International HR Adviser Spring 2014

SPRING 2014

ISSUE 57

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International HR Adviser The Leading Magazine For International HR Professionals Worldwide

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EXPATRIATE ADVISER SUMMER

AUTUMN INTERNATIONAL HR ADVISER

CONTENTS

In This Issue Page 2

Key Trends In Global Mobility Andy Piacentini, Partner, The RES Forum

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1FOTJPOT 5IF "HFJOH (MPCBM 8PSLGPSDF Stewart Allanson, Zurich Corporate Life & Pensions

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*OUFSOBUJPOBM )3 4USBUFHZ 'VFMMJOH 5IF "TJBO (SPXUI &OHJOF Rob Hodkinson & Andrew Robb, Deloitte LLP

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$BTF 4UVEZ -VYVSZ #SBOET 3FMZ 0O 5SBEJUJPO "OE 7BMVF 5P 8FBUIFS &DPOPNJD 4UPSNT Phyllis Chen, SPHR, HRMP, Human Resources and General Service Manager, BVLGARI Taiwan "VTUSBMJBO .PCJMJUZ 5JNFT 5IFZ "SF " $IBOHJO Deborah de Cerff, Founder, The Employee Mobility Institute (MPCBM 5BYBUJPO 6QEBUF Andrew Bailey, BDO LLP 5BYJOH *TTVFT &GGFDUJWF 4IBSF *ODFOUJWFT David Gardner, Reward Director, BDO LLP 5BMFOU .BOBHFNFOU 5BMFOUJTN "OE 5IF #VJME 7T #VZ %FCBUF Helena Wennberg, Nordic & Eastern Europe Mobility Leader, Talent, Mercer (MPCBM .PCJMJUZ -JOLJOH .PCJMJUZ 5P 5BMFOU .BOBHFNFOU Peter Sewell, Crown World Mobility 3FDSVJUNFOU "O 0WFSWJFX 0G 3FDFOU 5SFOET *O 3FDSVJUJOH Chris Harper, Baird Capital (MPCBM .PCJMJUZ 4VSWFZ 6OEFSTUBOEJOH 5SFOET *O (MPCBM .PCJMJUZ Nicola Rich, International Private Bank, Lloyds 4FSWJDFE "QBSUNFOUT 8IBU *T 5IF 'VUVSF 0G 5IF 4FSWJDFE "QBSUNFOU "OE $PSQPSBUF )PVTJOH *OEVTUSZ Jo Layton, The Apartment Service 3JTL 3FUIJOLJOH 3JTL *O 5IF 3FBMN 0G 3FMPDBUJPO o -FWFSBHJOH 5IF -BX 0G -BSHF /VNCFST Paul Coleman, TERN Financial Group )FBMUI 4NBMM 4UFQT 5PXBSET " )FBMUIJFS 'VUVSF Bupa International *5 4FDVSJUZ 4FDVSJUZ "OE 5IF &OE 6TFS Don Thomas Jacob, SolarWinds 4USBUFHJD 1MBOOJOH 5IJOLJOH 4QBDF Emma Gibbs & Natalie Grundie, Expat Academy %JBSZ %BUFT

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t &NBJM EBNJBO!JOUFSOBUJPOBMISBEWJTFS DPN XXX JOUFSOBUJPOBMISBEWJTFS DPN 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.

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THE RES FORUM REPORT

Key Trends in Global Mobility The RES Forum is an online community of senior in-house International Human Resources Professionals with over 500 members in over 30 countries. One of the Forum’s core aims is to facilitate information exchanges between forum members on policy and practice within HR Global Mobility through member e-surveys and email exchanges.

March 2014 saw the launch of the third RES Forum report, authored

by Professor Michael Dickmann of the Cranfield Business School, on key trends in mobility. The 2014 report is an amalgamation of all RES Forum member information exchanges over the last 12 months, amounting to 50 member e-surveys and 250 spot emails exchanged between the Forum membership.

However, the report is so much more than an amalgamation of data – it not only aims to analyse the ‘real life’ information and data from the RES membership but overlays that reality with both academic and professional research on global mobility, incorporating research on both international HR and strategic talent management. In the report itself we can therefore see theory compared to practice over a number of key areas touching the mobility world, including compensation, organisational development, talent management, programme compliance and technology.

So what are the highlights of the report?

These can be broken down in to 5 key themes as follows:

dimension to the work of global mobility departments.

The global mobility function knows where it needs to be, but how can it get there? At the RES Forum, our opinion is that there is only one route to that strategic positioning and that is through greater alignment of the mobility function with the talent management function in HR. The mobility function forming part of a Reward function might give mobility technical kudos, but in doing so it risks becoming a dark science of technical but confusing concepts rather than an easily accessible, strategic lever of talent management for organisations. Forming part of shared services takes the global

and institutional knowledge, leading to more effective organisations. Also having employee development (international or domestic) as a meaningful opportunity for employees to grow their careers, allows companies to focus less on financially expensive rewards and more on an intangible, but ultimately rewarding and engaging, element of their package, through which employees can grow their careers.

Our research shows that more than two thirds of organisations have a dedicated top talent strategy and almost half have a talent pipeline. There is also clearly a perception amongst mobility professionals that the effectiveness

The Role of Global Mobility Functions

Strategy

Strategic Advisor

Global Talent Manager

Processes

People

Global People Effectiveness Expert

Expert on Due Diligence

Operations

The Role of the Mobility Function From the information provided on the role of the mobility function we can almost feel the tension between the mobility function and the broader HR function, as the global mobility function fights to position itself as a strategic rather than a service orientated support function.

The core view of the function entails four main value propositions: due diligence and programme compliance, expert on global people effectiveness, an inherent part of global talent management and global mobility as strategic advisor to the business. An unusual, major trend is to use international assignments for organisational transformation and restructuring. This adds a further, strategic INTERNATIONAL HR ADVISER SPRING

Dickmann, 2013

mobility function even further away from any sort of strategic perception and positioning.

Mobility in the Context of Organisational Development and Talent Management A key emerging trend in the world of global mobility is the increasing role mobility plays in supporting organisational redesign and the movement of talent in the broadest sense – the concept is simple: having the right talent in place and developing your own talent saves the company money (not having to buy in expensive talent) and also improves organisational

of worldwide talent management is being supported by global mobility management. However, long-term career planning through global mobility for the leaders of the future is still in its infancy in many organisations.

Global Mobility and Compliance Management Our member surveys indicate that there is the ever increasing burden on mobility professionals in ensuring programmes are compliant with the multitude of areas which their world touches, including payroll, tax, social security, immigration and Sarbanes Oxley amongst others. When considering compliance one might also reflect on the

THE RES FORUM REPORT which their measures backfired against their local staff.

Paternalism and duty of care are cyclical concepts in the world of HR mobility it seems, where companies struggle with empowerment, in offering flexible policy packages, versus the paternalism and arguably less-optimised prescribed policy rule book. The cynics on one side will tell you that ‘flex’ reads ‘chaos’, whilst the opposing opinion is that over-prescribed rules result in less engagement. Can we say with certainty who is right and wrong in this discussion?

‘duty of care’ obligations of companies with internationally mobile employees.

Our research shows that employers take their duty of care very seriously and have drawn up emergency plans to respond to a variety of natural and political/security crises. In the event of a major incident, it is highly probable that international assignees and their families will be evacuated. About a third of all organisations would also evacuate all local staff. The willingness to proactively intervene, seeking to increase the safety and well-being of their employees, is an indication of a developed sense of corporate responsibility. However, again our research shows that many employers distinguish between local and overseas staff. While there can be sound reasons for this distinction, these multinationals leave themselves open to public scrutiny if there was a crisis in

Compensation and Remuneration in Mobility Packages Package design and the compensation elements of assignment packages are

How do you feel about the following statement? ‘Providing a higher base salary to expatriates compared to local employees on a similar position is fair.’

Strongly disagree

always a popular area for discussion within the RES Forum.

Some interesting information emerges from the RES membership during 2013 and into 2014, namely the continuing predominance of the ‘balance sheet’ as well as the emergence of global nomads or individuals who are on open-ended international commuter assignments.

One of our surveys assessed perspectives on fairness between international assignees and local staff. The data shows that more than half of organisations pay similar base salaries (international assignees – locals) but only a quarter have the same total compensation and benefit package. There is a moderate agreement amongst global mobility experts to provide more benefits to expatriates due to their special circumstances.

Beyond fairness and package design considerations, global pensions remain an important emerging topic. Less than a quarter of corporations have a global pension scheme in place but almost half are interested in creating one.

14.6%

Moderately disagree

Global Mobility and Technology

34.1%

14.6%

Neither agree or disagree

12.2%

Moderately agree

Strongly agree

7.3%

17.1%

Other

0%

5%

10%

15%

20%

25%

30%

35%

How do you feel about the following statement? ‘Providing a higher salary, compensation and benefits package to expatriates compared to local employees on a similar position is fair.’

Strongly disagree

7.3%

Moderately disagree

17.1%

Neither agree or disagree

4.9%

Moderately agree

31.7%

22.0%

Strongly agree

Other

17.1%

0%

5%

10%

15%

20%

25%

30%

35%

Mobility technology is an area which we hear much about in the Forum as members look to technology to drive workflow and manage expatriate HR data as well as supporting and reducing the need for the Human Resources function to support programmes through systemisation.

We realise, from our research, that there is still a space in the market for a smart technology solution for smaller programmes (less than 30 assignees) evidenced by a majority of smaller programmes still using spreadsheets to manage their programmes.

So overall we can see the key issues confronting mobility programmes and professionals in 2014 – we would be delighted to provide a full copy of the report for free to all IHRA subscribers.

Please just quote ‘IHRA’ and send an email directly to our mail box: res.forum@yahoo.co.uk Andy Piacentini Partner, The RES Forum Email: res.forum@yahoo. co.uk if you are interested in joining The RES Forum.

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PENSIONS

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The Ageing Global Workforce Most of us are living longer and longevity is rising at an ever-increasing rate. Extrapolate the current trends and it’s easy to believe that immortality is just around the corner! Closely linked to improved mortality is the growing trend for people to remain in employment well past traditional retirement ages. In this article I would like to take a look at the demographic changes that are taking place, the likely impact of these changes on employee benefits, and the opportunities that these may bring for businesses in the future.

Employee benefit consultants Lane Clark Peacock have recently released their 2014 Global Benefits Update, which highlights that life expectancy increases witnessed in the first ten years of the millennium outstripped the increases in the preceding 20 years. The report shows that the Australians, Japanese and Swiss appear to be living longest and on a forecast basis the French seem to be the bookies’ favourite. However, disparity in the mortality assumptions in different parts of the world is highlighted in the report as cause for concern and I’ll come back to that later.

Meanwhile, Towers Watson has published a report it commissioned from The Economist Intelligence Unit entitled "Is 75 the new 65?" The Intelligence Unit surveyed 480 senior executives at companies across Europe and 71% of these expect the proportion of their workforce aged over 60 to increase in this decade, with 22% saying this change would be significant. The greying of Europe is well observed – German businesses in particular face significant demographic change and a shortage of skills looks to be inevitable. That said, employers appear to be positive about the prospect of employing an ageing workforce and are already looking at ways to adapt working patterns to suit older workers.

Before moving on to the possible impact of these changes on businesses and their employee benefits, let’s consider whether this change is both global and industry-wide. Well, improving longevity is unquestionably a global trend driven by major improvements in health and medical advancement, with the only region not demonstrating any marked improvement in the past 50 years being

Eastern Europe. Bear in mind that some regions, such as Africa, are coming from a very low starting point with life expectancy in Sierra Leone, for example, remaining below 47. In China, United Nations data suggests that 8.50% of the population is currently over the age of 65, but this is forecast to rise to 24% over the next 40 years. Concern over the economic implications of this shift is certainly a key factor in the decision to relax the one child rule. As for the greying workforce, this is particularly pronounced in the developed economies of Europe, the US, Australia and Japan. For the emerging economies of India, Mexico, Brazil and Indonesia, this is much less of a concern and this disparity between countries may give some indication of likely future trends in global mobility.

So the ageing population is pretty much worldwide, but is the trend towards a greying workforce happening across all industry sectors? Well, it would seem that certain sectors of the workforce are faced with a much more acute problem than others, and this also partially explains the particularly acute problem in certain countries.

Let’s take Germany as an example with its traditionally strong engineering sector. Faced with a decline in younger, adequately skilled recruits, German industry has little choice but to embrace their older, skilled employees and to offer appropriate incentives for them to remain in employment. It’s a similar story in the oil and gas industry where a skills shortage among younger employees has arisen largely as a result of a contraction in that industry in the 1980s. An interesting statistic to consider in this context is that, according to the World Petroleum Council, US universities turn out around 43,000 lawyers every year, but only 430 geologists.

The IT and finance industries have fared much better as the career destination for graduates in recent times, both in terms of the local workforce and also in respect of mobile employees from developing economies such as India. In the US, the public sector faces a potential crisis in certain sectors, such as health and education as the workforce hurtles toward retirement age. In the state of Pennsylvania, 47% of the education workforce will be eligible to retire within four years. For health services the number is 37% and while for transport the number

falls well below 30%, it’s nonetheless a concern for the organisations faced with retaining or replacing these employees.

Having looked at some of the changes that nations and industries face, let’s now consider some of the problems that this demographic shift poses for global businesses and their employee benefits.

The LCP Global Benefits Update 2014 raises the spectre of very significant balance sheet surprises for global firms operating defined benefit plans. It highlights the very different assumptions currently being used in different countries with regard to longevity. It points out, for example, that if Germany, the US and Japan adopted the same mortality assumptions as France, the liabilities would be around 10% higher than is currently the case, potentially increasing liabilities shown on company balance sheets by many tens of billions. A more global perspective on longevity, the report concludes, is increasingly needed.

It’s not just pensions that are of concern to employers. While longevity is ever increasing, chronic illness does not appear to be declining at the same pace.

Yes, fewer people are dying from chronic ailments such as heart attacks, but more and more people are living with these conditions and the incidence of chronic illness increases significantly with age.

This has serious financial implications for the cost of health care and risk benefits for employers. The Towers Watson report "Is 75 the new 65?" points out that 43% of the senior executives surveyed expect the demand for employee benefits in later life to grow and 55% expected the cost of this to fall upon employers.

At Zurich we are seeing increasing numbers of requests from employers to continue to provide life and income protection benefits for employees post their ‘normal’ retirement age and increasingly into their 70s. The cost of providing cover for this older group, particularly for health, disability and income protection benefits, escalates rapidly and in some cases, perhaps due to existing chronic conditions, obtaining cover at any price from insurers can be a challenge.

A further consideration here for employers is the situation with state benefits. In some parts of the world there SPRING INTERNATIONAL HR ADVISER

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PENSIONS remains a strong expectation that the state will provide for sickness and retirement.

This view will be increasingly challenged as governments push back their retirement ages and struggle to cope with burgeoning healthcare costs. In Germany, Spain and Greece, the state pension age is moving from 65 to 67, while plans are already in place in the UK and Ireland for this to be 68 within less than twenty years.

It strikes me that globally mobile employees in particular will be affected by this trend. Already finding it difficult to maintain a meaningful record within any one country’s state system, these people are even more dependent upon support from their employer. Providing private healthcare and meaningful retirement savings for this group will become increasingly important and it’s often the very industries we’ve flagged as having the greatest problem – energy and engineering, for example – that rely heavily upon the expatriate and mobile community.

So what can companies do to capitalise on the benefits of retaining experienced and skilled employees, while at the same time managing the potential burden of benefit costs? "Is 75 the new 65?" concludes that adapting work to suit older

INTERNATIONAL HR ADVISER SPRING

workers will have a knock on benefit for all employees. Yes, there will be a demand for more benefits, but also for greater choice over benefits, working hours or working from home. It also suggests that as Europe recovers from the economic crisis companies will shift their focus away from cost control to the effective management of their global talent. With this, in my mind, comes a need to revitalise the pensions and savings benefits of the globally mobile and expatriate community.

LCP’s Global Benefits Update 2014 recommends that employers look at the options of sharing the longevity risk with employees through innovative benefit design or by switching to defined contribution savings plans. There are already effective solutions in place for retirement savings for mobile workers which offer a single pension pot, multicurrency options, access to global investment options and low charges, but it’s likely that even more flexibility will be needed to reflect the changing working patterns in some industries.

Health and risk benefits may prove more challenging in this respect and as a result there is likely to be a much greater emphasis placed upon the health

of employees than has yet been the case.

Although frequently part of flexible benefit schemes today, will regular medical examinations and education around lifestyle and diet become more central and heavily promoted by employers as part of a drive to manage costs among their older employees? Will the decline in workplace facilities, such as gymnasiums, sports facilities and social clubs be reversed in an effort to keep employees fit and well? Will job share become more prevalent, as older workers seek partial retirement?

Longevity and the greying of the workforce will bring both challenges and opportunities for employers. Benefit design will need to change, as will flexibility around the working day - and interesting times lie ahead for HR and compensation and benefits managers.

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

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

TECHNOLOGY IN GLOBAL TALENT

Global Talent Managers Are Missing A Trick By Overlooking The Role Of Technology There’s no denying that technology today plays a huge role in our lives. The majority of us are using social media and other various digital communication channels to stay in touch across the globe. And if you walk down the streets of almost any city across the world, you’ll see professionals sending emails on their tablets or the creative types tapping away on their laptops in coffee shops.

The sheer scale of our global social technology use is immense. For example, according to independent research by web designer and developer, Creotivo, every minute of the day; UÊ 100,000 tweets are sent UÊ 2 million queries are searched on Google UÊ 48 hours of video are uploaded to YouTube UÊ 684,478 pieces of content are shared on Facebook UÊ 3,600 photos are shared on Instagram From a business perspective, corporates across the globe are using these channels to encourage engagement with their brand. It’s common to see companies communicating with customers and clients through Twitter, LinkedIn and Facebook to name a few. We just need to look at the vast number of updates, comments and reactions posted through social media on the 2014 UK Budget announcement, or the 2013 US elections, to see how instrumental these channels have become in the way we operate globally.

In fact, according to McKinsey & Company, 90% of organisations worldwide are using social technology and reporting a direct business benefit from them. From an employee point of view, 28 hours of their working week are spent writing emails and searching online for information.

And as many of us are perhaps already aware, the use of tablets and mobile devices is increasing around the world. The prediction by The World Bank that within 4 years 71% of the world’s literate population will have a smartphone highlights just how reliant

we are all becoming on technological innovation.

It’s clear, then, that technology plays an extensive role in the way individuals operate both in and out of work wherever they are in the world. But, while it might be used well by a corporate brand or an individual, it would seem this is yet to be utilised in a vital company process: that of staff learning and development.

Examples of talent management strategies that incorporate social technology devices to engage employees and assist with formal training programmes are few and far between. But, considering the clear value staff and business decision makers place on this, could the HR profession be risking losing its credibility if it fails to catch up with, and integrate, technological developments in people processes?

This certainly appears to be the case in the UK, with a recent report by the CIPD (Social technology, social business?) indicating that, whilst over half (54%) of employers are using this medium for recruitment, there’s a clear gap in expanding this across wider people strategies. The majority of those surveyed (78%) stated that their organisation doesn’t use social media to deliver learning and development.

Considering that the report also found that almost two thirds (61%) of the UK workforce use a mobile device for work and one in nine have found a new job through this channel, talent management professionals are certainly missing a trick.

Talent strategies – whether implemented by internal teams or external suppliers – quite simply must be driven by the business world and staff expectations. If, as the CIPD report suggests, social media and mobile technology are significant influencers in our working lives, it’s vital that these resources are used as part of the full people agenda. While the data from the CIPD clearly identifies a gap within UK talent strategies, it’s perhaps fair to say that this challenge is of global

significance. If HR teams and resourcing professionals around the world fail to utilise social technology in internal training and development, there is the risk that people strategies will become significantly outdated.

That’s not to say that people processes need to become wholly digitalised either.

Of course we must embrace the media that all our stakeholders are engaging through, but it can’t be overlooked that talent management is all about people.

There is the slight danger that, as digital developments simplify the engagement element of a company’s talent programme, businesses and candidate or employee pools become separated by technology.

At the end of every channel there needs to be a person engaging with another person. As with any talent management plan, if it becomes too processed HR teams will lose touch with the end user. So, rather than using these tools as a replacement for existing strategies, resourcing teams need to look at how they can be incorporated into current people processes.

In my view, it would also be interesting to measure engagement levels and business impacts as a result of social interaction. It’s all too easy to assume that the activity on these digital channels is engaging, but without identifying measurement indicators it’s impossible to demonstrate the true business value and assess where improvements can be made. In our experience we find that few companies around the globe achieve true engagement with their social initiatives and therefore it’s hard to quantify the return on investment from implementing social practices.

Stephen Gilbert is Practice Director at Rethink Talent Management For further information visit: www.rethinkrecruitment.com/ talent-management

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INTERNATIONAL HR STRATEGY

Fuelling The Asian Growth Engine Talent Supply Chains in Asia Pacific Buoyed by domestic demand, the increasingly affluent consumer market and relative stability and growth, the Asia-Pacific (APAC) region has become increasingly attractive to multinational companies looking to invest their financial and human capital. The result of this investment is an ever increasing impact on the overall talent demand and supply equation within APAC. According to a survey conducted by Deloitte and the Human Capital Research Institute, in the next year APAC companies anticipate an increase on workforce demands and challenges as they struggle to fuel their talent growth with 71 percent of respondents reporting they are struggling to find the right talent.

This supply/demand mismatch is characterised by the high competition for available talent in the region which is not aligned with the available levels of appropriate talent. Currently, the majority of talent resources do not have the appropriate critical skills needed, with the main reasons being cited as the lack of qualifications or required global experience. For those with the right skills, widespread salary inflation poses an additional challenge: salaries in APAC are increasing nearly 10 percent each year, a result of top talent candidates changing jobs every nine to twelve months in order to capture the most worth for their value.

These factors together with the inability of many companies to retain the right talent only add to this supply/demand mismatch.

As a result companies based in the APAC region need to move away from the traditional training methods and development planning cycle and instead embrace a more systematic, continuous process or “supply chain” approach to manage their global workforce.

Getting Ahead of the Curve Supply chain approaches are used so companies can examine their capabilities at all levels and project gaps into the coming years to manage the supply/ demand mismatch on a proactive basis.

Once these gaps have been identified, companies can focus on which skills they will need, where they might need them INTERNATIONAL HR ADVISER SPRING

Figure 1

Figure 2

and how they might fulfil them (e.g. acquire or deploy).

Deloitte’s Global Human Capital Trends 2014 Report suggests that executives generally believe their companies are doing an adequate job of identifying both skill gaps and where skilled workers are located. However, it becomes apparent that executives are struggling to access those skills, particularly when it comes to moving talent to the work and redesigning work to access skills in new places. (figure 1).

For many organisations, one of the key drivers for managing their global people supply chains is the need for talent mobility within the company. Leading companies often move talent from region to region to address key talent gaps.

Consider a business unit in California with a strong need for engineering skills. The company may have a team in Moscow with precisely the right skills that has just finished a similar project. Unless the company’s talent practices are globally integrated, this match between business need and existing skills may never take place.

A prerequisite to guarantee the success of talent mobility is the implementation of the right systems to support the

increasingly common HR responsibilities around deploying the right specialists on the relevant global assignments in a rapid and cost efficient way. A globally integrated HR is critical, but when HR readiness was compared in the Deloitte Global Human Capital Trends 2014 Report among more than 20 talent practices, the implementation of global mobility and career programmes was one of the lowest rated – in fact it was more than 40% lower than the average for all other HR practices. More than two out of three executives (70%) rate their company’s ability to deliver on global mobility as “weak”. (figure 2).

Overcoming the Gap in the APAC Region While businesses today operate in a pervasively global environment when it comes to customs, talent and supply chains, each local labour market has vastly different dynamics. To balance strong global HR strategies and platforms, companies should build flexibility and agility into HR so it can be customised for local markets.

The talent markets in Asia, for example, are far different than those in Western

INTERNATIONAL HR STRATEGY Europe and North America. According to Deloitte’s upcoming “Fuelling the Asian Growth Engine” survey, the majority of employers in APAC are seeking to overcome these challenges by creating a diverse framework of assignment types to support alternative ways of moving talent across the region. (figure 3). The three most common alternative approaches for deploying talent across the region are: UÊ Locally hired foreigners; the external recruitment of foreigners to a location different from where they currently reside UÊ Permanent transfer; the internal cross boarder movement of an employee

from country A to country B on local terms and conditions UÊ Localisation, the act of moving an employee from traditional home based expatriate terms to the host country terms and conditions.

More specifically, Deloitte’s “Fuelling the Asian Growth Engine” survey indicates that permanent transfer and localisation moves have seen an increase towards becoming standard practice with 49% and 53% respectively of companies having a formal deployment approach to support such moves. Conversely, only 26% of companies have a formal policy in place specific to locally hired foreigners

Figure 3: Within the next 2 years and specifically in the countries that your country operates in, what volume and type of hires/ moves to you expect to see?

Figure 4: Percentage of companies who have formal policies in place for Localising Expatriates, Locally Hired Foreigners and Permanent Transfers.

and less than 10% of companies have a policy in place for all three of the alternative move types. (figure 4).

Deep Dive: Most prominent alternative approaches Locally Hired Foreign Nationals One of the points standing out the most in Deloitte’s upcoming APAC survey is that companies agree the most significant increase in move types will be amongst locally hired foreign nationals in the next 2 years.

In general, job level, job role/function and hiring circumstances are consistent across all three move types but are most likely to influence packages for Locally Hired Foreign Nationals. The most commonly indicated factors for locally hired foreign nationals were job level of the employee (29%), followed by job role or function (25%) and hiring circumstances (21%). (figure 5).

In terms of the package, benefits provided to Locally Hired Foreign Nationals are likely to be phased out.

Where benefits are provided to Locally Hired Foreign Nationals approximately two-thirds of benefits are provided for a limited period following the relocation.

Benefits are most likely to be provided for between 2 and 5 years (in between 25 and 43% of cases) or offered indefinitely until the individual’s employee with the company ends. (figure 6).

Permanent Transfer

Figure 5: Which of the following factors influence the Locally Hired Foreign National’s package?

Our survey indicated that Permanent Transfers are not only on the rise, but are also the most prevalent way for deploying talent within the region.

There are many reasons that lead to the execution of a permanent transfer rather than deploying an international assignee.

The most prominent cited in the survey are either initiated upon the employee’s request to transfer to another country or in an effort to manage the mobility costs of the assignment. (figure 7).

The survey also indicated that permanent transfers are more common within Asia. (figure 8). More specifically, only 8% of companies have the majority of their permanent transfers occurring in moves from Europe to Asia and only 2% originate from the Americas to Asia.

Conversely 35% of companies have the majority of their permanent transfers willing to permanently relocate within Asia with the main reasons being that SPRING INTERNATIONAL HR ADVISER

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INTERNATIONAL HR STRATEGY

Figure 6: When offering the above benefits to Locally Hired Foreigners, is there a limit as to how long these benefits are provided for?

those with backgrounds or origins in Asia are more likely to adapt quickly to the new location. This is collaborated by the fact that the lack of cultural readiness and adaptation are cited as the most common challenges with permanent transfers which suggests why this deployment type is the most common practice for Intra-Asian moves.

As a result each organisation will be required to manage a careful balancing of the use of traditional international assignments to plug short-term skill gaps versus deploying people on a permanent basis in order to manage their overall supply chain in the short to medium term.

Localisation

Figure 7: What were some of the factors that prompted your company to initiate intra-company permanent transfers instead of deploying an international assignee/ expatriate?

Figure 8: Using best estimates, what percentage of your company's permanent transfers into Asia are from:

INTERNATIONAL HR ADVISER SPRING

For many years the reason to deploy talent to Asia was to ‘plug’ particular talent gaps on a short-term basis with traditional expatriate assignments with employees who had a clear intention to return to their home country.

The sustained economic growth of the region more recently however, has changed this dynamic with a greater longer-term demand for talent within the region. This goes some way to explaining an increasing trend to the localisation of ‘traditional’ expatriates from both an employer and employee perspective who both see the longer-term growth opportunities in the region.

Our survey suggests that assignee nationality and assignment origin were found to have an impact on the likelihood of localisation. The results showed that 83% of respondents indicated an employee would be likely to be localised in APAC following an expatriate assignment if the assignment originated within Asia, or if the assignee was an Asian national.

By the same token, 72% of respondents felt that assignments originating outside APAC, or where the assigne origin was non-Asian, then they would be unlikely to be localised.

In terms of locations, the three countries in APAC where respondents indicated it was most common for assignees to localise were Singapore, China and Hong Kong. Approximately, 64% of all cases of localisation are split across these three respective locations.

In addition, 55% of companies reported that localisation of expatriates typically happens after 3-5 years. However, significantly, 88% stated that localisation is not mandatory and therefore assignment benefits can be extended based on a case by case assessment. Where assignment terms and conditions are extended beyond the usual localisaiton

INTERNATIONAL HR STRATEGY Figure 9: In your experience with your company; would the nationality/ originating country of the employee impact the localisation process?

date, 57% of respondents report the same terms and conditions are maintained on an ongoing basis.

Of the companies where a localisation policy is in place (57% of the respondents), less than a fifth apply the policy strictly.

The vast majority (81%) cited that the application of policy tends to be assessed on a case by case basis.

Overall Thoughts Taken into account the talent supply/ demand mismatch the requirement for a combination of supply chain management of global workforces together with the right framework of assignment types has

become more apparent than ever before.

Businesses will react in variety of ways to address these challenges however here are a few starting points: Understand skills gaps today and into the future: Begin by identifying key customer or project needs, then identify key talent segments and expected supply into the future. Factor in company and geographical growth, retirement and attrition.

Extend the global supply chain: Understand the extended supply chain: to identify where keys skills are located, where they are going and where and how to source or relocate work to tap into talent hubs.

Extend the time horizon: Recognise how

long it will take to fully develop key skill sets - the “time to proficiency� and model the training, experience and exposure necessary to build these capabilities.

Encourage local or regional differences within a global framework: Adopting flexible local or regional alternative approaches to assignment policies can avoid a mismatch between investing in the right talent and receiving the appropriate business results without dramatically increasing business costs.

Rob Hodkinson Global Mobility Partner Deloitte LLP, United Kingdom +44 20 7007 1832 rhodkinson@ deloitte.co.uk Andrew Robb Global Mobility Transformation Director, Practice Leader. Deloitte LLP, United Kingdom +44 20 7303 3237 anrobb@deloitte. co.uk

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CASE STUDYY

Luxury Brands Rely on Tradition and Value to Weather Economic Storms With the global economy struggling, consumers are scaling back their spending and waiting to purchase big-ticket items until markets improve. But there is one industry that seems untouched by the financial tumult: the luxury fashion and accessories sector. Indeed, the highend luxury shopper appears not to have missed a step in a shaky economy.

What keeps this market strong and vibrant through the turmoil and uncertainty of a recession and post-recession recovery?

Many luxury brands have adopted new strategies to reach a new brand of customer.

Dior and Louis Vuitton have begun selling some of their product lines in department stores, which places them in front of a different audience than the ones they have traditionally marketed to. A few brands have entered the world of flash sales by offering a time-limited online sale to exclusive customers. This tactic draws in the customer who can’t pass up a good deal — especially when it is a short-lived one.

On the other end of the spectrum, some attribute the luxury fashion market’s strength to traditional brand loyalty and to the power of the brand itself. Phyllis Chen, who is a Senior Professional in Human Resources (SPHR®) and a Human Resource Management Professional (HRMPSM), is the HR manager at BVLGARI Taiwan. She discusses how human resources in the luxury industry differs from other industries.

Chen began working for BVLGARI eight years ago. Today, Chen oversees human resources for BVLGARI Taiwan and manages all of the company’s HR general services — everything from staffing, compensation, performance management,

INTERNATIONAL HR ADVISER SPRING

training and development to public relations. She credits this role as giving her a seat at the organisation’s table. “Over the years my scope increased and I have become more of a business partner. I understand the business and can provide suggestions and solutions to our managing directors.”

Chen remembers that when she started working at BVLGARI she often wondered why individuals paid so much for the products.

What she found was that BVLGARI customers did not buy just a product — they bought much more: lifestyle and value. “It involves more of the psychological factors,” Chen explains. “They are buying the image, the prestige and the glamorous feeling that the product alludes to. You can buy a Swatch or you can buy a BVLGARI watch. What’s the difference? A sense of luxury.”

Employees of BVLGARI must represent luxury as well. Chen describes the HR role in the luxury sector as different from other industries she has worked in.

One of the unique factors is the way in which recruitment is done — it is highly competitive and the talent pool is limited.

Employees who work for BVLGARI must be very experienced because the company caters to an exclusive group — customers who do not focus on price. Therefore, BVLGARI does not conduct campus recruiting or hire entry-level workers. To acquire the best talent in the industry, recruiting takes skill and persistence.

Chen spends much of her time out of her office looking for talent and scouting the competition to ensure there isn’t someone working for another company who should be with BVLGARI. The talent wars can be brutal. “Today I can recruit someone from Cartier and tomorrow Tiffany will approach and steal them.”

The battle for employees keeps Chen attentive to retention. She researches benefits packages, market rates and other employee incentives extensively to ensure that competitors’ offerings aren’t more attractive than BVLGARI’s. The company must have the tools in place

to keep employees engaged, satisfied and happy; otherwise, talent might leave for a better deal elsewhere. The HR team must be flexible, willing and ready to change policies instantaneously and be willing to brave the executive team to prove the need for any such changes to retain top talent.

According to Chen, the role of human resources in the luxury industry is to know the customer and know the products.

To be a true business partner, human resources must understand the needs of employees and how they align with the business. When HR managers gain intimate knowledge of the product, they achieve a clear understanding of the perspective of the retail employees who deal and engage with customers directly. “I attend retail meetings not just to understand the business, but to understand my salespeople’s conflicts and issues. I can then provide my suggestions and solutions to solve them and ensure they are happy employees who will meet our customers’ needs,” Chen says.

This article has been truncated for space.

To read the article in its entirety, please visit: www.hrci.org/luxuryhr.

Phyllis Chen, SPHR, HRMP, for the past eight years has been the human resources and general service manager at BVLGARI Taiwan, where she provides full-function HR generalist expertise. Her past experience is in training and development, staffing, employee relations and HR policy and procedures establishment in a variety of industries including mobile communications, retail and hospitality.

The HR Certification Institute offers a comprehensive portfolio of advanced professional credentials for HR professionals worldwide. More than 130,000 HR professionals worldwide maintain the Institute’s credentials as a mark of high professional distinction.

The Institute’s global credentials include the Global Professional in Human Resources (GPHR®), Human Resource Business Professional (HRBPSM) and Human Resource Management Professional (HRMPSM). For more information, email marketing@hrci.org or telephone on +1 703-535-6000.

AUSTRALIAN MOBILITY

The Times They Are A-Changin’ Australian mobility professionals must be tearing their hair out. An everconstant wave of change to deal with has resulted in Australian mobility becoming increasingly complex to manage. Legislative changes and shifting migration trends require Australian mobility professionals to become jugglers, balancing the needs of the company versus available resources. We highlight some of the issues they are dealing with and shine a spotlight on some solutions that might prove fruitful.

We expect there to be Australian legislative changes each year. However, the last 12 months have seen a raft of amendments that require more than just a tweak to current policy and practices.

Last year heralded substantial changes to the concessional tax treatment of fringe benefits tax for living-away-fromhome-allowances (LAFHA) and benefits.

Previously, companies with long-term temporary foreign workers could expect to benefit from reasonable concessions on everything from housing, education, food and airfares. The Australian Government decided to tighten this concession and companies were forced to completely rethink remuneration packages.

Let’s be honest. The LAFHA concessions had enabled companies to entice overseas workers with promises of benefits that they maybe wouldn’t have otherwise been able to afford. The changes have resulted in widespread issues with disgruntled employees seeing their ‘assignment carrots’ disappearing. Businesses have either had to manage the fallout and convince employees to still stay, or continue the benefits at greater cost. The ripple effect on many service providers, particularly within accommodation and education sectors, is still being realised. Astute mobility professionals may need to develop remuneration packages that cater for individual needs instead of a generic offer that may not be as enticing or cost-effective.

The Australian Government also decided to implement tighter control on the issue of Temporary Work (Skilled) visa (subclass 457). The subclass 457 visa is the most commonly used visa scheme to sponsor overseas workers on a temporary basis up to four years. Companies have been required to demonstrate that there is a genuine job that fits within the 457 visa eligibility criteria,

and that they are genuinely training local workers and where they are investing in that training. Companies also have to meet new Labour Market Testing rules and ensure roles are being advertised before being filled from offshore.

Historically, the mobility, learning and talent functions have been managed in silos with little interaction. These groups now need to work together by necessity to formulate policies and practices that will fit within the new rules. Not necessarily a bad outcome, but not easy to manage either with potentially conflicting motivations and business pressures. This co-operation may, however, be an inventive way to handle the limited resources that mobility professionals are often faced with, whether from a personnel or budget perspective.

These changes have certainly been taking up a lot of time. Imagine the dismay of mobility professionals when they then learnt about the biggest overhaul of Australian privacy legislation since the commencement of the Privacy Act 1988 (Cth)(the ‘Act’). The Act includes a new set of privacy principles that will regulate the handling of personal information by businesses. The new Australian Privacy Principles (APPs) are significantly different from the prior principles and are creating more hurdles for human resources to jump over, in particular, the international flow of personal information. Companies are now required to disclose what information they are sharing and storing with overseas entities and 3rd parties, and how sensitive information will be collected, stored, protected, used, updated and disposed of.

What does this mean in practical terms?

As a start, a review of all existing policies and procedures that deal with personal information.

Australian mobility professionals are also continuing to be faced with increasing issues around talent retention resulting from the challenges of the Australian employment landscape and the draw from the growth economies such as Asia. According to the ERC Mobility December 2013 article on Global Talent, “How the New Geography of Talent will Transform Human Resources Strategies”

by Oxford Economics, the 22 countries with the highest talent deficits anticipated in 2021 will include Taiwan, Japan, South Korea, Thailand and Singapore, all of

which are at Australia’s doorstep. The lure of well-paid Asian roles continues to entice highly motivated, educated, talented and upwardly mobile Australian professionals.

The fight to retain key talent is an uphill battle and requires flexible and responsive international relocation policies that will support expatriates throughout their journey. However, historically only a few Australian based companies can boast of fully developed and well thoughtout international relocation policies, a situation that will need to be rectified.

Resourceful mobility professionals should also look to align assignment strategy with the broader talent agenda.

It is not uncommon to find Australian organisations also seeking to capitalise on Asian growth opportunities by launching their employees into new countries with the previously successful and Australian practical approach of “just need to get my gear from here to there and she’ll be right”. With the increasing complexity of immigration laws, tax, company governance issues, security concerns and cultural gaps, this approach is very dangerous. Not only is there a risk of business ventures failing, but high risks of employees being put in difficult and risky situations. The company will be considered liable for non-compliance in immigration and employee’s actions and behaviours in foreign countries. Companies therefore need to make careful plans to ensure the success of their commercial ventures.

Mobility professionals need to protect these employees with international relocation policies and procedures that address these concerns.

Company decision-makers also need to be convinced by mobility professionals that a holistic approach to the entire family is the key, and that cross-cultural training is vital. Without the tools to communicate and integrate effectively, there is a strong possibility that the relocation will fail.

Companies need to understand these cultural differences and be prepared to embrace them, in order to ensure the longevity of their global workforce.

Another trend developing in the Australian market includes the outsourcing of services to offshore centres for HR administration, shared services and accounting payables to take advantage SPRING INTERNATIONAL HR ADVISER

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AUSTRALIAN MOBILITY of high capabilities and lower cost wages in regions such as Asia. This trend is more and more evident in the Australian market. It is not unusual to come across Australian owned enterprises that have off-shored their entire administrative management of HR benefits, payments of invoices and payroll functions. While there are demonstrated benefits of this approach there can also be a mountain of challenges. It is often left to the human resource or mobility professional to iron out these issues. According to the Deloitte Debate of ‘Does HR Outsourcing Really Work?’ it requires clear expectations, custom solutions instead of one-size-fitsall, to treat the vendor as a partner, and a focus on achieving business results that are realistic, measurable and allow for continuous improvement.

According to the latest Ernst & Young Global Mobility Effectiveness Survey 2013, 40% of companies surveyed did not have a risk control framework to monitor payroll, tax and social security compliance. In addition, only 30% of companies surveyed had a system in place for tracking business travellers.

Technology can play a vital support role for both domestic and international mobility programmes. There are a variety of IT systems that can automate, simplify, track, monitor or expedite mobility processes which is important in an environment where an agile workforce is key to being competitive.

To manage these issues the role of the mobility professional in Australia needs to change, and will continue to change rapidly as corporations focus on expansion strategies into new markets. As the economic environment continues to be uncertain, C-suite leaders are beginning to grasp the importance of domestic and global mobility in driving growth

initiatives. Across industry sectors there is a perceptible change in the status of the mobility function and this presents a great opportunity for the mobility professional of today. Expect to see astute companies moving the mobility function closer to the business as a support function.

Managing Australian mobility in a time of significant change is not easy by any stretch of the imagination. Mobility professionals would be wise to recognise the challenges and investigate the variety of solutions that may suit. Whether this is reviewing policies and practices, seeking advice from like-minded mobility industry professionals, or researching available technologies, innovation, flexibility and resourceful teams are key to staying ahead of the change game.

Article written by Industry Steering Committee Members of The Employee Mobility Institute. Jon Johnson: Deloitte Australia, Wendy Jenkins: Moving2plan, Sue Latina-Cohen: Toll Transitions and Robyn Vogels: Personnel Relocations.

Sources UÊ Australian Department of Immigration and Border Protection UÊ Australian Taxation Office UÊ Office of the Australian Information Commissioner UÊ Mobility December 2013 “The Numbers. Global Talent 2021: How the New Geography of Talent will transform Human Resource Strategies” reprinted from the Oxford Economics “Global Talent 2021: How the New Geography of Talent will Transform Human Resources Strategies” report.

UÊ Deloitte Debates online “Does HR Outsourcing Really Work?”

UÊ Ernst & Young Global Mobility Effectiveness Survey 2013.

With a simple search and click... find an immigation specialists who will assist with Australian compliance!

Take the stress out of moving to or within Australia INTERNATIONAL HR ADVISER SPRING

Deborah de Cerff Founder, The Employee Mobility Institute.

With nearly 30 years’ experience in the field of strategic global mobility programme design, integration and optimisation, Deborah is a seasoned practitioner recognised for creating leading edge customised employee mobility solutions. Deborah has assisted many multinational organisations across varying industry sectors to develop fit for purpose global mobility functions.

Having longstanding and respected working relationships with industry vendors around the world, Deborah launched The Employee Mobility Institute in April 2013.

The Employee Mobility Institute is Australia’s peak industry body supporting Australian organisations navigate the complexities associated with moving personnel across country or state borders. In today’s complex business environment, where globalisation and expansion are high on the corporate agenda, The Institute’s mission is to advocate, promote, represent and grow the Australian Employee Talent Mobility Industry.

Visit www.employeemobility.com.au for further information.

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FIND OUT MORE

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GLOBAL TAXATION

Global Taxation Update AUSTRALIA Taxation of Employee Share Schemes Employee Share Schemes (“ESS”) are used worldwide to attract, retain and motivate staff by aligning employee interests with shareholder interests. Having a vested interest in a business is said to give employees a sense of participation, and a good reason to want to see the company grow and profit.

The tax laws governing ESS in Australia are unlike those of many countries, and companies operating schemes in Australia should be aware of these differences.

In Australia, the default taxing point for individuals granted ESS interests is at grant unless the interests qualify for deferred taxation. Subject to meeting a number of conditions, interests will usually qualify for deferred taxation where there is a real risk that the individual will lose or forfeit the interests (other than by disposing of it). A ‘real risk of forfeiture’ is considered to exist when there is a real risk the employee may lose, or never receive, the actual shares or options to which they become entitled under an ESS. For example, a real risk of forfeiture may exist where an employee needs to meet performance hurdles or work for their employer for a minimum period before their ESS interests vests.

The taxing point for deferred taxation interests occurs when any real risk of forfeiture lifts and there are no restrictions on disposing the underlying shares. For many ESS interests, this is at the vesting date. The employee may also be subject to capital gains tax where the underlying share is sold after 30 days from the taxing point. Where the underlying share is sold within 30 days of the taxing point, there is no assessable capital gain.

What is the Taxable Amount?

The amount that is subject to income tax in the hands of the employee is the ‘discount’ they receive in respect of their ESS interests at the taxing point. The discount is the difference between the amount that the employee paid to acquire the ESS interests and their market value at the taxing point. The ‘market value’ of ESS interests is its market value according to ordinary concepts. If the ESS interest is an unlisted option, its market value INTERNATIONAL HR ADVISER SPRING

is determined by using two different methods stipulated in the ESS legislation.

Where the underlying share is sold after 30 days from the ESS taxing point, the assessable capital gain is calculated as the difference between the sales proceeds received and the amount taxed at the ESS taxing point. It is important to note that where a capital asset is granted to an employee and there is no assessable discount under the ESS rules, there may be Fringe Benefits Tax (FBT) payable by the employer (FBT is an employer tax on non-cash benefits provided to employees).

The valuation rules for FBT are different to the ESS rules.

associated with the employees being assessable upfront is that the employee would have to fund a tax liability on an unrealised discount. It goes without saying that the share price could subsequently fall.

What Can Companies do?

BDO comment

The downside of these rules for plan participants is that a taxing point may arise for their ESS interests (e.g. at grant or at the deferred taxing point) before employees are able to sell the underlying shares to fund the tax liability. Where this is the case, employees will need to have access to cash to fund their tax liability, which can generate cash flow issues and a reduced desire to participate in the ESS. Thoughtful structuring of an ESS can reduce this risk. The scheme can be designed to ensure that the taxing point is either early enough to ensure negligible value or late enough such that the employee is readily able to cash-in and cover any tax liability.

In some cases, employers may consider it preferable for employees to be assessable at grant or ‘upfront’ on the unrealised discount under the ESS provisions (cash flow permitting) where: 1. The options are likely to be exercised; 2. The options are likely to increase in value; and 3. The funding costs (e.g. interest on borrowings to pay the tax) are likely to be less than the tax savings (or they have capital losses).

This is because a greater amount of the overall economic value is treated as a capital gain and therefore subject to tax at the maximum rate of 23.25% when the resulting shares are sold (assuming that the shares increase in value and satisfy the 12 month holding period test to obtain the 50% discount), rather than at 46.5% under the ESS provisions.

As noted above, the main downside

When designing ESS plans to be operated in Australia, companies need to consider the Australian taxing point as well as their reporting obligations. Simply ‘importing’ a foreign ESS plan to Australia is unlikely to provide the best tax outcome for the employee and most foreign ESS plans will benefit from modification.

Care should be taken to ensure there is an understanding of income tax issues and interaction with Capital Gains Tax (CGT) and consideration of how a scheme can be set up to achieve the desired tax outcome.

ESS Reporting While there is no withholding obligation for ESS interests in Australia (unless the employer does not have their employees Tax File Number), employers are required to fulfil annual ESS reporting obligations by providing ESS statements to employees in the format approved by the Australian Taxation Office (“ATO”) as well as an Annual ESS Report to the ATO.

Superannuation Obligations for Employers of Inbound Expatriates When seconding employees to work in Australia, employers need to consider their Australian superannuation obligations.

Superannuation is a type of pension scheme – but it is quite different to most other countries’ pension schemes, particularly when it comes to its tax treatment. It is primarily an employer funded scheme where the contributions are made to privately run funds and are fully vested in the employee.

Contribution Rates Employers are required to pay superannuation contributions into an Australian complying superannuation fund on a quarterly basis at 9.25% of ‘ordinary times earnings’ for eligible employees working in Australia subject to certain exemptions (see below).

Compulsory contributions are capped at 9.25% of the lower of an employee’s

GLOBAL TAXATION quarterly earnings or the ‘maximum contribution base’ (currently $48,040 per quarter, rising to $49,430 per quarter from 1 July 2014).

The compulsory contribution rate is increasing incrementally to 12% by the year ending 30 June 2020.

Exemptions Superannuation contributions are not compulsory when employees are: 1. Inbound assignees to Australia where a Certificate of Coverage is in place; or 2. Senior executives holding a temporary visa (a ‘prescribed employee’).

Bilateral Social Security Agreements and Certificates of Coverage Australia has entered into agreements with a number of countries which address the issue of international assignees and their employers paying social security contributions in both their home and host country (superannuation being treated as a social security for this purpose).

Superannuation contributions are not required for inbound assignees where Australia has a bilateral social security agreement with the assignees’ home country and a Certificate of Coverage has been obtained from that country’s social security authority thereby confirming that home country social security contributions continue.

Senior Executives Exemption Where an employee holds a certain temporary visa, typically subclass 457, they may be classified as a ‘prescribed’ employee for the purposes of compulsory superannuation contributions and so exempt from superannuation.

In order to be a prescribed employee, the employee must meet one of several tests in the Superannuation Regulations.

As a general rule they must: UÊ Hold a certain temporary visa UÊ Have a full time position UÊ Be a senior executive and carry senior executive responsibilities.

Guidance should be sought to confirm if an employee will meet the definition of prescribed employee as there are several qualifying categories.

Taxation of Contributions and Fund Growth Unusually, for pension contributions by global standards, Australian employer superannuation contributions are taxed at

15% on entry to the fund.

Contributions up to $25,000 per annum (increasing to $30,000 for the year ending 30 June 2015 or $35,000 for older employees) can be made into Australian superannuation with this ‘entry tax’ rate, although if the employee has income over $300,000 per annum, the entry tax is increased to 30%.

Contributions above the applicable contribution cap are taxed at the employee’s marginal tax rate after taking into account the entry tax paid.

In addition, growth in the fund is taxed at 15% or 10%.

Accessing the Funds Australian citizens, permanent residents and New Zealand Citizens can retire in Australia and withdraw their superannuation fund as a lump sum or pension at a set age dependent on their year of birth. Importantly, the lump sum or pension is tax free.

However, temporary residents (apart from New Zealanders) who cannot retire in Australia can only withdraw their superannuation funds once they leave Australia and their temporary visa has been cancelled. The ‘Departing Australia Superannuation Payment’ (DASP) is subject to 35% withholding tax, with complications arising if the 30% or marginal tax rates have been applied to contributions.

US Citizens and Residents Superannuation contributions, DASPs and tax paid on entry, growth are particularly complicated for US citizens and residents. Specialist advice should be sought to ensure that employees understand the US tax implications and reporting requirements.

Failure to Pay Contributions Failure to pay superannuation when required will result in having to pay a ‘Superannuation Guarantee Charge’ without an accompanying corporate tax deduction. This consists of the superannuation payment originally required plus penalties and interest.

considering given the tax consequences for many employees UÊ Penalties for not paying.

CANADA Sourcing Stock Option Benefits The Canada Revenue Agency’s (CRA) long standing default position with respect to sourcing stock option benefits was that a stock option benefit is attributable to services rendered in the year of grant (i.e. a past service approach) unless there is compelling evidence to the contrary.

Many jurisdictions apply a ‘future services’ approach based on grant date to vesting date or alternatively grant date to exercise date. The CRA’s historical position gave rise to double taxation in many instances.

Due to the differing sourcing rules, a stock option benefit may be taxable in both jurisdictions with no foreign tax credit available in Canada for the foreign tax paid on the portion of the benefit which is sourced to Canada and to the foreign jurisdiction with no clear relief under an income tax treaty.

The Organisation for Economic Co-operation and Development (OECD) sourcing principles are contained in commentary to Article 15 of the OECD Model Income Tax Convention which was issued in September 2005. According to the OECD, sourcing stock option benefits between jurisdictions should be based on: UÊ The number of days worked in a jurisdiction during the period from grant to vest, and UÊ The total number of days worked during the period from grant to vest.

The CRA has recently announced that it will adopt the OECD sourcing rule for sourcing stock option benefits for Canadian domestic purposes with exercises after 2012. However, where the CRA’s sourcing position results in a more beneficial result than the treaty approach, a taxpayer is free to adopt the CRA position.

BDO comment BDO comment Be aware that Australian superannuation is very different from most other countries’ pension arrangements with: UÊ Compulsory employer contributions UÊ Complicated and potentially adverse tax consequences – especially for US citizens and residents UÊ Exemptions in some cases – well worth

This change in policy should help minimise the potential for double taxation.

Normally, the sourcing provisions of an income tax treaty override the CRA’s administrative position. However, the position should be reviewed in each case to ascertain whether the treaty approach or the CRA approach will be more beneficial.

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GLOBAL TAXATION SINGAPORE Housing – Changes to the Method of Calculating the Taxable Value of Accommodation and Hotel rooms for Expatriates Changes to the methods of calculating the taxable value on the provision of accommodation and hotel rooms for expatriates will apply from the year of assessment (“YA”) 2015 (fiscal period – year ended 31 December 2014) onwards.

These are set out below: From the YA 2015 onwards, for employees provided with housing by their employer (where the tenancy agreement is between the landlord and the employer, with the employee as the designated tenant) the taxable value of the accommodation will be: UÊ Annual value of the premises (excluding the cost of rental for furniture and fittings) UÊ Less any rental contributions made by the employee.

The taxable value of the furniture and fittings will be based on a percentage of the annual value of the housing accommodation as follows:1. 40% of the annual value if the premises are partially furnished (where only fittings such as lighting, air-conditioners, water heater etc. are provided); or 2. 50% of the annual value if the premises are fully furnished (where both fittings and furniture/household appliances are provided).

Where employees are provided with hotel accommodation by the employer, the taxable value of the hotel accommodation will be the actual costs incurred by the employer for the hotel benefit provided to the employee, less amounts paid by the employee.

BDO comment Employers who provide expatriates with accommodation in Singapore,

and expatriates who are provided with accommodation in Singapore, should review the changes to the tax treatment of such accommodation and ensure it is reported in line with the new rules.

SWEDEN Employer Social Security Contributions – Research and Development From 1 January 2014, a relief has been introduced in relation to employees aged between 26 and 65 whose work involves research and development. The relief operates by reducing the amount which would otherwise be subject to Swedish employer social security contributions (e.g. remuneration, salary, benefits in kind etc.) by 10 %. The relief is capped at a total of SEK 230,000 per month per group or company.

creates difficulties in predicting tax and social security implications for both the company and the individual.

The investigator will map out different types of incentive programs, analyse how the taxation rules affect the structure of the schemes and provide suggestions for clarifications and/or legislative changes.

The results of the review are to be reported by 1 October 2015.

BDO comment Businesses operating in Sweden and providing incentives to key individuals should be aware that the tax rules in relation to incentive schemes are under review, and consider the impact on the business once the results of the review are known.

BDO comment Employers subject to Swedish social taxes should review the work carried out by employees to ascertain if they will be eligible to claim this relief.

Review of Taxation Rules for Incentive Programmes According to a press release from the Swedish Ministry of Finance, the Swedish Government is now appointing a specific investigator to review the taxation rules for share related incentive programmes. The purpose is to enhance the quality of the Swedish taxation rules ensuring the rules are competitive thereby encouraging growth.

Different types of share related incentive programs targeting key individuals are an important tool for encouraging growth in companies, especially newly founded and smaller businesses.

However, appraisal and valuation of options is difficult, especially if the companies concerned are smaller and their shares are not listed on a stock market or otherwise publicly traded. This in turn

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. 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

HUMAN CAPITAL WORKSHOPS First workshop: 20th May 2014 The BDO Human Capital team are planning a series of workshops focussing on the challenges of managing an internationally mobile workforce. The workshops are designed to be interactive, providing an opportunity to discuss the issues you face with fellow international mobility specialists. We thought we would move away from sessions which focus on one pre-determined topic to a workshop format so that we can focus on topics of direct relevance and interest to you.

For further information on these workshops please email Gemma Salmon at Gemma.X.Salmon@bdo.co.uk

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TAX

Effective Share Incentives Share values and share incentives are on the rise. After one of the longest recessions in history share values are recovering and transaction volumes increasing. The Financial Times Stock Exchange (FTSE) 100 and New York Stock Exchange (NYSE) 100 indexes are currently at around 6,500 and 7,900 respectively. Five years ago they were both at 3,500. Share awards are typically made with three year performance or vesting periods, awards made in the past five years are likely to be standing at significant profits.

We are therefore seeing a growing volume of share incentive transactions as employees exercise share options and other awards vest.

Alongside this there is a growing international focus on tax compliance for share plans. I have focused on UK developments but the key points about sourcing, withholding and reporting will apply in many countries.

Most companies use share incentives as a standard part of executive remuneration.

Nearly all listed UK and US companies have some form of share incentive. The technology sector in particular uses share incentives at all levels. Properly structured share incentives ares a powerful retention and motivation tool. They align employee and shareholder interests and often provide a mechanism for participants to make significant, life changing gains.

Failures can often go unnoticed for years, leading to large settlements. In many cases we see faultless payroll systems for local hires but significant issues on internationally mobile employees.

These issues can turn an incentive into a problem. Employees are not tax experts and expect their employer to deduct the right amount of tax and social security.

Let’s take an employee who exercises share options and makes a gain of £30,000.

He is pleased and uses the gain to buy a car costing £30,000. 18 months later the HR department contacts him to explain that tax and social security of £15,000 should have been withheld and can he now make a payment? The car is scratched, he doesn’t have £15,000 and may have to fund a penalty to the taxman. The glow of the £30,000 gain (the incentive) has turned into a nightmare for which he will probably blame the company (the disincentive).

We may say that he should have expected to pay some tax and is partly responsible for this situation. This is a difficult message, especially where the company has been remiss. Whilst we are thinking about this, add a zero to the gain and think about how your company would handle a director who has a £150,000 problem on a £300,000 gain?

Share Incentives becoming a ‘Disincentive’

In this article I have focused on three key compliance issues, withholding, reporting and sourcing.

The purpose of this article is not to focus on the tax complexities of share incentives.

There is a real risk that these complexities can lead to significant tax costs for the company. I therefore want to alert you to key compliance areas and cost saving opportunities. You can then ensure that your incentives work and don’t become an unexpected cost to the company or participants.

Payroll compliance has always been complex particularly for internationally mobile employees. Companies are often exposed to costly settlements where they do not deduct the right amounts of tax and social security. Compliance problems often lead to unexpected tax bills plus interest and penalties. As a rough guide, the ‘worst case’ cost to a company of settling a UK payroll failure is roughly equivalent to the original taxable gain i.e. if an employee made a gain of £100,000 the cost of payroll errors could be around £100,000.

INTERNATIONAL HR ADVISER SPRING

Key Compliance Traps

Withholding When mobile employees exercise share options or Restricted Stock Units (RSU) awards vest there will generally be tax to pay in one or possibly more countries. In order to ensure that employers meet the tax and social security obligations the company will usually have arrangements in place designed to ensure that the correct amount is withheld. Most share plan rules include withholding clauses.

In the majority of countries the company is responsible for deducting tax and making payment to the tax authorities, which is key when dealing with any payroll problems.

If withholding is incomplete for whatever reason, most employers will cover the costs of the unpaid tax and social security as well as any interest or penalties. While some companies may see these as costs which should be claimed from employees, this

is often difficult in practice. In particular it is very difficult to reclaim funds from ex-employees. There are also legal points – if a plan provides a ‘window’ for a company to withhold at the time of exercise or vesting there may be no right to require participants to make payments at any other time. Settlements cover existing and former employees, if the company decides that it is not going to pursue the former employees it may be uncomfortable with asking existing employees for money or advised against this by employment lawyers.

Where employers cover liabilities on behalf of the employees, HM Revenue & Customs (HMRC) may also insist on a ‘gross up’ of that amount as in effect payment of the tax liability is a benefit to the employee. This is rare but costly as the taxable gain often has to be roughly doubled and then taxed.

The other particular ‘nasty’ in terms of extra cost is application of the punitive S.222 liability. Currently a S.222 charge will mean that an employee paying tax at 45% will have an extra 20.25% tax cost, which the employer will often fund.

A S.222 charge may occur where funds are not withheld and paid over to the company within 90 days of the option exercise, RSU vesting or other tax point.

Where S.222 applies the employee is treated as receiving extra taxable income equal to the unpaid tax. A welcome change from 6 April 2014 will mean that there will be no S.222 charge provided payroll tax is collected from the employee within 90 days following the end of the tax year in which the taxable event occurred.

As stated above in many payroll cases the employer ends up settling the whole bill – 45% tax, 13.8% employers National Insurance Contributions (NIC), 2% employees NIC, 20.25% S.222 and NIC on S.222 together with interest and penalties. This can all add up to an effective tax rate of around 100%!

To help avoid potential withholding issues the best advice is to withhold at source at the employees prevailing tax rate. Failing this, the safest method is to use the top rate of tax and social security.

Ideally, shares should not be transferred to the employee until the tax withholding has been satisfied. Typically clients do this, work out the actual liability through payroll and repay any excess funds withheld.

TAX Reporting In the UK, annual returns for all share incentive plans and employee share transactions are due to be filed with HM Revenue & Customs (HMRC) each year.

Returns are due by 6 July each year and record all transactions in the year ended 5 April.

This year is the last year of paper annual returns. From 6 April 2014 new and existing share incentive plans will need to be registered online.

Recent experience with HMRC has also highlighted the extent to which information in the Form 42 is monitored and reviewed.

HMRC are undoubtedly increasing their focus on share plan tax compliance. The introduction of electronic filing will help them to identify errors

Sourcing – do you know where your employees are?

It is always best to seek advice on mobile employees and maintain accurate employee movement data in order to assist with sourcing calculations. The rise of short term business trips and the ‘super commuter’ adds complexity.

Problems with withholding may arise where employees are internationally mobile and companies are unsure where the gain is to be taxed. Questions include: where to operate withholding, on what gain and at what rate?

The tax and social security treatment could be aligned or the gain subject to tax in one country and social security in another. In many cases local legislation determines the tax position, if not it is necessary to consider double tax agreements. Mobile employees are often tax equalised or protected, if so the company will have to work through the complex implications of being subject to tax in multiple jurisdictions.

New UK sourcing proposals This area is constantly evolving as tax authorities are realising that substantial amounts of tax revenue are being lost. In the UK there are proposals for a new sourcing system which will apply from 6 April 2015 and bring the UK into line with OECD principles. The Budget on 19 March 2014 contained proposals for this change to apply to all awards existing on 6 April 2015. Share options granted to non UK residents are not generally subject to UK tax, this is well known. The new rules will means that there will be a potential UK income tax liability if an employee spends any time working in the UK during the life of an award.

Companies will need to ensure that payroll and employees are aware of the new rules.

The 2015 changes are significant, accurate employee data and tracking will be key to good compliance. Companies will have to identify and payroll these gains with HMRC possibly taking a close interest via the new electronic filing regime.

Safeguards against Traps There are a number of things that you can put in place in order to help safeguard the company. Effective communication between head office, local management and local country payroll is key. In some cases share incentive awards are highly confidential and are not shared with local payroll, these cases frequently lead to payroll problems.

An understanding between all parties is therefore needed to ensure everyone is aware of the payroll and reporting processes for share incentives, and any withholding required on gains made by employees. Usually best advice is to withhold tax and national insurance contributions at the top rates when a gain is made and then detailed calculations can be performed to see what rates the employee should actually be paying.

With internationally mobile employees the sourcing of the share incentives is imperative.

Countries have different rules and treaties to apply but generally there is a principal against double taxation. Companies typically need to consider the rules in allcountries where the employee was located between award and vesting / exercise.

Good employee communication is critical.

Ensuring employees understand current share incentives and benefits can lead to a greater appreciation and realisation of the value of awards and may be useful in dealing with communications when things go wrong.

Optimise Share Incentives There are also a number of things that can be done to protect and enhance the company position. Whilst it is natural for an international company to want to use one share plan for all countries, this approach will typically lead to higher tax costs. Some element of country by country personalisation can optimise the tax position whilst still operating within the broad parameters of the main plan.

The first priority has to be a robust withholding system and good employee communications.

The maximum effective UK rate is typically just under 55% (it can be as high as nearly 70%). In many cases it may be possible to use an approved or qualifying sub plan to reduce the tax cost. In the UK it may be possible to use an approved plan and achieve a tax

rate of 28% or lower. There are a number of different plans which may be suitable for all employees or for senior executives.

There are a number of approved plans that can be implemented in the UK in order to optimise the position for the employee including all employee plans like the Share Incentive Plan and discretionary plans like the Company Share Option Plan.

The cost of share incentives for companies can be optimised. The simplest way for the company to keep its share incentive costs down is to transfer the 13.8% employers NIC liability to the employee. This is fairly typical, especially for US parented companies.

A recharge agreement should also be considered. A recharge agreement is an agreement between the parent and a foreign subsidiary where the subsidiary agrees to reimburse the parent for the costs associated with issuing the parent company’s shares to the subsidiary’s employee. The idea is that the recharge payment will not be taxable to the parent as a dividend or otherwise but will be deductible by the local subsidiary. A word of caution is that for some countries (in particular in Eastern Europe and Asia), a recharge can change the employer social security position and increase company social security costs.

Summary Share incentives are likely to continue to be a key part of remuneration for many mobile employees. Share price growth over the past years means that more value will be flowing throughplans. In the UK and other jurisdictions the tax authorities are striving to address perceived flaws in the taxation of mobile employees. Forward planning and robust systems are vital to protect companies and ensure that the positive messages around share incentives are not lost or diluted.

David Gardner is a Reward Director at BDO LLP. He has over 15 years’ experience of advising multi-national companies on all forms of equity incentives. David advises on plan design, implementation and taxation. BDO is able to provide global assistance for share plans and incentives. If you would like to discuss any of the issues raised in the article or any other reward issues, please do not hesitate to contact David Gardner on +44 (0) 118 925 4468 or email him at david.gardner@bdo.co.uk SPRING INTERNATIONAL HR ADVISER

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TALENT MANAGEMENT

Talentism And The Build Vs. Buy Debate An ongoing transformation of traditional staffing into talent management has taken place within leading organisations all around the globe. Like many evolutionary changes, after a slow start it is picking up momentum exponentially. This transformation was initiated by senior leaders who realised that talent - as much as, if not more than, technology - is the driver capable of increasing or limiting the capability and/or capacity of an organisation.

Strategic talent management functions are being established in forward looking organisations, championing new workforce practices that demonstrate that talent management is as much a science as any other management discipline. Methods for workforce analytics and talent planning are becoming more and more sophisticated as the war for talent continues.

Mercer and the World Economic Forum conducted research back in 2011 to better understand global good practices in talent mobility and development (Mercer, 2012). From this research Mercer created its Talent Barometer Survey which aimed to measure the degree to which organisations have a formal, strategic workforce plan that addresses critical talent. Mercer’s research also explored three accelerators for high performance - education, health and wellness, and career experience - and identified effective practices and opportunities in each area.

(Mercer, 2013).

The Talent Barometer Survey included responses from talent management executives in 1,268 organisations representing 65 countries. Survey data revealed the growing importance of talent driving success, and that organisations around the world are making greater talent investments in response. Mercer also asked respondents about the effectiveness of their organisation’s workforce plans.

More than three-quarters indicated they had plans that forecast their talent needs, but the scope varied. From a global perspective, the Talent Barometer Survey found that organisations take career experience seriously, and the majority of firms surveyed map out their future talent INTERNATIONAL HR ADVISER SPRING

needs via regular talent reviews. (Ashford & Laverock, Mercer; 2013).

We often hear that talent shortfall can hold back business growth when there is a mismatch between available talent and needed talent. Finding, cultivating, and retaining experienced, highly skilled workers are among the biggest challenges facing, for example, the oil and gas industry today.

According to Mercer’s Oil & Gas Industry Talent Outlook and Workforce Practices Survey Report addressing the shortfall of talent will require an industry-wide solution that starts with companies understanding internal and external labour market forces. Innovative practices and advanced analytics may, however, help companies better understand who to hire and how rewards affect attraction, development, and retention. (Mercer, 2014).

According to the survey report, many oil & gas companies plan to fill the existing talent gap by recruiting workers away from their competitors. This typical “buy” approach to talent acquisition will however likely not be sufficient to meet demand. Not only is such an approach impossible to sustain industrywide, but oil and gas is also in competition for that talent with other industries.

With regard to talent management, the build vs. buy debate has always been in play. In a society committed to talentism successful organisations can no longer rely on a talent strategy that simply treats human talent as a commodity. With talent scarcity being the norm, innovative organisations will instead actively work on the development of new global talent sourcing channels through multistakeholder networking and collaboration.

Employers can significantly improve their workforce pipeline by adopting a ”build” strategy that focuses on identifying new and different sources of talent, as well as reskilling talent within their reach.

Moving towards Talentism In the opening address of the World Economic Forum in Davos back in 2012, Dr. Klaus Schwab (founder and executive chairman of the World Economic Forum), outlined that capital was being superseded by creativity and the ability to innovate –

and therefore by human talents – as the most important factors of production.

Michael Haid from Manpower Group, has elaborated on what the talentism era will mean for business and our society: “A new era is upon business: the human age… Now, human potential will be the catalyst for change and the global force driving for economic, political and social development. Talentism is the new capitalism.” (Haid, 2012).

According to Orlando Ashford, President of Mercer’s Global Talent Business, talentism can be seen as an economic concept calling for organisations to develop their human capital not only internally via creative talent practices, but also through collaborative public, private and peer initiatives designed to enhance talent quality and availability. In his forthcoming book entitled “Talentism: Unlocking the Power of The New Human Ecosystem”, Ashford expresses that his focus is not talent shortfall, but on spreading a positive vision for the future; “where talents, abilities, and passions of individual employees will be recognised and nurtured by mentors, employers, peers, and other industry networks”.

(Ashford, forthcoming).

Accelerating and enabling talentism in today’s global business landscape is an ambitious strategy that demands leaders invest in talent as the key competitive asset. They must build a culture that values talent and seeks to develop the best in every member of the team. (Ashford & Laverock, Mercer; 2013).

Talent capital is not as finite as natural resources, but unless talent is nurtured appropriately, we may find ourself cannabilising on the existing talent capital rather than living off the interest and successfully expanding the overall talent capital base of our human ecosystem.

Companies will, in the era of talentism, need to find ways to contribute to the common good also through their talent management practices in order to stay in business.

In the words of Dr. Klaus Schwab, founder and executive chairman of the World Economic Forum: “In an age when social networks are enabling greater

TALENT MANAGEMENT participation and transparency, companies will only be able to achieve economic success if they can generate long-term benefits not just for their shareholders, but also for the common good.�

(Schwab, K., 2012).

The Emergence of a New Employer-Employee Compact Life-long employment is a thing of the past, but many companies have not yet adapted their talent management strategies to the fact that human talent now often look for the “best fit� not for life, but for “right now�. The chief principle underlying the emerging new employer-employee compact is reciprocity: Both parties understand and acknowledge that they’ve entered into a voluntary relationship that benefits both sides. Instead of entering into strict bonds of loyalty, both sides seek the mutual benefits of alliance. As allies, employer and employee try to add value to each other. Employees invest in the company’s adaptability; the company invests in employees’ employability.

(Hoffman et al, 2013).

The world is changing and no one really knows what tomorrow will bring. It is therefore also difficult to identify which skills and capabilities will be needed.

Creativity and innovation will most likely be core strengths within the talent pool of tomorrow, as organisations will increasingly be moving into unchartered terratories.

The Harvard Business Review article “Tours of Duty: The New EmployerEmployee Compact� highlights that the tour-of-duty approach, when properly implemented, can boost both

recruiting and retention as it will serve as a personalised retention plan that gives a valued employee concrete, compelling reasons to finish his/her tour, as well as establishing a clear time frame for discussing the future of the relationship.

(Hoffman et al., 2013).

The new employer-employee compact can in other words be considered as a mutualism within the human ecosystem.

Mutualism is a symbiotic relationship in which interrelated organisms benefit from each other. The new employer and employee compact aims at helping both succeed, thus resulting in a win-win situation.

Looking Ahead So what characterises talentism? It is a vision of a human society where talent is the main capital and main driver of sustainable competitive advantage.

Talentism requires a new employeremployee compact to be put in play – a compact which strives for a win-win outcome. Talentism will reshape not only our organisations but our whole societal structure as we know it. The move towards talentism will be aided by forward-looking individuals and organisations who are set on collaborating for the common good.

As an International HR professional you can act as a change agent for talentism and help your organisation implement creative workforce practices that will fulfill the talent needs of the future. In order for organisations to achieve sustainable growth during the era of talentism, they need to ensure that they attract, nurture and retain the right human talent at all levels of the organisation. Focusing SUMMER

courtesy of

solely on �buying� talent will not be enough in the future, as a more longterm perspective will be required by all stakeholders. All companies will in one way or another have to contribute to the establishment of talent supply systems (i.e. building the human talent capital base) at a global level, both internally within their own organisation, and externally through public-private partnerships.

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Helena Wennberg, GMS, HRMP, HCS is the Nordic & Eastern Europe Mobility Leader within the Talent business at Mercer. She has previously been a Global Mobility Research Associate at King’s College London and also served on the Worldwide ERC EMEA Leadership Board 2010-2012. Since 2007 she has held in-house Global Mobility specialist roles within Statoil, Sandvik Tooling and Maersk Oil. Helena holds Master degrees in Business Administration and Intercultural Relations, and earlier taught industrial management and economics courses at LinkÜping University in Sweden.

To contact Helena please email helena.wennberg@mercer.com.

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TALENT MANAGEMENT

Linking Mobility To Talent Management With the global economy producing more overseas postings, a more thorough approach can yield better results for both the firm and the employee.

One of the most important changes to international assignments today lies in the development of steps that companies can take to maximise the investment that they, and their employees, make. These steps serve as a means to ensure a better return on investment (ROI). They have been established as companies have better linked their global mobility programmes to talent management initiatives.

International assignment ROI strategies involve a combined effort from both Human Resources and the company’s senior leadership.

In the past, international assignments were primarily filled by members of senior management based in a company's headquarters, sent to open a new office or take a leadership role in a new or less mature business location. Eventually the assignee returned to the same home location and into the same pre-assignment role. In terms of the demographics, the assignee of the past was almost always a middle-aged or older man, with a "trailing" spouse and a couple of children. For the most part, international assignees were "out-of-sight, out-of-mind" while away. Sometimes there was a promotion included in their repatriation, but often there was not, and the latter led to employee dissatisfaction and eventually attrition.

Today, multinational companies are much more complex in their global business strategies, and many international assignment programmes have become more sophisticated in order to meet these global business complexities. There are more reasons to send employees on international assignments and a much more mature approach to supporting such assignments. The latter involves the selection process to choose the person who goes, supporting them and their families along the way, and a long-term strategy that includes a post-assignment career plan. Assignees today are found in earlycareer or pre-retirement stages, male or female, unaccompanied and accompanied, with spouses or partners often having their own careers to think about.

There is general consensus that INTERNATIONAL HR ADVISER SPRING

international assignments are expensive.

Industry studies show that sending an employee on an international assignment costs between two to four times the employee's annual salary. International assignments also have personal costs on the part of the employee, whether it is leaving friends and family for an extended period, adjusting to a new culture and business environment, or managing the logistics of a physical move. The employee might also need to let go of a spouse or partner's income so that the family can go on the assignment. With the financial and personal investments in mind, having a strategy to get the most out of the assignment is key.

Not all assignments are alike One of the first steps when starting to establish a strategy for managing the ROI is to recognise that not all assignments carry the same weight in terms of what the firm wants to get out of them in the long term. It is important to assess which types of assignments the company has and then to put them into categories that will help determine the level of support needed to get the right level of return. While no company can afford an "out-of-sight, out-of-mind” approach to any type of international assignment, some secondments are more strategic than others.

There are those assignments that primarily serve to provide cross-border experiences for employees wanting an international experience, looking for more of an adventure. These are becoming more frequent as the Millennial generation of employees move into the workforce. At the same time, there are also those assignments that are simply used by companies to fill job opportunities across the globe. Both of these should be available in any global business environment, but there are other types of assignments that are directed at more targeted, critical business priorities: filling leadership roles, developing a future leadership or management pipeline for specific locations or business units, developing skills that are missing in a key location or meeting client-driven needs, for example. It is this second category of more strategic assignments that should be formally addressed by a company's international assignment ROI strategy.

Maximising ROI The following three steps can be taken for any type of strategic assignment: UÊ Set clear assignment objectives – what does the company expect the employee to get out of the assignment?

UÊ Are there long-term goals that the company has for the assignee, and how does the assignment fit into them?

UÊ What will happen upon repatriation?

The assignee, HR representative and the sending and receiving managers should be clear on what these developmental objectives are, in addition to any of the technical aspects of the assignment position.

Provide support during the assignment – some type of support needs to be provided during the assignment to encourage and reinforce the assignment objectives and the experience. This could involve a formal mentor in the assignment location who understands the objectives and meets with the assignee on a regular basis. For cases where a group of assignees go to the same location, the support could consist of regular meetings with the group to discuss the assignment, the objectives and the adjustment. Some companies encourage or require weekly lunch "appointments" with local colleagues in order to ensure that the assignee is developing a personal network in the new location and interacting with local nationals regularly. Too often, companies with no ROI strategy leave developmental assignees on their own and assume that the experience itself is sufficient. An ROI focused company will proactively support the assignment and make sure performance and developmental goals are discussed and measured.

Follow-up after repatriation – one of the most important aspects of an international assignment ROI strategy involves the post-assignment phase. It is still rare and considered a best practice for companies to integrate repatriation and retention into their global mobility programme and talent management strategies. One of the easiest ways to begin is to make sure that the company's exit interviews ask if the exiting employee has ever been on an international assignment. With that one question, the company begins to have retention and attrition data about the assignment investment. Another strategy

TALENT MANAGEMENT is to provide some sort of performance requirement for the assignee’s receiving manager and HR support of repatriating assignees. Do they know the value of the international assignment programme to the larger company objectives? Are they aware of the objectives of the employee's assignment and do they know ways to incorporate the new experience into the employee's post-assignment role? Are they aware of the challenges of repatriation and able to check in with the employee during the first year post-assignment? Linking the assignee, the receiving manager and local HR representative to the larger strategy of the company investing in international assignments is critical to repatriation and retention and, ultimately, to maximising the company's investment.

In today's business environment no one can afford to assume international assignment ROI happens automatically.

In order to get the most out of international assignments, whether inbound or outbound, and irrespective of the assignee’s level, it is necessary to first determine which assignments are most strategic. Following that, firms must

make sure that those assignments have an infrastructure in place to set objectives, as well as to support the assignee during the assignment, and establish responsibilities and a structure for post-repatriation and retention goals.

For further information about Crown World Mobility’s services, please visit www.crownworldmobility.com Peter Sewell is a Regional Director at Crown World Mobility. Peter has a strong track record in developing global mobility policies, processes and strategies. Peter is responsible for overseeing client programmes and service delivery, implementing group policies, working closely with expatriate tax and other suppliers. He’s also in charge of reviewing existing local practices and leading project reviews with customers.

Email: psewell@crownww.com

NOTE FOR YOUR DIARY The 2015 Corporate Relocation Conference & Exhibition will take place on Monday 2nd February 2015 For further information on attending or exhibiting, please email: helen@internationalhradviser.com or telephone Helen Elliott +44 (0)208 661 0186

SPRING INTERNATIONAL HR ADVISER

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RECRUITMENT

An Overview Of Recent Trends Of Recruiting In The UK Very strong demand for professional talent, the movement of candidates across the European continent, and the rise of alternative and flexible work arrangements are altering the way UK companies recruit talent.

While the global economy continues its slow recovery, the demand for skilled professionals such as accountants, lawyers, doctors and engineers is increasing at a very rapid pace. However, this demand has not translated into a fluid job market, due to a shortage of available talent. This is particularly prevalent in London, where companies are recruiting qualified candidates, extending offers, but ultimately losing the hire because the incumbent employers step in and make the employee an offer they can’t refuse.

There is simply a shortage of people willing to take the risk of moving jobs in our current economic cycle.

Not only are qualified professionals relatively hesitant to switch companies because of the economic climate, but we also lack a sufficient supply of graduates to meet the demand in “hot” markets such as healthcare, software development, technology and engineering. Since 2008, many major professional services firms have reduced their intake of graduates.

One of the consequences of this pullback is a lack of young graduates with two, three or four years of post-university work experience, which means employers will likely have to pay premium prices to recruit qualified candidates in the next three to five years.

Age demographics have greater implications in certain industries and European markets than others. For example, the UK’s oil and gas sector is experiencing a major shortage of new talent not just due to a shortage of candidates but also as a function of an ageing workforce. The industry was formed in the late '70s, and there was a great deal of skill that went into its early days as new offshore oil fields were developed around the UK. Now, 40 years later, individuals that joined the sector as it was getting off the ground are approaching retirement age. This has driven a remarkable boom in oil and gas recruitment over the past few years.

INTERNATIONAL HR ADVISER SPRING

In terms of a geographic market comparison, Germany is struggling with a difficult combination of a shortage of young, skilled workers and a very low birth rate, while the UK is projected to be the continent’s largest economy by 2030. Why is that? The UK isn’t feeling the same talent crunch due to an influx of qualified professionals from Eastern Europe and former British Empire nations. Professionals are moving West because they see – and can obtain – high-paying, attractive opportunities to utilise their university education and professional experience. This migration into the UK is actually refreshing the country’s workforce with motivated and highly educated talent.

Companies in the UK and across Europe are taking a number of different approaches to address recruiting demands.

Some are turning to familiar channels such as outsourcing labour and operations to make up for a lack of available resources and talent in their home market.

Another tactic companies are using to re-energise and re-imagine their recruiting strategies is “proactive sourcing.” Organisations are turning to technology solutions such as social media to build relationships with people they may consider recruiting in due course.

They are tapping into social platforms such as LinkedIn to proactively identify and converse with passive candidates – professionals that often have a job and are not necessarily looking for a new opportunity, but possess a skill set that makes them very desirable for companies with critical vacancies.

The UK labour market is also seeing a major increase in the use of “flexible resources.” More and more companies are employing people at “zero hours contracted”; a controversial hiring technique. Rather than committing to a traditional full-time hire, zero-hour contracts enable companies to hire new employees without committing to a set number of hours.

This global approach to sourcing recruitment solutions is encouraging UK students to reconsider their education and ultimate career paths. Over the past five years, the focus within the university

education system has shifted away from traditional humanities disciplines such as art, literature, history and geography.

Today, there is increasing interest in subjects that translate into careers in certain fields where there is not an adequate supply of talent, particularly technology. In the long-term, this supplydemand tension will be addressed as students start to select different paths in the education system to attain careers in rapidly growing markets.

We see a major opportunity in businesses that embrace a flexible workforce, and we believe this will evolve over the next three to five years. It is a matter of finding human capital solutions that optimise your business strategy: How should we respond to a lack of qualified candidates? How should we handle our ageing workforce? Can we accommodate the demand for more flexible work arrangements?

Businesses that are able to grasp that opportunity by leveraging key opportunities – such as approaching the “grey workforce” as a competitive advantage and allowing flexible work schedules for parents – will have a key advantage in the next three to five years.

Chris Harper Managing Director, Baird Capital The Managing Director in the UK Private Equity team of Baird Capital, the direct private investment arm of Robert W. Baird & Co. Baird Capital Partners Europe Limited is authorised and regulated by the Financial Conduct Authority.

T: +44 (0) 20 7667 8400 Email: charper@bcpe.co.uk

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SURVEY

Understanding Trends In Global Mobility The five years since the start of the global financial crisis have seen significant shifts in the flows of globally mobile professionals. Organisations of all sizes are changing their patterns of assignment, relocating employees to new markets, for longer periods of time, all in the search for growth.

In this paper, Lloyds Bank International Wealth explores the trends and themes surrounding assignments, and identifies what impact these changes have had, and will have on assignees – specifically in relation to financial needs.

Our research is based on the survey responses of 95 senior HR professionals from organisations headquartered all over the world.

Two important trends exist in relation to flows of globally mobile professionals; assignment length is increasing and destinations are changing.

Figure 1: Changes in regularity of long-term assignments

Figure 2: Growth markets for assignees

Companies are increasingly sending assignees away for longer periods of time According to the majority of respondents (53%), companies are increasing the number of long-term assignments they commission with assignments of this sort now far more prevalent than short-term equivalents. This shift is particularly noteworthy given that it is the reverse of the trend that emerged immediately after the onset of the global financial crisis in 2008, when many companies consciously shortened the length of global assignments.

Figure 3: Destinations for assignees

China is the fastest growing destination for assignees High levels of current and projected economic growth have made emerging markets such as China, India and Brazil increasingly attractive as host countries.

The same is true for financial centres such as Singapore, Hong Kong, Dubai and Abu Dhabi. Interestingly, some of the more traditionally favoured markets have retained their importance as key destinations for global organisations: for example, the UK and USA still rank as the two most regular destinations for assignees.

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The financial needs of assignees are rapidly evolving The impact of these changes is having an impact on the financial needs of assignees.

The importance of pensions and insurance

considerations increase considerably when assignees are away from home for longer periods of time. Insurance coverage becomes a heightened concern for assignees in emerging markets, as are

SURVEY

Figure 4: HR professionals’ perception of the importance of professional advice on assignee pensions

was noted by some HR professionals that the lack of advice offered was largely down to a lack of internal expertise and a fear of liability for any bad advice offered.

Furthermore, 77% of HR professionals currently feel that their globally mobile employees would benefit from more financial advice with regards to pensions, strongly suggesting that the movement towards long-term assignments is having significant impact.

Insurance Coverage Figure 5: HR professionals’ provision of professional advice on assignee pensions

Figure 6: Perceptions of portable insurance

Living abroad for longer periods of time means assignees need to ensure that their domestic insurance coverage transfers to equal coverage when overseas. The extent to which insurance policies are valid when abroad is a matter of considerable confusion for assignees: 88% of surveyed HR professionals believed that it is not always clear to assignees what coverage domestic insurance policies offer when people move abroad.

For assignees who mistakenly think they are covered in geographical areas that they are not, major problems can arise – even in areas that may not have required insurance coverage in an assignee’s home country.

74% of HR professionals agree that portable insurance policies, which offer coverage across the world, would offer peace of mind to globally mobile professionals’.

Portable policies are understandably considered particularly important by experts in relation to life assurance and critical illness cover. Research shows that with regard to emerging markets specifically, portability should be extended to other forms of cover.

Tax advice

issues involving tax optimisation, which is complicated by the fact that tax codes in emerging markets can be complicated and often liable to rapid change.

Pensions The applicability of assignee pensions can vary hugely from country to country.

Longer-term assignees may face the decision of whether to continue to pay into an existing scheme denominated in their home country currency or whether to switch, where possible, an equivalent in their host country. The increasing

prevalence of long-term assignments across the world means that pension arrangements are becoming of greater importance to assignees, rather than a factor that they can afford to ignore.

Our research shows a considerable discrepancy between the importance of this issue to assignees and the relevance and quality of advice that is made available to them. There is also a distinct lack of advice specifically about host country pensions, with many preferring instead to advise on how assignees can best manage their domestic policies whilst abroad. It

Even in individuals’ home countries, understanding tax codes and obligations can be a difficult and daunting task; assignees are frequently trying to overcome this challenge in new and unfamiliar markets. The regional fragmentation of India, for example, means that there are different tax rates in operation in different parts of the country, and the location of personal wealth is therefore an important consideration when on assignment there. Indeed, across a range of emerging markets there are different laws regarding the storage of wealth offshore, implying that assignees can optimise their earnings by seeking expertise on these laws.

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SURVEY laws are clear, yet 56% of surveyed HR professionals are not confident that their company’s assignees understood their host country’s tax laws prior to the beginning of their assignment and the sentiment expressed below is common.

Although many assignees benefit from employer-provided guidance on general tax issues in their host countries, the majority do not receive specific advice around ensuring the tax efficiency of their investments.

Figure 7

Advisory services Our research further shows that the financial needs of globally mobile professionals are not currently being met adequately in a number of areas.

It is therefore unsurprising that many HR professionals agree that there are significant opportunities for financial services providers to offer advisory services to assignees, in the areas of pensions, tax and insurance.

Longer assignments heighten the importance of ensuring that pension schemes are optimised. Yet only 22% of surveyed companies currently provide rounded advice involving options denominated in host country currencies.

Employer organisations are not addressing the reality that tax efficiency and efficiency of assets and investments has become a salient issue. Additionally, as a result of the trends identified in this paper, the importance of comprehensive insurance coverage when on assignment is greater than before. And yet, insurance portability is still considered an unclear and uncommon option by many HR professionals.

Figure 8: Areas offering the greatest opportunities for financial services providers

Figure 9: Advice offered to assignees on tax issues

Conclusion Despite the clear signs that there is an appetite for better guidance, global organisations have hitherto relied on the professional services of consultancies and accountancies. Of the organisations sur veyed, 54% engaged with accountancies for advisory services and 46% engaged with consultancies, whilst none engaged with banks.

Our research suggests that changes to flows of globally mobile professionals are having an impact on their expectations and requirements when on assignment.

Simultaneously, concerns around current provisions of advisory services in pensions, tax and insurance, suggest that employees would benefit from greater clarity and guidance.

Banks and other financial providers are INTERNATIONAL HR ADVISER SPRING

in a position to meet the needs of globally mobile professionals. With access to comprehensive expertise across a range of products and services, and global reach,

such organisations are ideally placed to offer assignees peace of mind as they undertake major, potentially daunting transitions, into new markets.

Nicola Rich Head External Channel & Business Development, Lloyds Banking Group Nicola is a former expat herself, having living outside the UK for seven years, where her last posting was Branch Manager, Lloyds Bank Middle East, Dubai. Nicola has a wealth of International and UK experience having undertaken numerous leadership roles across Lloyds Banking, Head Office and Wealth management divisions. She has attained numerous banking qualifications and holds her financial planning certificate.

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SERVICED APARTMENTS

What Is The Future Of The Serviced Apartment And Corporate Housing Industry? al·li·ance: ‘A union or association formed for mutual benefit, esp. between countries or organisations’.

What does a sector do when after 30 years of growth they find themselves in a situation where there are a few large good players, and thousands of small to midsize great players?

This journey is not unusual or unique to the serviced apartment industry – in fact – it’s a rite of passage for most sectors – the good news is that this young, vibrant and passionate industry is ‘growing up’.

With the ASAP (Association of Ser viced Apartment Providers) celebrating its 10th year and now at 74 members, and the CHPA (Corporate Housing Providers Association) in the US working for the industry for over 20 years with 220 members worldwide, Mary Ann Passi who is CEO for CHPA is delighted to advise that ‘over the last three years, membership has grown by 25% on average and that our high annual retention rate of around 89% reflects the value and need for the Association’.

Since the addition of James Foice as MD for ASAP last summer, the Association has already achieved a 35% growth in membership. Foice is excited to be leading the association at this stage of its journey and adds ‘one of our goals is for ASAP members to deliver best in class standards of accommodation with our support’.

This growth in member numbers of both these associations shows the want and aspirations of the serviced apartment and corporate housing industry to work together to educate, deliver standards, benchmark and define the sector.

The Serviced Apartment industry, like many other industries at the same stage of development, is going through a change process.

Most of you, who are part of large organisations, have been on training and development courses that discuss and celebrate the well-known and memorable phrase from the psychologist Bruce Tuckman who first discussed "forming, storming, norming, and performing" which was published in his 1965 article, INTERNATIONAL HR ADVISER SPRING

"Developmental Sequence in Small Groups." He used it to describe the path that most teams follow on their way to high performance.

This is no different for the Serviced Apartment industry which is now reaching its ‘performing’ stage.

The tipping point, which is that magic moment when an idea, trend, or social behaviour crosses a threshold, tips, and spreads like wildfire, is, in our case, the uptake of serviced apartments into global programmes. This is being achieved primarily through the development and creation of cohesive associations, networks, partnerships and alliances that are creating platforms for all players in the industry – whatever their size, on all continents.

These alliances and networks are now challenging the status quo for the large providers that have been able to ‘sell or provide globally’ for the last decade, without competition from smaller independent operators across the globe or from huge regional brands.

These ‘new’ alliances or networks share vision and commitment to quality and service – which certainly are not new terms in this or any other industry.

So really - what is the difference? Why will these ‘new’ alliances work and why could they work better than those that are simply ‘suppliers’ to a large global providers?

It’s simple – it’s called ‘buy in’.

We all know that ‘buy in’ creates ownership and accountability which leads to individual and team passion to succeed – this of course then ensures we all go beyond the normal call of duty. It’s like being a member of a club where – and in this particular club - you can influence outcomes and business individually and as part of a team, therefore having a high impact on the success of both your company and other member companies.

Surinder Arora (Owner and Chairman, Arora Hotels) at last years ‘Serviced Apartment Summit’ suggested that serviced apartment operators should keep their individuality. Of course, there are ‘absolutes’ in the provisions of

all apartments that include the essential services of guest care, uniform levels of 24hr assistance and commitment to quality service, friendliness, cleanliness, connectivity and safety – but when an owner has developed ‘personal service’ and added ‘local’ flavour and tries to do those ‘little things that make the difference’ in his market – who are we to stamp on this spirit in the name of ‘consistency’? Surely as long as we meet the ‘absolute’ criteria there is ‘room’ for personality.

This, of course, can be a contentious subject amongst buyers who want consistency over and above personality.

What buyer or booker wants to receive feedback from assignees that the programmes they are developing are inconsistent?

However, let’s be honest, just how consistent is any ‘brand’ that travels the globe – even those that can be manufactured not built? For instance, as quoted on wise geek - Coca-Cola® is an internationally recognised drink, popular in many countries throughout the world.

The company that produces the soft drink has an interesting way of distributing it around the world, which many people may not realise. You don’t get exactly the same Coke® in India that you do in the US, because bottling of the drink is franchised.

And within your own brand or organisation, if you are in multiple cities, countries, regions, or continents, consider the differences and the challenges to get everyone to ‘adhere to global processes and procedures’.

How many global HR managers or Operations Directors, when they are trying to roll out a company initiative or process, have heard the objection ‘it’s different in our market’.

Let’s consider the first day of any trip to any country, be it a business trip, a relocation, a project or a graduate programme – where are the gaps?

You fly on a safe airline and you stay in a good hotel or serviced apartment, however, for 90% of travellers, the first true ‘out of airport’ experience in every

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city is the car that takes you from the airport to your new place of residence.

If you pull away from the airport in a city taxi, you are clutching a sheet of paper with your new ‘home’ address (a hotel or serviced apartment) and at that time, it is one of the most precious pieces of information you carry. You call home from your mobile, you check your currency, all the while you are wondering why you felt more safe at 30,000 feet in the air than you do on the ground, and you realise that you and your company have taken every measure to ensure safe transit but scarily, this stranger, whose driving and language skills sometimes leave a lot to be desired, now holds the key to your destiny as firmly as he is holding the steering wheel.

After gaining entry to your room or apartment, the most impactful part of the arrival is the welcome. When you see a note from Guest Relations, the GM or the Front Desk with their contact details telling you something as simple as ‘the water is complimentary and the chocolate bar is on us’ – doesn’t that make you smile? Then if you find an issue with your accommodation, and you already have a ‘personal’ connection, you feel completely differently about how you will handle this challenge.

And even more surprising – this ‘welcome’ can so easily be achieved either with or without human interaction.

A personal note on the table, a small gift or something as simple as a pair of gloves when you arrive into sub-zero temperatures in New York (thank you Furnished Quarters!) can make you feel warm and welcome – and completely erase the total fear you had of watching the speedometer of the taxi as you swung across 4 lanes to leave the freeway.

A mix of uncompromising standards, process and personality helps to make

a perfect move and create a perfect stay.

All suppliers completely understand that 80% of a perfect stay is in the product, cleanliness, connectivity, location and issue resolution, but we also know that we can enhance this for our guests with a welcome and a local flavour and personality that will make the experience enjoyable – the goal of any company is 100% satisfaction and want to return.

A recent meeting with a senior employee for a global relocation company shared one of the most valuable pieces of feedback that our industry could hear.

She shared that the relocation company loses the confidence of the assignee most regularly and to a higher degree with their transfer from the airport and the serviced accommodation provision. Weeks and weeks of excellent hard work can be lost if these two areas fall down. What a huge amount of pressure on our industry.

This 100% satisfaction is the aim of the Alliances and Networks that are being created across the globe.

Alliances are looking to provide global mobility managers, relocation companies, HR and bookers access to the best independently owned and operated serviced apartments and corporate housing solutions.

The GO Network in the Americas was launched more than 3 years ago, and has more than 10,000 apartments, and is a privately-funded and managed entity. GO’s clientele includes relocation companies and Fortune 1000 companies.

Go quotes; ‘Our “Leading Hotels of the World” concept provides temporary housing solutions delivered with local expertise on a global scale. Our vision is to create an innovating lifestyle brand that integrates industry partners to provide a more dynamic corporate housing experience, one that is authentically local, personal, and meticulously cared for by

business owners’.

New alliances are being developed across the globe – and they are exciting to be part of. The Apartment Service has also launched ‘The TAS Alliance’, which has partnered with the GO Network in the US to provide a Global Solution.

Charlie McCrow explains the rationale behind this venture; ‘Operators joining the TAS Alliance will be expected to work co-operatively to generate solutions for buyers. Our members will be required to meet exacting standards in accommodation and service. Member properties must also have robust and transparent reservation, cancellation and customer complaint handling procedures’.

What does this mean to the end user (our guests), the booker (HR or Global Mobility), the small corporate, the large corporate and to the relocation industry as a whole?

It means the serviced apartment and corporate housing industry is taking its place amongst other mature industries – it is coming together and becoming stronger.

It will provide more choice, healthy competition, creative solutions and opportunity.

The new buzz word – Alliance.

Jo Layton MD Group Commercial Sales, The Apartment Service Jo Layton has joined The Apartment Service as Managing Director – Group Commercial Sales.

She will spend her initial 12 months establishing 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 has joined from BridgeStreet where she was responsible for sales and marketing throughout EMEA and APAC and was instrumental in the expansion of the UK office.

A committee member of the Hotel Marketing Association and Executive Committee Member of the Association of Serviced Apartment Providers (ASAP), Layton played a leading role in creating the UK grading system for serviced apartments in conjunction with Visit Britain. Jo’s hospitality career has also included nine years with Marriott and five at the flagship Intercontinental London on Park Lane. www.apartmentservice.com

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RISK

Rethinking Risk In The Realm Of Relocation - Leveraging The Law Of Large Numbers Dynamic shifts in the global economy and the relocation sector have coincided with the maturation of the mobility industry. These converging circumstances present a genuine opportunity for the industry’s corporates, vendors and associations to gain a deeper understanding and mastery of the risks inherent to their business en route to delivering added value, product and service innovation, and new diversified revenue streams.

Capitalising on this fleeting opportunity will require that industry players replace established patterns of passive, transactional insurance procurement with alliance partnerships while reconfiguring data in the context of strategic risk management.

Risk Fundamentals: A Primer Far too often, risk is confused with loss, a much simpler, yet decidedly more negative concept. A loss is a loss; it is related to a gain only to the extent that a gain is a loss’s inherent opposite. The notion of deriving gain from risk to many, smacks of the oxymoronic, if not outright blasphemy.

In general terms, risk is defined as the likelihood of an event with a negative outcome occurring, and is gauged in terms of frequency and severity. How often does it/could it happen, and how costly does it/could it get?

Compounding the confusion is the fact that a loss of any magnitude or origin that happens with predictable regularity isn’t by anyone’s definition a risk, but rather a certainty. Yet time and again, tunnelvisioned insurance procurement decisions are made with loss in mind instead of risk.

Ironically, in the banking sector and fixed income markets, where interest rates are in some respects merely a numeric expression of risk, no one seems to struggle with the concept of deriving gains from interest. Perhaps it is owing to the fact that insurance has long been perceived as the unloved stepchild of the financial services family. Or a necessary, but unsavoury bit of bitter medicine to be swallowed reluctantly.

No wonder then, that insurance, a risk management tool among many, is thought of only in terms of costs and not considered for its revenue or value creating potential.

Insurance and risk management practitioners have for years been harnessing the power of risk to generate handsome returns. Returns that have been, over the last decade, despite a flurry of high profile catastrophic events, the envy of the financial services marketplace.

Managing risk has traditionally been the exclusive domain of large enterprise, and includes everything from traditional insurance, loss control engineering, to business process re-engineering, outsourcing, and straight out avoidance.

Fundamentally, low frequency, high severity events that an organisation does not have the financial wherewithal to bear are typically transferred to more solvent parties in exchange for a premium via traditional insuring contracts. In the extreme form they are referred to as catastrophic. Higher frequency, lower-severity events are retained, and are reflected in insurance contracts in the form of deductibles or excesses. It is unquestionably equal parts art and science determining the optimal alchemy and thresholds.

While comprehensive risk exposure profiles, cost of risk assessments, alternative risk financing schemes and loss control mechanisms are typically deployed in respect only of large, often times multinational enterprise, the varied and global nature of the relocation industry niche, requires that much smaller players tear a page or two from the big kids’ playbook, and adopt downsized but ever relevant and applicable risk strategies to effectively manage and ultimately derive gain from risk.

Unfortunately, after decades of industry consolidation and regional disparity, the insurance and risk industry is neither calibrated nor disposed to dispense this level of expert service to the small, dynamic international businesses that comprise our industry.

The myriad privately held, small-tomedium size enterprises that constitute the on-site service backbone of the relocation industry, on a standalone basis, can only aspire to be insurance purchasers in respect of their own operations year after year.

Collectively however, the picture looks much more promising.

Without having to go so far as matching the arithmetic prowess (or, heaven forbid, sartorial stylings) of actuarial mathematicians, relocation industry vendors and service providers, through partnering with forward-thinking financial services innovators dedicated to the sector, can harness the power of risk. By aggregating the collective purchasing power of their business partners, astute managers of risk can bring that to bear against the market to achieve optimal programme design, terms, pricing and revenue.

The Law of Large Numbers Simply put, the Law of Large Numbers and probability theory dictate that the average of the outcomes observed from a large number of events will approach an anticipated number based on simple arithmetic, and will tend to become closer to that expected amount as an increasing number of events are observed.

A familiar concept from the world of procurement asserts that the average cost of widgets will be expected to fall as the number of widgets purchased increases. On the risk front, the premise is different but the outcome is similar. The amount of premium that needs to be charged to accommodate for uncertainty falls as uncertainty is reduced. Affordability is achieved by increasing the data set and in turn reducing uncertainty. In the procurement world, it’s called volume discounting. In the world of risk, it is referred to as pooling risks and is ideally suited to niche business and global boutique operations, indeed far moreso than the highly commoditised domestic markets.

Revolutionary Perspectives A risk rethink is on order on all fronts.

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RISK Opportunities to achieve elusive critical mass, to effectively pool risks within the relocation sector are abound.

Corporates may be well advised to revisit existing programmes and unmanaged risks, and ask whether their vendors enjoy a more proximate and holistic perspective on the risks inherent to mobility, and if indeed vendors might be better disposed to procure aggregate programmes and actually deliver superior solutions than those that they might be able to even recognise, address or manage themselves.

Vendors in turn would be wise to examine their businesses to identify areas where new risks exposures are introduced to their operations vis a vis their clients, and whether they are ideally situated to bring the collective purchasing power of all their clients to bear against the market, and achieve superior pricing and terms in the course of enhancing value and distinguishing their market offering.

Competitors in the same space could be well served to assess whether it might pay dividends to set aside market rivalries to the extent that risk solutions and insurance procurement are concerned.

Vendors of a similar ilk in parallel industries have a track record of organising the formation of purchasing groups and/ or reciprocals based on their relative competitive advantages, relationships and understanding around a given risk.

Finally, the industry’s associations might ask themselves if they have overlooked a glaring opportunity to retain and attract members.

Industry trade associations have a pivotal role to play in drawing awareness to the gains that can be derived from pooling risk through presenting affinity programmemes. Such schemes serve to legitimise the organisation through the delivery of improved terms, better pricing, reduced underwriting requirements and less application administration to the membership. This new negotiating strength can often leave room for a diversified revenue stream for the organisation itself, taking pressure off of conference revenues and membership fees, and perhaps, just maybe, even improving the quality of banquet dinners and wine selections.

Data is the Key As it is with any new initiative these days, data is the critical key. In recent years the relocation industry has taken great strides INTERNATIONAL HR ADVISER SPRING

toward capturing and analysing data specifically with regards to pricing and customer satisfaction. Until similar gains are made on the risk front, industry sellers and buyers alike will be at the mercy of operational uncertainties and purely transactional insurance procurement relationships where transparent alliance partnerships could take root and thrive.

That having been said, market players will be comforted to know that the challenge is not to identify and catalogue strange new data sets and pioneer trailblazing software systems to track hitherto unknown variables. The data that is required to adequately assess and manage risk are the very data that the industry routinely uses to go about its business.

The industry need only repackage and present that data in a way that is meaningful to underwriters.

A Case Study The care hire industry long ago recognised that it was far simpler and infinitely more cost-effective for people to procure their integrated damage waiver than it would be for every individual or corporation to contact their broker, who would in vain try to find an insurer that could be bothered to incur the risk and administrative expense for a three day rental contract.

While reserving comment on the quality of coverage or claims service, I will credit the industry for recognising it was ideally situated to pool risks and respond to a genuine need, and acting on it.

Soon thereafter, credit card companies recognised that they too could distinguish their premium card offerings by leveraging the law of large numbers to include default rental car insurance and reap additonal profits. Not to be outdone, the homeowners’ insurance carriers thereafter woke up and determined that there was value to be created and money to be made by including ‘non owned’ auto insurance coverage as a standard enhancement on high-end policies, while corporations negotiated coverage enhancement with fleet insurers to include hire cars for business travellers.

Applying The Lessons The relocation industry enjoys several distinct and material advantages over the care hire industry, above and beyond the absence of polyester uniforms and offices located in underground parking lots at the airport.

One is spread of risk. The global nature

of the business generates an appealing spread of risk whereby it is more unlikely that one catastrophic event could knock all players out of the game.

The second relates to the profile of international assignees. Whereas the car hire agency must serve every Tom, Dick and Harry that walks off the street with a drivers’ license, the relocation industry typically interacts with educated, well-remunerated, savvy international executives. From an insurance perspective, that translates to a low risk of ‘moral hazard’ or fraud, and as such a highly desirable sub-segment of the market.

Another relative upside is the comparative order of magnitudes of product price and risk solution price. Incredibly, car hire agencies have been wildly successful in adding a two-digit surcharge onto a two-digit price point. Relocation vendors however, even in a highly competitive marketplace, would at most be adding a two- or three-digit surcharge onto a fouror five-digit price point.

Finally, whereas automobile insurance in general was no mystery to underwriters when the car hire agencies leapt into the fray decades ago, at the present moment, international mobility and relocation market players know their business far better than the insurance marketplace at large. Organisations that mobilise resources quickly to embrace a progressive perspective with respect to risk will garner the keen attention of underwriting partners seeking to form alliances to produce timely cost saving solutions, deliver innovative value and generate new revenue.

Ill-informed skeptics may perceive the integration of protection and risk solution elements into the vendor service offering on a default, ‘opt-out’ basis as a desperate and brazen cash grab. Those who bother to pursue a deeper understanding may be surprised to discover forward thinking innovators who delivered timely and costeffective risk solutions. This appreciation may be underscored in light of abundant evidence of shifting trends and emerging developments in the industry.

Historically, the relocation industry’s risk consolidators have been the removals industry providers. Unquestionably, the pooling of international household goods risk has given rise to a comprehensive series of protection programmes with innovative coverage enhancements reflecting the nuanced and distinct needs of corporates and transferees alike.

However, recent demographics shifts

RISK whereby transferees are more likely to be light-travelling Millenials than Boomers, shorter assignment durations, intensified procurement discipline and the emergence of the furnished corporate accommodation sector, are a sampling of causative factors that will serve to undermine the dominant position removers have enjoyed.

In the New Normal, removers will necessarily abandon their defensive postures and forge alliances, engender a higher degree of transparency and break free from linear ‘point A to point B’ perspectives should they hope to retain, and perhaps enhance, the risk-related revenue streams that have enabled many to endure in a notoriously cut-throat environment of competition.

Meanwhile, vendors who have been to date politely kept at bay by the removals sector, deliberately chose to

eschew risk solutions, or simply were blissfully unaware of the value and revenue potential, will be challenged to recognise the immediacy of the opportunity before them.

In 2014, the industry is ready for a new model. A revised operating paradigm

that strips away layers of unnecessary intermediation, draws back the curtain on the mechanics of insurance and risk management and shines a light on the gains that can be achieved through revisiting every aspect of risk, internal and external to each market player.

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

In 2002 he embarked on a innovative start-up project that grew into a multimillion dollar enterprise. As Executive Vice President he provided strategic and tactical guidance and direction for the organisation that included oversight and development of the Canadian, European and UK markets.

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

Email paul@terngrp.com www.terngrp.com

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HEALTH

Small Steps Towards A Healthier Future Every year more people die from cardiovascular disease (CVD) than any other cause worldwide. In 2008 it claimed over 17.3 million lives and by 2030 this figure is expected to reach 23 million.

Although these figures sound alarming there is good news. As with plenty of things in life, there are some things we can control and others we can’t. When it comes down to cardiovascular disease, there are plenty of things well within our control.

Lifestyle choices like smoking, drinking too much alcohol, eating poorly and not getting enough exercise are some of the biggest causes of cardiovascular disease.

Of course, changing behaviours on a global scale is far easier said than done. And we certainly won’t be able to influence people’s lifestyle choices overnight. But we’ve all heard the saying ‘prevention is better than cure’. So with the right strategies, initiatives and information from governments and healthcare organisations, it is possible to start educating people about the risks and what steps can be taken to tackle the rising rates of cardiovascular disease.

Understanding the basics Essentially cardiovascular disease relates to a number of conditions that affect your heart or blood vessels. This could include coronary heart disease (angina or heart attack), stroke, heart failure or heart valve problems just to name a few.

Cardiovascular disease is often caused by a process known as atherosclerosis. This is when the blood vessels that supply your heart with blood – your coronary arteries – become narrowed and hardened from a build-up of fatty deposits (called plaques).

This usually happens gradually over a number of years, but in time your arteries may become more and more narrow, meaning they can’t get enough oxygen-rich blood to your heart. When this happens some people get pain or discomfort in their chest known as angina.

Sometimes those fatty deposits building up in your arteries can break away and cause a blood clot. If one of those clots block the blood supply to your heart or brain, this can cause a heart attack or stroke.

Health Organization estimates that about 80 percent of all coronary heart disease and strokes could be prevented by lifestyle changes such as by stopping smoking, eating a healthy diet and doing more exercise.

There have been huge efforts in many countries across governments, schools and workplaces to encourage healthier lifestyle choices. For example, The Wold Health Organization has seen significant progess in efforts to stop people smoking.

Initiatives such as creating smoke-free public places, restricting advertising and introducing effective health warning labels and mass media campaigns are having a real impact in some countries.

Did you know?

According to the World Health Organisation (WHO), high-income countries have more than double the rates of insufficient physical activity compared to low-income countries – for both men and women.

Exercise is another lifestyle choice where vast efforts are being made to encourage people to be more active. It seems the demands of modern living, long working hours, pressurised jobs and family commitments are just some of the challenges preventing people from exercising enough. Globally one in three adults are not active enough and those people in high income countries seem to be doing less than those living in low income counties. But in reality, exercising more comes with huge benefits – it can help us stay focused at work, act as a great stress buster and allow you to enjoy some precious time with your friends and family.

It could be said we are simply out of the habit of physical exercise. The convenience of jumping in a taxi rather than walking, or of getting in a lift rather than using the stairs, are all too easy options. So in order to re-establish health and wellbeing as a priority, the challenge is to make people realise that exercise doesn’t have to be an added pressure to an already busy schedule – it can just as easily be a practical solution.

Minimising the Risk Although we can’t do anything about our family history or age, the World

Getting Active The recommended level of activity for

children and young people is 60 minutes of moderate to vigorous-intensity exercise each day. Ideally this should involve aerobic activities such as walking, running, swimming and cycling; with exercises to strengthen muscle or bone activities included at least three times a week.

The Talk Test The easy way to work out the intensity of your exercise is to try the talk test. If you’re doing moderate-intensity activity, you can talk but not sing. If you’re doing vigorous intensity activity, you will not be able to say more than a few words without pausing for breath.

Adults should be aiming to do at least 150 minutes of moderate-intensity (or 75 minutes of vigorous-intensity) aerobic activity throughout the week – with muscle-strengthening activities on at least two of the days.

While this may sound a lot, it’s worth pointing out that it doesn’t have to involve blood, sweat and tears down the gym. It could just as easily be a brisk walk to and from work each day or carrying out the odd bit of gardening. In fact, the more functional it becomes, the easier it is to manage.

Did you know?

One study in Taiwan suggested found that just15 minutes of walking each day can increase life expectancy by up to three years.

Naturally, as we get older our ability to perform physical activity can be a little more complicated, so we need to be sensible. The important thing to remember is that doing something is always better than doing nothing, because even small increases in physical fitness can significantly reduce the risk of cardiovascular disease.

Best Foot Forward Often, the hardest part of any new fitness regime is getting started – especially when those involved are not used to exercise. A common mistake is to become overwhelmed or take on too much too soon, when a gradual approach is more likely to help you succeed. That’s why, last year Bupa teamed up with the World Heart Federation to try and help.

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HEALTH On ‘World Heart Day 2013’ the two organisations launched their ‘Ground Miles’ challenge to promote walking as a way of reducing the risk of cardiovascular disease. They set a target of walking 5 million miles in various initiatives throughout the world, and used all their powers of persuasion to get people on their feet and active.

As part of the challenge, more than 50,000 people downloaded a free motivational walking app called ‘Ground Miles’, which allowed them to set daily targets and track their progress. Bupa also produced a spoof YouTube video featuring ‘Chad Strider – The world’s greatest walker’, to offer some lighthearted inspiration. The video received over a million views within two months and seemed to capture the imagination of people all over the world.

The many benefits of regular walking UÊ iVÀi>ÃiÃÊ L `ÞÊ Üi } Ì]Ê L `ÞÊ >ÃÃÊ index (BMI), body fat percentage and waist circumference UÊ ÜiÀÃÊ L `Ê «ÀiÃÃÕÀiÊ > Ì Õ} Ê more research is need to determine how quickly you need to be walking to have this affect UÊ Ê VÀi>ÃiÊ>iÀ L VÊV>«>V ÌÞÊ­Þ ÕÀÊ>L ity to transport and use oxygen during exercise) UÊ VÀi>ÃiÃʼ} `½ÊV iÃÌiÀ Ê­ ®Ê UÊ ,i`ÕViÃÊÌ iÊÀ Ã Ê vÊ Ì iÀÊ V municable diseases, such as type 2 diabetes UÊ «À ÛiÃÊà ii«Ê«>ÌÌiÀ à UÊ ÃÌÊi iÀ}ÞÊ iÛi ÃÊ UÊ VÀi>ÃiÃÊ ÕÃV iÊi `ÕÀ> ViÊ UÊ i «ÊÌ ÊÀi`ÕViÊvii }ÃÊ vÊÃÌÀiÃÃÊ> `Ê anxiety UÊ iVÀi>ÃiÃÊÌ iÊÀ Ã Ê vÊ`i i Ì >Ê UÊ ,i`ÕViÃÊ> `Ê> iÛ >ÌiÃÊ ÌÊ> `ÊL>V Ê pain UÊ VÀi>ÃiÃÊ ÕÃV iÊÃÌÀi }Ì Ê> `Ê i «ÃÊ to keep bones strong.

From beginning to end, the ‘Ground Miles’ campaign was a resounding success and exceeded all expectations. More than a million people joined in from 150 different countries and it was amazing to see how effortlessly people incorporated walking into their daily routines.

On January 29, 2014, the 5 million mile target was reached and to celebrate this success, Bupa provided funding to the World Heart Federation, which is now being used to support programmes INTERNATIONAL HR ADVISER SPRING

in Africa and South Asia, which protect children from the symptoms of Rheumatic Heart Disease (RHD).

A Brighter Future Feedback on the campaign has been overwhelming and it just goes to show that given the right incentive, individuals and entire communities can change habits and adjust their behaviours. More importantly, it has proved that exercise doesn’t have to cost money, take up unnecessary time or interfere with our busy schedules – it can be an enjoyable part of everyday life.

For Bupa, the World Heart Federation and millions of people all over the world this is hopefully just the beginning of a brighter, healthier future. Plenty more initiatives are planned and plenty more people will be encouraged to take part.

But as a wise man once said, even a journey of a thousand miles begins with a single step!

For more information about Bupa International and its business healthcare plans, please call: +44 (0)1273 256 012 or visit: bupa.intl.com/company

IT SECURITY

Security And The End User More than ever, user education, predominantly through the use of global electronic communications policies, is becoming central to securing company networks and avoiding cyber-attacks. Ultimately, organisations that want to leverage BYOD without risking security breaches must ensure that users take personal responsibility for how their behaviour can impact a company’s network.

HR and IT must collaborate in order to set out clear and well-publicised rules while using training sessions to educate users on the consequences of noncompliance. In addition, conducting internal IT security policy quizzes or tests for employees will encourage users to learn policy violations and their potential impact on the business. Organisations can also consider registering employees for free daily online security tips, like these from the SANS Institute.

Communications policies should aim to outline what is expected of employees and what they can do to protect corporate networks and devices from malicious attacks. The simple and often commonsense measures that employees can take to help keep data secure are often the most effective. This includes the immediate reporting of lost devices, working closely with the company’s IT team, refraining from installing apps from unknown sources and not putting off security updates.

HR should work together with IT to encourage employees to have different passwords for various sites, while ensuring that the password itself is strong, with a combination of numerals, letters and special characters. If employees are using a public computer, it is imperative that they log out when finished and not share passwords with others both internally and externally or leave them anywhere easily accessible.

Public or unsafe Wi-Fi networks can also pose a serious security risk to organisations, particularly if employees are travelling abroad. When processing financial transactions and sharing sensitive information it’s safer to use a protected private network (wired or wireless).

We tend not to exercise the same

amount of caution while sharing information on social media as we do with other forms of peer-to-peer communication. It is essential that employees are aware of what information they are sharing over social media. It’s not only friends and professional connections that are privy to your information. There can be cyber-criminals snooping around, and listening in on your conversations and social messages.

Untrusted, potentially malicious sites will often appear genuine, but in reality can mislead employees to disclose personal, financial and secure information (such as username password, bank account number or credit card PIN). Phishing is becoming increasingly common on the Web. Employees should only enter passwords on websites when they know it is a trusted source and never by following a link in an email or chat message.

Additionally, by checking that websites have the closed padlock symbol on the address bar, employees help ensure that the right encryptions are in place to secure data integrity. If sites appear fishy, users should come out of them immediately and inform HR and IT to ensure credentials have not been compromised.

Companies must also be cognizant of data theft from within the organisation, often caused by the ease of access to data.

USB Data Theft has been the simplest form of insider data theft because, all it takes is to plug in a flash drive and copy sensitive or confidential information.

Over the past few years, we have seen so many organisations tracking down the loss of sensitive and confidential information to have happened owing to usage of USB drives and other mass storage media. Making sure that your employee signs a privacy agreement alone is not a strong deterrent. Typically, it could be a disgruntled employee that decides to just copy sensitive information and tries to leak it externally or may be a case where an employee’s unsuspecting USB device has a malware in it which can automatically trigger a script or code to install or run on your system and steal data.

Transmitting sensitive files online using online file sharing tools has also become common practice with the advent of

cloud-based solutions like Dropbox and Google drive. So when an employee tries to share files or transfer files through insecure channels, there are chances that sensitive corporate data can be easily accessed by third parties especially when data is stored in the public cloud.

A concerted plan to curb employee data theft should incorporate admin, human resources, IT and top-level management.

There are steps that a watchful and well-equipped IT department can take to pre-empt data theft, with network data providing valuable insights into employee behaviour. With the help of a reliable security and management tools, organisations can build rules to restrict unauthorised access and be notified about violations. You can also build an authorised group with limited people and ensure that they are the only ones with privileged access to business critical data.

Security education is part of smart security preparation. Better awareness and preparedness will help avoid many commonplace security lapses, ultimately better protecting an organisation’s intellectual property and corporate data.

Don Thomas Jacob, Head Geek, SolarWinds.

Don Thomas Jacob has worked in a variety of tech roles including tech support engineer, product blogger, product evangelist, and tech marketing lead.

His experience and interests lie in network performance monitoring, security analytics, packet inspection solutions, flow-based technologies like NetFlow, sFlow and IPFIX, and technologies such as QoS, NBAR, IPSLA, and Cisco Medianet and MediaTrace.

Don follows tech blogs like Wired. com, TechCrunch, and ARS Technica, and struggles to decide whether Neo, Yoda, or Darth Vader rules the sci-fi universe. For further information visit www.solarwinds.com SPRING INTERNATIONAL HR ADVISER

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INTERNATIONAL HR ADVISER SPRING

STRATEGIC PLANNING

Thinking Space A review of how Global Mobility Professionals can benefit from time out to think strategically.

Everybody makes plans and has goals.

We have personal goals, career goals, team goals - the list goes on. Most of us have figured out what works well for us – “To Do Lists”, deadlines, and rewards, and we adopt the same approach to many aspects of our lives.

Realistically though, how enjoyable is this? Do you ever stop and question why?

For each new project, maybe it’s just easier to pull out your preferred project plan and start mapping out all the micro tasks to get the job done. We are all so busy, time is limited and we know it works. But does it produce the best results and make you happy?

If we could ask Albert Einstein he may suggest not!

“Insanity: doing the same thing over and over again and expecting different results.”

There is no set definition for strategic thinking but leading academics in this space suggest the following: UÊ “Strategic thinking is promoting unorthodox perspectives; challenging the obvious and fostering divergent thinking and creative solutions” (Dr David R Stevens 1997) UÊ “Strategic thinking is to seek innovation and imagine new and very different futures that may lead the company to redefine its core strategies and even its industry.” (Fiona Graetz 2002).

Interestingly, Jeanne Liedtka in her article Strategic Thinking: can it be taught?

(1998), argues that there are five “major attributes of strategic thinking in practice” that resemble competencies: 1. Systems perspective - being able to understand implications of strategic actions.

2. Intent focused –being more determined and less distractible than rivals in the marketplace.

3. Thinking in time –being able to hold past, present and future in mind at the same time to create better decision making and speed implementation.

4. Hypothesis driven - ensuring that

both creative and critical thinking are incorporated into strategy making. This competency explicitly incorporates the scientific method into strategic thinking 5. Intelligent opportunism - being responsive to good opportunities.

Fascinating, but what has this got to do with Global Mobility?

Everything! Global Mobility is becoming increasingly complex. The volume of moves isn’t easing up, home and host country combinations are more diverse each year and regulatory regimes continue to get more sophisticated and onerous.

Global Mobility professionals are desk bound, trying to get through the mountains of bureaucracy to move employees from one jurisdiction to another and have little time to eat, let alone think!

We passionately believe this has to change to ensure that Global Mobility does not become an administrative function which can be easily out-sourced or automated.

In the words of Martin Luther King Jr. this isn’t easy though: Taking it one step further, some believe

gold medal triumph in the 2000 Sydney Olympics. The men’s eight rowing team had not won Olympic gold since 1912, they therefore decided to change their focus. Their strategy was to make the boat go as fast as possible, not to focus on winning regattas and warm-up races.

‘Will it make the boat go faster?’ became the team’s personal mantra. Focusing their energy on this strategy, ultimately led them to their victory.

The same principle can be applied to shape your own strategy. Forget the end result and focus on improving your performance.

Strategic thinking assumes that you can only predict the shape of the future not the specific details. Once you have decided on your end goal you simply think about new and different ways you can approach your challenges.

Here are some ways to start you on your journey of strategic thinking:

Network Global Mobility professionals are often struggling with the same challenges.

Joining a network of like-minded professionals can inspire and help you to think in a different way.

Share Experiences Sharing your experiences can be extremely beneficial to both yourself and other professionals. Discovering how someone else is approaching a challenge can shape your strategy. If another professional has found something that works, consider adopting a similar approach. Equally, learning about others mistakes can help you avoid pitfalls.

“Rarely do we find men who willingly engage in hard, solid thinking. There is an almost universal quest for easy answers and half-baked solutions. Nothing pains some people more than having to think.” that allowing time to think creatively boosts overall happiness and wellbeing. If this is the case thinking space is essential to us all!

But will it make the boat go faster?

Let us explain: Ben Hunt Davis is an Olympic champion who rose to his

Collaborate Collaborating with other people can improve both the speed and quality of your work. Gain insight and opinion from your peers. At a recent meeting of Global Heads of Mobility, “Expat Lite” policies were discussed. One Global Head brought to the meeting his draft policy to discuss with others. After much thought and discussion it was agreed that rather than everyone trying to add such a policy to their suite of offerings it may be better to scrap the idea! The group decided that such policies are not different enough from standard Long-Term Assignment Policies and often cause issues when SPRING INTERNATIONAL HR ADVISER

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STRATEGIC PLANNING deciding eligibility criteria. It was a learning to everyone that sometimes it is right to scrap an initiative rather than follow the crowd!

Take time out The corporate world is full of people making plans and then never sticking to them. Having a vision of where you are going is what will make a difference to how far you get. Take 30 minutes each day to think about your strategic objectives.

You may consider reviewing the past and your current situation and remember things constantly change. You need to ensure your current ideas for the future are up to date, and your previous reasons for not going ahead are still valid.

Conclusion Strategic thinking isn’t easy and needs to be constantly worked at. Even the concept takes some brain power to understand!

What is easy is to adapt this article and

INTERNATIONAL HR ADVISER SPRING

use it as a business case to justify some “Thinking Space” for you and your team.

Our strapline has always been: “Where corporate Global Mobility Professionals Learn, Connect and Share”.

We agree with Harvard business School that as a group: “Individuals gain other people's perspectives on critical and complex

issues. This is regarded as a benefit in highly competitive and fast-changing business landscapes”.

We also passionately believe that as a community of Global Mobility professionals we can “redefine the Industry’. If we put our minds together we can elevate the strategic influence of Global Mobility Functions.

Emma Gibbs 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.

More recently Emma has worked as an independent international HR consultant advising companies across many industry sectors of best practice and trends in the marketplace. Emma joined the Expat Academy as Director in November 2010.

Natalie Grundie is studying for her Events Management degree at Bournemouth University and jumped at the opportunity to complete her placement year with Expat Academy which she completes in August 2014.

If you would like more information on Expat Academy, or want to meet Ben Hunt-Davis, contact Natalie Grundie at natalie@expat-academy.com.

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DIARY DATES APRIL The Forum for Expatriate Management London Chapter Meetings First Thursday of every month, 2014 London Currently, FEM chapter meetings are held quarterly in over 30 locations worldwide – but as a result of immense popularity, FEM are pleased to announce that London chapters will now be held on the first Thursday of every month throughout most of 2014 - the first of which, will be held on January 17th to allow for the festive season. Chapter meetings are a great opportunity to meet your peers, keep up to date with industry developments and to discuss current issues in global mobility with expert industry representatives. In-House Corporate HR Professionals attend free.

For more information, please contact Myrianthe Ewington on +44(0) 20 7970 4570 or email myrianthe.ewington@centaur.co.uk To learn more about upcoming chapters and to register your attendance, please visit: http://totallyexpat.com/events/

Expat Academy Training Course 3rd & 4th April 2014 Global Mobility: A Practical Introduction, London This Expat Academy course covers the essential principles of global mobility and its practical application. If you are fire fighting inaccuracies and constantly managing expectations this will be a really beneficial course for you. You will also leave equipped with a valuable toolkit for daily use back in the workplace. To book please e-mail admin@expat-academy.com.

The Chicago Totally Expat Show April 28, 2014 Marriott Oak Brook, Chicago, Illinois The Chicago Totally Expat Show will be the last in the US Series for 2014.

Totally Expat Shows are an excellent forum, designed to unite global mobility professionals, providers, consultants and industry experts, giving them the opportunity to network, discuss and discover new opportunities in the constantly evolving world of expatriate management. Discover new opportunities, gain insight from experts and reach out to other global mobility professionals at this one day conference and networking exhibition. For more information, please contact Iyla MacIntyre on +44(0) 20 7943 8027 or email iyla.macintyre@centaur.co.uk In-House/HR Global Mobility Professionals attend free – book your place at: http://totallyexpat.com/chicago-show-2014/

MAY

topical areas of Global Mobility, including exploring new locations, justifying the cost of Global Mobility and building the brand, ensuring that you put Global Mobility on the map in your organisation. We will also look at some technical areas such as deciphering deferred compensation, employment law and understanding pensions. To book please e-mail admin@expat-academy.com.

The London Totally Expat Show May 19, 2014 Business Design Centre, London The London Totally Expat Show is FEM’s flagship of the series and is designed to help make your international assignees experiences the best they can be. Register today and meet with hundreds of your global mobility peers at this one day conference and exhibition, where you can benefit from; a cutting edge conference programme featuring top global mobility experts, the opportunity to network with leading suppliers to learn about the latest innovations expatriate management, plus the opportunity to meet, network and share best practice with industry peers.

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

JUNE Expat Academy Symposium 16 June 2014 London A convivial meeting for intellectual discussion and debate, with drinking and revelry! Sounds great doesn’t it? The Expat Academy Symposium is ideal for organisations with a team of Global Mobility professionals managing medium to large size expatriate programmes regionally or globally.

This one-day conference will provide you with a wide variety of topical and technical agenda items delivered to you via lectures, workshops and case studies.

Facilitated by experienced global mobility professionals the event is specifically designed for in-house Global Mobility professionals with a minimum of five years’ experience.

You will also have the opportunity to tap into the knowledge of carefully selected Global Mobility specialists. To book please e-mail admin@expat-academy.com.

HR Inspired Conference Thursday 8th May Ascot Racecourse, UK www.hrinspired.co.uk An elite group of senior HR Directors are invited to meet at the World Famous ASCOT RACECOURSE to discuss key industry challenges and meet with executives who share similar challenges within their organisations.

Over the course of a knowledge packed day, the speaking panels and advisory team seek to explore new ideas and ways of solving problems whilst raising standards to support the HR functions of the business.

Themes: Talent and Succession, Leadership, Employee Engagement, HR Data and Metrics, Line Manager Capability, HR Operating Model, Employee Value Proposition Please Book Online via www.hrinspired.co.uk or email j.awatar@cibexmedia.com for information.

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

Expat Academy Training Course Global Mobility: Intermediate course 14 May 2014, London This course is for Global Mobility Professionals with 3-8 years experience. We will cover in depth some of the key, current and INTERNATIONAL HR ADVISER SPRING

Entries cost £250 per conference

DIRECTORY ASSIGNMENT MANAGEMENT SERVICES TOTAL REWARD GROUP Chart House, 10 Western Road, Borough Green, Kent, TN15 8AG Contact: Simon Richardson Telephone: +44 (0) 1732 780777 Fax: +44 (0) 1732 668284 Email: simon.richardson@totalrewardgroup.com Website: www.totalrewardgroup.com Total Reward Group is a ‘boutique’ employee owned reward practice, providing consultancy, search, interim managers and professional training for analysts.

The Global Mobility division of TRG provides both advisory services on policy development, as well as fully outsourced assignment management services, which provides a ‘virtual’ in house Global Mobility HR service.

BANKING NATWEST GLOBAL EMPLOYEE BANKING Address: Eastwood House, Glebe Road, Chelmsford, Essex, CM1 1RS Contact: Neil Barsby, Head of NatWest Global Employee Banking Telephone: +44 (0)1245 355628 Email: neil.barsby@natwestglobal.com Website: www.natwestglobal.com NatWest Global Employee Banking is a specialised department within NatWest who work with Company HR functions/ Relocation Agencies to offer a streamlined account opening service for relocating employees. One of the main benefits of the service is that employees can apply for their account before they arrive in the UK so their account is ready when they arrive. This may also help if they want to transfer funds to their new account in preparation for relocation.

BUSINESS ASSOCIATION J-1 VISA PROGRAMME BRITISHAMERICAN BUSINESS (BAB) 52 Vanderbilt Avenue, 20th Floor New York, NY 10017, USA Contact: Tamra Eker Telephone: +212 661 4060 Fax: +212 661 4074 Email: teker@babinc.org Website: www.babinc.org BritishAmerican Business’s J-1 visa programme assists companies in offering US training and work experience to qualified employees of any nationality and from anywhere in the world, for a time period of up to 18 months. Sectors covered by our J-1 Visa designation include management, business, commerce, finance, law, industry, sciences, engineering, architecture, information media & communications. Using the J-1 Visa helps companies overcome cross-cultural differences and improve communication between US and overseas offices; enhance employee recruitment/ retention efforts by offering US assignments; and meet global mobility challenges. Please call to discuss the programme with our J-1 Visa Programme Administrator.

HEALTH INSURANCE BUPA INTERNATIONAL Telephone: + 44 (0) 1273 718304 Website: www.bupa-intl.com UÊ Õ«>ÊqÊ Ê > iÊÌÀÕÃÌi`ÊLÞÊ£äÊ Ê«i « iÊÊ in 190 countries UÊ/ iÊ ÌiÀ >Ì > Ê i> Ì V>ÀiÊ«À Û `iÀÊÜ Ì ÊÊ over 35 years’ experience UÊ Õ Ì }Õ> Ê i « iÊ «i ÊÓ{Ê ÕÀà UÊ ÀiVÌÊVÕÀÀi VÞÊÃiÌÌ i i Ì UÊ"«Ì > Ê>Ãà ÃÌ> ViÊV ÛiÀÊ V Õ` }Ê evacuation and repatriation.

Depending on the member’s requirements, Bupa International offers plans for both individuals and companies. Most of our plans include; primary care, maternity cover, home nursing, emergency dentistry, hospital treatment and accommodation, health checks, cover for chronic conditions, emergency road ambulance, cover for sports injuries.

INSURANCE AND FINANCIAL SERVICES ZURICH INTERNATIONAL LIFE Abbey Gardens, 4-6 Abbey Street Reading, Berkshire, RG1 3BA Contact: Adele Cox Telephone: +44 (0) 118 952 4253 Fax: + 44 (0) 118 952 4300 E-mail: adele.cox@zurich.com Website: www.zurichinternational.com Zurich International Life is a global provider of life insurance, investment and protection products. Our corporate range offers flexible, portable solutions, designed to suit multinational organisations with an internationally mobile workforce. The International pension plan offers a cost effective, bundled retirement benefits solution comprising of trust services, investment funds and online administration.

International group protection is designed to protect an employers’ most important asset qÊÌ i ÀÊi « ÞiiÃÊqÊ> `Ê vviÀÃÊ>ÊÀ> }iÊ vÊ viÊ and disability protection.

With a local presence in key global business hubs and over 20 years experience of implementing and administering plans world wide, we’ve developed our knowledge and understanding of key markets to meet the needs of our customers and business partners.

INTERNATIONAL HR CONSULTANTS DELOITTE LLP Stonecutter Court, 1 Stonecutter Street, London, EC4A 4TR Contact: Robert Hodkinson, Partner Telephone: +44 (0) 20 7007 1832 Fax: +44 (0) 20 7007 1060 E-mail: rhodkinson@deloitte.co.uk Website: www.deloitte.co.uk Whether you are creating your first international mobility programme for employees or addressing fundamental changes to an existing programme, our International Human Resources team can help. Deloitte provides consulting support that has an appreciation for each company’s

size, background and unique cultural environment, aligning your international programme goals with corporate business strategies. Our consultants have developed deep expertise in many fields based on first hand experience with many of the world’s leading organisations: international assignment policy and process design, benchmarking, service delivery modelling, improving vendor management and helping our clients become more compliant and their administration more cost-effective.

INTERNATIONAL MOVING DT MOVING LTD 49 Wates Way, Mitcham, Greater London, CR4 4HR Contact: Tim Daniells Telephone: +44 (0) 20 7622 4393 Fax: +44 (0) 20 7720 3897 Email: london@dtmoving.com Website: www.dtmoving.com DT Moving is a world leading international moving company. Founded in 1870, we serve corporate customers all over the globe with an award-winning* move management and destination service programme. Through our London and Paris headquarters and worldwide network of global partners, we help clients achieve their workforce mobility goals.

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

Our goal is your complete satisfaction, and with a 96% customer rating for 2012, we offer unrivalled quality at competitive rates. *Awarded six global relocation awards since 2010.

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

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

Entries in this Directory cost £175 per issue or £700 per annum.

For further details email helen@internationalhradviser.com SPRING INTERNATIONAL HR ADVISER

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DIRECTORY INTERDEAN RELOCATION SERVICES Central Way, Park Royal, London, NW10 7XW Contact: Barrie Gilmour Telephone: +44 (0)208 961 4141 Fax: +44 (0)208 965 4484 Email: London@interdean.com Website: www.interdean.com Thinking Relocation? Think Interdean.

Whether looking to expand into new territories or to leverage your human capital in core international markets, Interdean has the relocation service to support the needs of your business and your relocating employees. Interdean provides the full range of relocation services to support businesses with international interests. We make it easy. Our Services: Relocation Management, Visa & Immigration, Area Orientation, Temporary Housing, Home Finding, School Search, Settlingin Assistance, Tenancy Management, Household Goods Moving, Intercultural & Language Training, Relocation Expense Management, Moving & Relocation Insurance > `Ê Ì iÀÊÃiÀÛ ViÃÊ>Û> >L iÊqÊ« i>ÃiÊ>à ° UNIGROUP RELOCATION One Worldwide Drive St. Louis, MO 63026, USA Contact: Mario M. Amato Tel: + 1 636 349 2718 Fax: + 44 (0) 208 181 4945 Mobile: + 44 (0) 7513 061 536 mario_amato@unigroup.com www.unigrouprelocation.com UniGroup Relocation is a global mobility network serving nearly 1,200 locations in more than 180 countries across six continents, making it one of the largest owner managed relocation networks in the world. Our broad range of pre-assignment, transportation and destination services will guide transferees along every step of the journey, from beginning to end. A common voice, a consistent standard of quality and unsurpassed local knowledge set UniGroup apart, giving our customers support and peace of mind as they settle in to their new international locations.

RELOCATION ASSOCIATIONS ASSOCIATION OF RELOCATION PROFESSIONALS (ARP) PO Box 189, Diss, IP22 1PE, UK Contact: Tad Zurlinden Telephone: 08700 737475 Fax: 01379 641940 Email: enquiries@arp-relocation.com Website: www.arp-relocation.com The ARP is the professional association for the relocation industry in the UK. The ARP’s activities include seminars throughout the year, an annual conference, the publication of an annual Directory of Members and a website, which is updated regularly.

THE EUROPEAN RELOCATION ASSOCATION (EURA) PO Box 189, Diss, Norfolk, IP22 1PE Telephone +44(0)8700 726 727 Fax: +44(0)1379 641 940 INTERNATIONAL HR ADVISER SPRING

E-mail: enquiries@eura-relocation.com Website: www.eura-relocation.com EuRA is an industry body for Relocation Professionals in both Europe and Worldwide.

EuRa have launched The EuRA Quality Seal, the world’s first accreditation programme for relocation providers. This pioneering initiative provides a straight forward, cost effective audit to reflect your company’s excellence in providing relocation services.

SCHOOLS INTERNATIONAL COMMUNITY SCHOOL 21 Star Street, London, W2 1QB Contact: Matthew Cook, Director of Marketing and Secondary Admissions Tel: +44 (0) 20 7402 0416 Web: www.icschool.co.uk Email: marketing@icschool.co.uk Twitter: @icslondon Youtube: ICSLondon An international school located in the centre of London. We offer all three International Baccalaurate Programmes (PYP, MYP, and Diploma) to children aged 3-18yrs. ICS has a diverse community with 45 different nationalities, and boasts a strong tradition of working with students who need support with learning English and also Special Educational Needs. Students at ICS benefit from a wide ranging activity programme during term time and also during school holidays. We have outdoor education centres at Chorleywood and Bawdsey, Suffolk and an extensive Travel and Learn programme that has taken students as far afield as Brazil, South Africa and the Galapagos Islands.

ISL GROUP OF SCHOOLS ISL Surrey Old Woking Road, Woking, Surrey GU22 8HY Contact: Claudine Hakim Telephone: +44 (0)1483 750 409 ISL London 139 Gunnersbury Avenue, London W3 8LG Contact: Yoel Gordon Telephone: +44 (0)20 8992 5823 ISL Qatar PO Box 18511, North Duhail, Qatar Contact: Nivin El Aawar Telephone: +974 4433 8600 Website: www.islschools.org Email: hmulkey@islschools.org Celebrating its 40th anniversary in 2012, the International School of London (ISL) Group has schools in London, Surrey, and Qatar.

The internationally recognised primary and secondary curricula have embedded language programmes (mother tongue, English as an Additional Language, and second language) which continue throughout the student’s stay in the school. A team of experienced and qualified teachers and administrators provides every student with the opportunity to grow and learn in an environment that

respects diversity and promotes identity, understanding, and a passion for learning.

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

Consistently ranked within the top 5% globally, Marymount also offers the pre-IB Middle Years Programme; this stretches students without the need for incessant testing. The nurturing, supportive Catholic Community welcomes all faiths and achieves a shared purpose for girls of more than 40 nationalities.

TASIS THE AMERICAN SCHOOL IN ENGLAND Coldharbour Lane, Thorpe, Surrey, TW20 8TE Contact: Karen House Telephone: +44 (0)1932 582316 Email: ukadmissions@tasisengland.org Website: www.tasisengland.org TASIS England offers the International Baccalaureate Diploma, an American college preparatory curriculum, and AP courses to its diverse community of coed day (3-18) and boarding (14-18) students from 50 nations. The excellent academic programme, including ESL, is taught in small classes, allowing the individualised attention needed to encourage every student to reach their potential. Outstanding opportunities in art, drama, music, and athletics provide a balanced education. Extensive summer opportunities are also offered. Located close to London on a beautiful and historic 46-acre estate.

TAXATION BDO LLP 55 Baker Street, London, W1U 7EU Contact: Andrew Bailey Telephone: 020 7893 2946 Fax: 020 7893 2418 E-mail: andrew.bailey@bdo.co.uk Website: www.bdo.co.uk BDO LLP is the award-winning, UK Member Firm of BDO International, the world's fifth largest accountancy network with more than 600 offices in 100 countries.

We have a partner-led approach, which delivers the highest quality of service by using short, functional chains of communication to aid decision-making. Clients benefit from our fresh thinking, constructive challenge and practical understanding of the issues they face. Developing strong, personal relationships with our clients is at the forefront of our service approach.

Tax advice is just one of our award-winning services and our expatriate team give practical and direct advice, delivering solutions which suit your needs.

AUTUMN INTERNATIONAL HR ADVISER