ANY COMPANY WILL GUARANTEE YOU A ROOM. PC HOUSING GUARANTEES THE WHOLE STAY.
At PC Housing (formerly Pasha Corporate Housing) weâ€™ve made it our mission to make your job easier. What exactly does that mean for you? How about the convenience of risk-free booking, guaranteed stays and our team of highly motivated professionals. We work to fulfill even the most challenging housing requests with ideal locations in major metropolitan areas and remote settings. PC Housing has been a trusted housing provider for travel managers, HR managers, relocation companies, government employees and the insurance industry for more than a decade.
The No Hassle PC Housing Guarantee We are so confident in our ability to offer a superior stay every time that if the stay is unsatisfactory due to our service or the quality of our accommodations, we will resolve the situation within 48 hours or refund your company $500.
Changing business travel one stay at a time.
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Real estate valuation issues? Solved. Whether you’re a global relocation services provider, a lender, an HR professional, or a local agent, our Mercury Network system is the solution to your valuation management needs. Using cutting edge technology and innovative workflow tools, Mercury Network eliminates delays and information bottlenecks. Everyone stays in the loop, on point, and happy.
It scales seamlessly to your needs, from handfuls of valuations to hundreds of thousands. You always get 24 x 7 status, a PDF plus full XML data, and automated review rules — even for the ERC form. And it’s of course 100% compliant with GLB, HVCC, USPAP, and every other acronym. But perhaps best of all, it’s free, fast, and secure. You simply can’t lose. Try it today.
Mercury Network Vendor Management Platform We’ve delivered more appraisals than any other company, period. Here’s why. t Use your appraisers, or augment with ours — we cover every county in the U.S. t All appraisals are auto-reviewed for over 1000 items before being transmitted, reducing issues due to oversights t Get a printable PDF, plus full XML data for the entire ERC report (or any other form) t Check the AVM and assessed values, market direction, and other key info with one click t Tie it in to your own back office systems using APIs, or just use it ad hoc on the web t Benefit from the sharpest technology: Proximity selection, 24 x 7 status, appraiser mobile iPhone tools, and much more
Try it right now! www.MercuryVMP.com/Relo Or call 1-800-ALAMODE AD CODE: MAMM0210 a la mode and its products are trademarks or registered trademarks of a la mode, inc. Other brand and product names are trademarks or registered trademarks of their respective owners. All prices, terms, policies, and other items are subject to change without notice. Copyright ©2009 a la mode, inc.
FEBRUARY 2010 Worldwide ERC® Learning Zone Webinar Quarterly Tax and Legal Update February 9 2 p.m. to 3 p.m. EST
MOBILITY • Vol. 31 No. 2 • February 2010
EXECUTIVE COMMITTEE President MICHAEL (MIKE) C. WASHBOURN, SCRP, GMS, Pfizer Inc., Peapack, NJ Vice President SUSAN SCHNEIDER, SCRP, GMS, Plus Relocation Services, Inc., Minneapolis, MN Secretary/Treasurer PAMELA (PAM) J. O’CONNOR, SCRP, Leading Real Estate Companies of the World®, Chicago, IL
MARCH 2010 Global Workforce Summit®: Focus on Asia-Pacific March 10-11 Hong Kong GMS™ Training and Certification March 6, 8-9 Hong Kong March 16-18 White Plains, NY
Chairman, Board of Directors AL BLUMENBERG, SCRP, NEI Global Relocation, Omaha, NE
BOARD OF DIRECTORS CORI L. BEAUDET, SCRP, GMS, SC Johnson—A Family Company, Racine, WI LISA CARAVELLA, CRP, Bank of America, Plano, TX JAY K. DELICH, SCRP, SRA, IFA, Arizona Appraisal Team, LLC, Scottsdale, AZ MARIO FERRARO, International SOS Pte Ltd., SINGAPORE MARK GIORGINI, GMS, China Vanke Co. Ltd., Shenzhen, CHINA WILLIAM (BILL) GRAEBEL, GMS, Graebel Relocation Services Worldwide, Aurora, CO JOHNNY H. HAINES, CRP, GMS, Deloitte, Hermitage, TN
MAY 2010 National Relocation Conference May 19-21 Orlando, FL
LARS LYKKE IVERSEN, Santa Fe Relocation Services, Hong Kong, CHINA CHRISTOPHER (CHRIS) JAMES, Bechtel Corporation, Phoenix, AZ JO LAY, SCRP, GMS, Coldwell Banker Central Region Relocation, Chicago, IL EARL LEE, Prudential Real Estate and Relocation Services, Scottsdale, AZ STEPHEN C. MCGARRY, SCRP, WPP, New York, NY
GMS Training and Certification May 17-19 Orlando, FL
SANTRUPT MISRA, PH.D., Aditya Birla Management Corporation Ltd., Mumbai, INDIA
JOHN PFEIFFER, GMS, Mustang Engineering, L.P., Houston, TX
Global Workforce Symposium October 27-29 Seattle, WA
C. MATTHEW (MATT) SPINOLO, SCRP, GMS, Primacy Relocation, LLC, Memphis, TN
GMS“ Training and Certification October 25-27 Seattle, WA
Chairman, U.S. Advisory Council
JOY MORRISON, CRP, GMS, PepsiCo, Inc., Purchase, NY STEVEN A. NORD, UPS, Atlanta, GA IAN PAYNE, GMS, Cartus, London, UNITED KINGDOM
PANDRA RICHIE, SCRP, GMS, Long & Foster Corporate Real Estate Services Division, Chantilly, VA
JOSEPH V. BENEVIDES, JR., SCRP, Consultant, Assonet, MA
MAY 2011 National Relocation Conference May 18-20 Las Vegas, NV
MOBILITY (ISSN 0195-8194) is published monthly by Worldwide ERC®, 4401 Wilson Boulevard, Suite 510, Arlington, VA 22203, +1 703 842 3400. MOBILITY examines key issues affecting the global mobility workforce for the benefit of employers and firms or individuals providing specific services to relocated employees and their families. The opinions expressed in MOBILITY are those of the authors and do not necessarily reflect the opinions of Worldwide ERC®. MOBILITY is printed in the United States of America. Periodical postage paid at Arlington, VA, and additional mailing offices. Worldwide ERC® members receive one annual subscription with their membership dues. Subscriptions are available to both members and non-members at $48 each per year. Copyright © by Worldwide ERC®. All rights reserved. Neither all nor part of the contents published herein may be reproduced in any form without written permission of Worldwide ERC®. POSTMASTER: send address changes to M OBILITY , Worldwide ERC ®, 4401 Wilson Boulevard, Suite 510, Arlington, VA 22203
2 MOBILITY/FEBRUARY 2010
Allied wins its 16th Quest for Quality award.
Quality moving and logistics services.
depend on Allied for extraordinary service, unrivaled dedication,
“Q4Q Recipients have consistently proven that they’re meeting ever increasing shipper demands in what is now a 24/7 global marketplace where actions and mistakes can be tracked down to the day, hour, minute, or even second.”
and innovative solutions for all your moving and shipping needs.
Allied Van Lines wins another Quest for Quality award for Household Goods and High-Value Products. Allied received high
“...Walking away with a Quest for Quality award in 2009 is a true testament to a company’s ability to adapt and stay relevant in what may be the most difﬁcult operating environment since the Great Depression.”
marks in 5 key criteria: On-time Performance, Value, Information
Around the world, one name is recognized as the leader in professional, quality moving services: Allied Van Lines. You can
Technology, Customer Service, Equipment, and Operations.
www.allied.com | 866.841.7530 © 2010 Allied Van Lines, Inc. U.S. DOT No. 076235 ALLIED and the ALLIED ROADWAY DESIGN are registered trademarks and service marks of Allied Van Lines, Inc.
From Survive to Thrive ike the tentative shoots of new plants pushing through the earth in the spring, we’re seeing some hopeful signs of
growth. The National Association for Business Economists (NABE) predicted real growth in U.S. gross domestic product for 2010 would be 2.9 percent, up from its October forecast for 2.6 percent growth. And they see a brighter labor
picture, too. NABE President Lynn Reaser noted that, “while the recovery has been jobless so far, that should soon change. Within the next few months, companies should be adding instead of cutting jobs.” Underscoring this thought and edging into the news are stories about companies thawing out their hiring freezes and carefully reinstituting benefits and salary increases that were shelved for months on end. There really does seem to be light at the end of this tunnel! The recent McKinsey Global Survey, which surveyed more than 1,600 global executives representing the full range of industries, regions, and tenures, notes that “over half of executives continue to say economic conditions are now better than they were in September 2008, and for the first time this year a majority—54 percent—expect customer demand for their companies’ products or services to rise in the near term, compared with 39 percent in April 2009. In addition, notably more are seeking—and getting— external funding than have done so in more than a year.” The survey also stated that, similar to what we have observed in the workforce mobility industry, companies are carefully planning not just for the short term, but for the medium and long term, though they “remain wary, assessing more options and checking progress more frequently than they did before the crisis.” It feels good to have a little more energy in our steps, to attend meetings where reduction is no longer the 4 MOBILITY/FEBRUARY 2010
expected centerpiece, and to use our creativity and business skills to examine options that we had put aside in previous months. And while we know that credit will not return soon (if at all) to pre-recession availability, and that mobility activity may not bounce back to the “old normal,” this is an environment we can work with, that makes even better use of our ability to strategize even as we continue to economize. It’s time to thrive, and we need to lead our own employees through this phase, just as we guided them through the recession. In his article, “Leading out of the Downturn,” author Steve Zaffron says that the
most important mission for today’s leaders is “to recognize that people normally have an unconscious, gut-level idea of where they—and their company—are, and where they’re likely to go. In difficult times, you want information to flow in organizations, but, actually, the flow is lessened. The first task of leadership is to identify the future, discuss it, and analyze it, and then go about reimagining—and, in effect, rewriting—the future. Leaders who open up the channels of communication and feel comfortable—and who take the risk of inviting people to think about the picture they’re looking at—will find that they have partners they never expected.” Zaffron likens the darkest days of the recession to a patient spending time in the intensive care unit. “When you come out of the ICU, are you going to build a strong and healthy future for yourself? Leaders need to be setting in motion conversations that really are about the future. What are you going to be when this turns around?” So here we are—after a year or more of “recession status,” the U.S. and the world economies are inching toward recovery. We are moving, however cautiously, from our survival positions to an outlook that includes growth as part of the equation. We are moving from survive to thrive. —Michael C. Washbourn, SCRP, GMS 2010 Worldwide ERC® President Pfizer Inc.
MOBILITY Magazine of Worldwide ERC®
Worldwide ERC® Celebrates 20 Years of the CRP® By Allison Peña
Culture and the Crash: Exploring the Connection Between People’s Responses to the Economic Crisis and Their Culture By Dean Foster and Nicole Barile, GMS
Localization— the Silver Bullet? By Yvonne Bosson, GMS, and Deborah Wilkes
Losing Sight of Corporate Culture— Securing Your Brand in a World of Mergers, Acquisitions, and Recession By John D’Ambrogio, CRP, GMS
Mergers and Acquisitions: Seven Tips for Successful Mobility Program Integration By Susan Vittorio, CRP, PHR, and Joleen Lauffer, CRP, GMS
A Holistic, Team Approach to Global Assignments Minimizes Risk and Promotes Success By Wes Okumura
Relo World 2010 By Charlie Flagg, SRA
Minimizing Direct Homeselling Costs By Steven John, CRP, GMS
What Veterans Advise New Professionals By Stefanie R. Schreck, CRP, GMS
MOBILITY/FEBRUARY 2010 7
MOBILITY Magazine of Worldwide ERC®
2 CALENDAR 4 PERCEPTIONS From Survive to Thrive By Michael C. Washbourn, SCRP, GMS
10 AROUND THE WORLDWIDE ERC® 14 EXECUTIVE SPOTLIGHT
Vice President & Publisher Jerry Holloman
Managing Editor Frank Mauck EDITORIAL ADVISORY COMMITTEE
Chairman Joy Morrison, CRP, GMS, PepsiCo, Inc., Purchase, NY Gaetane Brummett, CRP, GMS, Prudential CA Realty, Huntington Beach, CA
17 INDUSTRY SPOTLIGHT
Claude A. Choate, CRP, Choate Realty Group, Dallas, TX
17 WORLDWIDE ERC® TRENDSPOTTING
Sean Dubberke, RW3 LLC, New York, NY
20 QUICK TAKES
Pamela Dunleavy, CRP, Primacy Relocation, LLC, Memphis, TN
78 SPECIAL ADVERTISING SECTION
Marge A. Dillon, CRP, GMS, Xerox Corporation, Lewisville, TX Deborah A. Dull, CRP, GMS, Crown Relocations, Houston, TX C. William Heald, SCRP, Heald Associates LLC, Boston, MA Tacha Kasper, CRP, Leading Real Estate Companies of the World®, Chicago, IL Joleen Lauffer, CRP, GMS, AIReS, Pittsburgh, PA
84 RAC REPORT
Mark A. Lozano, CRP, Wells Fargo Home Mortgage, Minneapolis, MN
Paul O’Leary, CRP, GMS, The Move Management Center, San Mateo, CA
88 LAST PAGE
Bari L. Rubenstein, CRP, Consultant, Glenview, IL
Patrick Moore, Hayden Moore LLC, Chagrin Falls, OH Christopher J. Otteau, Otteau Valuation Group, Inc., East Brunswick, NJ Stefanie R. Schreck, CRP, GMS, American International Group, New York, NY Judit Slezak, GMS, Prudential Relocation, Washington, DC Carolyn White, Graebel Relocation Services Worldwide, Aurora, CO GLOBAL EDITORIAL ADVISORY COMMITTEE
Chairman Joy Morrison, CRP, GMS, PepsiCo, Inc., Purchase, NY Michele Bar-Pereg, Bar-Pereg Group, Amsterdam, THE NETHERLANDS Lorraine Bello, GMS, Ricklin-Echikson Associates, Inc. (REA), Millburn, NJ Lorelei Carobolante, SCRP, GMS, GPHR, G2nd Systems, LLC, San Ramon, CA Scott Craighead, SCRP, GMS, Blue Sky Executive Search, New York, NY Anne Dean, Living Abroad, LLC, Norwalk, CT Cindy Madden, CRP, Cartus, Danbury, CT Derrick Kon, Mercer (Singapore), Pte. Ltd, SINGAPORE Anne-Claude Lambelet, GMS, The International Relocation Associates (TIRA), Geneva, SWITZERLAND
Design/Production: Ideas, Communicated, LLC, Vienna, VA, www.ideascommunicated.com Printing: CADMUS Specialty Publications, Richmond, VA Reprints: Katina Moaney, CADMUS Reprint Services, email@example.com; +1 800 487 5625 Advertising Sales: Glen Cox, National Sales Manager, The Townsend Group, +1 301 215 6710; ext. 109; firstname.lastname@example.org
8 MOBILITY/FEBRUARY 2010
Tacita Lewars, GMS, Globaforce Incorporated, Calgery, Alberta, CANADA Andrea Massoud, GMS, Living in Brazil, International Relocation Services, Barueri-Sao Paulo, BRAZIL Christine Moore, SIRVA Relocation, Westmont, IL Nino Nelissen, GMS, Executive Mobility Group, Schlipol Airport, THE NETHERLANDS Constance Pegushin, Berry Appleman & Leiden LLP, San Francisco, CA Maureen Bridget Rabotin, Effective Global Leadership, Paris, FRANCE René Rosemary Stegmann, GMS, Relocation Africa, Cape Town, SOUTH AFRICA Rita Wagner, GMS, Interdean International Relocation, London, UNITED KINGDOM Nick Woodhams, GMS, Woodhams Relocation Centre, Sydney, AUSTRALIA
Prudential Real Estate and Relocation Services
Take the path to a Rock Solid Relocation ®
When you choose Prudential Real Estate and Relocation Services, you do more than secure the most comprehensive range of relocation services in the industry. You also realize the value of an organization that delivers satisfaction, savings and security at every step. It all leads to a better experience — for both you and your transferees. To learn more, call 1-877-418-0617. To download our complimentary relocation tools, visit www.prudential.com/relocation/value Benefit from the experience of our Prudential Real Estate Network.
Trust The Rock®, where promises have been kept for more than 130 years.
Increase transferee satisfaction with our caring relocation professionals.
Minimize home sale costs, thanks to our revolutionary eValuator Market Intelligence Tool. SM
© 2010 Prudential Financial, Inc., Newark, NJ, USA. All rights reserved. Prudential Real Estate brokerage services are offered through the independently owned and operated network of broker member franchisees of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. and Prudential are registered service marks of The Prudential Insurance Company of America. Equal Housing Opportunity
Around the Worldwide ERC®
Worldwide ERC® and RESPRO®
he Real Estate Services Providers Council, Inc. (RESPRO®) is a national, non-profit trade association that unites providers from across the homebuying and financing industry toward one common goal: a business and regulatory environment that better enables all of its stakeholders to efficiently offer affiliated services through subsidiaries, joint ventures, and strategic partnerships. Given our industry’s informational and advocacy needs, it is natural that Worldwide ERC® was one of the very first Associate members of RESPRO®, and that we have continued our membership over time. Many of our
members also are members of RESPRO®. Members of RESPRO® include real estate broker-owners; real estate franchisers; mortgage lenders/brokers; title insurers/agents; homebuilders; home warranty companies; and other settlement service providers throughout North America. Representing the affiliated businesses of its members before federal and state policymakers, RESPRO® provides information to help manage the complex and changing regulatory environment under the Real Estate Settlement Procedures Act (RESPA) and state laws, and enables its mem-
bers to develop and operate successful and legally-compliant affiliated businesses, joint ventures, and marketing agreements. While affiliated business arrangements are not of strategic importance to the mobility industry as a whole, they are important to many Worldwide ERC® members and do directly affect domestic real property sales practices. RESPRO® provides us with comprehensive information on affiliated business arrangements in the settlement service industry, comprehensive regulatory information, and representation for our members interested in these areas.
The Worldwide ERC® Unique Property Database n conjunction with several relocation management and appraisal companies, Worldwide ERC® has developed the Unique Property Database to house case studies on properties with highly unusual characteristics from actual relocation transactions. The purpose of the project is to provide the industry with examples that appraisers and others can use as a reference against their own research. Data is collected on both positive and negative characteristics. In many cases, a feature is so unusual that the appraiser will have no examples of it in their files or, possibly, in their market area. These case studies will provide information on how large (or small) an effect a particular feature can have on market price. The examples are not intended to instruct appraisers on how much to adjust for an item but, rather, to supplement their own research.
The case studies are restricted to relocation appraisals because the eventual sale of the property provides an opportunity to re-analyze the property and make adjustments in light of the sale. For example, an appraiser may suggest that a 15 percent adjustment be made for a unique feature only to discover on resale that the market penalized the property more or less than the appraiser expected. Traditional “mortgage lending” appraisers do not revisit their analyses and, thus, are lacking the feedback necessary for those case studies to be entered in the database. To access and search the Unique Property Database, please visit https://www.WorldwideERC.org/Resources/ USRealEstate/Pages/ssl-unique-property-database.aspx.
National Relocation Conference Exhibit and Sponsorship Opportunities
et ready for one of the workforce mobility industry’s largest annual events! Exhibit and sponsorship opportunities are now available for the 2010 National Relocation Conference at the Walt Disney World Dolphin in Orlando, FL, May 19 through 21, 2010. Now more than ever before, it is critical to take advantage of this opportunity to boost your company’s visibility, showcase your services, and connect with your clients and partners. You will experience exceptional networking opportunities, insightful educational sessions, and a dynamic mobility services marketplace at the conference. If you provide relocation and workforce mobility services, exhibiting at this event is MUST for your company! Exhibit space and sponsorship opportunities for the National Relocation Conference are limited and selling quickly. Booth space is available on a first-come, first-serve basis, so sign up today! For more information and to sign up, visit the National Relocation Conference online at: www.WorldwideERC.org/Events/Pages/nrc10.aspx. 10 MOBILITY/FEBRUARY 2010
Don’t just relocate your people. Move them.
Service excellence translates into smooth transitions around the world – and smooth transitions make people happy, secure and more productive. At Primacy, we understand this. Our network of worldwide offices ensures you can access local expertise on both ends of any move. Regardless of location or logistics, we can provide continuous “on the ground” support for seamless moves – assignee by assignee, day by day, line item by line item. The result is that your people can get back to business – and life – as soon as possible. For more information, visit www.primacy.com today.
©2009, Primacy Relocation, LLC. All rights reserved.
9/14/09 3:29:38 PM
Global Relocation Is Always A People Willing to Expand Their Horizons & People Eager to Exceed Expectations
Global mobility begins and ends with people helping people. It starts with the corporate relocation manager who teams with talented people who manage a people-focused relocation program and the people performing in-person relocation services worldwide.
Here are some reasons why people choose our people and ﬁnd us easy to work with. #1 Your budget is our budget Graebel is NOT a cost-plus service arranger. Our services are competitively-priced with direct pass-through costs so you will never pay expensive hidden fees or middleman mark-ups.
#2 Excellence everywhere and every time For 59 years, Graebel has asked...
What do you need? How can we help?® Our people are driven by one common goal worldwide...
Commitments Made. Commitments Kept.® Graebel is truly one-of-a-kind. We are not cost-plus service arrangers. We are service providers of the highest caliber worldwide.
Graebel is your single source global relocation solution. Our menu is all encompassing from policy review to inperson destination services worldwide. Our 150-country alliance unites over 11,000 experienced relocation people who are continuously measured to ensure excellence.
#3 Our expertise knows no boundaries Up-to-the-minute information helps your people make informed decisions about where to live, find the best schools, special interest and social networks, and more. We also offer cultural and language training, currency information, helpful hints to settle-in, and of course far more!
me | Worldwide Com Worldwide Full-Ser vice Relocation Ser vices | Worldwide Move Management © 2009 - 2010 Graebe l Companies, Inc. All rights reserved.
rcial Ser vices W
s About People
Ofﬁcial Sponsor of the Worldwide ERC® 2010 Conferences HONG KONG | ORLANDO | PARIS | SEATTLE
#7 Right for today. Ready for tomorrow! #4 Minimum open case files for maximum service Every consultant is teamed with a trained relocation associate to make sure your people’s calls never reach voicemail. And, every team’s open case ﬁles are monitored daily so highest-possible personalized service is preserved.
Our people are never satisﬁed with business as usual. We regularly arrange business reviews to set higher benchmarks; write white papers and share trendsetting best practices; host regional roundtables and hold an annual global relocation policy summit, and a by-invitation alliance conference for relocation leaders from around the world.
#5 Real-time business intelligence Our real-time business intelligence reports provide you with the decision-making power at your ﬁngertips, around the clock! 24/7, your transferred people can access city or countryspecific details and more. Of course, they can submit expenses or check reimbursements online.
#6 Always grateful for – never satisfied with! Graebel is widely recognized. The HRO ‘relocation bakers’ dozen,’ the Workforce Management ‘HotList,’ and the Quest for Quality Award, and SAS 70, C-TPAT, TRACE, and ISO certiﬁcations are examples of our ongoing quality commitment.
Mo v | Worldwide
ing & Storage Ser vic
To learn how our people will make a positive impact on your relocation program and your people, visit: www.graebel.com/OurPeople.html
cle, Aurora, Colorado 80011 U.S.A. | www.graebel.com | marcom@gra s: 16346 Airport Cir ebel.com | er t ar u q d a e H +1.800.72 World 3.6683
ragomen, Del Rey, Bernsen & Loewy, LLP, New York, NY, has named Tina Niedzwiecki partner in the firm’s New York office. Patrick Shen has been named partner in the firm’s Washington, DC, office. Magdalene Tennant has been named managing director of Fragomen Global Immigration Services, LLC, where she will lead the firm’s Greater China practice. Capital Relocation Services, Sterling, VA, has promoted Rick Bruce, CRP, GMS, to vice president, client development. Capital also has hired Denise M. Guzzetta to enhance the company’s business development efforts. Frank Assini has joined DJK Residential, New York, NY, as a sales agent. Dixon Lim has been named move manager for Arpin International Group’s Singapore office. Marriott ExecuStay, Bethesda, MD, has named Stephanie Miller regional director of operations, Kathy Brockway regional director of sales for the East Coast, and Kelly McDaniel regional director of sales for the West Coast. Ernie Kassoff has been promoted to vice president of sales for a PODS, Clearwater, FL, master franchisee. Jeff Berryhill has been hired as PODS corporate sales director. The Crown Worldwide Group, Dubai, United Arab Emirates, has appointed three new managers to its Middle East operations. Gus van Geijtenbeek was named business development manager for Crown’s fine arts division in the Middle East; Amanda Jones was named division manager for Moving Services in Dubai, United Arab Emirates; and Christopher Grimshaw joins Crown Doha, Qatar, as general manager. A. Arnold World Class Relocation, Louisville, KY, has named Terry McElroy vice president and general manager of the company’s international division, and also as president of the company’s Sterling International unit. 14 MOBILITY/FEBRUARY 2010
SIRVA Inc., Chicago, IL, has named Matthew B. Dickerson, CRP, GMS, customer experience, operational excellence, and chief innovation officer. Dickerson has more than 16 years of information technology, quality, and client integration expertise. His focus will be on client-facing technology and innovation projects that serve SIRVA’s corporate clients, transferees, and moving customers, as well as lead the company’s enterprise-wide global customer Dickerson relationship management strategy. For Worldwide ERC®, Dickerson has served on the eSolutions Think Tank, Unique Property Database Committee, Global Workforce Symposium Planning Committee, and currently serves on the U.S. Advisory Council. Dickerson also is a recipient of the Meritorious Service Award.
Capital Relocation Services, Sterling, VA, has promoted George Herriage, SCRP, GMS, to senior vice president. Herriage has held several volunteer positions for Worldwide ERC®. He has served on the planning committees for both the Global Workforce Symposium and the National Relocation Conference, as well as served on the Certification Review Board, Industry Advisory Council, and Solutions of Herriage Distinction Awards Committee. He currently serves on the Global Advisory Council. Herriage also has received both the Meritorious Service Award and Distinguished Service Award. The Southeastern Regional Relocation Council (SRRC), Orlando, FL, has announced its 2010 executive staff, executive committee, and advisory committee. Faye Chadwick, SCRP, GMS, Walt Disney Parks & Resorts U.S., was named president. GeLaine Joachim, SCRP, Promisor Relocation, was named vice president. Sherry Yerger, CRP, PHR, Walt Disney Parks & Resorts, was named secretary. Sherry Ross, CRP, Wells Fargo Home Mortgage, was named treasurer. Elected to the executive committee (the group’s charter name for its board of directors) are Pat Dolan, Graebel Orlando Movers; Nancy Carter, SCRP, GMS, Darden Restaurants, Inc.; Ann Moore, ATB Furnished Housing; Joyce Brown, CRP, GMS, Altair
Global Relocation; Sheila Castellanos, JM Family Enterprises, Inc.; and Shannon Greeley, Oakwood Worldwide. Elected to the advisory committee are Ann Burkart, CRP, GMS, CMC, RIM, Alexander’s Mobility Services; Barbara Denson, CRP, CSX Transportation, Inc.; and Mary Lou Lee, CRP, GMS, Watson Relocation Services. Prudential York Simpson Underwood Realty, Raleigh, NC, has named Merritt Atkins Brinkley as business development director. Tiffany Whitney, CRP, GMS, has joined Emigra Group, LLC, Phoenix AZ, as an account manager. Coldwell Banker Commercial United, Realtors®, Columbia, SC, has named April James commercial real estate advisor.
feb_calendar.qxd:khan.qxd 1/25/10 10:09 AM Page 3 adSailingMobilityFinal:Layout 1 12/28/09 10:45 AM Page 1
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New Survey Reveals U.S. Migration Trends for 2009
espite a downturn economy affecting the United States in 2009, employers continued to move their human capital across state lines. According to a new survey, American’s migration patterns last year led people to move away from areas of high unemployment. According to Atlas Van Lines, Evansville, IL, “2009 Migration Patterns” study, which has tracked the nation’s moves since 1993, the total number of relocations has decreased, the Midwest is losing residents, and the hottest destinations are located in the Southwest, Northeast, and Southeast regions of the country. According to Atlas, residents of the Rust Belt states continue to move in large numbers, largely because of employment declines in the steel and manufacturing sectors. History shows that the nation’s residents generally move west, according to the release, but job losses—especially those in construction, manufacturing, and tourism—in California, Nevada, and Oregon have led to a decline in popularity of these states than in year’s past. Also worth mentioning is Colorado, a historically inbound state, became balanced in its number of moves in 2009. The survey also found that states in the Southwest—Texas, New Mexico, and Oklahoma are popular inbound locations. Oklahoma had not been a popular state for inbound moves for the past five years, according to Atlas. Also popular are states in the Northeast and Southeast, with Virginia, North Carolina, Maryland, Vermont, and New Hampshire all experiencing popularity as inbound destinations. Washington, DC, tallied the highest percentage of inbound traffic for
the fourth straight year, while Connecticut led the states with the highest percentage of outbound moves. New Jersey and South Dakota rounded out the top three outbound states. According to Atlas, the total number of household moves mirrored the cooling economy of 2009. The total number of interstate and crossborder moves by Atlas declined 16 percent from 2008, from 84,447 households moved to 71,301. According to the release, relocation activity experienced what Atlas calls a
“higher-than-average” jump during the summer months, potentially indicating a recovery in the moving market. “Atlas’ migration study takes the pulse of our nation—it reflects the economic climate and is a guide to the general migration patterns throughout the country,” said Glen Dunkerson, chairman and CEO of Atlas World Group. “The results this year are surprising, because many states that have for years been outbound, inbound, or balanced have changed.”
Stewart Relocation Services
Title and Closing Services for the Relocation Industry MOBILITY/FEBRUARY 2010 17
FYI CORT’s Global Network, Fairfax, VA, announced the addition of new partner, SC Rentamuebles, Bogota, Colombia. VISION Relocation Group®, Chantilly, VA, South Africa, has announced it has been awarded a contract by the United States government’s General Service Administration (GSA) to provide employee relocation services. Interdean International Relocation, Luxembourg, has announced the completion of its rebranding, changing the name of its Luxembourg office from Interdean Daleiden Sàrl to Interdean International Relocation and moved to a larger facility. Arpin Group, Inc., West Warwick, RI, announced the launch of a website, http//www.ArpinGroup.com and an updated logo for subsidiary Arpin International Group. Prager Moving & Storage, Naperville, IL, has announced it has joined Atlas Van Lines, Evansville, IN, as an agent. ReloJapan K.K, Tokyo, Japan, has announced it has rebranded with its sister company, H&R Consultants K.K. to form the H&R Group. NuCompass Mobility Services Inc. announced a move to new office locations in Connecticut and Texas. The new addresses are: 15601 North Dallas Parkway, Suite 525, Addison, TX 75001 and 40 Danbury Road, Suite 101, Wilton, CT 06897. The company’s headquarters office in Pleasanton, CA, remains unchanged. IMPACT Group, St. Louis, MO, announced the unveiling of a new brand logo and updated corporate website. Weichert Relocation Resources Inc. (WRR), Morris Plains, NJ, has announced that its EMEA Operations Center in Crawley, United Kingdom, has achieved ISO 9001:2008 certification. The center has held ISO certification for 13 consecutive years. Marriott ExecuStay, Bethesda, MD, announced the launch of a newly-designed website, www.ExecuStay.com.
18 MOBILITY/FEBRUARY 2010
orldwide ERC® members are exchanging questions, answers, and ideas in our five online Forums. Under discussion right now: • How do you feel the bid process for domestic relocation has changed in the last three years? Would you say there have been any marked improvements? • Given that FHA mortgages are now accounting for a much greater percentage of loans for buying homes, are you anticipating more problems in selling inventory homes or in having your employees sell the family home through a BVO/amended value program? • Does your relocation policy take into account whether a relocation is company-driven versus associate-driven? If so, what type of benefits does it include? • Did you hear that the UK Border Agency (UKBA) implemented the requirement that all sponsored, skilled foreign workers (i.e., Tier 2 workers) and their accompanying family members must obtain Identity Cards for Foreign Workers (ICFNs)? • How does your company determine whether an employee should be placed on an expatriate assignment or given a local contract/package? Be part of the conversation. Log in and add your comments and questions today. Visit www.WorldwideERC.org/Pages/Web2.0.aspx or click on the white “Communities” text hyperlink at the top of every page of www.WorldwideERC.org. Come join your community. Note that access to the forums is an exclusive benefit of Worldwide ERC® membership. Join now or review your membership for 2010 if you have not already done so.
‘CRP®/GMS™ Designations (Preferred)’
he headline above is quoted directly from the job requirements listed by Interstate Relocation Service, Inc., in its January 12, 2010, ad for a client services director listed on the Worldwide ERC® Career Center. And Interstate is not the only employer setting its standards high in 2010. On January 6, 2010, Weichert Relocation Resources Inc. posted an ad for a manager, broker network services, that specified “CRP® preferred” and, on January 4, 2010, Mobility Services International posted an ad for a relocation counselor that declared “CRP®/GMS™ certification a plus.” By the looks of things, the industry has spoken. The Certified Relocation Professional™ (CRP®) and Global Mobility Specialist™ (GMS™) designations, 20 and six years old, respectively, signal to your clients and current and prospective employers that you are committed to excellence in assisting employee mobility and to ongoing education and professional development. To earn the CRP® designation, candidates must study and pass a comprehensive live exam that covers six topics in the specialized field of U.S. domestic relocation: corporate relocation policies and procedures; residential real estate; relocation appraising; relocation tax and legal issues; family mobility issues; and mobility strategies. This year’s exam will be held on May 19. For more information visit www.WorldwideERC.org/Education/CRP or, to speak with someone directly, please call +1 703 842 3430 or e-mail crp@WorldwideERC.org. Candidates for the GMS™ designation must attend a three-day live training program that equips them with extensive global mobility knowledge on practical topics affecting industry professionals: Module 1—The Fundamentals: Applied Expatriate Policy Development; Module 2—Strategies and Tactics: Global Workforce Mobility; and Module 3—The Intercultural Challenge: Doing Business Globally. Upcoming training will be held on March 6, 8, and 9, 2010, in Kowloon, Hong Kong, and on March 16 to 18, 2010, in White Plains, NY. For more information visit www.WorldwideERC.org/Education/GMS or, to speak with someone directly, please call +1 703 842 3430 or e-mail gms@WorldwideERC.org. 20 MOBILITY/FEBRUARY 2010
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Getting Down to Business in South Africa Fragomen Helps Ease the Immigration Process in an Expanding Region
South Africa, a long-standing international destination for business, has made enormous strides to increase its importance and prominence in the global economy. In the past fifteen years, the government has worked tirelessly to reengineer its economic system, reducing its role in the economy in favor of investment and competition within the private sector. Today, South Africa has highly-developed legal, financial, transportation, energy, and communications industries. In fact, in 2005, services accounted for more than sixty-five percent of South Africa’s GDP, and the country is now considered the twentieth largest consumer of information technology products in the world. South Africa’s stock exchange ranks within the top twenty in the world in terms of total market capitalization.
Beyond that, the firm’s extensive involvement in the region has enabled it to appreciate the increasing need for services into additional countries in Africa, such as Nigeria, Guinea and Namibia, to name a few. To service the changing needs of its clients, Fragomen’s Johannesburg office will, over time, serve as the regional hub for its sub-Saharan African practice, a role currently performed by the firm’s London office. Given the commonalities between the language and legal systems of North Africa and the Middle East, the firm’s base for North Africa will remain in Dubai. Through the opening of its office in Johannesburg, Fragomen is not only building a country practice, but also putting into place the infrastructure needed to service a critical region and what is deemed by many to be the new frontier.
This level of investment and development generally brings with it an equal or greater need for additional infrastructure and the products and services which naturally flow from its effects, and South Africa is no exception. As multinational organizations enter the marketplace at a rapid pace to keep up with demand, there is a consequential need to bring their employees into the region, and hire additional local personnel. For many years, Fragomen has partnered with co-counsel in South Africa to service the increasing immigration needs of its corporate clients into the region.
Central to Fragomen’s efforts in the region is its new Practice Leader, Angelica Yakovchuk, who joined Fragomen soon after it opened its doors. Angelica previously worked in a major South African law firm, but was excited at the prospect of working in an international firm.
Recognizing the importance of South Africa as a destination, Fragomen opened its doors in Johannesburg in December 2009. While the firm’s name may be new to the region, the firm itself is not. Having partnered with co-counsel in South Africa for many years, the firm has become finely attuned to the needs of the local marketplace.
S P E C I A L
“South Africa is fast becoming the next most important destination for major multinational companies, bringing with it an unprecedented demand for human resources.” Ms. Yakovchuk reports. “Working with a firm with a reach as vast as Fragomen is critical to fully meeting the needs of our clients. Our global network enables us not only to service the inbound needs of multinational organizations, and local needs of South African companies, but also to assist South African companies with a presence in other jurisdictions ensure that they are able to effectively move their personnel across the globe. As clients seek to enter new marketplaces, working with other Fragomen offices and co-counsel
A D V E R T I S E M E N T
around the world also enables me to assist my clients implement sound immigration programs and internal compliance programs from the onset in every jurisdiction worldwide.â€? Compliance initiatives have, in fact, increased in many jurisdictions around the world, prompted in part by the global economic crisis. These initiatives have made the development of and adherence to internal compliance procedures more important than ever. In many jurisdictions, those efforts have included increased enforcement of immigration, the Foreign Corrupt Practices Act (FCPA) and anti-corruption laws, and export control regulations. In each instance, with the rapid movement of companies into South Africa, failure to adhere to entry requirements into the region could easily have a profound impact on a companyâ€™s ability to successfully enter the marketplace. South Africaâ€™s immigration compliance initiatives havenâ€™t risen to the level of other jurisdictions. For example, in some instances in the United States, failure to adhere to immigration requirements has resulted in multi-million dollar ďŹ nes levied against companies and, in others, mandated dramatic changes to companiesâ€™ on-boarding procedures. It remains critical, however, that companies continuously review their internal compliance programs to ensure that they are not running afoul of local immigration laws in any jurisdiction in which they do business. â€œWith ofďŹ ces in more than ďŹ fteen countries around the world, and a network of co-counsel in more than 120 additional jurisdictions, the ďŹ rm is able to provide a unique platform for its clients to assess the impact of new government compliance initiatives across the globe on their immigration programs, and assist in developing or restructuring those programs to ensure they meet current requirements and are agile enough to address future demands.â€? Ms. Yakovchuk says. As with many jurisdictions around the world, employers need to be cautious not to run afoul of South Africaâ€™s business travel requirements. South Africa currently permits nationals of more than forty countries to enter the country for speciďŹ c business travel purposes for less than ninety days without obtaining a visa to do so. Many countries across the globe have visa waiver programs of this nature to facilitate international business travel. One of the hazards of these types of programs, however, is the ease with which a business traveler can engage in activities not contemplated and, in fact, not authorized by use of the programs. For instance, these business traveler programs typically permit employees to attend business meetings or conferences in the local jurisdiction. They do not generally enable employees to engage in productive employment while in the country. South Africaâ€™s immigration laws, in particular, provide a variety of alternatives for employers who will need their employees to engage in productive employment while in the country. For example, South Africa permits intracompany transfers under certain circumstances. If these requirements are not met, a test of the local labor market may ďŹ rst be required to establish that a South African worker is not available to perform the activities contemplated by the employer. As a result, analysis of the intended business travelerâ€™s speciďŹ c activities in South Africa must be undertaken in advance of the trip to ensure that a visa entitling the individual to work while in South Africa is not required.
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â€œDetermining whether or not an employeeâ€™s intended activities in South Africa requires work authorization or not is often difďŹ cult for an employer to assess on its own. This sort of analysis is essential, however, to conďŹ rm that the employee will not be engaging in activities which are not permitted when seeking entry into the country without a visa,â€? Ms. Yakovchuk says. â€œThe situation is often made more difďŹ cult because that type of short term business travel is generally not managed centrally within an organization. Because the human resources or legal departments of the company are not always aware of every employeeâ€™s short term business travel, it is important that the organizationâ€™s managers and employees fully understand the restrictions of entering South Africa without a visa, so they donâ€™t inadvertently engage in activities which are not permissible under the program and consequently jeopardize their status in the country, and their employerâ€™s compliance with the immigration laws. When in doubt, immigration counsel can easily help the company assess whether obtaining a visa in advance of their travel would be required or advantageous to permit the employee to engage in a broader range of activities while in the country.â€? â€œIn todayâ€™s world, government compliance efforts are increasing in unprecedented proportions, and the immigration laws of many countries are becoming more complex. The collision of these conditions has made it far more challenging for employers to navigate these complex waters than ever before. Involving immigration counsel in the assessment of an existing immigration program, or development of a new program, is vital for an organization to ensure compliance with the litany of laws that can prove to be stumbling blocks to their entry into a new marketplace,â€? Ms. Yakovchuk opines. â€œSouth Africa has always been an attractive destination for a variety of reasons. Business interest in the country, and the region, however, is at an all time high and the number of companies seeking to do business in the country for the ďŹ rst time at an historic level. Being able to assist companies as they seek entry to the region is one of the most rewarding aspects of the practice.â€? To reach Fragomenâ€™s South Africa ofďŹ ce, please call +27 (0) 11 252 1220 or email firstname.lastname@example.org.
Your World. Our Experience.
Worldwide ERC Celebrates 20 Years of the CRP ®
Worldwide ERC® is celebrating 20 years of Certified Relocation Professionals™, and Peña offers a look back at this historical mobility industry certification. BY ALLISON PEÑA
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May 1990—palms are sweaty, mouth is dry, and the butterflies in your stomach are churning. You are about to do something that no one has done before… sit for the examination to earn the newly minted Certified Relocation Professional™ designation. Questions swarm in your brain: “What if I don’t pass? What if I do? What will that mean for my career? Am I ready for this? What if I freeze and don’t know anything?” The test is given out, the instructions are read, and the time begins…
MOBILITY/FEBRUARY 2010 25
And so it was on May 9, 1990 when the first examination was held for the Certified Relocation Professional™ designation. Twenty years in and the CRP® exam still is given annually, and the nerves, questions, and self-doubt still accompany candidates as they enter the testing rooms, prepared to test their knowledge on all things related to U.S. domestic relocation and mobility issues. To date, the CRP® exam has been offered a total of 23 times to more than 11,500 people. During the last 20 years, more than 9,300 have earned their designations, and more than 4,500 still hold their designations today. Slightly more than 1,000 candidates passed the first year’s exams and, of those designees, more than one-third will be celebrating 20 years as Certified Relocation Professionals™ in 2010. The Certified Relocation Professional™ designation originally was “anticipated to be the single most important event in our association and our businessplace… the CRP® designation will impact our industry in the way we obtain and conduct our business and will embrace all corporate and service industry professional—truly making it the ‘universal relocation designation,’” according to the December 1989 MOBILITY article from then Worldwide ERC® President, John M. Clarke, SCRP. The industry has only grown and diversified during the last 20 years. It requires specialized knowledge of the particular rules, regulations, and “soft” issues associated with the detailed process of employee mobility. We wanted to return to some of those first-year CRP® designees to determine the answers to some questions: 26 MOBILITY/FEBRUARY 2010
• Why did they take the exam? • What benefits have they seen as a result, if any? • Why have they kept the designation all these years? • How would they advise newcomers to the industry who wish to earn their own CRP® designations?
Crunch Time Most of the 20-year class that we interviewed expressed that taking the CRP® exam was a “logical next step” when it came to their careers. They already had established themselves as relocation professionals and wanted this designation to show others that relocation was (and remains) a truly niche field, with quite a bit of expertise required. It is not a job that just anyone can do— successfully, that is. The exam was a way to prove their knowledge and push the boundaries of their own job descriptions by showing that they not only knew their own part in the process, but that they knew about the entire process with all of its varied facets and, by knowing “the whole,” they were better able to serve the needs of the transferees. Some went about taking the test a little differently, though: Laura Henneberry, SCRP, GMS, of Morreale Real Estate Services, Inc., Glen Ellyn, IL, laughs as she recalls, “when I got back from lunch, there was a big pile of books on my desk and a note from the regional vice president. That is how I found out I was to take the exam. I had no idea what it was to be quite honest.” In preparing for the exam, many remember that it was quite the college atmosphere. So many were gathering into study groups, pulling all-
nighters, drinking tons of coffee, scared about exactly what would be on that test. No one wanted to be the one who did not pass this test. On the day of the exam, a “feverpitch” was hit as nerves were frayed, nails chewed down, and the test rooms smelled not unlike a gymnasium with all the nervous bodies pressed in, concentrating so hard on the task at hand. Douglas Weed, SCRP, GMS, of NSA Consultants, Wheaton, IL, recalls, “at the time, the president of my company was taking the exam at the exact same time I was taking it. And I was seated right behind him. I finished the test and looked up to find he was still going strong. I thought, ‘wait a sec. I shouldn’t be finishing so quickly. Should I leave before him?’ I went back over the questions again and still ended up leaving a little before him.” Others swore they failed it and simply went to the bar with fellow test-takers to cry in their beers. And then… the wait for the results…. Mollie Lannigan, SCRP, president of Lannigan Consulting, Inc., Grandview, MO, recalls that when she finally received her letter, “I was just too nervous to open it. I remember holding the letter up to the light but I just couldn’t open it. It took me 15 minutes before I finally got up enough nerve to see what it said.”
Creating the Exam Taking a step back, one might wonder how that first test came to be. How did it even get created? Did a group of Worldwide ERC® staff write questions? Did the testing company review the materials and create the standards?
In actuality, while a testing company was chosen to help guide and proctor the exam, a select group of Worldwide ERC® members came together to create the standards in which the Certified Relocation Professional™ examination still is based. While there have been slight modifications and updates during the years, the standard guidelines that the first Certification Review Board created still are evident in today’s testing. Consultant, Sharon Richards, SCRP, GMS, Carmel Highlands, CA, one of the founding members of the Certification Review Board, and a past president of Worldwide ERC®, recalls that serving on the committee and helping to write all of the questions associated with the (then) THREE industry-specific examinations was truly, “the biggest project I ever undertook at ERC®. I have been a part of this organization for so long now and have been involved with many committees, but the CRP® was what I gave my heart and soul to create. I was up days, nights, and weekends, creating questions. After all, we had no basis to go from; we were creating an entire designation program from scratch!” Richards continued, “the camaraderie across the industries was incredible. I still speak with a few of the committee members to this day because that project made us become so close. By pulling all these different members from different segments of the industry to create a standard knowledge set on which other members would be tested truly made you appreciate what everyone brought to the table. “I really think that the creation of the CRP® ushered in a spirit of camaraderie within ERC® as a whole, MOBILITY/FEBRUARY 2010 27
which is seen to this day when you go to the ERC® conferences. That spirit of togetherness, despite being amongst your competitors, was not always so evident, but I believe that this designation actually helped to foster a cooperation that only existed tenuously before.” Worldwide ERC® interim Executive Director, Karen Reid (then director of professional development), who oversaw the creation of the CRP® program 20 years ago, also witnessed its effect on the industry. “CRP® designees now had an understanding of all facets of the mobility process and their interactions with other practitioners were greatly enhanced. I noticed pretty early on how more efficient and effective Worldwide ERC® committees were thanks to the common body of knowledge held by CRP® designees and undoubtedly this also transferred into the workplace.”
The ‘Rights’ of Passage And what benefits have these 20year designees seen as a result? Phil Giessler, CRP, from Cam Taylor Co. Ltd., Realtors, Columbus, OH, says that “the CRP® raised the bar. It became so that in order for you to truly be a part of corporate relocation you needed to have this knowledge set in order to compete.” Jay Delich, SCRP, of Arizona Appraisal Team, LLC, Scottsdale, AZ, comments, “the CRP® has definitely enhanced my career as I am recognized as a specialist in relocation. Clients trust the dedication to achieving and maintaining the CRP® and it has always been a benefit to my career.” Arnold Schwartz, SCRP, of Arnold M. Schwartz & Associates, 28 MOBILITY/FEBRUARY 2010
Inc., Atlanta, GA, adds, “the CRP® continued to open up speaking opportunities at conferences and committee opportunities. I was ultimately able to serve on the Board of Directors and was inducted into the Hall of Leaders.”
“the depths of information tested are very good, especially for a lot of people who specialize in one area of relocation—it is a great opportunity to get exposure to the whole relocation picture.” Giessler encourages, “read EVERYTHING that Worldwide ERC® publishes. Digest it! Don’t just cram for the test—you will miss some valuable information.” Jeffrey Arouh, SCRP, of Holland & Knight, LLP, New York, NY, said, “it is worthwhile to earn the designation if for no other reason than it forces you to learn about the many and varied issues that exist and affect relocating employees. In order to do your job effectively, you need to be aware of these issues.”
Looking Back, Looking Ahead This 20th-year class holds their designations in high esteem. They studied hard and were determined to keep up with the recertification requirements. When asked what advice for the newcomer to this industry who is eager to earn his or her own CRP® designation, each pointed out that they need to get their feet wet and wait a couple of years. They encourage them to get some experience and knowledge under their belt before taking on this designation. After that, Kathleen Curtis, SCRP, GMS, of Cisco Systems, Inc., San Jose, CA, then advises to “take the exam. From a personal standpoint, they will have a good sense of accomplishment from studying for it and they will learn a lot from their studies. Then, keep it current—it will make them feel better about what they do and having that designation.” Dory Binge, SCRP, GMS, of Johns Manville, Denver, CO, notes,
Celebration and Continuation We would like to invite everyone, particularly the 1990, spring and fall classes, to join us in Orlando, FL, at the Worldwide ERC® National Relocation Conference to celebrate 20 years of the Certified Relocation Professional™ designation—still one of a kind in this industry. And for those who are eligible, the 24th exam will be held, as always, in May, right before the conference. Yes, the nerves and test jitters have not really changed during the years but, as you can see, it really is worth “pushing the envelope” and moving past the worry and excuses to earn the CRP® designation. We look forward, as we do each year, to helping a new class of designees join in the prestigious ranks of Worldwide ERC® members who hold this esteemed designation. Allison Peña is manager of professional development for Worldwide ERC®, Arlington, VA. She can be reached at +1 703 842 3435 or e-mail email@example.com.
“My experience with Sally White was nothing short of GREAT!” -N. Dabrowski
Partner Employment Assistance Outplacement Services Community Connections Research Predecision Programs Group Moves w w w. s a l l y w h i t e . c o m
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Culture and the Crash: Exploring the Connection Between People’s Responses to the Economic Crisis and Their Culture BY DEAN FOSTER AND NICOLE BARILE, GMS
The way people choose to respond to external negative events should be similar to the way they make decisions about so many other aspects of their lives, and that decision-making process is profoundly affected by their culture. Foster and Barile test this theory and present an overview of their findings.
aking lemonade out of lemons has become a refined art during the past year. Few individuals and organizations have been left untouched by the dramatic bursting economic bubble, and all have been challenged to adjust and respond. The way people choose to respond, however, should not be dissimilar to the way they make decisions about so many other aspects of their lives, and that decision-making process is profoundly affected by their culture. At least that was the premise we were working from when we began an intensive study in April 2009, on the link between an individual’s personal reaction to the economic crisis and his or her culture. Our hypothesis was simple and based on a belief inherent in all the work we do: how people behave is intrinsically and fundamentally tied to their culture; therefore, individual responses to the crisis not only should be culturally identifiable, but generally predictable, along cultural lines. If we knew an individual’s culture, we thought, we could anticipate the way he or she more or less might respond to key aspects of the crash. And by linking crash responses to culture, we then could anticipate the kind of reactions to the crisis, in terms of social, economic, and political decisions, that would be likely from various countries. In short, we would prove responses to the crash to be, on the one hand, just the latest major example of the “culture-drives-behavior” phenomenon and, on the other hand, a new tool for understanding the behavior of nations as they attempt to respond to the crisis.
MOBILITY/FEBRUARY 2010 31
The Survey y April 2009, the effect of the economic crisis on individuals and organizations was being deeply felt around the world. The pain and anxiety was different, of course, in different locations, but few countries were immune from having to respond in some fashion to its impact. However, responses to this powerful new reality could vary, and we believed that the different ways of responding around the world were tied intrinsically to each individual’s culture. We decided to test this theory by developing a survey that would attempt to gauge an individual’s response to a variety of different aspects of the crisis, and then try to link those responses to what we know to be the underlying societal orientations of their culture. The aspects of the crisis ranged from beliefs about who or what was responsible for the crisis, ideas about the best ways to get out of the crisis, thoughts about the best ways to cope through the crisis, and the like. We created questions in a variety of formats (some using scales from one to 10, multiple-choice questions, and open-ended questions) that we categorized into three areas: 1. Reasons for the crisis. 2. How to get out of the crisis. 3. How the crisis affects you and your country. The survey was designed to be administered across as many different world cultures as possible and, being an intercultural consulting company, we focused heavily on ensuring that the survey was as culture-sensitive as possible, scrubbing out as much of our own U.S. bias of the design and language as possible (It was designed and reviewed by a number of individuals representing various cultural backgrounds. This was particularly important because, despite our desire to have the survey available in multiple languages, we could, in fact, only distribute the survey in English.). The survey would take approximately 20 minutes to one-half hour to complete. Fortunately, our database of potential respondents is inherently global, spanning thousands of individuals in more than 100 countries. We were careful to distribute the survey with a regional focus: that is, we wanted to be sure that we would capture as many potential responders who might share similar cultural attitudes toward the survey questions because of cultural similarity within a particular geographic region, to ensure a large enough response from regions where we might have a smaller per-country number of respondents. The survey design was completed and distributed electronically in June, with the request to responders to please complete it and send it back within 10 days of receipt. Responses starting coming in almost immediately and, by the end of June, we had what we believed to be statistically valid responses from a variety of the world’s major cultural and geographic regions (Europe, North America, Latin America, Asia, Africa, and the Middle East). We spent most of July and August collating the data, integrating some additional last-minute responses, and beginning the challenge of organizing response patterns according to culture. For us, this was the exciting part, for if we could find patterns of responses that were clearly identifiable with what we knew to be typical orientations of the culture of the responders, this would support our hypothesis.
32 MOBILITY/FEBRUARY 2010
The Linkage Challenge The challenge of this undertaking, of course, was to link specific responses to known cultural orientations. While research in the crosscultural field has identified a variety of different cultural orientations around which cultures can differ worldwide, we needed to prove a link between specific responses and these cultural orientations. For example, if a responder chose to answer the question, “who is best suited to get us out of the crisis?” by selecting the answer “each individual person on their own,” as opposed to “everyone working together,” that would strongly indicate a corresponding cultural orientation to what interculturalists call “individualism” (as opposed to “collectivism”), one of the major categories of cultural orientation around the world. Not all responses were as easy to link to a cultural orientation but, surprising, many were. As interculturalists, we also know that a country’s actions—whether creating and implementing social or economic policy or making political decisions—is mainly the result of the confluence of all of its many cultural orientations, not just one. Therefore, we anticipated that while some of the responses were clearly linkable to a single cultural orientation, many of the responses were the result of a more subtle confluence of a number of critical orientations. Our final job then was to analyze the linkages between responses and cultural orientations and see if we could identify patterns that were predictable based on what we know about countries and cultures. If, for example, most of the responders from “individualist-oriented” cultures were answering the previous question with the “each individual
on their own” response, it would justify the generalization that such responses were predictive of these cultures. Further, we could then safely draw the bold conclusion that certain types of social and economic policy, as well as political action (in this case, policies and decisions that promote individual responsibility for lifting oneself out of the crisis), probably would be more acceptable, and perhaps ultimately more successful, in the individualist culture than other possible interventions. If, on the other hand, respondents from these individualist cultures mainly answered “everyone working together” to this question, we would not be able to support a link between individual’s behaviors and their culture, or a conclusion about the best possible policies and decisions to implement for that country. We definitely were hoping for the former situation. And that’s just what we got… mostly. Throughout, we tried to create questions that were engaging and relevant to the issue: “Who got us into this mess?” “What’s the best way to get out of it?” “How did you first feel when the crisis started?” “How are you feeling now?” When attempting to make the link between responses to possible cultural orientations, we found most of the responses were linkable to the following acknowledged intercultural categories, directly or in combination: Individualism or group orientation (or consensus orientation): describes the extent to which cultures value either individual activity, initiation, decision-making, and the like, or group and consensus-driven action. External control versus internal control (or resistance to or acceptance of change): describes the MOBILITY/FEBRUARY 2010 33
extent to which cultures believe in “others” being in control of what happens, destiny, and the like, or the degree to which they believe they have control over their own destiny and the future. Risk or uncertainty comfort or discomfort: describes the extent to which cultures are either comfortable with risk, uncertainty, and ambiguity versus the degree to which they may put great effort into avoiding uncertainty, reducing risk, and determining a clear process for getting to an end result. Time orientation: describes the extent to which a culture values actions that move things progressively and conclusively toward the future versus valuing a “here and now” orientation, where how we achieved success in the past determines what we do today. Rules and systems orientation versus situationist orientation: describes the extent to which cultures rely on rules, systems, and processes versus the degree to which cultures rely on the unique and particular aspects of any given situation as the overriding criteria for making decisions and taking action. Orientation toward hierarchy and privilege versus orientation toward egalitarianism: describes the degree to which cultures confer and demonstrate respect for role and authority based on class, hierarchy, race, gender, age, and the like versus the degree to which such criteria are subordinated to competency as the overriding criteria for action. Process-driven versus resultsdriven: related in certain ways to uncertainty avoidance and internal control, this category describes the extent to which cultures value creating a perfect process as a valid 34 MOBILITY/FEBRUARY 2010
method for achieving end results versus cultures that value determining an end-result and then discovering the most efficient and valuable ways of getting there.
The Results “When this economic crisis first began, how did it make you feel?” This multiple choice question provided answers from “very anxious” to “somewhat worried” to “left it up to a higher power.” The majority of respondents were “somewhat worried” when the crisis first began, but Latin Americans and North Americans were the most worried of all (71.43 percent and 70.15 percent, respectively), with all Africans/Middle Easterners responding being “somewhat worried.” Of note, 80 percent who stated when the crisis first began that their response was to leave their fate “to a higher power” were Asian. “Which answer best describes the way you feel today about the economic crisis?” Multiple choice answers mirrored the first questions and, when asked how they feel about the crisis today, all respondents were generally more “optimistic,” with every region expressing greater optimism than North America. Of note, 75 percent of all people claiming to still feel “very anxious” today were U.S. men. “In what direction do you feel the economic situation is going?” Multiple choice answers ranged from “rapidly worsening” to “rapidly improving” (both of which received no measurable responses). While most people across most cultures believe the situation is generally improving, Africans/Middle Easterners and Latin Americans believe so significantly (100 percent and 71.43 percent, respectively).
“How do you feel about the economic crisis as it affects your home country?” Out of the Europeans who state they are “very pessimistic” about the crisis as it affects their home country, 75 percent were British. Europeans and North Americans were “fairly pessimistic” about the crisis affecting their own country, while Latin Americans, Asians, and Middle Easterners/ Africans were significantly more positive. “When do you believe the global economic crisis will be over?” Multiple choice responses ranged from “less than 1 year” to “7+ years.” When asked when they thought the crisis would be over, the only respondents who chose “more than 7 years” were North Americans. “Who do you believe is most responsible for the global economic crisis?” Multiple choice answers ranged from “multinational companies (MNCs)” and “governments” to “individuals” and “fate/destiny/ higher power.” When asked who was most responsible for the crisis, the only respondents who chose “MNCs” were Latin Americans. The only respondents who chose “fate/ destiny/a higher power” were Asians. “Who do you believe is the best choice for getting the world out of the crisis?” Multiple choice answers mirrored the same choices as in the previous question. The majority of respondents chose “governments,” although Latin Americans and Middle Easterners/ Africans almost equally chose “individuals” (almost twice as much as Europeans), and 75 percent who chose “fate/destiny/higher power” were women (Asian).
“Please check the box that most closely reflects how you feel about the following possible government interventions designed to alleviate the economic crisis:” Possible responses were: A. Non-conditional business bailouts (no strings attached). B. Conditional bailouts (fully accountable). C. Nationalization of private companies by governments. D. Increase everyone’s taxes to pay for government bailouts of private companies. E. Criminal investigation and prosecution of individuals and businesses associates with causing the crisis. Overall, most people “agree” with conditional bailouts (bailouts should only be given with strings attached) and “disagree” with non-conditional bailouts. The group to mostly “disagree” with conditional bailouts was Latin Americans. The group to mostly “agree” with conditional bailouts was Asian (50 percent of the respondents being from Asia). Almost all North Americans and Europeans wanted conditions. Seventy percent of all respondents who “strongly disagree” with nationalization of private companies by governments are U.S.; although overall most people disagree with nationalization, the group that most “strongly agreed” with nationalization were Asian; Europeans were the largest group to choose “agree.” Most people are “against increasing taxes to pay for government bailouts of private companies;” it is interesting to note that 100 percent of all Latin American and Middle Eastern/African respondents chose “strongly disagree.” Overall, most respondents endorse the criminal investigation and prose-
cution of those associated with causing the crisis. The only respondents to choose “strongly disagree” (against prosecution) were North Americans and Europeans. The group most in favor of investigation and prosecution are Asians. “Which answer do you believe most reflects the best way to end this crisis?” Of note, Latin Americans overwhelmingly chose “government must create more work opportunities.” “Individuals can best survive the crisis by….” When asked how individuals can best survive the crisis, Europeans were the largest group to choose, “depend on family and friends,” Asians and Latin Americans were the largest groups to choose, “rely on government.” The only groups to choose “rely on employers” were North Americans and Europeans, with North Americans mainly choosing, “take charge of your own destiny.” “What do you feel is the best way for companies to downsize during the crisis?” When asked what is the best way for companies to downsize during the crisis, more than 60 percent who chose “lay off workers based on individual performance” were North American. Latin Americans and Asians were more in favor of “lowering salaries of all.” Europeans and Middle Easterners/Africans were torn between “lowering salaries of all” and “selective salary freezes.” “While enduring the crisis, I will…..” North Americans, Europeans, and Asians all were overwhelming in their choice that while enduring the crisis they would “learn a new skill,” no Middle Easterners or Africans chose
this; instead, they chose, “spending time with family and friends” and “find continuing education.”
Connecting the Cultural Dots Looking at the data, we were struck by two major trends: first, we were pleased to see that the data, in the main, supported our hypothesis that responses were tied critically to cultural orientation and, second, in those few cases where responses veered away from what the cultural orientation would seem to predict, it was, for the most part, consistently what we came to call a “crash impact” response; that is, any variation from culturally predictable responses occurred mainly in those cultures where the effect of the crash was so powerful that it simply blew any and all other possible determining factors—including culture— away. For example, it was a surprise to us that the United States, a significantly “individualist” culture, scored so high in support for government intervention to get us out of the crisis while, on almost every other measure, responses from the country supported the U.S. individualist cultural orientation. We attributed the response supporting the counterintuitive government intervention to a crash impact response, given that the crisis had the most profound and immediate effect on the U.S. economy, and that the U.S. government was so deeply involved in the crisis as soon as it was identified. Starting with the questions regarding attitudes toward when the crisis first began and now, it was not surprising to find that those cultures responding on the “more anxious” side also were mainly cultures that have high risk-aversion and a MOBILITY/FEBRUARY 2010 35
What Do You Think? re our responses to the current global economic crisis “just the latest major example of the “culture-drives-behavior” phenomenon?” Join the co-author of this article, Dean Foster, as he continues this conversation from print to the web in the Worldwide ERC® online Global Workforce Mobility All Members Forum. To read Foster’s February 1 post and to post your own questions, comments, and feedback about this topic, click on the “Communities” link at the top of the Worldwide ERC® homepage, www.WorldwideERC.org, and then select the Global Workforce Mobility All Members Forum. And, while you’re online, you can see the full charted responses to the 12 questions asked by Barile and Foster in their crisis response survey here: www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/ 0210-Foster.aspx.
stronger belief in external control. Cultures responding with “less anxious” or even “optimistic” were in the main cultures that had a higher tolerance for ambiguity and uncertainty and a stronger belief in internal control over events. It is interesting to note that certain age and gender groups in certain risk-comfortable and internal control-focused cultures (we did ask respondents to identify themselves, in addition to their culture, by age and gender for deeper analysis) scored high on “external control” and riskavoidance, and we attribute that to the challenging perception for this group that events that would affect them negatively were occurring that they could not control, an uncommon situation for previously privileged groups. This sense of lost privilege and the ability to control previously controllable events revealed itself again in questions regarding when respondents felt the crisis would be over. 36 MOBILITY/FEBRUARY 2010
When asked about who was responsible for the crisis, cultures that typically would attribute individual responsibility and a sense of control over events unsurprisingly scored high on individuals (Atypically, the U.S. response indicated a clear tendency to blame banks and financial institutions, which we attribute to a crash impact response, the failure of the U.S. banking system being the primary cause of the crisis.). Cultures that diffuse responsibility among many typically scored high on institutions (governments, MNCs, and the like), and those cultures with a strong sense of external control also responded with “fate/higher power.” When it came to questions about who could best get us out of the mess, cultures generally lined up uniformly behind some kind of government intervention; however, the type of intervention often was in line with the cultural orientation around individualism versus collectivism: individualist cultures chose responses that
considered individual actions and conditions as a primary criteria, while collectivist cultures chose responses that required all to sacrifice for all. Interestingly, Asians scored the highest in approving of non-conditional bailouts (no strings attached), which we saw as a cultural statement on the importance of diffusing responsibility in collectivist oriented cultures (shame being more a more important motivator than guilt). Again, individualist North American responses were strongly against nationalization, while more collectivist European cultures were strongly for nationalization. When it came to increasing taxes to pay for bailouts, North American individualist cultures supported individualist responsibility (more income, more tax; less income, less tax), while more government-oriented (collectivist) European cultures more uniformly supported increased taxes for everyone. Interestingly, both Latin American and African/Middle Eastern cultures resisted the idea of government intervention in most forms as a solution, reflecting, we believe, these culture’s historical and deep distrust of the effectiveness of government solutions to social and political problems. While on the one hand, the collectivist cultures of Latin America, Africa, and the Middle East expect uniform sacrifice by all for the good of society, and express an ideal wish for government to solve the problem, they do not on the whole believe that government intervention can in fact solve the problem, or effect the required group sacrifice (traditionally, such collective action in these cultures occurs through non-governmental institutions, such as the church, family, and non-government-sponsored political action, i.e., resistance).
When we asked the question about how individuals planned to best survive the crisis, the responses revolved mainly around the cultural orientation toward individualism versus collectivism (take charge of my own destiny, or rely on institutions and others— including a higher power—to do so). For example, Latin Americans and Asians chose “depending on government action” and “relying on family and friends,” while North Americans chose “take charge of your own destiny” consistently. When asked about the best way for companies to downsize in response to the crisis, the responses were very clear and revolved around a number of cultural orientations, including individualism versus collectivism, and rules/systems/ processes versus subjective/ particularist/situationalist action. Latin Americans, for example, were more in favor of “lowering salaries for all,” while North Americans were more in favor of “company-wide salary freeze” and “layoff workers based on individual performance.” Finally, when asked about what they will do while enduring the crisis, responses were clearly in line with their country’s cultural orientation: Middle Easterners and Latin Americans scored the highest on “spending more time with family and friends,” with Latin Americans scoring the highest on “seeking spiritual guidance;” Europeans scored the highest on “learn a new skill or hobby,” with North Americans and Latin Americans eager to find “a new job” (indicating to us a high level of distrust in relying on existing contacts and institutions, and a willingness, inherent in both cultural sets, to try new things and creatively solve problems).
Some Major Conclusions Beyond the inherent fascination with the responses, we were pleased to see that there were direct correlations between the cultural orientations inherent in the questions and answers and the responses from the different cultures being surveyed. We believe that the study supports our initial hypothesis that the variety of responses to the economic crisis are clearly rooted in the cultural orientations of the individuals responding. As the data shows, most of the time, responders from any one particular country overwhelmingly chose answers that were in sync with the cultural orientations of their country. In addition: • Different responders (and subsequently the countries they represented) provided very different responses to the same questions, each mainly in synch with their own respective cultural orientations. • Individual responses were in the main predictive of the country from which they came. • Some countries were affected by the crisis more severely than others, and the perceived severity is reflected in the responses from individuals of those countries (this might have a mitigating affect on culture being the overriding driver behind the response; the “crash response”). • A nation’s social, economic, and political response to the crisis can, therefore, be anticipated based on their cultural orientations. • Social, economic, and political interventions, designed to ameliorate the crisis, need to be created and applied differently in different cultures, based on the cultural orientations of those countries. • Drilling down into the data, we also can draw some interesting conclusions regarding differences
between gender and generation to the questions that, going beyond culture, do support known gender and generational orientations. Editor’s note: Dean Foster’s upcoming book, “The Culture Prophecy,” makes the case that culture often is the overlooked indicator as to the actions of individuals, organizations, and nations. All too often, we look for explanations for an individual’s behavior, an organization’s strategy, or a nation’s political decisions, in an economic or political analysis of the event. “The Culture Prophecy” makes the case that the real reason for these behaviors is deeper, embedded in the cultural DNA of an individual, organization, or nation, and that economic, social, and political decisions are, in fact, the result, and not the source, of cultural orientations. If we analyze any issue, whether it is an individual’s behavior, a business’ strategy, or a nation’s actions, from a cultural perspective as opposed to merely an economic or political one, we have a whole new tool for understanding—and anticipating—the behaviors and decisions of individuals, businesses, and nations. The book looks at a number of examples, ranging from popular culture, business lore, and the world’s headlines, to support the idea of “cultural analysis” as a fundamental predictor of behavior, and the results discovered through the study of cultural responses to the world economic crisis of 2009 goes far in supporting Foster and Barile’s belief in the prophetic power of culture. Dean Foster is president of DFA Intercultural Global Solutions, Brooklyn, NY. He can be reached at +1 718 287 9890 or e-mail firstname.lastname@example.org. Nicole Barile, GMS, is director of program development for DFA Intercultural Global Solutions, Brooklyn, NY. She can be reached at +1 718 287 9890 or e-mail email@example.com. MOBILITY/FEBRUARY 2010 37
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A topic that continues to gain industry interest is the localization of international assignees in the host country. According to Bosson and Wilkes, this practice continues to grow in use as HR managers, under pressure to trim the costs of global mobility programs, increasingly are turning to localization.
BY YVONNE BOSSON, GMS, AND DEBORAH WILKES mployers are using localization today more than ever based on perceived cost savings as compared to traditional international assignments. The term â€œlocalizationâ€? in todayâ€™s global environment has developed many variations to its once straightforward and purest form, which is the process of transitioning an expatriate remuneration package (compensation, medical benefits, retirement/pension plans, and taxes) into one provided to a locally hired employee in a similar position. The fundamental decision to use localization depends on whether the employee will return to the home country. The answer not only affects participation in benefit plans, but also affects important personal financial decisions such as retirement and estate planning, as well as whether to purchase a home in the host location. Localization is a viable option when the understanding is that there is no intention for the employee to return to their home country.
Why Do Employers Localize? The primary reason most employers move to localization is cost savings. If managed correctly, localizations can reduce costs, although the exact savings (25 to 50 percent) vary greatly depending on location and extent of localization. However, there are other reasons why employers consider localization initially, such as what began as a temporary assignment is now a permanent position, or the temporary assignment has been concluded and the assignee has moved into a new role that is really a host-location position. Localization is not always driven by the employer, as an employee also may request to be localized in the host country. It may be that the job opportunity that the employee wants is in the host country and cannot be matched in the home country or it is time for the employee to repatriate, but there is not an appropriate position in the home country, or the assignee (for personal reasons) simply wishes to remain beyond the terms of the international assignment contract. MOBILITY/FEBRUARY 2010 39
Localization Is Easy, Right? When localizing an employee, there are many complex issues that employers and employees must consider seriously and proactively address as part of the local agreement. Following are a few of the most critical components to consider. Base salary. The preferred approach is for employers to transition the employee to local salary levels. It is not recommended that the employer simply convert the home country base salary using an exchange rate; rather, total compensation should be compensable to the position the employee will be holding in the host country. Employment law/immigration. Given that localization is a permanent move, it will be necessary to start a legal permanent residency/citizenship process. Consult with qualified attorneys in both the home and host countries. In some situations, even though the employee is employed in the host location, they still may be entitled to severance payments from the home country organization. There is a possibility the employee will not be able to secure permanent residence in the host country for any number of reasons. Consult legal counsel. Income taxes. While the employee now will be subject to the host country tax system, he or she may have continuing liability for the home country income taxation. This is a complex issue, and does require research and consideration prior to acceptance of localization. Employers must clearly state what, if any, tax support will be provided so the employee is fully aware of the tax compliance obligation inherent with the localization. Employers should be aware that federal governments 40 MOBILITY/FEBRUARY 2010
do hold corporations to a higher standard of liability for tax filing and payment than the employee. There have been situations where the employer left it to the employees to file tax returns but the employees failed to report some or all of the income as required by the home country (Germany, Brazil). The taxing authorities of Germany and Brazil discovered the failure to report, and the respective governments not only forced the employees to make up their back taxes due plus penalties, but the employer was forbidden from doing business in both Germany and Brazil. The government maintains the position that it was the employer that stationed the employee abroad and is, therefore, responsible for assuring that all tax liabilities are paid in full. Consult with your tax firm. Pension/retirement benefits. This is the real “800-pound gorilla” in the room that represents formidable challenges to evaluate and resolve for both the employer and employee. Each country has its own rules and regulations as to how long an employee has to work to qualify (be vested) for benefits, and each country calculates the retirement/ pension benefits differently, which makes the integration and transfer of pension benefits extremely difficult— impossible in many circumstances. Multiple “bits and pieces” of pension plans will not equate to a home country peer’s “whole pension,” as there is a heavier accrual in the last years in the calculation itself. In most countries, employees rarely can remain in their retirement (401(k)) or social insurance plans as voluntary contributions are not accepted (only exception might be if they were selfemployed) and frequently the
employee loses his or her rights to disability benefits. Some of the questions that must be answered include: 1. After the localization, will the employee be able to continue contributing to a qualified pension or savings plan such as a 401(k) plan? 2. If the employee is still entitled to participate in such plans, will future contributions be calculated on the basis of a host country salary? 3. If the employee is prevented by plan rules from participating in those retirement plans and must withdraw his or her funds, who will pay the likely tax penalty? If the employee retains funds in home country qualified plans, the income generated by those funds, though not normally taxable at home, probably are considered taxable in the host country. Who is liable for such taxes? 4. How will the employee’s years of service in the home country count toward retirement benefits in the host country? 5. The employee will retire with split participation in both home and host country social security/pension
systems. Will that cause the employee to be subject to a reduction in benefits? 6. How can the employee know what his or her final social security/ retirement/pension income will be? 7. Who will help the employee apply for benefits under a totalization agreement (if one exists)?
Solutions for the Biggest Challenges? It is a challenge for employers to establish and administer pension programs in multiple countries. Many multinational companies are seeking a global approach to employee mobility and use global employment companies to address these needs. Establish an offshore global employment organization (GEO), an employee leasing organization, to which your “global nomads” are attached. The organization may be “for profit” or operate “at cost” to the parent, which is a corporate business decision. A GEO permits all global employees who are subject to work assignments in multiple or sequential global locations to be
placed on a global pay scale that is compensatory to the position’s responsibilities regardless of the location of assignment, have a formal retirement plan that is registered for multiple nationalities, and provides equitable employment law protections. If the size of the employer’s global employee population would not justify the cost of establishing a GEO, and the primary challenge is the resolution of the pension/retirement plan issues, then consider a shadow 401(k)-type plan that can be established in an offshore plan. There are several countries that have fewer plan design restrictions and favorable tax regimes to support such schemes.
Challenges With Implementation While localization offers some clear-cut benefits to employers and employees, localization is not for everyone. Generally speaking, localization will be much more difficult when it involves employees from an advanced industrial nation going to one of the lesser developed countries.
MOBILITY/FEBRUARY 2010 41
Localization Agreement Traditional Components Following are the traditional components addressed in a localization agreement: • health benefits/pensions; • cultural/language training; • taxes (liability/tax return prep in home/host country); • vacation/sick time (service date); • household goods/pets; • spouse/partner assistance; • home country housing support; • rental car (home/host country); • dependent education; • airfare to return to home country to close out ties; • termination of employment (voluntary/involuntary)/ payback terms (prorated?); and • immigration/permanent residence/citizenship. Many countries have low standards of living, less sophisticated social security, retirement savings, and pension systems, and less reliable currencies. All of those factors can spell trouble for the long-term planning crucial to localization. Further, the transition from expatriate to localized employee is most effective when the employee knows up front that the assignment-related benefits will cease and the employee, if he or she wants to remain in the host country, will be localized (i.e., after three to five years on assignment). For clarification, it is recommended the potential for localization be stated in the expatriate policy and letter of assignment. Localization represents a real alternative to traditional temporary assignments. At the same time, the 42 MOBILITY/FEBRUARY 2010
significant differences between locations around the globe mean that there are challenges to localization that sometimes cannot be surmounted. Certainly, localization programs and policies are in effect and are effective at a number of employers around the globe, but determining if and how they apply in any organization requires consideration of a large number of factors.
Ideal Scenarios for Localization When attempting to structure the localization agreement of an employee from a highly developed country to a developing country, there are case-by-case modifications that are necessary because of extreme differences in the base pay structures of the home country versus the host country; cost-of-living differentials;
and cultural or quality of life differences that made localization an extremely difficult employment status to “sell.” Such “modifications” make the costs savings and intangible benefits of localizations a debatable issue. It becomes apparent rather quickly to multinational corporations that there were certain criteria that make localization a more acceptable option to offer their assignees: • limited promotional opportunities or the employee has “outgrown” the internal progression structure in the home country; • significant promotional opportunities in the host country; • employee’s skills and competencies are in higher demand in the host country; • salary structure/pay scale of the host country is higher; • employee benefits and employment laws are more favorable in the host country; • employee (and/or their family) has personal reasons to want to remain in or transfer to the host country; and • employee has requested the localization. There are different approaches to implementing local status. The most common is a straight localization, ceasing all assignment-related benefits effective immediately (housing allowance, cost-of-living allowance, home leave, and the like) on the effective date of localization. Transitioning from an expatriatebased lifestyle to a local-based lifestyle may take time, hence the reason many employers respond by providing transitional assistance. Transitional assistance may mean employers continue to pay some premiums/allowances for a specified period of time (e.g., one, two, three
years) or to provide the allowance on an annual declining scale basis during that time (e.g., 75 percent, 50 percent, 25 percent). This approach is commonly known as a “local-plus” package, which provides allowances less than the full expatriate package, but more than local pay and benefits. Some assignment-related allowances would be phased out over a pre-determined duration of time. For example, many employers will continue to pay a reduced housing allowance for a specified period of (transitional) time after the effective date of localization and phase out education assistance and home leave. In locations where assignees receive a cost-of-living differential, common practice is to stop this allowance immediately. Other assignment incentives such as mobility/foreign service premiums and hardship allowances normally cease with the effective date of conversion to local status. A less common approach is the lump-sum method that is rarely used because of the tax treatment of lump-
sum payments for those employees with both home country and host country income tax exposure. Stated simply, a lump-sum payment is fully exposed to income taxation in both the home and host countries and may not generate as much benefit to the employee as employer-paid (or directly reimbursed) household goods shipment, immigration expenses, and education costs.
Policy? Absolutely! It is important that employers have a clearly defined localization policy/ agreement that must be communicated and re-communicated to the employee and business manager in the beginning of the discussion to localize. Employers may want two policies; one to address expatriate conversions and another for international transferees who were never on an assignment. Localization is not the cost-saving solution that so many have made it out to be. The appeal of near-term reductions in assignment program costs can lead to shortsighted deci-
sions that can come back to haunt the employer, the employee, or both. It is in the employer’s and the employee’s best interest to make sure that all involved understand that localization is not to be entered into lightly. Employee and employer must make some tough decisions and confront the questions of whether the long-term goal is localization or eventual return to the home country, and whether it ultimately will result in cost savings. But, in the long run, the result is better for both the employee and the employer when the right decision is made in the beginning. Proceed with caution to ensure localizations are managed based on educated decisions by all parties involved. Yvonne Bosson, GMS, is founder and president of Bosson Consulting, Dallas, TX. She can be reached at +1 214 499 0237 or e-mail firstname.lastname@example.org. Deborah Wilkes is director, global consulting services, Lexicon Relocation, Jacksonville, FL. She can be reached at +1 904 390 7195 or e-mail email@example.com.
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Recession, mergers, acquisitions, defaults, bankruptcies, foreclosures, commoditization—the real estate and mobility industry is navigating through the worst U.S. business crisis since the Great Depression. At a time when image and leadership are more important than ever, where does branding fit in? D’Ambrogio explores how individuals and organizations can perpetuate their brands in times of change.
B Y J O H N D ’ A M B R O G I O , C R P, G M S
istory has shown us that you can buy a company, but you can’t “buy” a brand or coerce it to fit your goals. A conglomerate buying a niche player does not give the bigger fish the qualities of the brand they bought. The merger of two companies can increase economies of scale and eliminate redundancies (those redundancies are our many colleagues who are now out of work). However, preserving the desired, or stronger, of the two brands is much more difficult to accomplish. Simply joining forces does not instantly (or automatically) confer desirable brand qualities from either company to the new entity, yet these intangibles are an important factor in the eyes of the consumer. Judy Gray, CRP, global relocation director for Cam Taylor Co Ltd, Realtors®, Columbus, OH, and 2010 president of the board for The Relocation Directors Council, Inc.®, adds, “never has branding been more critical than it is today. An effective brand gives you a major edge, especially during challenging times like we’re currently facing. Just because market conditions change, your brand should never change. It is your identity, your reputation, your value, and your promise to your clients. It differentiates you from all others. When you provide a consistent message with a consistent delivery model, you and your company will become the brand of choice.”
“trust and transparency (are) more important to us than ever.” Powerful words from one of the world’s most powerful brands. This is all coming at a point where there are immense issues of “trust” between consumers and business. A recent survey by PR giant Edelman indicated that the percentage of Americans indicating they trust business is 44 percent, the lowest point in the last seven years. At the end of September, BusinessWeek reported the biggest winners in their annual survey of “The Best Global Brands” Not surprising, two companies with the biggest gains have a reputation for customer service and trust—Google (increase in perceived brand value 25 percent) and Amazon.com (up 22 percent). What is “brand value?” In short, it is the monetary value of the brand, in millions of dollars (Google came in at 31,980, Amazon at 7,858). Big numbers. Whose brands are worth the most in this economy? Some familiar names, to be sure: Coca-Cola (68,734), IBM (60,211), and Microsoft (56,647) lead the pack. And who is slipping to the bottom? I will let you read the article itself but, not surprising, four of the five biggest losers are financial institutions. And no, there were not any real estate or relocation companies in the top 100.
The Brand is Mightier than the Sum of its Parts—Usually! Economics Is (More than Ever) About Emotion and Psychology Emotion, psychology, passion, and trust—perhaps economics are more about these things than ever. Or maybe we are just now remembering that. How powerful and important for a brand is trust? Mary Dillon, global chief marketing officer for McDonalds, Oak Brook, IL, recently was quoted as saying,
In an example of brand superiority that may be lost on Gen Y—John Lennon and Paul McCartney never enjoyed the success they had after they left their “Beatles” branding (to say nothing of poor Ringo!). That is to say, powerhouse executive teams that have built a culture (in this case helped define a decade of culture) have a challenge, to say the least, when they decide to redefine themselves without listening to their audience. MOBILITY/FEBRUARY 2010 45
How does this relate to the employee mobility industry? Well, your brand is reviewed with every relocation. As a group, we need to remember that we are dealing with (likely) the biggest purchase a family makes in its lifetime (and currently at a time when it is experiencing the biggest decline in net worth that it will ever see). To miss the opportunity to make or break your reputation by your handling of this transaction is foolhardy (I would like to note here that when transferees hear the word “dispose” when discussing the sale of their home, that is not a good thing….).
Securing Your Brand—Personal Versus Corporate The brand at a real estate or relocation management company likely is defined by its people as well as its corporate culture (not to say that service does not play into its perceived brand). Any changes to the brand— whether they come from mergers, acquisitions, or policy changes— require the buy-in and support of the executive management team. The message behind any of these events must be communicated to employees, clients, and customers by a united front to secure stability for both the corporate and personal brand. According to Sharon Michnay, CRP, GMS, director of corporate business development for Halstead Property, New York, NY, “in relocation, actually in every industry, both a strong corporate brand and a strong personal brand are prerequisites of success. In fact, the necessity of a strong corporate brand may be of more importance than ever in relocation as of late. Considering the mergers, acquisitions and closures of companies during these hard finan46 MOBILITY/FEBRUARY 2010
cial times, confidence in a company’s ability to provide service has been deeply shaken.” Today, a company not only must be a recognized leader in their industry/area but also must show it can maintain that position. If in doubt, check the increasing number of questions on RFPs that lend themselves to describing a company’s stability. Michnay adds, “in an industry that demands a ‘single point of contact’ there is also a ‘single point of accountability.’ A company that has a strong brand, but lacks a strong representative known for its industry expertise and superior service delivery will have limited success and vice versa.” That’s a powerful idea. Can the personal brand of the executive usurp that of the corporate brand? “That can be a serious issue for a company,” says Dave Collins, CRP, vice president of strategic development for OnBoard Informatics, Weddington, NC. “If personal brand is stronger than corporate brand, it can put the company at risk both in terms of human capital and potential lost clients. While it is important to always be building your reputation (and, therefore, to some extent your brand), individuals should seek to always represent the corporate brand to the best of their abilities. It’s difficult for an individual to represent everything a brand is to everyone out there.” That being said, we have all heard stories of corporate accounts following a stellar salesperson, or entire offices of agents walking across the street to follow a favorite manager. In a Web 2.0 world, where participation on social networking sites and blogs are instrumental to an individ-
ual’s and company’s success, the word “mobile” takes on a whole new meaning. It is easier to find an individual than ever before and information is disseminated at a mind-bending pace. There exists a symbiotic relationship between the corporate and executive brands, however, ultimately the most important element can be the loyalty the customer feels toward one or both. Despite the perceived risks, it is to the benefit of both parties to realize and support that relationship.
Web 2.0, Branding, and Corporate Culture Speaking of the web, the landscape is quickly changing in how social media is perceived as an authoritative voice. How does Web 2.0 affect branding? Today’s consumers, especially Generation Y (who will be buying a lot of houses in their lifetimes), are more affected by “influencers”—they listen less and less to traditional forms of advertising and trust their sphere of influence, so that good (or bad) review on Yelp! may define the brand more than the talking head on the TV. Game-changing stuff! All the more reason that progressive companies have reached beyond their own websites to strategies that include LinkedIn, Facebook, Twitter (yes, Twitter) corporate sites, YouTube channels, direct and indirect corporate blogs, and the like to reach out to tomorrow’s consumers today.
Mergers and Acquisitions—Defining Moments in Your Brand According to Stefanie R. Schreck, CRP, GMS, manager of corporate relocation for American Insurance Group, Inc., New York, NY, “any time there is a merger or acquisition,
employees feel unsettled, and itâ€™s common for transferees to delay their relocations due to the unknown. Once management is able to establish direction within the new company, employees start to feel more stable, morale increases, productivity increases, and more employees are willing to take the risk of relocation.â€? On a larger scale, there are no more defining moments in a companyâ€™s history than the decision to merge, sell, or acquire. This is a critical time for a brand. John Horning, principal of Shorewest RealtorsÂŽ, Milwaukee, WI, says that â€œbrand and cultural alignment are key to a successful merger.â€? Shorewest should knowâ€”they have completed six successful acquisitions in the last five years with minimal attrition. The reason, according to Horning, is that they â€œinvest time investigating the culture and brand strength of the office we are acquiring. We have walked away from several opportunities that were not a fit. If an office is not focused on provid-
ing unsurpassed customer service to its clients or there is not a sense of teamwork among the associates and office staff, they likely will not be a fit.â€? John Sable, principal for Active Website (whose clients are primarily independent real estate firms), Boulder, CO, has seen many mergers and acquisitionss in his career. Sable comments, â€œcompanies work for years to build a message and a brand for their employees, shareholders, and customers. This brand ends up establishing a culture for the company. Then comes a defining moment such as a merger or acquisition. At these moments, the decisions we make as leaders determine the future of the brand. If not, they run the risk of losing everything they have worked for.â€? He goes on to say, â€œif the two companies do not align on culture and branding, you run the risk of losing the trust of key people and, worst of all, you send a mixed message to the marketplace. This is where the real risk lies because itâ€™s almost impossible to regain the lost momen-
2EUNITING THE ONES YOU LOVE ANYWHERE IN THE WORLD
tum and position.â€? History is ripe with examples. Sableâ€™s business partner, John Gadeken, agrees. â€œLosing site of corporate branding is really a loss of focus. Often, we follow trends and trends can take us out of focus. When communicating with your customers, remember that people like to be communicated to differently. If you communicate to your customers how they want to be communicated to, this will create loyalty to the brand. If you focus on creating a dialogue with your customers, gaining their trust, theyâ€™ll be more likely to be loyal to your brand. The web, social networking, and mobile devices give us such opportunity to reach out to the masses.â€? The future is here. Consumers have more research at their fingertips than ever before. Communicate with them wisely and be sure to listen to what they are saying. John Dâ€™Ambrogio, CRP, GMS, is vice president, strategic development for Baird and Warner, Chicago, IL. He can be reached at +1 312 857 9909 or e-mail firstname.lastname@example.org.
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