that these terms are used differently around the globe and whilst in some countries they are interchangeable, in others they will define which type of secondary payroll is being run. So for instance looking at Sweden, a Ghost payroll may be maintained for local compliance and reporting purposes, whilst a home country Shadow payroll would be utilised for an employee who was being paid via the host country payroll but needed to remain in the home country social security system. Not to be confused of course with the phrase GHOST Employee which has a different meaning altogether, and typically relates to a situation where a fraud is being committed through the use of fictitious employees. A SPLIT payroll arrangement is similarly used to maintain compliance in home and host countries for an expatriate employee, but in this scenario, both of the payrolls will be used to deliver part of the net salary to the employee. As well as the issues covered above in relation to other secondary payroll arrangements, a split payroll solution may be preferred because an employee needs to maintain accommodation in both locations perhaps because a posting is unaccompanied, and therefore the employee needs to receive funds in both locations to assist with meeting their liabilities, or it can be utilised to help with fluctuations due to currency exchange rates. Another term widely used is the phrase BENEFITS IN KIND which in the UK refers primarily to the non-cash elements of a remuneration package, the most popular being private medical insurance and company cars. Other countries might refer to these items as FRINGE BENEFITS or PERKS. Australia and New Zealand for instance have FBT or Fringe Benefits Tax which is paid on certain benefits provided by employers. In the UK in particular, it is important to identify which items are effectively a cash reward, perhaps the reimbursement of an expense item which does not meet the qualifying standards for exemption as a wholly business expense. Such payments

will be considered to be part of salary and should therefore be subject to tax and social security/NIC via the payroll. Whereas a non-cash item such as medical insurance which is provided under a company’s group insurance scheme is generally reported post tax year end, and whilst the employee is taxed on the value of the benefit, under current rules only the employer will pay social security contributions on the value of a non-cash benefit, there are no employee social security contributions. We should add that it is now possible for employers to opt to payroll such non-cash benefits on a voluntary basis and we have a new phrase PAYROLLING BENEFITS IN KIND to denote this arrangement. In the UK we also have the concept of a SHORT-TERM BUSINESS VISITOR, and whilst again the terminology might vary from country to country, many jurisdictions now have separate rules which apply to BUSINESS VISITORS or BUSINESS TRAVELLERS. Rather than an employee who is seconded to work abroad, the business visitor we have in mind will be an employee of an international company who makes short trips to countries on business and most likely will visit several countries a year, if not several a month. Whilst the visits may only be of a day or two in length, in some countries such as the UK or Canada, this will be sufficient to trigger withholding obligations and or reporting obligations. The obligations for business visitors may vary depending on the type of group entity which is present in the country visited, for instance whether this is a subsidiary company or, a branch office of the company which employs the individual in question. The purpose of the visit may also be important to determine the status of the visit for tax purposes. The taxation of business visitors is under increasing scrutiny by HMRC in the UK and international organisations which have a UK presence ignore the obligations at their peril. We cannot finish a discussion on the language of international payroll without giving some consideration to some phrases which you might come across, that although not directly related to the payroll tax withholding process, none the less represent key issues which may arise in conjunction with an international employment situation but are all too often overlooked when planning assignments and business trips. The concept of PERMANENT ESTABLISHMENT and consideration of TRANSFER PRICING are both Corporate Tax matters which fall outside the scope of payroll, but they are both complex areas which may be directly impacted by an international secondment or enhanced business presence

due in the local jurisdiction. Transfer Pricing looks at the pricing of transactions between two companies within the same business group and therefore the recharging of employment costs will fall within the scope of this. Suffice to say that the rules for Permanent Establishments in particular are under close scrutiny due to the new BEPS action point which is set to tackle the artificial avoidance of Permanent Establishment Status so we will leave you with one final definition as follows: BEPS – Base Erosion and Profit Shifting. These new rules will see greater alignment of costs and value creation going forward. As mentioned, the action points will make it harder for businesses to avoid the creation of a permanent establishment but also much harder for individuals to avoid tax in an overseas jurisdiction, as more business will have to recharge costs, which in turn will reduce the tax treaty exemptions available.

Summary

It is sometimes too easy to assume that all understand the payroll terminology used or indeed that the same terminology is used across the world. If you are not sure of the words being used by your tax or payroll adviser then do ask. A clear understanding at the outset is better for all.

ANDREW BAILEY

Andrew Bailey is global leader for BDO International’s expatriate tax services and 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. He is indebted to Karen Foster for her immense contribution to this article. 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 or Karen Foster on +44 (0) 1473 320747, Karen.Foster@bdo.co.uk

GLOBAL TAXATION

Global Tax Update CANADA

Voluntary Disclosure programmes consultations In June 2017, the Canada Revenue Agency (CRA) released a discussion paper relating to their Voluntary Disclosures Programme. This paper outlines the CRA policy for disclosures involving income tax and source deductions. Of considerable interest are the proposed changes which narrow the eligibility for the Voluntary Disclosure Programme (VDP) and impose additional conditions on taxpayers applying under the programme. If the proposed changes are implemented, the effective date would be 1 January 2018. Overview The VDP promotes compliance with Canada’s tax laws and regulations by providing taxpayers with an opportunity to voluntarily come forward and correct any previous omissions in their dealing with the CRA. Under the current VDP, taxpayers can request that CRA provides relief from prosecution and penalties. Also under the current programme, anyone can use the VDP, including individuals, businesses, employers, payers, trusts and estates, whether a resident or a non-resident of Canada. The CRA has recently conducted a review of the VDP and has begun consulting with the general public on the proposed changes to the programme. It is expected that the Minister of National Revenue will announce formal changes to the programme in the fall of 2017. Canadian Non-Resident Employers – International Payroll The information outlined below is to inform and provide Canadian non-resident employers with the importance of disclosure to the CRA and the CRA’s upcoming changes to the VDP. We commonly use this programme to assist non-resident employers to ensure all filings and tax obligations are up to date in Canada, as well as other noncompliance. For example, subject to meeting certain tests, the non-resident employer certification offers the removal of the requirement to withhold tax from the salary, wages, and other remuneration that the employer pays to “qualified” non-resident employees. In many cases, the Canadian nonresident employers were not compliant with Canadian payroll taxes, therefore a VDP was necessary to bring all filings and obligations up to date prior to the non-resident employer qualifying for the certification. Proposed Changes To Make The VDP Tougher • Under the proposed VDP, the “no name” process will be eliminated. However, prior

to a VDP application, taxpayers will be able to participate in a preliminary discussion about their situation on a “no name” basis for a better understanding of the VDP programme process and the risks involved • The CRA has proposed two tracks for income tax disclosures, one for applications under the General Programme, and one for applications under the Limited Programme. Acceptance is not guaranteed under either programme. If accepted under the General Programme, applications will be eligible for penalty relief and partial interest relief. In contrast, applications that disclose major non-compliance will be processed under the Limited Programme and if accepted, will receive reduced relief under the VDP • The taxpayer must include payment of the estimated taxes owing together with their VDP application • Corporations with gross revenue in excess of $250 million in at least two of its last five taxation years will generally not be accepted, as the CRA considers that such corporations should follow normal procedures to amend their tax filings. BDO Comment Canadian non-resident employers with employees in Canada should ensure they are compliant in Canada. If not, determine whether or not a VDP can be completed prior to the proposed upcoming changes.

NETHERLANDS

Days of physical presence test Based on the OECD model convention, most double tax treaties give the right to tax employment income to the country in which the employment activities are performed as well as the country of tax residence. However, an exception is made to this rule, with respect to the income from employment when the employee does not spend more than 183 days (in a calendar year, tax year or period of 12 months beginning or ending in the tax year). When the other treaty conditions (no employer and a permanent establishment in the country of the activities) are also fulfilled, only the country of residence of the employee will be entitled to tax the income. The counting of the days of presence seems straightforward. If, at any moment, a tax payer is present in the working country, this is considered as a full day of physical presence and needs to be included for the test. However, in a recent court case amongst others, the calculation of the days was at stake. In this court case a resident of Belgium had been working 181 days in the Netherlands in the

reference period for calculating the 183 days. Besides these working days, the tax payer was present in the Netherlands for private purposes on several other days. Therefore, the total number of physical days of presence in the Netherlands had exceeded the 183 days. The lower Dutch courts decided that the number of days the taxpayer was present in the Netherlands for private purposes should not be included for the physical presence test. As a result, since it was determined there was no material employer or permanent establishment in the Netherlands, the Dutch court decided that only Belgium had the right to tax the income relating to the Dutch working days. Finally, the highest Dutch court has decided that, based on the explanation of the word presence (commentary on the OECD Model convention), all days of presence (working or non-working) in principle need to be taken into account for calculating the number of days of physical presence. Calculation of the number of days is indeed straightforward and is now consistent with most other countries approach. BDO Comment As a consequence of the above, please bear in mind that all days should be taken into account to determine your tax position. The days spent in the other country for non-business purposes could change your tax position.

NETHERLANDS

Evaluation of the 30%-ruling published The results of the report ‘Evaluation of the 30%-ruling’ were recently put forward to the Dutch parliament. The report concludes that the 30%-ruling is efficient and effective. The 30%-ruling is easy to use for employers and the Dutch tax authorities. In short, the conclusion is that the 30%-ruling should continue, but to a certain extent. In the report the following possible adjustments (not necessarily cumulative) have been suggested: • Shortening the duration of the 30%-ruling (currently eight years) to five or six years • Extend the 150 kilometer limit • Reduction of the 30%-ruling at an income above €100,000 • Other adjustments (like another percentage than 30%), but these are less obvious. The parliament should decide whether or not to make any adjustments in the current regime. Almost simultaneously, but independent of this report, another report by the Netherlands Foreign Investment Agency (NFIA) was also published. This report relates to the (positive) impact of the 30%-ruling on the Dutch business climate. The results are similar to the

INTERNATIONAL HR ADVISER AUTUMN

‘evaluation of the 30%-ruling’ report. Both reports provide insight into the effects of the 30%-ruling in the Netherlands, confirming that the 30%-ruling is indispensable.

in employing local Saudi nationals. Saudi Arabia is not alone in this. Companies operating in the kingdom should ensure they comply with the new expat levy.

The 30%-Ruling In A Nutshell By means of the 30%-ruling, under conditions a tax-free reimbursement amounting to 30% of the income can be paid to certain groups of employees (with a specific expertise) who are seconded to the Netherlands. The 30% reimbursement is intended to cover the extra cost (extra-territorial costs) for working outside the country of origin. To qualify for the application of the 30%-ruling, the expat should meet the following criteria: • The expat should be hired from abroad or seconded to a domestic employer in the Netherlands (the expat must be living at least 150 kilometers away from the Dutch borders during two thirds of a 24 month period before the start of the activities in the Netherlands) • The expat should have specific expertise that is not or scarcely available on the Dutch labour market (over 30 years of age a gross annual salary of at least EUR 37,000. Younger than 30 years of age and in possession of a Master degree a gross annual salary of at least EUR 28,125) • The expat must be included in a Dutch payroll, i.e. the salary of the expat must be subject to Dutch wage tax withholding.

Expatriates still form a key part of the Saudi Arabian workforce, however the government is continuing to try and promote an increase in employing local Saudi nationals.

BDO Comment Whilst we expect the facility to continue do watch out for possible revisions to current requirements for eligibility and terms.

SAUDI ARABIA

New expat levy The government of Saudi Arabia recently introduced measures to increase the number of Saudi nationals employed locally. Extensive use of foreign labour has helped the kingdom develop in recent decades and the demand for expatriates has been widespread, both in low skilled services and highly specialised areas such as medicine and law. The Saudi Arabian government has recently been embarking on a nationalisation process, mainly involving raising the barriers to entry and to renewal of contracts. This has had limited success. A new expat levy has therefore been introduced from July 2017 for expats working in commercial entities. There are two kinds of fees; the first relates to the number of family members an expat has and the second is in respect of the Labour office fee already imposed on companies with expat employees. BDO Comment Expatriates still form a key part of the Saudi Arabian workforce, however the government is continuing to try and promote an increase

SWEDEN

Proposal from the Swedish Tax Agency regarding implemenation of the term economic employer Sweden is one of the few countries not applying the concept of economic employer, but the legal employer. In a proposal set forward by the Swedish Tax Agency, the concept ‘economic employer’ has been suggested to be incorporated into Swedish domestic law. The legislative changes, if passed, would apply from 1 January 2019. Proposed Change The proposal mainly focuses on the change of view from ‘legal employer’ to ‘economic employer’ and will mostly affect the determination of a Swedish non-tax resident’s tax liability under ‘the 183 days rule’ found in Swedish domestic law. The domestic rule is similar to the one commonly found in the employment article 15 p.2 of the OECD’s model tax convention. Current Domestic Legislation Generally, a non-tax resident is liable for tax on income deriving from work performed in Sweden. However, with the exemption to the general rule there is the ‘183 days rule’, which is based on the same rule found in the OECD’s model convention. Under current

Swedish domestic law, a non-tax resident could be exempt from Swedish tax liability under certain provisions. The income could be exempt if the employee would be paid from a foreign employer without a permanent establishment in Sweden, the employee would not be present in Sweden for more than 183 days in a 12 month consecutive time period and no costs are recharged to Sweden. The result is no tax liability in Sweden based on domestic legislation. Swedish domestic law uses the concept of ‘legal employer’, that is the company which the employee is formally employed by and receives remuneration from, is considered to be the employer. This is regardless of which company/employer actually benefits from the work performed or bears the actual cost for the employee (hence ‘economic employer’). Sweden has not been able to tax income which the tax treaties in general allow it to, as the tax treaties cannot extend the right to tax. The Swedish Tax Agency has therefore suggested a change of view from ‘legal employer’ to ‘economic employer’ in order to be able to tax Swedish non-tax residents who work for and are paid by a foreign employer. The purpose is also to achieve a more balanced competition between workers employed by a company in Sweden and employees who are employed by a foreign company and are sent to work at its Swedish establishment. BDO Comment The changes may lead to an increased number of tax liable employees working in Sweden. The proposed change of the concept will not affect which company/ employer has the obligation to report and pay tax withholdings and employer social contributions in Sweden. However, there could be a situation where the employee has to assume these obligations.

USA

Potential changes to US state withholding requirements Early in Summer, the US House of Representatives passed H.R. 1393 the “Mobile Workforce State Income Tax Simplification Act of 2017” that prohibits the wages or other remuneration earned by an employee who performs employment duties in more than one state from being subject to income tax in any state other than: (1) the state of the employee’s residence, and (2) the state within which the employee is present and performing employment duties for more than 30 days during the calendar year in which the wages or other remuneration is earned. The bill exempts employers from state income tax withholding and information reporting requirements for employees not subject to income tax in the state under this bill. For the purposes of determining penalties

GLOBAL TAXATION related to an employer’s state income tax withholding or reporting requirements, an employer may rely on an employee’s annual determination of the time expected to be spent working in a state in the absence of fraud or collusion by such employee. For purposes of this bill, the term “employee” excludes: professional athletes; professional entertainers; production employees who perform services in connection with certain film, television, or other commercial video productions; and public figures who are persons of prominence who perform services for wages or other remuneration on a per-event basis. The bill does not apply to any tax obligation that accrues before the effective date. The bill takes effect on 1 January of the second calendar year that begins after the enactment of this bill. Companion US Senate Bill S. 540 was introduced in the Senate on 7 March 2017. This is the third time the House version of the legislation has been cleared and while the Mobile Workforce State Income Tax Simplification Act of 2017 would create a uniform national standard and would significantly simplify compliance with all the different state laws, there are those who are opposed to the bill. Several states like New York, Massachusetts, and Illinois have publically stated that they stand to lose revenue if the

bill is enacted and the Congressional Budget Office projects that the bill could cost states a combined $78 million in 2020. The American Institute of CPAs (AICPA) and organisations representing multistate corporations welcome the bill since currently employees who travel outside their state of residence for business purposes can be subject to onerous administrative burdens to file an income tax return in every state they work in even if they were in a state for only one day. AICPA President and CEO Barry C. Melancon said “This legislation strikes an equitable balance, and we urge Congress to take swift action so the bill can become law and relieve the burden imposed on countless US employers and employees by inconsistent state laws.” BDO Comment While the bill has bipartisan support in the House and Senate, and many lawmakers agree that a de minimis threshold is necessary, we will need to wait and see if the Senate passes S. 540 and what changes, if any, they might make to the legislation. Prepared by BDO LLP. For further information please contact Andrew Bailey on 0207 893 2946 or at andrew.bailey@bdo.co.uk

International HR Adviser Register now for International HR Adviser’s monthly email newsletter, and invitations to the free Global HR Conferences we organise. Simply email helen@internationalhradviser.com and put Newsletter in the subject, and you will receive up to date information on Global Mobility every month, as well as a complimentary invitation to our Global HR Conferences.

INTERNATIONAL HR ADVISER AUTUMN

Re-engineer International Resourcing We are becoming increasingly familiar with the changing nature of work and employment relationships. However, the impact on international resourcing is still emerging amongst a great deal of uncertainty and international employers need to prepare. International resourcing challenges are about managing people involved in increasing varieties of international or crossborder employment. International resourcing is more than just expatriate programme management; the rapidly changing human context of internationalisation also needs to be factored in.

Investment In Human Capital

Human capital is defined by the OECD as “the knowledge, skills and competencies embodied in individuals that facilitate personal, social and economic well-being” and should be a key idea driving effective international resourcing. What contributes to an individual’s fit to an international assignment is a set of skills that form capital in which employers and employees make a variety of investments. Individuals need to have a variety of characteristics to suit specific cross-border employment scenarios, including those with development potential. In addition to the technical knowledge and skills related to a job role, an individual will need to demonstrate an ability to operate in an increasingly complex and diverse international workplace and show a high level of cultural literacy, requiring a talent management approach that is able to evaluate an individual’s cultural background and their cultural intelligence.

Weaknesses In International Resourcing

International resourcing is about handling the key challenges facing organisations in building a talent pool of internationally mobile individuals and building the infrastructure to support them. • How do you attract, recruit, develop and retain talented people to meet immediate and future strategic international objectives and business needs? • What are the talent management issues that you believe you would have to deal with?

• What would be the key elements of your talent management strategy, and what would you need an employee to do to make it happen? International talent management is a broader concept than plotting a series of international assignments for young high-potentials. International assignments have such an impact on an individual’s personal life and career that to only focus on managing them through the process is less than it should be; the assignment should also be an opportunity to ensure these individuals are developed. A place to start is to reflect on some fundamentals: a) Do you understand what kind of internationally mobile talent you need? b) Do you understand how your talent management practices fit with each other in home and host locations? c) Do you know whether your key talent is compatible with your corporate culture in each location? d) Do you have a high level of management commitment to developing staff in all locations? e) How do you respond to local demands while maintaining a coherent HR strategy and management approach? f) How do you make the company more attractive to potential candidates outside their home country?

Preparation And Planning

International talent management should be a key part of preparing and planning for international assignments. There are many factors to consider including: • Reasons for employing international workers – e.g. specialist skills, to fill long-term vacancies, developmental assignments, to fill short-term vacancies, unskilled or low-skilled vacancies due to labour shortages, succession planning etc. • How to identify, recruit, deploy and develop the appropriate talent for those cross-border activities. There is no one way to approach international talent management. Across industry sectors and sizes of organisation there are differing perspectives on what constitutes talent; some focus on gifted high-flyers and others take a broader perspective. But it usually refers to people who have the potential to make a significant impact. It incorporates areas such as performance management, management development, succession planning, and organisational capability. Many organisations who manage internationally mobile employees lack focus on the international talent aspects.

Key Issues That Limit The Effectiveness Of International Resourcing: 1. Lack of strategic vision

International resourcing challenges are about managing people involved in increasing varieties of international or cross-border employment.

• There is no strategic direction for international resourcing or “set objectives” which support HR and corporate strategy and/or drive cost reduction and service excellence • The strategic importance of international resourcing and the management of an internationally mobile workforce are often overlooked by organisations.

2. Lack of a coherent operations strategy

• Supply chain (e.g. decisions on sourcing professional expertise and transactional support) is managed on an ad-hoc basis with service and cost consequences • The interface with other support functions, such as payroll, pensions and share schemes, is fragmented, and savings from tax & social security planning ideas are often not realised • Organisational arrangements are loose, responsibilities and reporting lines are unclear, and staff often lack skills or training to perform their roles.

INTERNATIONAL RESOURCING 3. Lack of performance metrics and monitoring mechanism

• No mechanism for benchmarking cost, quality of service, and effectiveness of compliance of the international resourcing operation.

4. Lack of co-ordination with back-office operations strategy

• While organisations pursue cost reduction through ambitious outsourcing arrangements for their back office operations, they focus on domestic services - ignoring the global needs of international resourcing. Now more than ever before, the way organisations approach international resourcing is in need of refocusing to: • Ensure that they maintain their competitive position in international markets • Leverage off their investments in back office operations • Build operational resilience to the pace of change. Re-engineering the international resourcing service will maximise the value it adds to the organisation through the fundamental rethinking and redesign of the service aiming to: • Achieve improvements in critical performance measures such as cost, quality speed, dependability of the service, and global compliance • Assist the organisation in developing competitive advantage in global markets by ensuring that talent and man-hours are transferred abroad at optimum cost for the receiving business to remain competitive. The aim should be to make a significant difference in the cost and quality of the international resourcing. Success would be measured on the basis of measurable, bottom line benefits for the organisation. Key to the development of a solution is reconciling all the aspects of international resourcing, such as, strategy, policy, tax planning and operations (including employment law, immigration services, HR, and tax planning).

Reconciling the interdependencies between the various aspects can multiply the impact of the improvements in each, for example, cost savings and service improvements will be a multiple of what would have been achieved if each aspect was improved individually. Approaching international resourcing as a micro – business unit that aims to achieve significant improvement on performance can be supported by the use of a balanced scorecard approach. This is intended to elicit a comprehensive evaluation of the current status of each of the aspects and identify areas for improvement.

Building An International Talent Management System

Building an international talent management system is based on a formal policy that defines the criteria and processes for identifying and retaining talented employees. The Gateley framework for this type of system is based on the following approach: • STEP 1 - Define your strategic talent – identify strategic types of expatriate for your organisation. Is it only highly skilled cadres? This can be very sector specific e.g. hospitality and recruitment sectors may be more reliant on low-skilled migrant labour than, say, financial services. • STEP 2 - Identify your key drivers for cross-border employment – changing demographics, changing work structures, cross-border differences, changing employer/employee relationships, changing immigration policies, and increasing diversity in the workforce. • STEP 3 - Determine your core objectives – attract, develop, retain, mobilise, align with strategy, internal consistencies, cultural embeddedness and ensure a balance of global and local needs. • STEP 4 - Design practices and policies that fit your organisation–including workforce differentiation/segmentation,

1. IR Strategy

2. Policy

• Relevance to corporate & HR strategy • Clarity • Dissemination • Effectiveness

• Alignment with IR strategy • Consistency • Effectiveness

3. Operations

4. Compliance

• Cost effectiveness • Quality of service • Integration with back office operations

• Global status of effectiveness of planning • New ideas to improve

assessing the suitability of an employee for an assignment and also intercultural training/support, career development planning, global leadership development, i n te r n at i o n al rewa rd p la n n i n g , performance management appraisal, repatriation and termination planning.

Summary

Outside of the larger multinationals, international resourcing often focuses on expatriate management with no, or very little time devoted to the talent management that actually drives successful assignments. Why is this? A possible explanation is a lack of capacity or senior buy-in to the strategic role of global mobility. Also, in some industry sectors that are reliant on low-skilled migrant labour, there can be a reluctance to recognise these resources as strategic assets. With the pace of international business transformation continuing to accelerate, a more strategic approach will benefit even the smallest organisation.

STEVE ASHER

Steve has over 25 years’ experience of working with a range of organisations and internationally mobile individuals across a number of sectors, advising on cross-border employment including international reward planning, global mobility management models and policies , procedural design and project management. Leading Gateley’s new Global Mobility service, Steve provides forward-thinking business advice on all aspects of international HR, talent management and global mobility strategies alongside the commercial advice that you would expect (tax advisory and compliance, employment law and immigration law). For more information on Gateley’s new global mobility offering visit gateleyplc.com/services/global-mobility.

Steve Asher, Director t: +44 (0) 207 653 1724 e: steve.asher@gateleyplc.com

INTERNATIONAL HR ADVISER AUTUMN

Impact Of Digital On Global Mobility Almost half (47%) of mobility teams have invested in new technology over the past three years to improve their visibility and management of internationally mobile employees (see Fig. 1). This technology is providing benefits across a range of factors; it is boosting global mobility’s ability to provide predictive data and improve workflow processes and financial modelling, and seems to be enhancement of the ability to measure ROI from assignments. And beyond these ‘hard metrics’, it is also improving the assignee experience and that of their families. Positively, for those companies where investment has already been made in technology, many seem to have entered a cycle of continuous transformation and plans are being made to re-invest in the next 12 to 18 months. On the flip side, companies who have not yet made the leap are in danger of getting left further and further behind as the majority have no plans to invest in technology in the future.

Businesses are starting to invest in the appropriate technology to help boost their visibility and management of mobile employees

This technology has the potential not only to provide predictive data, but also improve workflow processes and financial modelling. Interestingly, amongst global mobility leaders, who have adopted leading industry practices, over three quarters (77%) have invested in technology over the last three years to boost their visibility and management of international assignments. What this perhaps suggests is that having this technology infrastructure in place is enabling these global mobility leaders to adopt best practice.

Investing in technology is helping businesses to improve the measurement of ROI

When contemplating investment in a global mobility technology solution (whether that is purchased or delivered by an external global mobility services firm), the ability to improve the measurement and tracking ROI on individual assignments is significant. 65% of those who have technology investments in place are measuring ROI

(always or sometimes) compared to 30% of those who have not yet invested. In particular, those who are showing consistent best practice by always measuring ROI of individual assignments is 31% for those investing in technology, but only 9% amongst those who have not invested.

North America is leading the way on technology investments

North America shows great adoption technology as part of their global mobility programme more than any other region, with 77% having invested in technology over the past three years, compared to only 47% across all global mobility teams. What’s more, of the 23% who have not yet invested in technology, 14% – just over half – are planning to invest in the next 12-18 months. Unsurprisingly, therefore, North America

FIGURE 1: Number of global mobility teams who have invested in new technology over the past 3 years

FIGURE 2: What are the advantages of investing in technology?

2017 GLOBAL MOBILITY SURVEY is also leading the way on ROI, with almost half (48%) always measuring ROI on individual assessments compared to only 19% across the world. When it comes to tracking assignments, it is North America who are most likely to have invested in specialist in-house software, 46% versus 23% globally, or have a connected system, 37% versus 21% globally (see Fig.4). Global mobility teams in North America are also leading the way on using employee engagement metrics, such as job progression, employee retention and key skill development, to evaluate their ROI on individual assignments. As we see in Fig. 5, North American teams are more likely to be using these as their primary criteria for evaluating ROI.

Business leaders endorse investment to better measure ROI and have predictive data to make informed business expansion decision-making

In line with the more commercial focus of business leaders, overall, they report more strongly the benefits of investment in technology to enhance the management information that they receive both to enhance a better understanding of the return on investment from assignments, and also the ability to use predictive data for enhanced decision-making for business expansion and projects. This indicates therefore that the North American market is better leveraging technology through acquisition of technology or as an embedded solution in their global mobility outsourcing partner’s service delivery model, and it should be borne in mind that North America was an early adopter of in-source, out-source solutions since the 1990s. Those who have invested in technology are much more likely to be performing well at providing business management with hard and soft metrics to assess ROI and tracking meaningful data to help retain and develop talent. It also highlights that global mobility professionals see an opportunity to enhance the assignee and their family experience – which may be less visible to business leaders but is critical to achieving an engaged assignee who is not distracted by an accompanying family with integration issues in the new host location.

Technology has a key role to play in enhancing the assignee experience

Retaining and nurturing talent is a key business outcome from the survey results, and it is worthy to note that there is consensus between business leaders (34%) and global mobility professionals (32%) that one of the

FIGURE 3: Number of mobility teams in North America who have invested in new technology over the past three years

FIGURE 4: What mobility teams use to track costs - North America compared to the rest of the world

FIGURE 5: Metrics used to evaluate ROI of assignments by North American and global teams

FIGURE 6: Are global mobility teams planning to invest in technology in the next 12 to 18 months?

key benefits of their technology investment is an improved experience for their assignee. And this benefit extends past just the assignee themselves; both global mobility professionals (24%) and to a lesser extent business leaders (15%) also see technology as boosting the experience for their assignee’s families as well.

‘Halo’ effect of technology investment

It is positive to hear that almost half (47%) of businesses are planning to invest in technology in the next 12-18 months (see Fig. 6). However, rather than this indicating that those teams who are not yet investing in technology are going to start investing,

INTERNATIONAL HR ADVISER AUTUMN

FIGURE 7: Number planning to invest in technology in next 12–18 months for those have already invested vs. those who have not yet invested

what we are finding is that it is much more commonly those businesses who are already investing in technology who plan to keep investing going forward. Amongst those businesses who have already invested in technology over the past three years, 68% are planning to invest again over the next 12-18 months in a cycle of continuous transformation. This is in stark contrast to those businesses who have not invested yet, where only 28% are planning to

start investing in the future (see Fig.7). In common with the overall gap in expectations and communications between business leaders - who seek commercial dialogue with their global mobility teams - if global mobility professionals are not demonstrating the business case and payback from investing in technology, then they will continue to miss the opportunity to deliver better qualitative and quantitative data to drive more informed support of commercial decision-making.

With almost 1,000 HR and global mobility or business leaders that took part across 56 countries, it’s one of the world’s leading global mobility surveys. The total number of international assignees and business travellers being managed by global mobility teams who responded to the survey are estimated to be in excess of 500,000. The survey was conducted by an independent research organisation on behalf of Santa Fe Relocation. To request a complimentary full copy of the 2017 Santa Fe Global Mobility Survey report; Embedding Business Strategy in Global Mobility, please visit: www.santaferelo.com/globalmobilitysurvey

FREE SUBSCRIPTION TO AUTUMN

ISSUE 70

2017

nal Internatio viser HR Ad g The Leadin

Magazine

ational HR

For Intern

ER INSIDE

IPTION OFF

FREE SUBSCR

als Worldwid

Profession

The Leading Magazine for International HR Professionals Worldwide

Visit our website www.internationalhradviser.com and complete the online registration. Landscape Immigration INCLUDE: spots A Changeful FEATURES – Global Hot Impact Of Traveller • Immigration liant) Time sible World y • Global mp pon bilit (Co Res Mo A Socially y: Diary Of e Of Global Thing’ In A Evolving Rol al HR Strateg The Right ate Internation Payroll • The e’ & ‘Doing igration Deb Of sibl ge Imm der Pos gua ish Lea y Lan at Brit bable’ & ‘The bal Mobilit Taxation: The And The Gre n ‘The Pro n From A Glo gdom: Brexit nce Betwee Expectatio – United Kin The Differe tion – A Key Immigration Communica al Resourcing • Strategic r Internation ation Update Re-enginee Global Tax THIS ISSUE: PANEL FOR ADVISORY

International HR Adviser is the leading, quarterly magazine for International HR professionals globally. It has been publishing for 13 years and covers topics such as International HR Strategy, Benefits, Tax, Global Tax, Technology, Compensation, Trends in International Assignments, Healthcare, Insurance, Surveys, Country Profiles, Immigration, Moving & Relocation, Spousal Support, Education, Property, Cross-Cultural Issues, Case Studies, and more.

For further information please call Helen Elliott on +44 (0) 208 661 0186 Email: helen@internationalhradviser.com Website: www.internationalhradviser.com 20

HEALTH & SAFETY

The Difference Between ‘The Probable’ And ‘The Possible’ And ‘Doing The Right Thing’ In A Socially Responsible World The world is having to find ways to keep its populations, employees and families safe and secure - pre, during and post - any kind of disaster. From the incredible and unpredictable impact of mother nature’s natural disasters, to the sadly inhumane and planned terrorist activity affecting the world’s major cities – an increase in the focus on health and safety, risk, compliance and so importantly - disaster recovery - has become a critical success factor for every individual, family, company, supplier and stakeholder. On a corporate level, the global communities of local, national and international companies and authorities are having to consistently review their policies and procedures. They are having to teach their teams how to navigate the outcomes of these extremes, and of course, everything and every eventuality in between. Whether it is one life or 100 lives, the same process of understanding what could/should have been done to reduce the risk of a disaster happening (whether terrorist, natural or human error) is a must. Of course, the scale is different and the impact more intense with higher numbers, but the importance to educate and protect is just as high. Understanding and evaluating ‘risk’ is the primary activity. Putting in processes after the fact is not ideal in any situation, but trying to get global teams ready for any eventuality, is also nigh on impossible. A colleague of mine pointed me to VUCA. As the Oxford Leadership piece on VUCA, by Pablo Tovar states; ‘One of the key failures is to lead us to find what is probable rather than what is possible. The VUCA environment means that we must focus on what is possible (because anything can happen) rather than on what is likely to occur (which is determined by what happened before)'. Firstly, what do you focus on? What is the priority? What are you trying to protect? And how much is it going to cost to ‘do the right thing’? Should we start on the past disasters to learn from or should we at least have an eye on the future problems.

From the incredible and unpredictable impact of mother nature’s natural disasters, to the sadly inhumane and planned terrorist activity affecting the world’s major cities – an increase in the focus on health and safety, risk, compliance and so importantly - disaster recovery - has become a critical success factor for every individual, family, company, supplier and stakeholder.

The cost and emotional impact of the loss of life in the recent Grenfell disaster in London has been incredible. If there is anything to be learned/gained/gleamed from this horrific experience, that was captured so vividly on social media, is that since this terrible event, every high-rise building, (especially in the UK), is now undergoing rigorous checks; and that the suppliers of materials that maintain and create these structures are now under huge scrutiny. This is potentially one of the most expensive health and safety activities – but one that will help people to feel safe and secure while they sleep or work – this is priceless. This challenge doesn’t stop here, we watched the local entities trying to handle the amazing, generous and constant volumes of ‘goodwill’ that arrived at the doorstep of the disaster (while it was still happening) that could never have been anticipated. Grenfell was an ‘overnight’ disaster, and the SOP on ‘how to handle the goodwill of fellow humans’ maybe didn’t exist, or if it did, it was neatly filed away in a folder in the offices that were closed and that then re-opened the following morning in shock, while the magnitude of the actual event was becoming a reality. The global teams tasked with planning for or managing people through challenging situations have their work cut out for them. Disaster recovery and having your teams understand the ‘possible and probable’ situations they may find themselves in should be part of everyone’s ongoing training and development. Keeping people, property, and assets safe and secure has always been a high priority, along with company intellectual property and data. You only have to read a corporate contract to understand where the company focus is. The contract pages covering insurance (and having the relevant cover for every eventuality) is now a key feature; and the relatively new cover of cyber and data protection has changed the landscape dramatically in the last 10 years. It’s hard to estimate cyber and data protection versus the cost to insure a building. How do you estimate the risk to the business - if it has been disabled due to a cyber-attack?

INTERNATIONAL HR ADVISER AUTUMN

Data and the new laws coming into effect in May next year (2018) with regards to the storage of personal data, will have incredible consequences on anyone that ever takes a piece of information from a traveller or assignee, and subsequently passes this data down through their supply chain. We are responsible for understanding how our suppliers, (who are handling relatively sensitive information every day on our behalf) can negatively impact on our own business - if they do not follow the same rules and regulations as of May 2018. The relocation industry, hybrid agents, pure agents and aggregators, in fact, any company that is highly reliant on third party services, will be impacted. This change in legislation will demand higher levels of security and compliance, and a re-look at how everyone in the organisation (and outside) is dealing with personal data. This understanding is not just the responsibility of the IT team, it starts at the top of the organisation, and will need to work through all levels to ensure every team is taking a proactive approach to this new normal. Has risk now fully overtaken corporate social responsibility in the boardroom? Or have they joined forces? If you look back seven years, the environment and ‘all things green’ trended high. And, as I hoped and anticipated, being green has become part of everyday life rather than an opportunity to increase business flow through marketing. I personally wanted to ‘go green’ but wasn’t open to constant CSR messages while I was ‘off duty’ - I wanted the world to be conscious and sustainable, but I also wanted my own personal downtime. But, does downtime really exist in 2017? The terror attacks on our global citizens, the sleeping people in the beds in Grenfell, the families, individuals and businesses living and working in Houston (that are now reeling in the wake of Harvey) – these people were not ‘on-duty’, they were just living. The responsibility to stay focused, alert and aware, even in our everyday lives, has now become part of our being – and to survive and keep safe – it’s the only option. Everyone has to take time to think, discuss and debate, future ‘world’ risks. These can be individual, local, national or global. Alex Keatinge, my first general manager at Marriott International, advised me ‘in EVERY situation you find yourself in, ALWAYS think and consider the BEST possible outcome and the WORST possible outcome. IF you can cope with the WORST possible outcome, then you are going to be okay’. Taking this advice, I have always concentrated on coping with the WORST outcome’. It’s at this point that I start researching, planning, learning and preparing … every mistake we make is an opportunity (or gift) and I do look for the ghosts in the corridor – it’s this advice that

has helped me navigate many challenging situations and certainly helped my personal growth from an entry level associate into a strategic global MD (who is still learning…). My passion as one of the founding members of ASAP (Association of Serviced Apartment Providers) was to legitimise the industry. I invited QiT (Quality in Tourism) who were part of Visit Britain to help develop the first official rating system for serviced apartments. QIT began to officially evaluate everything from the bedside tables to the core requirements of health and safety. I am truly delighted that this continues to be the key focus of the association today and is one of its most prevalent core values – in fact, if the member is not accredited in the next year, they will no longer be able to wear the ASAP badge.

The responsibility to stay focused, alert and aware, even in our everyday lives now has become part of our being – and to survive and keep safe – it’s the only option. As a global agent, we use the template formed by the association to help all our suppliers globally to increase their awareness around the core requirements of health, safety and security of guests, even if they are not yet part of an association. But what else? At our most recent TAS Alliance meeting in July 2017, the agenda focused on disaster recovery and risk. Unknowingly, (but instinctively), the meeting followed Pablo’s advice on developing our habits on learning to evolve and improve how we handle different levels of complexity on these subjects, following some simple but challenging themes. We ensured that we: • Asked different types of questions • Took on multiple perspectives • Developed a systemic vision • Looked at the whole picture; took a step back to see what’s possible. It is amazing when you pull together some of the brightest and opinionated people in

the industry that handle operations and sales every day, just what incredible ‘common sense’ and creative ideas can rise to the surface. The TAS Alliance was a vehicle for discussion and debate, and the attendees successfully delivered the thought leadership. Each individual, family or team have to have ‘bought into’ and ‘connected with’ the accepted habits or framework around your HSSE and the thought processes around it both at home and at work. But remember to always consider the ‘possible’ as well as the ‘probable’. It’s important to understand the boundaries that any individual, family, company or organisation is happy to go to. When a disaster happens, it’s rare that you get time to engage with every individual and ensure they are empowered to make the right decisions confidently that reflect the personality of the group – when (and if) a disaster happens, we have to rely on the fact that our teams, be it our family, network or employees already share our values, common sense and ethos to ‘do the right thing’.

JO LAYTON

MD Group Commercial Sales, The Apartment Service. Jo Layton is MD - Group Commercial Sales at The Apartment Service. She has successfully established The Apartment Service’s new Alliance brand as part of her overall remit to develop the company’s successful agency, network and Roomspace brands. Layton joined from BridgeStreet where she was responsible for sales and marketing throughout EMEA and APAC.

INTERNATIONAL HR ADVISER AUTUMN

Brexit And The Great British Immigration Debate The last 18 months have been momentous for UK immigration practitioners and multi-national employers as we try to determine what the impact of the EU referendum will mean for future UK immigration policy. For lawyers and advisers the Brexit vote has been both a gift and a curse. Endless hours have been spent discussing the Article 50 process, the content of the negotiations that will follow and the potential outcome for Britain’s new place in the world. Will we opt for a Norway type solution – EU light with access to the single market and the retention of free movement? Or is a hard Brexit the only way of "bringing back control" and assuaging popular concerns around excessive immigration? There is no doubt that concerns around immigration and its impact on public services and the labour market was one of the main drivers of the vote to leave. It is impossible therefore to see how EU freedom of movement provisions can survive in the post-Brexit legal landscape. Furthermore, the Prime Minister has made it clear, both in her Lancaster House Speech (January 2017) and subsequent Brexit White Paper (February 2017), that cake cannot be both had and eaten – immigration control in respect of EU migrants has been mandated by the people and we will not therefore seek to remain in the single market. In March, forty years of hard work by successive British Prime Ministers, both Labour and Conservative, was dismissed in a single letter to the President of the European Council when Theresa May served notice of the UK’s intention to leave the EU under the provisions of Article 50 of the Treaty of Lisbon.

How can the UK relinquish EU laws and what do we put in their place?

On Thursday 13th July 2017, the Secretary of State for Exiting the European Union, David Davis, published before Parliament the European Union (Withdrawal) Bill. Previously referred to as the “Great Repeal Bill”, this legislation aims to repeal the European Communities Act 1972 and make other provisions in connection with the withdrawal of the United Kingdom from the EU. It represents the most significant change to the British constitutional settlement in nearly

50 years and is a key component of the government’s Brexit strategy. The first line of the Bill says the European Communities Act 1972, which took Britain into the European Union will be “repealed on exit day”. This will end the supremacy of EU law and stop the flow of new regulations from Brussels. It is part of the process of regaining control of laws from Brussels and reinstating Parliamentary Sovereignty.

For lawyers and advisers the Brexit vote has been both a gift and a curse. Endless hours have been spent discussing the Article 50 process, the content of the negotiations that will follow and the potential outcome for Britain’s new place in the world. All existing laws derived from the EU will continue to be enforced – thus providing for continuity and avoiding a “cliff-edge” scenario on Brexit day - but they can be changed or scrapped by further domestic legislation. The Bill does not detail policies line by line but transfers all EU regulations into domestic law. It gives the UK two years

after Brexit to correct any “deficiencies” arising from the transfer. Parliament will commence the arduous process of debating the Bill this autumn and it will have to have gained Royal Assent by the time the UK leaves the EU - which is due to happen in March 2019. Given the precarious parliamentary arithmetic, and the fact that the Prime Minister leads a minority government following her disastrous election result in June, this will be a highly charged and complex process. The Bill amounts to an enormous exercise in taking the laws made in Brussels that currently apply in the UK, and turning them into UK laws. Over the next two years the government will have to pass laws in areas that it will suddenly have sole control over, such as immigration. If the UK leaves the EU in an immediate “hard-Brexit” scenario in March 2019, a new immigration framework will have to be in place to regulate the entry and stay of EU nationals. This means that the new domestic immigration framework must be developed and legislated upon during the two year negotiation period. The government must find a way of balancing the twin needs to reduce overall immigration figures whilst safeguarding the ability of businesses to secure the workers that they need.

Net Migration Target – will it ever be reached?

In their election manifesto, published in May 2017, the Conservative Party reiterated its overarching immigration policy of achieving “sustainable levels” of net migration over the course of each twelve month period. The Prime Minister has made clear that this means net migration of tens of thousands annually. This policy was introduced into government in 2010, but has never been achieved. There are signs that the result of the Brexit referendum has already had an effect on numbers. Figures published in August 2017 showed net migration to the UK has fallen to its lowest level in three years, as significantly more EU citizens left the country in the wake of the Brexit vote. The headline net migration figure of 246,000, which is the difference between immigration and emigration, was 81,000 lower than the 327,000 recorded in the March 2016 according to the Office for National Statistics (ONS).

IMMIGRATION - UNITED KINGDOM Migration Advisory Committee – Commission 2017

In July 2017, the Home Secretary, Amber Rudd, wrote to the Migration Advisory Committee (MAC) to establish a commission to advise her on the impact on the United Kingdom labour market of the UK’s exit from the EU and also how the UK’s immigration system should be aligned with a modern industrial strategy. In her letter to the MAC, the Home Secretary acknowledges that migration benefits the UK, economically, culturally and socially. She emphasises that businesses, agriculture, public services and universities all rely on migration for labour, skills and ideas. She confirms that in a post Brexit environment, the UK must remain a “hub for international talent”. The MAC’s role will be to provide government with the detailed facts and evidence to inform the creation of a new regulatory architecture that will serve to reduce net migration whilst providing the country with the skilled workers required for it to compete as an autonomous state outside the EU single market. After Brexit, “freedom of movement” will no longer apply to EEA nationals. Consequently this commission will be central to informing the thinking behind the creation of new rules and regulations governing the entry of EEA nationals to the UK labour market. All businesses will be affected by the new policies.

Scope of the MAC Commission

The government has commissioned the MAC to provide evidence based advice on the economic and social impacts of the UK’s exit from the European Union as well as how the UK’s immigration system should be aligned with a modern industrial strategy. This is a huge project which represents the MAC’s most complex and far-reaching mandate since its inception in 2007. Employers may find the questions daunting and challenging to respond to in detail (not least because of time commitments), however, it is possible to be selective in terms of the questions answered and to rely solely on the most pertinent evidence relevant to the specific needs and experiences of the business entity.

The Call For Evidence – what does it contain?

The MAC seeks views and evidence from anyone with relevant knowledge, expertise or experience to help inform their response to government. Given that most employers, sectors and regions fall under this description - with significant concerns about access to skills, talent and labour prevailing generally – the committee may receive an avalanche of responses. The MAC has set out a broad range of questions across three specific areas: • EEA Migration Trends • Recruitment Practices, Training & Skills • Economic, Social and Fiscal Impacts.

The full set of questions can be found at the end of this article on the next page.

The MAC has asked to receive responses by 27 October 2017. However they may also take late submissions from participants who are unable to respond in the timeframe. In turn, they have been asked to report to the government by September 2018, although they are also encouraged to issue interim reports if possible. There is plenty of time therefore to engage with the MAC. With the two year notice period provided by Article 50 of the Lisbon Treaty due to expire in March 2019, and the possibility of a “cliff-edge” departure from the EU as a worst

case scenario at that time, the government is leaving very little space to develop, implement and legislate for a new legal architecture for immigration control. They are likely therefore to implement a two year transitional period consisting of temporary arrangements prior to the launch of new immigration policies and procedures in 2021.

Why should we participate?

Brexit will constitute the most significant challenge to the British economy and resident labour market in a generation. It will also result in a comprehensive restructuring of the UK’s immigration laws, systems and policies. For those with an interest in the outcome it is imperative to be involved in the discussion and to feed relevant evidence to the MAC in response to their Call for Evidence. This is an opportunity for employer’s voices to be heard before a whole new immigration regime is created.

The Transition to a Post-Brexit Immigration Policy

In June 2017, the Prime Minister set out a “fair and serious offer” to safeguard the position of EU citizens living in the UK and UK citizens who are living in the EU. The transition to new immigration arrangements is likely to take place in three phases. • Phase One - The offer - the 3 million EU nationals currently living in Britain and exercising “treaty rights” will be permitted to remain and apply for settled status once they have been here for 5 years. EU nationals arriving in Britain after March 2017 (the date that notice was served on the European Union under Article 50) and prior to a “cutoff date” to be agreed in negotiations, will also be permitted to remain and apply for settled status after 5 years. • Phase Two - The government proposes a temporary implementation period to ensure there is no “cliff-edge” on the UK’s departure for employers or individuals. This will include a grace period during which those EU citizens who arrived before a cut-off date (to be decided) will have time to obtain their documentation from the Home Office. During this time there will be a straightforward system for the registration and documentation of new arrivals. These transitional arrangements may last to 2021. Within the transitional period there may also be scope to apply for permission to remain under the UK’s new domestic immigration arrangements for EU nationals. • Phase Three - The government will implement the new long-term arrangements covering the migration of EU citizens, designed according to the economic and social needs of the UK and reflecting the “special partnership” with the EU.

INTERNATIONAL HR ADVISER AUTUMN

What are the main areas of potential conflict in the Brexit negotiations in relation to immigration and free movement?

There are a number of unanswered questions that will be subject to extensive negotiation. These include: • The cut-off date - The Prime Minister did not clarify from when EU citizens will cease to automatically qualify for settled status in the UK. She set a range: March 29th 2017 (Article 50 day) to March 29th 2019 (the likely “Brexit day”). The date will be agreed as part of the Brexit negotiation process. The EU will push for the latest possible date – probably settling on March 2019. • European Court of Justice - The EUs position is that the European Court of Justice should retain “full jurisdiction” over EU national rights. This will be a contentious issue in the Brexit negotiations as “bringing back control” of laws was a key tenet of the campaign to leave the EU. The government’s position paper on Enforcement and Dispute Resolution (August 2017) suggests that this remains the plan however there is the implication that jurisdiction of the ECJ may continue for a transitional period beyond Brexit day. A transitional period may encounter hostility from hard line “Brexiteers”. • Spouses and families - At present EU nationals can bring non-EU spouses and family members to the UK more easily than

British nationals because of the tough criteria contained within domestic immigration rules, including minimum earnings thresholds. It is unclear whether such preferential arrangements for family members of EU nationals will continue to apply. The EU is unlikely to accept that the requirements of the UK’s immigration rules offer sufficient protections to family members of EU citizens. • Benefits and Welfare - The Prime Minister’s offer is to treat EU citizens living in the UK

equally with UK citizens but it is unknown if EU citizens will continue to be able to send benefits back to children not living in the UK. • Reciprocity - The offer is dependent upon a similar agreement being reached regarding the status of British nationals living across the European Union. Mrs May says reciprocity is “vital” and the British government will not make a unilateral offer to EU citizens. This leaves open the question of what will happen if the Brexit talks break down.

BEN SHELDRICK

Ben is a Managing Partner and Head of Business Immigration at Magrath Sheldrick LLP, one of the UK's leading commercial immigration practices. Ben is also Director of Magrath Global, Singapore which caters to a significant corporate client base in the Asia Pacific region. He is recognised as a leading UK immigration expert by the legal community and is noted by all of the major legal directories for his expertise in immigration law. Ben is immigration counsel to many household-name multinational companies and he has extensive experience in strategic planning of global mobility programmes for large organisations, assisting global mobility departments and HR professionals in developing compliance and legal right to work policies and procedures. His team also advises individuals of all nationalities seeking entry to the UK as workers, investors, entrepreneurs, artists, performers or for family reunion. Ben works with the International Bar Association (IBA), the Immigration Law Practitioner’s Association (ILPA), the American Immigration Lawyers Association (AILA), British American Business (BAB), the Investment Migration Council (IMC) and many other groups in disseminating information in respect of global immigration policy and legal developments. He is a technical partner of Expat-Academy. Ben advises and speaks to many organisations in respect of the immigration law implications of the British decision to leave the European Union. He is recognised by Who’s Who Legal as a thought leader on Brexit. E-mail: ben.sheldrick@magrath.co.uk Web: www.magrath.co.uk

Migration Advisory Committee - Call For Evidence The Questions EEA Migration Trends • Please provide evidence on the characteristics (e.g. types of jobs migrants perform; skill levels, etc.) of EEA migrants in your particular sector/local area/ region. How do these differ from UK workers? And from non-EEA workers? • To what extent are EEA migrants seasonal; part-time; agency-workers; temporary; short-term assignments; intra-company transfers; selfemployed? What information do you have on their skill levels? To what extent do these differ from UK workers and non-EEA workers? • Are there any relevant sources of evidence, beyond the usual range of official statistics that would allow the MAC to get a more detailed view of the current patterns of EEA migration, especially over the last year? • Have the patterns of EEA migration changed over time? What evidence do you have showing your employment of EEA migrants since 2000? And after the Brexit referendum? Are these trends different for UK workers and non-EEA workers? • Have you conducted any analysis on the future trends of EEA migration, in particular in the absence of immigration controls? • Have you made any assessment of the impact of a possible reduction in the availability of EEA migrants (whether occurring naturally or through policy) as part of your workforce? What impact would a reduction in EEA migration have on your sector/local area/region? How will your business/ sector/area/region cope? Would the impacts be different if reductions in migration took place amongst non-EEA migrants? Have you made any contingency plans? Recruitment Practices, Training & Skills • Please provide evidence on the methods of recruitment used to employ EEA migrants. Do these methods differ from those used to employ UK and

• • • •

•

non-EEA workers? What impact does this have on UK workers? Have these methods changed following the Brexit referendum? Do recruitment practices differ by skill-type and occupation? What are the advantages and disadvantages of employing EEA workers? Have these changed following the Brexit referendum result? To what extent has EEA and non-EEA migration affected the skills and training of the UK workers? How involved are universities and training providers in ensuring that the UK workforce has the skills needed to fill key roles/roles in high demand in your sector? Do you have plans to increase this involvement in the future? How well aware are you of current UK migration policies for non-EEA migrants? If new immigration policies restrict the numbers of lowskilled migrants who can come to work in the UK, which forms of migration into low-skilled work should be prioritised? For example, the current shortage occupation list2 applies to high skilled occupations; do you think this should be expanded to cover lower skill levels?

Economic, Social And Fiscal Impacts • What are the economic, social and fiscal costs and benefits of EEA migration to the UK economy? What are the impacts of EEA migrants on the labour market, prices, public services, net fiscal impacts (e.g. taxes paid by migrants; benefits they receive), productivity, investment, innovation and general competitiveness of UK industry? • Do these differ from the impact of non-EEA migrants? • Do these impacts differ at national, regional or local level? • Do these impacts vary by sector and occupation? • Do these impacts vary by skill level (high-skilled, medium-skilled, and low-skilled workers)?

INTERNATIONAL SCHOOLS

Identifying Quality: Finding The Best International School For Expatriate Children As professionals in the global mobility sector will agree, selecting a school for the children of expatriate parents is usually a high-priority task. Highlighting a list of international schools in any one destination is sometimes straightforward, but ‘finding the right fit’ and ensuring that the school is suitable for the needs of the child or children can be more challenging. Minimal disruption ensuring education continuity should be the ultimate goal but naturally parents will also want to ensure future academic excellence for their children.

Shared Characteristics

The international schools sector has grown and evolved at a fast rate, meaning typical host destinations will have a range of schools that offer the same curriculum as the child or children of an expat family has been studying in their previous country. This will make for a smoother transition to a new school as the student does not have to come to terms with a completely new syllabus. However, a school offering the UK curriculum, for example, does not necessarily mean that it matches up to a good independent school in the UK in terms of quality. Beyond curriculum, and the national ethos of the school, there are some benchmarks that you can look out for to help you make the right choice especially if you are looking for a quality international school that is distinctively British. The independent school model, popular throughout the UK, has been exported with success around the world. Well-known British independent schools like Harrow, Dulwich and Wycombe Abbey have all opened franchises internationally (according to the UK Independent Schools Council, 46 campuses overseas are operated by ISC schools). Other standalone British international schools, establishing their presence in the market for the first time, tend to follow this model. Typically, a quality British school overseas will be characterised by the implementation of

a house system, high levels of safeguarding, the provision of a first-class pastoral care system and access to a wide range of co-curricular activities for students. Schools that are members of the Council of British International Schools (COBIS) are a mix of EYFS, Primary, Secondary, Cross-Phase or even Sixth Form so one size does not fit all. Like UK independent schools, COBIS schools have a keen focus on the development of the whole child and this certainly goes a long way to develop and nurture qualities such as resilience, adaptability, self-confidence, tolerance and internationally mindedness.

Typically, a quality British school overseas will be characterised by the implementation of a house system, high levels of safeguarding, the provision of a firstclass pastoral care system and access to a wide range of co-curricular activities for students.

Obviously, these are all valuable skills and attributes in an ever increasingly fast-paced and competitive world.

High Achievers

To become a member of COBIS, schools must either offer the National Curriculum for England and Wales or the International Baccalaureate (IB). As well as access to a high-level of pastoral care and co-curricular activities, academic excellence is encouraged and nurtured with British schools overseas regularly featuring in the list of top 20 independent schools by exam results for both GCSEs and A-levels. Of those that responded to the 2016 COBIS Annual Research Survey, 95% of 2015/16 leavers went on to study at university with more than 50% of those leavers choosing to study in a UK university. Of responding schools, the average GCSE A*/A pass rate was 52% and the A*-C pass rate was 92%, considerably higher when compared to the average rates of 22% (A*/A) and 70.8% (A*-C) in schools in England. In schools that offer the IB, results are similarly impressive. The IB pass rate for responding COBIS schools in our latest research survey was 96% and the average score 33.8. 13% of students passed the IB Diploma with a score of 40 points or more. To put this into context, the average pass rate for all schools taking the IB Diploma worldwide was 80.8%.

A Global Outlook

While COBIS schools are committed to instilling a British ethos and an understanding of British culture in the classroom, less and less students who choose to attend a British international school overseas consider themselves British and ‘third culture kids’ are common. International schools were once known for exclusively hosting the children of expatriates but more and more student bodies are dominated by children native to the host country whose affluent parents see a British school, for example, as a gateway to a British university. The number of nationalities within any individual school ranges from 2 to 99, according to the COBIS Annual Research Survey and on average, 62% of students in responding COBIS schools do not have English as their mother tongue. With that in mind, support for EAL (English as an Additional Language) students is strong and 86% of COBIS schools worldwide

INTERNATIONAL HR ADVISER AUTUMN

have provisions for non-native speakers of English. We want to eventually ensure that this figure stands at 100% as it is generally accepted that the identification of talented and gifted students can sometimes be hampered if English is not their first language. That’s why our new accreditation system, The Patron’s Accreditation and Compliance, specifically asks schools to ensure that curricula benefits students with learning difficulties as well as those students who are gifted and talented.

Parents can be sure that any school that holds ‘Member’ status with COBIS is compliant with our standards for recruitment, student welfare, facilities, governance, ethos and values, and if applicable, boarding. A Mark Of Quality

The introduction of a new accreditation scheme this year by COBIS for the best British international schools is part of our efforts to ensure families who are relocating do not have a challenging or difficult decision to make when it comes to choosing the most suitable British school for their children. We are delighted that The Patron’s Accreditation and Compliance scheme bears the name of our Patron, HRH The Duke of York, KG and over the course of the next five years every COBIS school will have been through the process. The new scheme focuses heavily on school development and improvement rather than a reliance on the one-off snapshot inspection model. Parents can be sure that any school that holds ‘Member’ status with COBIS is compliant with our standards for recruitment, student welfare, facilities, governance, ethos and values, and if applicable, boarding. In addition, schools that

Where British international schools that are members of COBIS are located. Source: COBIS Annual Research Survey 2016

are ‘Patron’s Accredited’ members of COBIS will have been tested against those standards but also against standards in learning and teaching, leadership, communication, and extra-curricular activities. Schools that have achieved a successful report following a BSO (British Schools Overseas) inspection, the inspection scheme run by the UK Department for Education (DfE), are known as ‘Accredited Members’ of COBIS. The BSO reports of all COBIS schools to have participated in the scheme are available to read on the COBIS website. Our website, www.cobis.org.uk, lists all of our member schools by category so you can search for COBIS schools in your chosen country and then filter by our membership tiers; ‘Patron’s Accredited’, ‘COBIS Member’ and ‘Accredited (BSO)’. Further information on COBIS and its family of schools can be found on social media via Twitter (@cobisorg), Facebook, LinkedIn and Instagram. Although COBIS is the only global association for international British schools overseas, there are other like-minded associations operating in the sector and membership of bodies such as FOBISIA, CIS and BSME alongside COBIS membership can signal that the school’s quality is widely recognised.

COLIN BELL

Colin Bell is CEO at the Council of British International Schools (COBIS), the global association for international British schools overseas. COBIS exists to serve and support British schools in 80 countries worldwide spread throughout 5 continents. The association also helps commercial companies such as global mobility firms to connect with schools via the COBIS Supporting Membership subscription service which offers introductions and digital marketing opportunities. More information can be found at www.cobis.org.uk. Colin tweets @COBIS_CEO

BREXIT

HR Impact Of A Changeful Immigration Landscape Brexit: UK Employers, Have You Assessed the Impact of Brexit on Your Employees?

For UK employers, Brexit has a wideranging impact, e.g., immigration status and employee benefits. As of August 2017, negotiations have been underway for only a few short months, and there is a lack of clarity on what the full impact will be on employment and immigration laws. For example, what will happen to the 3.2 million EU nationals who are currently living in the UK? Likewise, what will be the rights of the more than 1 million UK nationals living and working across the EU? According to the UK government’s draft proposal, the UK would offer EU citizens living in the UK, the following rights and protections, provided that UK citizens living in other EU countries are offered the same rights and protections: • EU nationals who have been UK residents continuously for 5 years or longer as of a specified date (some date between 29 March 2017 and the actual date when the UK has exited the EU) will be granted “settled status.” Settled status means that these residents will be free to reside in the UK and undertake any lawful activity. They will also have access to public funds and services and may apply for British citizenship • Those EU citizens who arrived and became resident before the specified date, but who have not accrued five years’ continuous residence at the time of the UK’s exit, will be able to apply for temporary status in order to remain as residents in the UK. After they have accumulated five years, they will be eligible to apply for settled status • EU citizens with settled status will continue to have access to UK benefits on the same basis as a comparable UK national would under domestic law • The UK will continue to export and uprate the UK State Pension within the EU • The UK will seek to protect the healthcare arrangements currently set out in EU Social Security Coordination Regulations and domestic UK law for EU citizens who arrive in the UK before the specified date and for UK nationals living in the EU before the specified date

• There are several provisions for those EU citizens who arrived after the specified date and/or have been UK residents for less than 5 years. It’s important to reiterate that the points above represent a proposal from the UK government. However, at this juncture, it should reflect your working assumptions in planning for the impact of Brexit on your company.

What Should Business Be Doing Now In Planning For Brexit?

Business should assess their current workforce in the UK and the rest of the EU. The primary goal is to identify employees who are working or based outside of their country of origin. These employees may be impacted by post-Brexit immigration laws and regulations. Although no immediate changes have been announced, immigration policy will be hotly debated during the exit negotiations. Businesses will need to be prepared to respond swiftly to any developments; up-todate and accurate intelligence regarding your workforce is essential. Assuming the EU agrees with the UK’s proposal related to “settled status”, it’s probably a good idea to conduct a detailed review of your workforce. For your UK citizens working for you in EU member states, determine how long they have been working there continuously. Likewise, do this for EU citizens working for you in the UK. Ensure that you have proper documentation to support employment dates. As an employer, you’ll want to assist your employees in establishing settled status where appropriate. You’ll also want to remain informed about the status of Brexit negotiations going forward. As new proposals are put forth regarding employment, immigration and freedom of movement, you’ll want to familiarise yourself with those proposals and assess the impact on your business.

Beyond Brexit

Outside of the UK and EU, similar trends can be observed, particularly in the form of heightened scrutiny and a general tightening on foreign labour practices and laws, particularly work visa/residency/citizenship grants and processes (Singapore and the US are just two examples).

What’s more, various countries have been introducing more rigorous labour regulations, which are intended to ensure fair employment practices, equal opportunities and diversity of the workforce, among other things. While this helps to achieve good outcomes in the long run, it also means that labour regulations may be changing at a more frequent pace than before. The impact of this trend is that companies needs to be cognizant of the changes to ensure that their practices are current and compliant. Our team at Blueback Global is ready to help you with your impact assessment and with developing a strategy for ensuring a smooth transition as the UK exits the EU in the coming months, as well as more broadly with local labour and immigration laws and related considerations and processes.

BLUEBACK GLOBAL

Blueback Global was founded in 2013 in Silicon Valley, CA. Founder, Arden Ng, spent the past 15 years working with clients on managing international operations, initially advising Fortune 500 companies on best practices for managing existing international Finance and Accounting processes. In the last 6 years, he has focused on working with companies to plan, expand into and manage their respective new international locations. Gateway to Going Global - This is the focus of our firm; we do all the heavy lifting to clear the path, and make managing international operations easier and simpler, so that our clients can focus on their respective core businesses. Website: www.bluebackglobal.com

INTERNATIONAL HR ADVISER AUTUMN

Immigration - Global Hotspots AUSTRALIA

The Department of Immigration and Border Protection announced several changes to migration policy, which became effective for subclass 457 visa applicants, whose applications were submitted on or after 1 July 2017. Such changes include but are not limited to the following: • Evidence of meeting English language requirements will be required by all applicants unless exempt by way of age, nationality or previous full time studies in English • Nomination applications must include significant evidence of the efforts made to recruit suitably qualified local Australian workers • Applicants must provide police clearance certificates for every country lived in for more for 12 months or more in the 10 years preceding the application submission date.

BELGIUM

Despite legislation not yet having been implemented, the Belgian Foreigner’s Office and the regional employment authorities have confirmed that foreign national holders of an EU ICT Permit issued by another EU member state are permitted to work in Belgium for entities of the same multinational group, for up to 90 days within a 180 day period.

FRANCE

• Prior approval of the French public organisation called the Direccte.

3) Investor

There are several ways that one can qualify for the French Tech Visa for Investors: • A foreign venture capital firm opens an office in France • A foreign investor is recruited by a venture capital firm based in France • A Business Angel (often a successful entrepreneur) moves to France. To qualify one must: • Be investing at least €300,000 in fixed tangible or intangible assets • Be investing either directly or via a company in which one has at least a 30% shareholding • Own at least 10% of the company in which one is investing • Be creating or protecting (or committing to create or protect) jobs within the four years following the investment.

INDIA

The deadline for the conversion of Person of Indian Origin (PIO) cards to Overseas Citizens of India (OCI) cards has once again been extended. The Indian government has extended the 30 June 2017 deadline to 31 December 2017.

The French authorities have implemented a “fast-track” Tech Visa which permits the holder to work in France with no need for an additional work permit. Eligible applicants may then apply for a “Passeport Talent” residence permit which will permit a stay for up to 4 years and can be renewed. The Tech Visa is intended to assist new fast growing companies in France to hire foreign talent, and to attract investors and entreprenuers to France. There are three categories of Tech Visa, each with different criteria. Further details of which can be found below:

JAPAN

1) Foreign Employee

PHILIPPINES

• Hold a graduate degree (master’s or higher) • Have a work contract with an eligible French company for a minimum duration of 3 months • Gross annual salary of at least €35,526.40.

2) Startup Founder

• Financial resources which meet the current French annual minimum wage, €17,763.20 as of January 1st, 2017 • An economically innovative startup project that one plans to develop in France

With immediate effect, after one year of temporary residence in Japan, it is now possible for Highly Skilled Foreign Professionals to apply for permanent residency, rather than having to wait five years as per previous requirements. The foreign resident must however reach a score of over 80 points on the Immigration Bureau of Japan’s point based system. The Japanese Immigration Authorities also announced that those scoring 70 points or more are eligible for permanent residency after three years.

As of 29 June 2017, when a foreign applicant applies in country to convert their 9(a) tourist or temporary visitor visa to a 9(g) Prearranged Employment Visa (Commercial), the Bureau of Immigration now requires provision of proof of the newspaper publication showing the approval of the applicants Alien Employment Permit. Here the original newspaper clippings of the approved list applications can be provided. A certification of the publication issued by the publisher can also be provided.

PORTUGAL

Portugal has now incorporated the European Union Directive 2014/67 concerning the posting of workers to Portugal into National law. All EU based companies who are posting foreign workers to Portugal, in the framework of the provision of services, must report the posting to Autoridade para as Condições do Trabalho” (ACT) and provide the following information via email using a designated form: • Details of the Foreign Service provider • Number of posted workers • Details of the workers to be posted • Proposed duration of stay and travel dates • Address of the work location in Portugal • Nature of the services to be provided and justifications for the posting of the workers • Host company personnel contact details. The above reporting obligation is also required to be accomplished by Portuguese based companies who are posting their employees to work in another EU member state. As well as the obligation to report, the sending/home company and the host company in Portugal must retain the following documents (those held in Portugal must be in Portuguese and retained by the person in the company who is the designated ACT liaison) throughout the period of the posting, and for a period of one year after the posting; • Details of the posted worker • Time records of the working days and times • Employment contract/provision of services contract • Payslips.

ROMANIA

Romania has now incorporated the European Union Directive 2014/67 concerning the posting of workers to Romania into National law. All EU, EEA and Swiss based companies who are posting foreign workers to Romania, in the framework of the provision of services, must report the posting at least 1 working day in advance of the start date, to the Regional Labour Inspectorate (RLI) and provide the following information in Romanian: • Details of the Foreign Service provider including its name, address and registration number • Number of the posted workers • Details of the workers to be posted • Proposed duration of stay and travel dates • Details of the host in Romania including its name, address and registration number • Details of the work location in Romania • Nature of the services to be provided and justifications for the posting of the workers

GLOBAL IMMIGRATION • Host company personnel contact details • Declaration. The above reporting obligation is also required to be accomplished by Romanian based companies who are posting their employees to work in another EU/EEA or Swiss member state. As well as the obligation to report, the sending/home company and the host company in Romania must retain the following documents (those held in Romania must be in Romanian and retained by the person in the company who is the designated RLI liaison) throughout the period of the posting, and for a period of three years after the posting; • Details of the posted worker • Time records of the working days and times • Employment contract/provision of services contract • Payslips • Secondment letter for each posted worker, together with a notarised Romanian translation of the document. The letter must provide details of the worker’s salary, details regarding payment, the period of the assignment, the sending and receiving companies, and other general conditions of the secondment • Original registered report notification • Details of the designated RLI liaison person.

GERMANY

Germany has introduced the European Union Intra-Company Transfer (ICT) Directive, (2014/66EU of 15 May 2014) permitting eligible third country nationals to be sent on assignment to Germany. Foreign sending employers and transferees may take advantage of two categories of ICT permits: 1) The ICT Card For transfers from outside the EU and where the stay in Germany is for more than 90 days 2) Mobile ICT Card For transfers from within the EU, where the employee already holds an ICT card in respect of the sending EU Company / EU employer and where the stay in Germany is for more than 90 days. Conditions and eligibility criteria apply to the above. For short-term ICT assignments, a notification of presence is required, which permits a stay of less than 90 days in Germany. For stays of less than 90 days it is not possible to apply for an ICT card for Germany. In such cases, the foreign EU employer/ sending company of an employee holding an ICT card for the EU employer /sending company, is required to notify the Federal Office for Migration and Refugees in advance of the assignment.

NIGERIA

The High Commission of Nigeria in London will introduce biometric appointments for all visa applicants. Effective Thursday 14th September, all applicants must visit the Nigerian visa application centre in London (operated by OIS), in order to have biometrics captured for visa purposes.

SAUDI ARABIA

The Saudi government has once again amended the criteria concerning the eligibility requirements for work permits for engineers. In order to try and increase the number of Saudi national’s employed locally in the engineering industry, the Saudi Ministry of Labor together with Social Development, and the Saudi Counsel of Engineers has announced that foreign nationals must now demonstrate a minimum of 5 years of professional related working experience, as opposed to the previous requirement of 3 years. “Saudisation” measures are on the increase and further changes are to be expected. Prepared by Ben Sheldrick at Magrath Sheldrick LLP, and is correct at the time of going to press. Visit www.magrath.com for further information.

INTERNATIONAL HR ADVISER AUTUMN

Strategic Communication A Key Expectation From A Global Mobility Leader Global Mobility professionals find themselves in the middle of ever changing landscapes in immigration regulations in countries which are strategic markets, continuous changes in the taxation landscape and emerging security threats across the world. These changes can create disruptive outcomes for our organisations and our clients. The biggest challenge faced by mobility leaders is how can we “anticipate change” and be an effective “trusted advisor” to our business stakeholders in keeping them informed on impact in a realtime manner. This article proposes to share some of the experiences and initiatives, a global mobility leader can consider to demonstrate value to their stakeholders – Business Leaders, Employees, Regulators, Global Mobility Team and Vendors. It elucidates the use of “communication strategy” as a key lever for managing the expectations of the stakeholders.

Business Leaders:

The Global Mobility leader is now a “trusted advisor” on co-developing the talent mobility framework and proactively advising the business leaders on changes affecting their commitments to their clients. It becomes critical especially where mobility is linked to generating revenue for the organisation. Recent transformational changes in immigration landscape in United States of America, United Kingdom, Singapore, Australia etc., represent significant opportunities for mobility leaders to help business leaders navigate these changes with limited impact to their businesses. An effective approach would be to appoint mobility business partners for each business who can develop sound knowledge of the vertical and can marry the mobility changes with the business impact. It is critical to have an established communication framework where such transformational changes and its granular impact are communicated on a real-time basis

to business leaders through mobility business partners - e.g. recent immigration changes in Australia classify the employees deployed into long-term and short-term based on skills and this in-turn has an limit on the duration of work visas. This change will have impact to longterm deployment plans for businesses and its client commitments.

Employees:

Talent is the biggest asset of any organisation, especially in a services industry, and it is imperative that mobility processes reflect the sensitivity towards employees deployed away from home. It is critical that the mobility team is fully aware of its mobile population through global tracking tools etc., especially in the current environment where terrorist attacks are on the rise and not limited to any geography. Ensuring effective communications like online training programmes to manage such emergency situations is indispensable for any mobility function. Further, ensuring constant and proactive communication with the mobile population to communicate changes which will personally impact them e.g. changes in tax regulations, any change in net take home as an outcome of immigration or income-tax laws will create a seamless experience without any surprises. Use of Analytics, Digital tools, Apps, Robotic Process Automation and Artificial Intelligence to create employee-centric solutions will define the next level of employee experience (“EX”) for the mobility function.

Regulators:

Governments across the world are increasingly moving their operations to digital platforms and integrating data from different sources to generate a holistic view of the assignment population - e.g. sharing of immigration data by Immigration authorities with Employee Provident Fund Authorities in India to ensure compliance with the social security regulations. It is critical for mobility leaders to match the requirements from the Government regulators as well ensure that the data systems within the organisation are integrated to ensure full disclosure of information required. The mechanisms for regulations change also provide a unique opportunity for the mobility leaders to partner with Governments to co-develop policies and regulations. It provides

a space to communicate thought leadership and industry challenges to Governments to help them amend policies to facilitate trade and investment. It also acts as a medium to keep updated on the upcoming changes and socialise the impact with the business leaders on a timely basis - e. g. the changes in international tax regulations on Base Erosion and Profit Sharing (“BEPS”) will have a disruptive impact on the organisation structure and the documentation generated by mobility processes.

Global Mobility Team And Vendors:

It is equally critical for mobility leaders to have a continuous communication with the mobility team coaching them on the changing landscape in the context of business challenges and process challenges. Each team member must be informed of the impact they create for the organisation to enable them to understand the big picture. Vendors like global immigration and tax firms are an extension of the mobility team and mobility leaders rely on constant communications from these vendors to understand and anticipate change. It is critical for the mobility leader to set expectations with global vendors on the communication framework to ensure effectiveness in identifying change. In summary, the role of a Global Mobility Leader as a “trusted advisor” is based on the strategic and timely communications to business leaders backed by well-integrated data systems, digital tools, effective partnering with Governments, global vendors and a proactive mobility team.

DHARMESH KOTHARI

Dharmesh is the Global Talent Mobility Leader for Genpact. He has more than 19 years of experience focused on various aspects of global talent mobility. He is a trusted business partner and has worked with Global organisations - Deloitte, EY, Capgemini, Siemens, Goldman Sachs & Genpact providing business solutions and managing compliance and reputation risks arising out of talent movement across geographies. Email Dharmesh.Kothari@genpact.com.

EMPLOYEE ENGAGEMENT

The Transformational Effects Of True Engagement I recently read a piece in Forbes which highlighted the fact that Europe’s employee engagement levels are the lowest in the world. It’s not surprising then, that we are facing a productivity crisis and companies are scrambling to implement new benefits and engagement programmes. Businesses have obviously realised it is an important topic, but I wonder if as many organisations that have decided they need an employee engagement programme or initiative, have really thought about why they need one.

best quality work tended to improve their own work by a factor of about 10%. This is the power of engagement. It is infectious, and as engagement levels increase so does productivity. People who are more engaged in their work give more of themselves to the task at hand and as a result, work is completed faster and with much more attention to detail. Essentially this means fewer errors, and higher quality output, which have a tangible effect on profits. A study by Gallup showed that organisations with high levels of employee engagement report 22% higher profitability levels as well as 21% higher productivity levels.

My definition of employee engagement is simple: it’s the ability for employees to be present, focused, and energised while feeling connected to their organisation’s purpose. Many organisations confuse employee engagement with the similar topic of employee well-being, which encompasses a range of traits from emotional and physical well-being, to community and social relationships, to financial stability. Employee well-being asks the question “Do my employees have what they need to do their best work?” and while it is important for employers to address questions of employee well-being, it is my belief that true engagement embodies so much more and can be transformational for a business, in a way that simply addressing employee wellbeing in a transactional way, cannot. As Simon Sinek says: “When people are financially invested, they want a return. When people are emotionally invested, they want to contribute.” Don’t we all want to foster true and meaningful contributions? If you want to address some of the key issues that impact every business e.g. employee retention, and how to increase profits, then taking a transformational and measurable approach to engagement is the first and most vital step. Here’s three areas in which a focused approach to increasing employee engagement will help transform your business:

A recent Independent piece stated: “One of the UK’s biggest challenges post-Brexit will be attracting and retaining talent” and engaging employees is a key competitive differentiator for businesses. By connecting employees to an engaged purpose, the individuals on the front-line of your organisation have an understanding of why they are doing what they’re doing, which makes them proud to come to work and provides context for their tasks. Furthermore, by implementing an employee engagement programme that helps businesses establish a two way dialogue with employees about what they need in order to do their job more effectively, it allows employers to address concerns before they become issues. This helps increase employee satisfaction levels and demonstrates employers’ long-term interest in their workforce. One way to do this is by introducing an interactive platform which allows employees to give crucial and honest feedback anonymously. This provides every team member with a voice, helping them to feel connected and valued. The data regarding how engagement improves employees’ commitment to a business speaks for itself: according to this years’ Gallup Workforce Study, only 37% of engaged employees are looking for new opportunities, compared to 73% of actively disengaged employees. In other words, engaged employees are not looking to leave their current role.

1) Productivity and Profitability

A recent study covered in The Guardian explored how seating arrangements impact productivity at work. The research found that people who sat nearest to the most productive staff members and workers who produced the

2) Employee Retention

3) Customer Engagement

I passionately believe that an organisation can’t truly engage its customers until the organisation itself is engaged. If employees don’t feel connected to their work or the individuals

around them, this can lead to feelings of frustration and disengagement. People love the idea of being part of a business family and getting to know one another outside of their everyday roles. By actively encouraging team get-togethers and social events, organisations can help to nurture a feeling of community as well as creating bonds between employees that extend beyond their professional lives. A great example of how employee engagement helps to create true customer engagement is Zappos’ brand philosophy: “Happy People Making People Happy.” The company used “WOW”- inducing customer service to build its brand as well as growing sales from $1M to $1B in 10 years. One of the things that helped them reach this monumental sales achievement, was the introduction of an employee currency called “Zollars”. Zollars were used as a way to recognise when a colleague had gone above and beyond. Employees could then choose to spend their Zollars on Zappos branded items such as clothing, in addition to purchasing movie tickets or donating them to a charity of their choice. This initiative created positive emotional connections between employees, and that positivity was then passed onto customers because Zappos employees became engaged with the practise of going above and beyond. Research has also emphasised this point: the University of Bath’s Engagement Report found that just 17% of non-engaged employees feel they have a good understanding of how to meet customer needs, but 70% of engaged employees feel that their understanding empowers them to do so. Imagine what your company could do if 70% of your employees described themselves as ‘empowered’ to serve your customers well.

STEFAN WISSENBACH

Founder and Chief Engagement Officer at Engagement Multiplier, Stefan is a serial entrepreneur and speaker who is passionate about the transformational impact of engagement on people’s lives and businesses. His company Engagement Multiplier is a digital platform that enables businesses and individuals all over the world to simply and efficiently measure and improve engagement levels by generating real, honest feedback from anonymous surveys every 90 days. www.engagementmultiplier.com

INTERNATIONAL HR ADVISER AUTUMN

The Evolving Role Of Global Mobility Through our organisation we facilitate briefings, training courses and networking events for in-house Global Mobility professionals. As an indirect result of our work, we are able to identify trends and patterns emerging, which suggest changes are ahead for the role of Global Mobility functions. So, how is the world of Global Mobility evolving? Short-term Business Visitors are increasingly coming under the remit of the Global Mobility function. Given the complexity of the tax and immigration compliance required for this category of employee, in many cases it just makes sense that Global Mobility oversee this.

We are able to identify trends and patterns emerging, which suggest changes are ahead for the role of Global Mobility functions. Many Global Mobility teams, especially in the financial services sector, have put together business cases to obtain additional headcount to manage STBVs effectively. Global Mobility have the relationship with the tax providers and the tax authorities and are technically aware of the questions to ask travellers to ensure that the tax and payroll obligations are met, and that any permanent establishment risks are mitigated. For organisations with smaller populations and who do not have a dedicated Global Mobility managers, managing STBVs is fast becoming one area of the business that is being out-sourced.

Similarly, the tax and immigration compliance for employees who regularly perform their home country role in an alternative location (Commuters) is now frequently considered to be a normal part of a Global Mobility manager’s role. We are hearing about more and more companies creating formal Commuter policies and following rigorous governance process to ensure that all commuter arrangements are strictly business critical. Due to the complex tax reporting required and associated professional fees for getting this right, those with a stronghold on their costs are limiting the use of Commuter policies to employees who have a strong business case for the arrangement rather than just accommodating personal requests. You may have already been aware of STBVs and Commuters being tacked onto the role of Global Mobility but more recently, Security has been added as a new facet of Global Mobility. Due to recent terrorist events, our Global Heads of Mobility network discussed this at length at their most recent meeting. The question on the table was: Should Global Mobility be responsible for reporting on the security of assignees, even when an event happens outside of office hours? The immediate response was of course, “yes - if we can”. There is recognition that Global Mobility hold the relationship with specialist evacuation partners and where at all possible, will help facilitate the roll out of technology solutions to help track assignees. However, after much discussion it was also recognised that in the event of a traumatic experience during leisure time it is unlikely an individual’s first priority will be to be to report their safety to their employer. It is more likely that they will be letting their family know first that they are safe. So, how useful is a system which relies on a user reporting their safety whilst in a dangerous or traumatic situation? The data will only ever be partially complete. We delved into this topic a little deeper at our recent Club 100 Network huddle (for organisations managing assignee populations of less than 100) and invited expert Mark Wolsey, PwC Head of Security Consulting along to provide us with some thoughts on how we can keep our assignees safe whilst on assignment. Mark advised us that a new directive

came out in September 2016 - PAS3001: 2016 code of practice - The travelling for work responsibilities of an organisation for health, safety and security. These guidelines advise what should be done legally by employers and also what is good practice. Companies have a duty of care and legal responsibility to ensure that their employees are safe and Mark explained the importance of having someone qualified in your organisation to prepare, train and brief assignees.

Should Global Mobility be responsible for reporting on the security of assignees, even when an event happens outside of office hours? Organisations are adopting various approaches. Some are using external vendors such as ISOS, integrated with travel booking technology. Others are using social media such as Facebook and WhatsApp groups to contact individuals in an emergency situation. One big take-away is that forging stronger working relationships with your internal travel team and linking travel booking through your TMC (Travel Management Company) to the reimbursement of assignment expenses is very effective. Those who do not book through their company’s approved TMC will not get expenses reimbursed so this will ultimately change behaviour and make it easier for Companies to track their people and keep them safe. Having a strong relationship with the internal travel team

GLOBAL MOBILITY also enables you to streamline processes and manage temporary accommodation costs more effectively. Due to the new directive and the frequency of terrorist events, the role of Global Mobility teams is evolving to include the co-ordination of specialist security advice for assignees. There are limitations on how we can track individuals during their leisure time, but every effort should be made to provide them with the information they need to prepare for potential security issues. Finally, at our summer network huddles we asked those attending to provide us with a summary of any interesting projects that they were working on and the responses from those attending really highlighted how much the role of Global Mobility continues to evolve. Global Mobility are getting involved in: • Global workforce planning • Gender pay gap reporting and how this impacts assignees working outside of the UK • Designing a programme to embed a recent merger and to provide international opportunities to all level of employees for short bursts of time. (e.g. 6 weeks at a time) • Managing change in a Japanese organisation • Assignee pay structures and how data analytics can identify barriers to mobility.

Conclusion

The highlights shared above are a snapshot of how we are seeing the role of Global Mobility evolving. Global Mobility is no longer just designing policies, organising relocation, administering payroll and settling assignees and families into their new locations. It covers a whole plethora of other complicated and interesting areas. We love the variety of the ever-changing role and it makes for lively discussion at our forums.

EMMA HOLDER

We love the variety of the ever-changing role and it makes for lively discussion at our forums.

Emma specialises in organisation effectiveness and expatriate management and has spent 20 years working in Global Mobility as both a specialist consultant and in-house corporate manager. Emma started her career in international tax at Arthur Andersen, moved into International HR with PwC and then moved in-house to work for Goldman Sachs and Diageo plc. Emma is a Director at Expat Academy Ltd and has overall responsibility for technical training and consultancy. She facilitates many crossindustry Global Mobility forums and is at the cutting edge of the latest trends and news in the Global Mobility Industry. If you’d like to find out more about how you can get involved in the Expat Academy email emma@expat-academy.com

DIARY DATES

INTERNATIONAL HR ADVISER AUTUMN

OCTOBER

Expat Academy Extravaganza

9 October, 9am - 5pm etc. venues - St Paul's - 200 Aldersgate Conference Centre, London, UK Although October may seem like a while away, spaces are filling up quickly for the best Expat Academy conference yet. Meet HUNDREDS of other Global Mobility professionals, and enhance skills that are vital to Global Mobility professionals in 2017. We’re not telling too much at this stage, but we have some simply brilliant speakers, activities and insights ready for the BIG EVENT. Open to all in-house Global Mobility professionals. E-mail bookings@expat-academy. com for more information.

Worldwide ERC® Global Mobility Specialist (GMS)® Programme Modules 1 & 3 in Hong Kong

12-13 October 2017 HKIHRM Office: Suite 1503, 15/F, 68 Yee Wo Street, Causeway Bay, Hong Kong Learn more and register at www.WorldwideERC. org/Events/Pages/GMSHongKong2017.aspx

Worldwide ERC® Master Series: Iberoamérica - Place of Growth and Change In alliance with EMS (Employee Mobility Solutions)

18 October 2017 Hotel Villa Real Madrid, Spain Learn more and register at www.WorldwideERC. org/Events

HR Tech World Amsterdam

24-25 October 2017 Venue: Amsterdam RAI HR Tech World Amsterdam will gather the leading visionaries shaping the Future of Work to highlight the latest HR strategies and solutions revolutionising today's market. Attendees will hear from Arianna Huffington, Nick Bostrom, Corinne Vigreux and Olivier Blum amongst other top influencers in the space. Join us from October 24-25 to hear about the hottest topics in HR Tech and unleash your people's potential. Learn more and register www.hrtechcongress.com/amsterdam/

Chief Learning Officer Forum

24-26 October 2017 Boston, Massachusetts, USA Event Organiser: Corinium Global Intelligence Website: coriniumintelligence.com/ chieflearningofficerfall Corinium’s Chief Learning Officer Forum returns in the Fall from October 24-26 to give you the C-Level view on efforts to create a culture where learning and development is truly valued and seen as a strategic business tool. It is led by Chief Learning Officers but is open to learning and development, human resources, talent and workforce professionals cross-industry, allowing you to meet and network with the very best of your peers from a range of organisations and experiences. Key agenda areas include Employee engagement, Talent Management, Diversity and Inclusion,

Continuous Learning Strategies and the Digital CLO. Using an interactive format, the forum will bring together over 100 learning and development, talent and Human Resources professionals to share their latest innovations, best practises, challenges and use cases, as well as facilitate conversations and connections. International HR Adviser subscribers can get a 10% discount on the ticket to attend. Quote promo code CLO10 when registering. For more information, contact Muhammad Junaid - email: inquiries@coriniumintel.com

NOVEMBER

Webinar: Aligning Mobility Strategy to Support Business and Talent Objectives

2 November 2017 9:00 a.m. (ET) Complimentary, sponsored by SIRVA Learn more and register at www.WorldwideERC. org/Events

Webinar: Talent Management: What’s Changed for Relocation Managers – The Five-Year Trends

7 November 2017 2:00 pm (ET) Complimentary, sponsored by Cartus Learn more and register at www.WorldwideERC. org/Events

Webinar: Home Sales Outlook and Relocation Trends

9 November 2017 11:00 am (ET) Complimentary, sponsored by WHR Group Learn more and register at www.WorldwideERC. org/Events

Mexico City Summit 2017

9 November 2017 Mexico City, Mexico Mexico, whose business sectors are growing in size and significance, presents specific challenges and future options for a mobile workforce. Are you ready to address them? Join us for the discussions, the game-changing concepts and the idea-sharing that emerges as we explore the new and next steps to consider for effective mobility programmes and practices in this exciting region! Learn more and register at www.WorldwideERC. org/Events

FEM Summit & EMMAs EMEA – London

9-10 November 2017 Intercontinental - O2, London We’re back at the InterContinental O2, London for the FEM EMEA Summit & EMMAs where you can hear from leading global mobility professionals. Our two-day program is brimming with keynote sessions, panel discussions, expert insights and roundtables and you can choose from a comprehensive range of topics including compliance, cost containment, immigration and tax, technology, talent development and risk management. Join us to share best practice and network with your peers while coming away with valuable insights and ideas for your own

programme. Find out more information at www.emea.forum-expat-management.com

5th Compensation & Benefits Summit 2017

13 - 16 November 2017 Kuala Lumpur The 5th Compensation & Benefits Summit 2017 will make an Asia’s premier networking and learning platform for the industry to discuss and share insightful experiences in creating effective compensation and benefit plans, establishing successful rewards & performance programmes, aligning employees’ expectation with business goals as well as the innovation to successfully communicate the remuneration package to the employees. To learn more visit www.equip-global.com/ compensation-and-benefits-summitor or email to: enquiry@equip-global.com

GloMo Training – Essential Global Mobility

27 November 2017, 10am – 4pm London, UK This session will provide you with an insight into Global Mobility jargon, acronyms and the assignment life cycle. Plus, we will provide an overview of the tax and immigration considerations when managing globally mobile employees helping you piece together the complicated jigsaw that is Global Mobility. Particularly relevant to those that are reasonably new to Global Mobility or those who work in a specialist area and are keen to broaden their knowledge. For more information go to: www.expat-academy.com/events or to book direct e-mail bookings@expat-academy.com

GloMo Training – Intermediate Course

29 November 2017, 10am – 4pm London, UK This one-day technical course for in-house Global Mobility professionals with a minimum of three years’ experience covers immigration, tax, employment law and assignee compensation methodology. Using numerous case studies, you will have the opportunity to delve into each area to build on your global mobility knowledge. For more information go to: www.expat-academy.com/events or to book direct e-mail bookings@expat-academy.com

DECEMBER

São Paulo Summit 2017

5 December 2017 São Paulo, Brazil From traditional businesses to blockbuster startups, we’re seeing Latin America take a front seat on innovation and development … and mobility leaders are there to help with creative solutions to workforce issues. Come to this remarkable São Paulo Summit for the education, the connections, and the next-level mobility. Learn more and register at www.WorldwideERC.org/Events

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