International HR Adviser Autumn 2023

International HR Adviser

The Leading Magazine For International HR Professionals Worldwide

FEATURES INCLUDE:

Mobility And M&A: Managing Global Talent During Organisational Disruption

Taxing Issues: Getting The Best Value From Your Tax Consultant Global Tax Update

Cracking The Code: Four Ways To Determine The Real Worth Of Corporate Travel What Is Cultural Training, And How Is It Improving Assignee Wellbeing?

The Era Of Digital Compliance

Workplace Technology Predictions

Retaining Trust In The Virtual World

ADVISORY PANEL FOR THIS ISSUE:

In This Issue

Mobility And M&A: Managing Global Talent During Organisational Disruption

Hayley Strachan, Deloitte LLP

Global Tax Update

Andrew Bailey, BDO LLP

Taxing Issues: Getting The Best Value From Your Tax Consultant

Andrew Bailey, BDO LLP

Cracking The Code: Four Ways To Determine The Real Worth Of Corporate Travel

Rich Quelch, Good Travel Management

What Is Cultural Training, And How Is It Improving Assignee Wellbeing?

Joanne Danehl, Crown World Mobility

The Era Of Digital Compliance

Chloe Dickenson, Sellick Partnership

Workplace Technology Predictions

Alex Arundale, Advanced

Retaining Trust In The Virtual World Avadhesh Dixit, Acuity Knowledge Partners

Mobility And M&A: Managing Global Talent During Organisational Disruption

Many of us can feel as though our organisations and our work lives are constantly being disrupted, a forgivable point of view given the last few years. This article focuses on the specific types of organisational disruption which can accompany any corporate transaction, whether that is a merger/de-merger, IPO, carve-out or spin-off, and considers how HR and global mobility teams can manage through, or even thrive in, times of merger and acquisition (M&A)-driven change.

No matter how well planned for, transactions undoubtedly bring disruption across a business – even though they also bring real opportunity. Areas with which mobility overlaps, such as organisational structures, leadership and headcount, policies, processes, vendors, and technology systems can all be subject to this disruption. Because of the range of business areas impacted, HR and global mobility professionals need to engage at an early stage and increase diversity of thought and action when considering how to assess and manage the risks and opportunities which present themselves.

Although some disruption is inevitable, there are a number of things which you can get right before, during and following a transaction, which will deliver immediate and longer-term results for your organisation and your global talent, and therefore this is an area which requires a good degree of thought and care.

Assumptions And Clarifications

Before we consider the transaction lifecycle in more detail, let’s review some widely held assumptions around the scope and role of mobility in M&A, and in organisations in general.

1. Mobility Just Means ‘Expats’

You know the ones, local employees sent overseas on a 2–3-year tax equalised assignment, relocated with their families etc. Well, yes it can still mean that, but today it also relates to a number of mobility personas - business travellers, cross-border commuters, non-resident

Directors, contingent workers, virtual assignees etc. A new and fast-growing mobile employee group who can create compliance obligations and risks on a truly global scale are remote workers. In much the same way as we have seen with off-payroll compliance (e.g., IR35 in the UK), which is an area of review at the due diligence stage, the topic of remote working is now more widely recognised, and potential corporate purchasers are getting wise to the opportunity to apply a ‘price chip’ where there is perceived or actual risk in a target business.

In a previous IHRA article(1) we outlined the benefits and risks of remote working, so won’t repeat those here, but one outcome of facilitating remote working or using it as an enabler to access global talent is the increased usage of Employers of Record (EOR); for example, to deliver pay in a location where you have no corporate presence. You may be familiar with EOR service providers in the context of M&A as they have been commonly engaged to meet urgent compliance gaps around transaction activity (more on that later).

can often go somewhat ‘under radar’ during due diligence, with attention only finally turning back to key mobility issues once the ‘dust has settled’ on other transaction challenges.

Whilst perhaps not always seen as being financially material, being insufficiently prepared to address mobility-related issues may be operationally material, with the potential to create far-reaching impact across the organisation. A potential impact could be that on transaction day +1 business activities in country X can no longer operate because employees have now lost their right to work. Or a Senior Executive cannot clear immigration for a critical meeting. How would it look (and feel) if you now cannot deliver pay to employees in country Y or Z?

For organisations who use mobility as an enabler to deliver an effective global talent strategy, ‘getting it right’ as early as possible (accepting that aligning mobility policies and processes won’t be top of list on day one) will deliver benefits. From the perspective of the business this could mean getting into ‘noise-free’ business as usual mode as soon as possible and maintaining global corporate, employer, and legal compliance. For your workforce there is also a more human element to be considered and getting that right could mean maintaining or improving engagement, retention and the productivity of your key talent - all important to a successful posttransaction business.

The Three Phases Of M&A Activity

Due to the diverse global mobility models mentioned above, the challenges that HR teams must address are arriving at a faster pace and are more complex, requiring agility, global collaboration and data connectedness like never before. These challenges are exacerbated when M&A activity is introduced.

2. Mobility Is Immaterial In The Context Of M&A Activity

Naturally, corporate transactions will not ‘live or die’ due to how well or otherwise a mobility population is managed, but the risks in this area

The way in which mobility is managed in an organisation has the potential to impact a diverse and potentially risk-generating global employee population – more than just ‘expats’! Effective global talent management at each stage has the potential to support the delivery of a ‘low-noise’ transaction experience to the benefit of all. With that premise agreed, let us move on to consider the three key transaction phases: (i) Pre-transaction, (ii) Post-transaction, the first 100 days, and (iii) Post-transaction, beyond 100 days.

(i) Pre-Transaction: Making The Time To Think Beyond Day One Will Pay Off Later

What is most important during this phase can and will vary by transaction type, and

These challenges are exacerbated when M&A activity is introduced

which side of the transaction you are on, but fundamentally activities undertaken pretransaction tend to be focused on assessment and identification with less time available for action or bigger-picture thinking.

Process mapping and data gathering are crucial activities. For example, it is always surprising how many organisations are unable to quickly confirm the locations in which they have employees or contractors operating. Ensuring that global payroll, tax, and other reporting obligations related to stock awards for mobile individuals are identified and managed can be particularly challenging, and highly emotive for the employees involved. Getting to the point where you have a ‘single source of truth’ will make compliance easier to achieve, and will make strategic planning and analysis much more impactful.

During the pre-transaction phase, HR and mobility teams may (rightly) be involved in high level HR/tax/legal due diligence risk checks to identify any deal-breakers which would erode value, but their participation and impact could and should extend beyond risk evaluation.

For example, after assessing your current state and concluding on how any necessary and immediate changes will be handled, you could begin to think about what mobility could look like in your new reality. Be bold!this will enable more effective management through the potential disruption ahead. It is never too early to start thinking about what would need to be true, e.g., investment in technology, size and skills of team etc., to deliver what the business will be asking you for in due course.

A transaction can present an excellent opportunity for mobility leaders to plant seeds of thought and push for change, which may not have otherwise been accepted. It may present a window to secure transactionrelated budget to deliver programme improvements for which you may have been campaigning for some time.

As a starting point, these are some of the key areas you may wish to consider pretransaction:

• General: Review and map programme information to gain better visibility of current states (e.g., demographics/ impacted populations, operating model, policies, technology, vendors, etc.)

• Payroll: Cross-reference active and trailing populations, e.g., bonus/equity reporting, against vendors or in-house capability to identify any gaps to be backfilled with a minimum viable process

• Immigration: Review any existing sponsorship obligations and sponsoring licences, review the work authorisation status of employees, understand and map any changing roles/responsibilities/job titles (updating visas accordingly)

• Talent: Prepare to fulfil any talent requirements in support of transaction

activity (i.e., if new assignments are needed); measure the impact of potential redundancies on existing assignee population (e.g., early repatriation costs, tax treatment of termination payments, accelerated stock vesting)

• Technology: Identify critical systems and data sources and confirm ongoing access, e.g., compensation and benefits data, payroll systems etc. In the case of a spin off – is everything ready to be stood up outside of the former technology ecosystem?

• Vendors: Catalogue vendors and review contractual arrangements to ensure continuity of provision post transaction, e.g., are there any audit related restrictions which require a change of tax, payroll and immigration vendor(s)? Are there changes in terms to be negotiated e.g., increased scope/scale could reduce pricing for a combined business, or are you prepared for vendors to seek to change pricing for a drop in scale following a spin off?

• Change Management: Develop communication strategies for existing assignee populations (e.g., to mitigate attrition upon repatriation/post transaction). All of this is easy to say but difficult to do, and one should not underestimate the challenge. You will need a raft of data, hours in the day and access to stakeholders across your business at a time when all three of those resources may be in short supply, and at a time when your global workforce, team and you may be feeling uncertain and anxious about the future.

(ii) Post-Transaction, Days 1100; Is Day 1 A Non-Event Or Are You In Survival Mode?

In many ways we need to stop thinking of day one as ‘day one’. In many instances starting to do something only on day one may mean you are already too late! Ideally what you want to aim for is day one being a non-event, but this can be very difficult to achieve in practice.

There may have been sensitivities with sharing certain types of information in

advance of day one. Teams may only be provided with demographic data, policy information, compensation information etc. at this stage. Knowledgeable and valued colleagues may not have made the transfer over to the new entity.

During the initial days, immediately posttransaction, HR and mobility teams may need to be very operationally (re)active, ensuring that existing assignee experience is maintained – no drop in the levels of focus or service provision – and that corporate compliance is delivered.

Getting people paid is one of the most urgent and critical tasks to be taken care of. As mentioned earlier, the increased use of EORs when it comes to remote workingthough EORs have supported businesses by providing employer services in the aftermath of transactions for some time now. For example, if you have acquired a business with employees in locations where you have no entity or infrastructure, or if you have divested in a location and no longer have infrastructure in a country where you still have people, what can you do to quickly stand up the compliance processes you need to deliver? Whilst not a silver bullet for all elements of talent engagement and compliance, EORs are often used for short-term purposes until longer-term needs are assessed and decisions are made in regard to a more permanent global talent engagement and deployment solution.

Transactions often come with expectations or targets for cost and/or headcount reduction in relatively short order, but terminating mobile individuals should be carefully considered. As mentioned above, it is important to understand where employees are (and where they have been!) in order to manage through a termination process, without being impacted by unexpected costs or risks. For example, remote workers may have obtained employee rights for the country in which they are working, but this may not be their employment country. Termination packages, including stock being delivered on exit, may need to be reported and subject to local taxes in a current or former host location etc. Advance knowledge of these types of issues may influence decisions taken, or at least enable more effective management of them.

Beyond getting the job done, there are some strategic aspects to be considered in the immediate post-transaction phase:

• Operating Model/Processes: Determine new ways of working e.g., evaluate team bandwidth and consider increasing headcount to manage additional cases; update roles/responsibilities, ensuring alignment with new corporate structure

• Corporate Structure: As business plans become clearer, review global corporate structure and strategy and start to consider how global talent engagement and

All of this is easy to say but difficult to do and one should not underestimate the challenge

deployment could best be managed within this, e.g., Global Employment Company (GEC), EORs, local employing entities etc.

• Policy: Review and consolidate mobility, tax and immigration policy types and provisions to promote a consistent and equitable experience across assignee populations e.g., determine whether to continue to use separate current policies for existing assignees or transfer to a new policy

• Technology: Evaluate opportunities to streamline technology ecosystems

• Vendors: Review vendor landscapes and identify areas for alignment or consolidation (e.g., explore possibilities for global vendors to absorb the scope of local contracts in place, if applicable)

• Change Management: Continued communication with global workforce as decisions are taken and changes implemented.

Why the focus on the first 100 days? It is because during this period you will have started to discover the truth of your new reality. Any theories or intentions you had about what and how your mobility programme would need to deliver, will start to be borne out or dispelled. Before it becomes too difficult to implement permanent change (e.g., by undoing or optimising any necessary, yet sub-optimal, temporary arrangements), or before mobility retreats out of the limelight to resume being perceived as a back-office function, the first few weeks and months post-transaction are when you can (re)evaluate and socialise your ideal longer-term mobility programme strategy and delivery frameworks

(iii) Post-Transaction, Beyond 100 Days; The Pay Off

As mentioned earlier, M&A-driven organisational disruption is not only something to be managed but is also something which can be exploited – there may be unexplored opportunities, untapped efficiencies, and unanticipated benefits.

Until now in the transaction cycle there has rightly been a need to prioritise getting the job done, but having already extinguished the fiercest fires in the first 100 days –everyone got paid and no one was stopped at the border! – the longer-term posttransaction environment allows for time and attention to be paid to closing off temporary arrangements or dependencies and replacing them with optimised permanent operations, technology and vendor ecosystems.

It is critical before finalising and implementing any mobility programme change that there is collective understanding of the role of mobility in the new (merged/spun out) organisation, as part of the wider global talent management strategy and approach. This requires HR and mobility teams to identify and engage with stakeholders across the business.

Mobility is an enabler to the engagement, employment and deployment of people across the world and so, among others, mobility leaders should be considering the following questions – and be ready to articulate the answers to secure buy-in:

• Global Expansion/Talent Deployment: What approaches can be used to engage/ employ/deploy global talent legally in all locations (current and future)?

• Global Talent Acquisition: How can we engage/employ key skills physically sited in other locations?

• Long-term Remote Work: What options are available to enable compliant longterm cross-border remote working, from both a business and/or individual driven perspective?

Mobility is in and of itself an exciting place. In the post-pandemic world of global talent, with new market pressures and increased demand for flexible working, what we used to consider as ‘in scope’ for mobility teams has already markedly changed, and there is more than enough to manage. Adding in M&A-driven change could be seen as one disruptor too many, or perhaps it could be just the catalyst to keep driving the ongoing transformation of talent mobility, repositioning it as a dynamic, diverse and strategic function, one with the ability to make a material impact on a business whether pre, mid or post M&A transaction stages. Embrace the change, and the challenge!

References:

(1) Winter 2022 02 International HR Strategy. pdf (internationalhradviser.com)

HAYLEY STRACHAN

Director Mobility M&A Lead, Global Employer Services

T: +44 1224 847385

E: hstrachan@deloitte.co.uk

Hayley leads the Global Employer Services team in Scotland. She oversees the delivery of GES advisory and compliance services to clients in the region - predominantly in the Energy, Resources & Industrials (ER&I) and Financial Services sectors. Hayley also leads our Global Talent and Mobility Advisory consulting services in the area of Mergers, Acquisitions, and Divestitures.

Hayley has a degree in Economic Science and a Masters in Chinese Studies. She is a current yogi and lapsed runner and cyclist, having completed over 50 half marathons and the Deloitte Ride Across Britain (980 miles in 9 days!).

This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms or their related entities (collectively, the “Deloitte organization”) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No representations, warranties or undertakings (express or implied) are given as to the accuracy or completeness of the information in this communication, and none of DTTL, its member firms, related entities, employees or agents shall be liable or responsible for any loss or damage whatsoever arising directly or indirectly in connection with any person relying on this communication. DTTL and each of its member firms, and their related entities, are legally separate and independent entities. © 2023. For information, contact Deloitte Global.

In the first few months posttransaction you can (re)evaluate and socialise your ideal longer-term mobility programme strategy and delivery frameworks

Global Tax Update

GERMANY

Court rules on taxation of income from German statutory pension after moving to Italy

After a long working life is over, some pensioners may decide to move their residence abroad, but which country has the right of taxation for the pension? The German Federal Fiscal Court recently decided this issue (again) in the case of a pensioner with German citizenship who moved his residence to Italy.

According to the relevant provision, in the Germany-Italy income tax treaty, pensions paid under the social security legislation of a contracting state ‘by’ that state will be taxable in that state only if the recipient is a national of that state without being a national of the other contracting state.

In a prior decision from 2011, Germany’s Federal Fiscal Court interpreted this provision and the word ‘by’ to mean that Germany, as the source state, would not have a right of taxation because the pension derives from contributions of the employee and the employer. This led to the risk of double nontaxation because Italy was also denied an Italian right of taxation.

In 2022, the Federal Fiscal Court changed its position regarding the interpretation of the treaty provision so that a state entity does not need to be the economic bearer of the pension payment. The underlying cash state principle in the income tax treaty should be understood in a broader sense. This results in Germany having the right of taxation.

BDO Comment

The change in case law has implications for German pensioners living in Italy. They are subject to a limited tax liability in Germany and thus have tax declaration obligations and tax payments in Germany. Under certain conditions, the tax payments may be avoided by applying for treatment as a taxpayer with unlimited tax liability; however, that would involve considerable compliance efforts on the part of the German pensioner abroad.

INDIA

Delhi Tax Tribunal rules on applicability of withholding tax provision to reimbursement of salary cost in case of secondment

The movement of employees across countries is a common practice. Often, employees from one entity within a group are assigned to another entity in a host country. This can be for specific assignments, technical support, or to provide expertise in specific areas of operation. In most cases, a portion of the seconded employees' payroll

remains in the home country to ensure the continuity of their social security benefits in their home country. The home company usually disburses the social security contributions, along with a portion of the employee's salary in the home country, which is later reimbursed by the host company to which the employee has been seconded, on a cost-to-cost basis.

Various courts have examined similar matters, and two key principles have emerged: each case needs to be analysed based on the facts, and the substanceover-form doctrine needs to be taken into consideration in determining whether the agreement is a “contract for service” or a “contract of service”.

The Delhi Tax Tribunal recently examined the applicability of the withholding tax provision on the reimbursement of salary costs in the case of a secondment.

Facts Of The Case

The taxpayer, a company incorporated in India, is a subsidiary of a UK-based company and operates as a captive service centre to provide IT services (research operations, business process outsourcing, and management consultancy support services) to group entities.

In the secondment model, seconded employees work under the host company’s direction, supervision, and control. In such cases, the host company bears the entire salary and related costs, including social security contributions paid in the home country. The host company takes responsibility for the work done by the seconded employee during the period of secondment in India and usually retains the right to terminate the secondment.

Secondment has been a contentious issue in India, where the tax authorities argue that under the secondment arrangement, the home company provides services to its host company in India through the seconded employees. They claim that the reimbursement to the home company by the Indian host company, including social security contributions and salaries paid in the home country, qualifies as a “fee for technical services” (FTS) and is therefore taxable in India. As such, it is subject to withholding tax under Section 195 of the Income tax Act, 1961.

The taxpayer recruited three UK company employees to work exclusively for it on a full-time basis as regional CEO, CFO, and HR Officer. The employees were released by the UK company and subsequently entered separate employment contracts with the taxpayer, so that during the period of employment, the taxpayer was the sole and exclusive employer of the employees, having complete control, while the hired employees ceased to be employees of the UK company. Further, the taxpayer had an unconditional right to terminate these employees, while the UK company had no obligation to replace them.

The taxpayer entered a “salary reimbursement agreement” with the UK company whereby the UK company would pay 40% of the seconded employees’ salary in foreign currency and claim reimbursement thereof from the taxpayer for administrative (and the employees’) convenience. For this purpose, the taxpayer was supposed to inform the UK company of the amount of foreign currency payable as salary to the seconded employees, as determined by and supposed to be reimbursed by the taxpayer. According to the appointment letters and salary reimbursement agreement, the taxpayer was exclusively and solely liable to pay salaries, allowances, and requisites to the seconded employees.

However, the Indian tax authorities disallowed the expenditure relating to reimbursement on the grounds that the reimbursements of expenses for seconded employees is in the nature of fees for technical services and is liable to deducting tax at source (TDS). The taxpayer filed an appeal.

In the secondment model, seconded employees work under the host company’s direction, supervision, and control

Delhi Tax Tribunal Ruling

The tribunal upheld the taxpayer’s claim and disregarded the applicability of Section 195 of the IT Act. They also made the following observations.

The employees had an employeeemployer relationship with the taxpayer only, and thus had no rights to act on behalf of the UK company or bind the UK company, which prompted the conclusion that the taxpayer was the legal and economic employer.

The employees’ salary is paid partly by the taxpayer and the remaining through the UK company at the taxpayer’s request, only for administrative purposes, and is reimbursed by the taxpayer on a cost-tocost basis. This salary was chargeable to tax as salary in the hands of the employees, and not as FTS because there was no agreement/document to prove that the UK company provided any technical services. Accordingly, TDS under section 192 of the IT Act is withheld by the taxpayer before making payment to the employees.

Emphasis can be placed on CBDT Circular 720, dated 30 August, 1995 (PB-703), to observe that payment will be liable for TDS, only under one section, Section 192 of the IT Act in this case.

Accordingly, the salary reimbursement to the UK parent company need not be subjected to withholding tax because tax has already been deducted on salary paid to the employees where the taxpayer is found to be the legal and economic employer.

BDO Comment

The issue with respect to whether tax needs to be deducted from a reimbursement of salary cost because of a secondment arrangement has been a matter of debate before the Indian courts and tax tribunals.

It is a settled practice position that the mere reimbursement by an Indian entity to an overseas entity of the salary of seconded employees cannot be regarded as FTS, and the Indian entity therefore, is under no obligation to withhold on the reimbursement. It is irrelevant whether any profit element is included in the income or not.

The Delhi Tax Tribunal in the present case also held that the reimbursement by an Indian company of salary and other costs of the seconded employees working in India to a foreign entity does not constitute FTS, but it is only the reimbursement of salary by an Indian entity to a foreign entity. Hence, the taxpayer was not required to deduct TDS under Section 195 of the IT Act.

The terms and conditions of the secondment agreement between the home company and the Indian host company need to be carefully drafted and factually substantiated to take a position on the nonapplicability of the TDS provision to the salary cost charge of seconded employees.

Cross Border WorkingRecent Developments Germany And Luxembourg Agree To Extension Of De Minimis Rule For Employees

Cross-border work is increasingly becoming the norm in the global labour market. Double taxation agreements regulate who has the right of taxation, generally depending on the scope of the activity in the other country.

In principle, employees who are resident in Germany and work in Luxembourg for a Luxembourg employer are taxed in Luxembourg exclusively if the activity is carried out exclusively in Luxembourg. However, if the employee also carries out an activity in Germany, the country of residence, the salary for the workdays in Germany is taxed there on a pro rata basis.

But what if the activity in the country of residence takes up only a few days per year because the employee works for his Luxembourg employer in the German home office?

Due to increasing international cooperation and the expansion of home offices because of the COVID-19 crisis, the 19-days per year threshold was often insufficient, which led to complicated consequences under tax law. The finance ministers of Germany and Luxembourg have acknowledged the situation, and the de minimis regulation has been extended to 34 days starting from 2024. This change is intended not only to make cross-border work and the handling of home offices more flexible, but also to reduce bureaucracy and simplify taxation. Luxembourg is also implementing a regulation with Germany that it had previously negotiated to a similar extent with Belgium and France. Thus, conditions for the taxation of workers in neighbouring countries are beginning to be standardised.

Switzerland And France Sign Agreement On Taxation Of Cross-Border Teleworkers

In June 2023, Switzerland and France entered into an agreement that provides new and permanent taxation rules for income from home office work.

The supplementary agreement to the bilateral double taxation agreement between Switzerland and France allows cross-border home office working up to 40% of the working time per year - especially for crossborder commuters. It is part of the mutual agreement on home offices concluded on 22 December, 2022, which entered into force on 1 January, 2023.

What Is It The Agreement About?

The supplementary agreement offers Swiss employers and employees the option of arranging to work from their crossborder home office for up to 40% of the annual working time. Within this limit, the supplementary agreement provides that salary payments in connection with home office will be taxed in the contracting state in which the employer is located. The supplementary agreement also introduces an innovation: an automatic exchange of information on salary data for persons who are residents of a contracting state and work for an employer in the other contracting state.

Daily Cross-Border Commuters

Until now, the following de minimis rule applied: If the activity in the country of residence (Germany) lasted a maximum of 19 days per year, this was disregarded, and taxation still took place exclusively in Luxembourg. Conversely, if the activity in Germany lasted 20 days or more, taxation had to be split between the two countries from the first day of activity, according to the provisions of the Germany-Luxembourg income tax treaty.

Employees who fall under the special regulation for cross-border commuters (according to the special agreement of 11 April 1983, for the cantons of Berne, Solothurn, Basel-Stadt, Basel-Land, Vaud, Valais, Neuchâtel and Jura, to which reference is made in Article 17 paragraph 4 of the FranceSwitzerland double taxation agreement) may, without calling into question their cross-border commuter status, carry out their activity for a Swiss employer at home in France for up to 40% of the annual working time without Switzerland losing the full right of taxation of the corresponding salary.

But what if the activity in the country of residence takes up only a few days per year because the employee works for his Luxembourg employer in the German home office?

Subject to compliance with this 40% limit, these employees remain liable to tax in their country of residence, France. The same applies in principle in the reverse case. In concrete terms, this means that France has the full right of taxation on the salary if an employee resident in Switzerland with a French employer works in a Swiss home office up to a maximum of 40%.

Other Cross-Border Workers

For other employees who do not meet the requirements for the application of the crossborder commuter status, and who fall under the regulations of the France-Switzerland double taxation agreement, the new mutual agreement basically provides for the same, namely that the salary remunerations which the French employee earns in the home office for his activity for the Swiss employer continue to be fully taxed in Switzerland, provided that they do not exceed 40% of the working time per calendar year. Again, the same applies in the reverse case.

What Does This Mean For Swiss Employers With French Employees?

For Swiss employers, this means that withholding taxes continue to be deducted as if the home office work performed in France, the employee's country of residence, had been performed on the employer's premises in Switzerland. However, if the activity in the French home office exceeds the 40% threshold, the part of the remuneration corresponding to the French home office activity is taxable in France starting from the first day of home office activity. This means that French home office activities over the 40% threshold are subject to the general provisions of the income tax treaty between Switzerland and France from the first day of teleworking.

In other words, the portion of the crossborder worker's salary that the employee performs at a place of residence in France and not at the usual place of work in Switzerland is taxable in France, not in Switzerland. Thus, for example, if an employer allows the employee to work from home three days per week (60% for a full-time equivalent), 60% of the employee’s remuneration would be taxable in France.

When Does The Supplementary Agreement Enter Into Force?

The supplementary agreement must still be approved by the parliaments of both states before it can enter into force. Since the purpose and content of the new agreement are essentially the same as those of the provisions in the already concluded mutual agreement of 22 December, 2022, the signing of the supplementary agreement on 27 June, 2023, has immediate effect. The Memorandum of Understanding is valid until 31 December, 2024,

but domestic ratification by the respective parliaments is expected by then.

Creation Of Domestic Legal Basis

Until now, Swiss tax law provided for withholding taxation on the earned income of employees' resident abroad only if the work was physically performed in Switzerland. The supplementary agreement now grants the employer’s state of residence the right of taxation, even if employees work from their home office in the state of residence for up to 40%. To create a domestic legal basis for this, the Federal Council sent an amendment to the national tax law into consultation at its meeting on 9 June, 2023.

Risk Of Permanent Establishment

If an employee works from home in France for a Swiss employer, under certain conditions, this may pose a potential risk for the Swiss employer of establishing a permanent establishment in France. An analysis of this risk is always recommended in specific cases.

FAQs

Is the part of the salary related to the activity performed by the cross-border worker in France taxable in France?

As of 2023, if French home office activity exceeds the 40% threshold, the entire amount (not just the portion in excess of 40%) is taxable in France, starting from the first day of work in France. If the teleworking for a Swiss employer from a home office in France is below the 40% threshold, there is no allocation of the taxation right to France. In the reverse case, with a French employer and a Swiss teleworking employee, the situation would be the same.

What are the consequences if a Swiss employer employs French workers who work from home for more than 40% of their employment?

As of 2023, the Swiss employer must reduce the income subject to Swiss withholding taxes by the portion relating to the home office activity in France as part of payroll accounting. It is the employer's responsibility to keep a record of these days, or to delegate this duty to the employee concerned to attest to the corresponding days of presence. It is also necessary to contact the French tax authorities to clarify the conditions for taxation of the portion of the remuneration related to French home office activity, as Swiss employers may be subject to certain payroll tax obligations in France.

Does The Agreement Apply To Part-Time Employees?

Yes, a corresponding reduction is made in relation to the workload. For example, an employee with a 50% workload can perform home office activities up to one day per week (40% of the 50% workload).

Does the agreement apply if one performs home office activities from a second residence?

Yes, providing the secondary residence is in the country of residence.

How can an employer prove that the French employee’s 40% home office activity threshold has not been exceeded?

The percentage of home office work an employee is allowed must be evidenced by the submission of a contractual document. This may include, for example, a provision of the employment contract binding the employee to his employer, or a home office agreement signed between the employer and his employee.

Is there a weekly limit that cannot be exceeded for determining the 40% threshold?

There is no weekly limit. Employers and employees will retain the flexibility to organise the work week as they wish throughout the year. The 40% mark cannot be exceeded within a calendar year. Thus, depending on how work is organised, it will be possible to work more than 40% from home for one part of the year, provided the 40% threshold is not exceeded for the full year.

BDO Comment

As cross-border working and working from home is now the ‘new normal’, established taxing practices will come under further scrutiny as tax and social security authorities seek to address how to efficiently and effectively tax individuals and their employers. We expect to see formal and practical working agreements put in place in the months and years to come. Do check with your local adviser as to latest developments.

Prepared by BDO LLP. For further information please contact Andrew Bailey on 0207 893 2946 or at andrew.bailey@bdo.co.uk

ANDREW BAILEY

Taxing Issues: Getting The Best Value From Your Tax Consultant

More than 20 years ago, I wrote my first article for International HR Adviser (then entitled Expatriate Adviser) and as I head towards retirement at the end of 2023, I have revised and updated this initial (my last) article. Many matters raised then hold true to this day, and have been repeated, but with supplementary commentary added regarding my experiences as a tax adviser over the last 20 years. I do hope you have found my articles to be of interest and use. Thank you for reading them.

You might be comfortable with your home country’s tax system, but add in the complexities of an international assignment, working across borders, remote working and a foreign tax system, and you might need some help. Tax consultants should ease your worries, not add to them!

Advice from consultants can fall into several categories, two of which are consultancy and compliance. Compliance is the basic element, not the most exciting, but you need it. Revenue authorities will happily extract penalties and interest for non-compliance. These are often levied on a business entity – you – not the employee, so it pays to get it right from the outset as employees can become ex-employees and simply refuse to meet any personal obligations towards foreign tax liabilities once they have left your organisation and the country. Consulting advice and appropriate planning can reduce the considerable expense of international work, and whilst more expensive than compliance costs, can be worth the added cost.

Whether you are looking for tax compliance and/or tax consultancy, how do you get the best value from a tax adviser?

In this article I have split the process of choosing an adviser into various headings. The key to each area is to ask questions, obtain answers and more importantly gain understanding. This understanding must involve all parties who must understand the part each will play, what will be delivered

and at what cost. Failure to understand will ultimately lead to confusion and dissatisfaction for both parties. This helps neither the client nor the consultant.

The Proposal

Proposals can take many different forms. They can range from a simple agreement for the consultant to act, to a comprehensive RFP (Request for Proposal) ‘beauty parade’ involving many consultants and client staff, including procurement.

provide a more personal service but may not have the network or in-depth specialised experience. Big 3 may have a larger network, but may be more expensive. Bizarrely they also could be cheaper, where they offer a tech led, but totally impersonal approach.

Concerns over audit independence persist, and I would highlight potential conflicts of interest as an issue to consider and this could further limit your choice of consultant. Think about what you really need, what you expect and what you want to pay. During the proposal you may find you need or want to reassess your expectations, so be realistic in doing so.

Consider a simple proposal, for example, a telephone call or email to establish whether a consultant can do the work and, if so, the consultant is appointed. Questions should quickly flow in such a scenario, including what exactly the work is you want, what are your responsibilities as a client, what will be delivered by the consultant, when it will be delivered and how much it will cost. Naturally you can add lots more questions and variations on the examples quoted. This may appear to complicate matters, but failure to resolve these issues is a recipe for future problems.

The so-called ‘beauty parade’ is generally a more comprehensive proposition. However, it is often much more complicated, and is certainly more time consuming and expensive for all parties. Yet ultimately is requires the same, possibly additional questions to be answered.

At the outset of the proposal stage, you need to consider who to ask. There are many different types of tax consultants from smaller independent advisers to the big 3/Vialto. Each type has advantages and disadvantages. For example, independent advisers may be generally cheaper and

For example, will the slick presentation team be the one working on your account? Will you ever see the lead partner again? The quiet person who doesn’t say anything at the proposal; will they be your day-to-day contact? Is a glossy proposal with videos, play books and diagrams what you really want? Does a standard response to a procurement led proposal really provide the answers sought? Is the standard procurement process fit for purpose – I have seen many aimed at buying a fixed product inappropriately used for buying what is a personal service – at least adapt the RFP to make it work better for you.

I would also strongly recommend you invest time with potential consultants. Often, I have heard that the potential client wants “to build a strong relationship”, “requires a better personal service” etc., but then they fail to invest any time doing so during (or after) the

At the outset of the proposal stage, you need to consider who to ask. There are many different types of tax consultants from smaller independent advisers to the big 3/Vialto

process, do not make themselves available, and invite up to 10 potential suppliers to the RFP. Doing this often fails to deliver what is sought and the same/identical RFP will reappear within 3 years and occasionally much sooner. I would recommend far fewer potential consultants, but do invest some quality time to get a better outcome.

Three obvious yet crucial questions must be asked:

• Can the consultant do the work?

• Have they done it before?

• What will it cost?

In these days of ever-increasing focus on corporate governance, the honesty and integrity of the consultant (and the employees and employer for that matter) is even more essential. Size of the consultancy firm may have no bearing in your assessment.

Remember tax consultants are just like you. If you treat them with respect and professional courtesy, they will respond more favourably. Where you do not, you may find there is a high turnover of staff on your account. If you reasonably find you do not get on with your designated contact, then ask for a change. Firms will typically oblige as they generally want your business.

The Scope

A key aspect in any discussion is to ascertain what exactly you want the consultant to undertake and who is eligible for assistance? What services are employees entitled to and have you told them? Who at the company can authorise individuals and work? Does the consultant know what you will and will not pay for? Are you being reasonable and fair to the consultant? In as much as the consultant should not ‘nickel and dime you’, ideally you should not do the same to the consultant and push back unfairly on valid invoices.

For example, too often individual employees or their partners will request advice for which they are not covered, but time will still need to be charged to the client code. Communication is vital and should involve the consultant, the client, and the individual taxpayer/employee. Make sure you let your employees know what they can expect and what they are allowed. Let the consultant know who from your company can sanction advice. Ensure you are only paying for what you agreed, and that the consultant knows this. If they do, they will try their utmost to follow your procedures.

Service Levels

Agreement should be sought over service levels to be met. Again, lots of questions with answers are required. When will the consultant respond to telephone or email queries? How much time will it take to prepare the tax return from receipt of complete information? What information does the company need to provide and what does the individual need to provide? Is everything truly urgent or can

it wait a few days or a week? Be clear! Your consultant should be only too happy to suggest and agree a timetable of who does what and by when. It helps to plan workloads. Again, be reasonable, for example, when you need to get responses from colleagues in different time zones or with different working weeks it takes time. Focus on the macro issue – how is the consultant doing in general - not every individual micro issue.

Ask who will be involved with the account. Will you only get to deal with juniors or senior staff? Do you have one or several points of contact?

Service and fees often go hand in hand. If you want a very low fee, you will generally end up with lower service levels and junior staff or a tech led impersonal service. This is fine if that is what you want. Tell your consultant what you really want, but be prepared and willing to pay extra for better service.

cheaper”. Consultants will typically use the right grade and right person for the job in question – they generally will know what works best – remember they want to get it right and be fair to all.

Make sure you have documented what you have agreed to pay and what this will cover. When choosing an adviser and comparing their fees are you really comparing like with like from the scope perspective? The £650 attractive tax return quote that you chose at the proposal stage may not include the tax calculation, any reminders or checking a statement of account. Another adviser’s quote of £950 may include all of these and may ultimately end up being cheaper for what you want. You must establish what is included and what is not. Is the foreign office bill paid by your consultant merely passed on or is it uplifted? Be open – either it gets reasonably uplifted, or you should pay an overt coordination charge. Be prepared to pay for global coordination – it does take time, is valuable and costs the consultant – pay willingly for it as it saves you considerable time and effort – don’t begrudge fair payment to the consultant.

What are consultancy hourly rates? Do you want a blended/average hourly rate for ease of budgeting? Ask questions and clarify when you will be charged more than the headline rates. Ensure employees know what they must do and by when. Time can be incurred, and fees accumulated purely down to lack of response by assignees. Make sure you do not allow your employees to neglect their tax affairs thus avoiding a pre-deadline rush, as this will help to better manage your fees.

Fees

The question “How much will this cost?” is the tax consultants equivalent to “how long is a piece of string?”. The response should be the favoured retort of all tax consultants and other service providers – “it depends”. (This holds true today even if younger people don’t know what string is!).

Fees are usually the most contentious aspect and cause of most complaints, but if you have addressed service and scope beforehand, fees should not be a problem as parties should know what is being billed and the cost. I would recommend seeking fee estimates or fixed prices for work as opposed to use of hourly rates wherever possible. I would also suggest that you don’t always seek to tell the consultant that “the call was only 5 minutes” (it rarely is, and that may ignore the 3 messages they left, the preparation for the call, the call itself, the file note and the follow up to the call etc.), or that they “should not use senior staff to do the work and to use someone

The tax consultant’s get out clause on fee quotes is usually something along the lines “the fee is based on the assumption of timely, accurate and complete provision of data”. In defence of consultants, we need this. This is however, where fees can escalate, and naturally consultants do not want to be unfairly exposed to any failings on your part or that of the employees. A word to the wise, ensure you know what this means and when it applies.

Remember there is a trade-off. If you want little involvement in the process, by implication the consultant must undertake more work. The more you are prepared to take on as a company, the easier it is for the consultant to do the work and provide a cheaper fee. For example, if the HR or mobility team is prepared to provide all compensation data, chase employees for personal data completion, or provide all information in one go in an easy manipulable format, then the benefits of economies of scale and batch working start to apply. This will help reduce your fees. If you do not want to get involved or help, then expect to pay more.

Value For Money

When it comes to consultancy advice, your consultant should be able to demonstrate

Tell your consultant what you really want, but be prepared and willing to pay extra for better service

their worth. A good consultant may not know all the answers but will certainly know the right questions to ask. They should be providing you with practical advice on how best to structure policies and packages to minimise liabilities legally and appropriately and maximise opportunities. Not only should they be bringing you ideas and suggestions, they should be able to help you with implementation if required. Furthermore, can you tell what your consultant has saved you? Remember, that this saving may not always be tangible. For example, time savings or prevention of later problems through addressing non-compliance. Does your consultant justify their expense? Most will demonstrate this either willingly or if asked, but if you are still not satisfied after a period, change advisers.

The Right Size, The Right Fit

Finally, are you and your employees happy with your consultant? Are they helpful and pleasant

people to deal with? Do they ask you for your opinion, do they undertake satisfaction surveys or seek assessment of their performance and are they proactive? Do remember that the consultant will be undertaking their own simultaneous assessment of your ‘value’ as a client to their business. Like you, consultants are in business to make a desired margin – a profit.

Build a business relationship, ask reasonable questions, but be fair. You will get much better value from your consultant if you do this and are reasonable yourself.

After 40 years as a tax consultant within global mobility I remain firmly of the belief that there is a “right size, right fit” consultant (and client) for all. Good luck in finding yours.

ANDREW

BAILEY

He will retire from BDO and the global mobility industry after more than 40 years’ experience at the end of 2023. This article is especially dedicated to Helen Elliott, Ben Everson and Assunta Mondello (RIP) for their unstinting support over the years and also to all those working in global mobility. BDO is able to provide global assistance for all your international assignments. If you would like to discuss any of the issues raised in this article or any other expatriate matters, please do not hesitate to contact Andrew Bailey on +44 (0) 20 7893 2946, email Andrew.bailey@bdo.co.uk

On behalf of International HR Adviser, Helen Elliott would like to thank Andrew Bailey for his unwavering support and loyalty to International HR Adviser and our Global HR Conferences over the past 20 years. I never thought I would enjoy reading tax articles, but Andrew, you have made them informative, educational and even amusing. Thank you for your commitment to providing quality advice throughout your articles to our readers, who I am sure have learned a lot from you Andrew, it has been an absolute pleasure working with you for over 20 years, and we wish you all the very best for your retirement, and look forward to keeping in touch. You will be sorely missed, but we appreciate everything you have done for International HR Adviser and our readership.

Cracking The Code: Four Ways To Determine The Real Worth Of Corporate Travel

In today's fast-paced global business landscape, determining the ROI of business travel is a crucial endeavour for organisations of all sizes. Not only this, but sustainable travel is becoming increasingly more important.

In fact, UK businesses that fail to offer and encourage low-carbon business travel, risk losing out on top candidates. A recent study of UK business travellers revealed 53 percent would prioritise a firm that supported lowcarbon travel over a competitor that did not.

However, measuring the direct ROI of business travel and its environmental impact can be challenging. As can finding the balance between increasing business opportunities, while protecting the environment.

It’s true some business results can obviously be directly linked to travel activities, but many benefits are indirect and might not have a straightforward financial measurement. The financial implications, combined with intangible gains, make this assessment a complex yet essential task.

In this article, I provide a guide to calculating ROI for business travel, helping shed light on the key considerations and methodologies needed for successful measurement.

1. Define Objectives

Clearly outlining the objectives of business travel is crucial to ensure that all parties involved understand the purpose and goals of the trip.

Each objective should be clear, measurable, and aligned with the overall purpose of the trip. Providing detailed descriptions can be useful, including:

• The rationale behind the objective

• The expected outcomes or results

• The stakeholders involved or impacted by the objective

• Any specific tasks or activities related to achieving the objective.

You’ll need to outline how the success of each objective will be measured and evaluated and define the key performance indicators (KPIs) that will be used to gauge the achievement of the objectives.

Make sure the outlined objectives document is distributed to all relevant

parties well before the business travel takes place. It’s important everyone is aware and that key company members agree with what is being suggested.

To help guide the evaluation process, businesses should identify specific outcomes that can be measured, like the potential number of leads generated, new partnerships formed, contracts signed, or new markets explored. This provides tangible evidence of the trip's impact and return on investment.

Of course, remember that ROI metrics won’t be the same for every business trip and a blanket set of KPIs isn’t always helpful. For example, a trip focused on lead generation might have a different set of metrics compared to a trip aimed at relationship-building.

You might need to differentiate between short-term and long-term impact and adjust your metrics to consider both immediate outcomes and more extended benefits as well.

For example, you may build a stronger business relationship with a client, by travelling to a trade show to see them exhibit. This would be an immediate, shortterm benefit. But increased sales between yourselves might not happen straight away, so this goal would become the long-term extended benefit many businesses would hope for, further down the line.

2. Quantifying Benefits

Quantifying the benefits of business travel involves measuring the tangible and intangible outcomes that result from the trips. While some benefits can be directly quantified using numerical data, others might require more qualitative assessment.

Tangible benefits are the concrete, measurable, and quantifiable outcomes that can be expressed in numerical terms. These benefits are typically associated with direct and observable results. They are often financial in nature and can be linked directly to revenue, cost savings, or other financial indicators.

For measurable outcomes of tangible travel benefits, it’s important to gather numerical data before and after a trip. This could include metrics like:

• Sales revenue generated during and after the trip

• Number of new leads or contacts acquired

• Higher market share.

For instance, if the goal was to secure new leads, you can measure the conversion rate of these leads and what percentage became actual clients. You can also keep track of how much sales revenue these leads generated.

Interestingly, it’s believed likely that companies will secure more business leads if they participate in strategic travel. In-person communication is estimated to be 34 times more effective than virtual alternatives and another study revealed nearly three-quarters of corporate travellers felt face-to-face meetings were more effective than online communications.

Intangible benefits are outcomes that are valuable to a company, but are not easily quantifiable in numerical terms. These benefits are often related to factors that contribute to the overall well-being, success, and competitive advantage of an organisation.

Intangible benefits can be harder to measure since they are not expressed as numbers, but they are equally important.

For example, business travel can be a valuable learning experience for employees, enhancing their skills in negotiation, communication, adaptability, and cultural understanding. It can also provide opportunities for team members to bond, collaborate, and reinforce the company's culture. Recognising and rewarding employees

For example, you may build a stronger business relationship with a client, by travelling to a trade show to see them exhibit

with travel opportunities can even motivate them to perform at a higher level. Studies show 83 percent of workers see corporate travel as a perk of their job and 65 percent of millennials consider corporate travel proof of their significance within their organisation.

The best way to measure intangible benefits, is to gather qualitative data through surveys, interviews, or feedback from employees, clients, partners, and stakeholders. This could include testimonials and success stories, feedback on improved communication and understanding and insights gained from on-site interactions.

3. Compared to alternatives

Evaluating the possible outcomes of reallocating a business travel budget to other activities is another way to see if there really are better solutions to some planned travel opportunities. However, it involves a comprehensive analysis of the potential benefits, costs, and risks associated with all alternative options.

You’ll need to determine the specific activities or projects that could potentially receive the budget originally allocated for business travel. These alternatives should also align with the company's goals and priorities.

Assess the potential benefits of each alternative in both quantitative and qualitative terms. Quantitative data tells us how many, how much, or how often in our calculations. Qualitative data can help us to understand why, how, or what happened behind certain behaviours. You’ll need to consider factors like revenue generation, cost savings, increased efficiency (quantitative), and improved employee satisfaction, and strategic alignment (qualitative).

You can calculate the potential ROI for each alternative by comparing the expected benefits to the estimated costs. This will help you gauge the financial viability of each option. Assign weights to each evaluation criterion based on their relative importance. Use these weights to score each alternative and rank them objectively.

When making bigger decisions on alternative budget spend, you should gather input from all relevant stakeholders, including employees, clients, partners, and management. Their perspectives can provide insights into the potential impact of these alternatives.

You’ll also need to consider the opportunity cost of not investing in business travel. This means thinking about the potential impact on relationship-building, market expansion, and other intangible benefits that business travel offers.

Finally, based on your evaluations, you can compare the scores of the alternative activities listed and make an informed decision. Try not to lose sight of the fact, that you should always choose the option

that aligns best with the company's goals and provides the highest potential value, even if this means causing some disappointment for others, on some occasions, if business travel is not the chosen priority.

4. Use Tools And Tech

To help businesses make more informed decisions about business travel ROI, a combination of tools and technologies can be used to provide data analysis, tracking, and reporting capabilities.

Travel Management Software (TMS) platforms offer comprehensive solutions for managing travel expenses, bookings, itineraries, and reporting. They can provide insights into travel patterns, expenses, and trends, enabling better decision-making.

Expense management software is also useful, as it helps track and manage expenses related to business travel. It can integrate with credit card systems, capture receipts, and provide analytics on travel spending. This is where a travel management company can be useful, as through constant analysis of your business travel spend and booking patterns, your account manager can consult with you on best practices and introduce ways to reduce your business travel costs.

As sustainability becomes more important, tools that quantify the environmental impact of business travel can assist in evaluating the ROI from an environmental perspective. As a travel management company, we recognise the importance of reporting on sustainability. This is why through our partnership with Thrust Carbon we can

upload Air, Rail and Hotel data from invoicing systems to produce and deliver reports for any requested period from our clients.

This provides an intelligent calculation of the CO2 emitted by your business travel, considering factors like Aircraft Type, Airline Routing, Class of Travel etc. We can deliver reports Monthly, Quarterly or Yearly which splits the emissions down by elements like transaction type, and company department. Having produced a report showing the emissions generated we can then provide several carbon offsetting options should the client wish to take this route.

Tools like Expensify or SAP Concur can aggregate travel and expense data from multiple sources, making it easier to analyse spending patterns and identify areas for cost optimisation. Implementing predictive analytics tools can also help forecast future travel expenses and identify cost-saving opportunities based on historical data and trends.

Collecting feedback from employees in the form of pre- and post-surveys can provide valuable insights into the effectiveness of trips and identify areas for improvement.

Remember that the effectiveness of these tools and technologies depends on factors like the company's size, industry, travel volume, and specific goals. Implementing a combination of these tools, customised to your company's needs, can significantly improve decision-making related to business travel ROI.

RICH QUELCH Group CMO, Good Travel Management

Known for his passion and results-driven, innovative approach, Rich brings a unique mix of strategic, creative, operational, and technical abilities to the John Good Group and its operational companies, driving their commercial growth. With the ability to understand and manage the integration of marketing and sales teams, he delivers seamless and optimised omnichannel marketing strategies that maximise budget return, both driving growth and revenues.

To help businesses make more informed decisions about business travel ROI, a combination of tools and technologies can be used to provide data analysis, tracking, and reporting capabilities

What Is Cultural Training, And How Is It Improving Assignee Wellbeing?

For assignees overseas, adapting to new ways of working is an inevitable part of the experience. A new language, new tech, and often a whole new job role, are just some of the adjustments employees are prepared to expect when being sent on assignment. But often, it is the change in culture that presents the biggest shock.

This is why we’re seeing more and more global organisations look to ‘intercultural training’ when planning their employee mobility programmes. You may hear the term ‘intercultural training’ and think of things like: knowing when to hand out business cards when conducting a meeting overseas, or how to use chopsticks when on a business lunch. But it’s more than that.

It’s about equipping assignees with the knowledge of different cultural norms and behaviours, in their business as well as their personal lives.

Providing support to employees – in the form of insights, understanding and awareness of new, unfamiliar cultures – has the power to relieve some of the stress of relocating, enhance employee wellbeing, and ultimately lead to a successful assignment abroad. Here, we explore what makes an effective cultural training programme, and what key elements need to be considered.

Cultural Training Isn’t Surface Level

Culture is a complex concept. It evolves, grows, and develops constantly, and varies enormously all over the world.

Intercultural training must reflect this and acknowledge the nuances of different cultural norms, to help employees build the right skills to function effectively in a country that isn’t their own. So, it can’t be a one-sizefits-all approach or a list of ‘do’s’ and ‘don’ts’. Effective cultural training should delve deeper into the ‘why’s’ and ‘what’s’.

While the more surface-level aspects of relocating abroad are useful for employees – whether that’s how to tie a sari, or how to greet others with respect – these local customs are the tip of the iceberg.

Intercultural training aims to delve deep below the surface and understand what

drives people’s behaviours. For example, are there different ideals surrounding social hierarchy? Do learning and problem-solving styles differ from one culture to the next? It’s important to understand how a culture works, and the social structures that underpin it, in order to help employees assimilate effectively. An effective intercultural training programme will focus on these aspects in great detail and develop your employees’ ability to settle into their assigned country.

Supporting The Entire Assignment Cycle

Intercultural training takes employees through the entire assignment cycle, even before they travel abroad. To ensure a successful assignment – one that meets the objectives of the business and career goals of the employee – certain tools can be used to assess whether an employee is going to be challenged in a certain location or acclimatise better in another.

Training programmes will also look at social elements of life in a new country, and everything needed to build co-worker relations, personal connections, professional networks, and even dating norms.

If we look at several countries within Asia, for example, relationship building in the workplace is often a social expectation, with negotiations between key stakeholders often taking place in outwardly social settings, such as lunch or drinks outing. By contrast, negotiations in the US tend to take a more transactional form, with the task

at hand being the focus of the interaction as opposed to building up those social connections. Intercultural training can build bridges across these differing social norms, equipping assignees with the knowledge of the ways in which business transactions take place in other cultures.

Similarly, when senior leaders and executives go on assignment, adapting management styles is vital, especially when co-ordinating a large team. If say, a US manager relocated to Japan without intercultural training they might not appreciate the complexity of hierarchy and value of relationships, much less the importance they have in Japanese working life.

Intercultural training builds an awareness of any unconscious biases in an individual’s management style. It’s not that any particular management strategy is incorrect, but it’s about understanding that in different cultures, there may be more effective ways of going about things with a new team.

And to complete the cycle, intercultural training also aims to support assignees upon their return home, allowing them to repatriate with ease. While this is a lesser recognised stage in the assignment cycle, reintegration into an employee’s home country is hugely important. When an employee has been immersed in a new culture for a long period of time, intercultural training can help an individual articulate to their teams back home what they have learned, and how they have grown and developed, and get back to terms with their original way of doing business.

The Employee Assignment Cycle

Intercultural Training As A Wellbeing Tool

It’s important for HR and mobility advisers to always keep in mind that relocation overseas can be a stressful process for employees and accompanying family members. Even grasping basic needs such as accommodation, public transport and figuring out where to buy groceries, can make navigating an unfamiliar country a mentally taxing experience. Employees are putting their lives on hold for a period of time, and it can take a while to establish a new routine, reconnect with hobbies and make friends in a new environment.

Intercultural training can ease some of these pressures, helping employees to put stress aside and focus on themselves, making it an effective tool for employee wellbeing. And it has come a long way in 20 years, increasingly integrated into company wellbeing and wellness ecosystems, as a way to support employees and assignees when they need to manage unfamiliarity. Intercultural training has moved on from theories and academic models towards real world skills that people can use immediately to help them put one foot in front of the other and know how to practically interpret situations.

Knowing how to respond appropriately is a powerful wellbeing tool, and understanding how to assimilate effectively into a new country can bring about a feeling of comfort and contribute to overall improvements in motivation and mental wellbeing. If an employee is aware of certain norms, ideologies, and behaviours ahead of their arrival, they are prepared for what is to come, and can find balance, avoid misunderstandings, and ultimately settle in more effectively.

Understanding The ROI

When intercultural training brings so many benefits to employees, businesses, and the overall assignment cycle, why is it that so many organisations choose not to implement it? It can often boil down to two factors: budgets and misconceptions.

Like many training initiatives, intercultural training programmes have the potential to be costly, particularly in large mobility programmes. As a result, some companies are not willing to pay for it, especially if the receiving manager isn’t aware of the unique personal circumstances that employees must navigate as they enter into the host country. This lack of understanding around how beneficial an intercultural training programme can be, often deter managers from making the investment. They may not fully appreciate the return on investment of this training – and therefore feel the cost is not worth it – until they experience the cost of a failed or compromised assignment performance which can happen as a result of not doing it.

Similarly, another contributing factor is the lingering misconception that cultural training is academic, and not practical and relevant. Intercultural training, in fact, is all about skill building and implementing concrete actions to support employees in assimilating into a new culture. While language training, for example, has very tangible outcomes – you can either speak Mandarin to a degree, or you can’t – cultural training often lacks a certain visibility that hinders organisations in seeing its worth. But in reality, intercultural training is practical, relevant, and functional – and as valuable as any career development training, improving the chance of a successful assignment, benefiting both the business and the employee.

Tailoring To Suit Individuals

Tailoring intercultural training programmes to suit the individual is key to successful outcomes. No two employees are the same, just as no two cultures are the same. It also should be recognised that when employees are at different stages of life, they also have different requirements. While there is a corporate-need objective and a personalneed objective to each cultural training programme, complexity lies within these needs and should be considered.

For example, will the employee be managing a team, or will they be in a less senior role? Depending on this, intercultural training must encompass building knowledge around different hierarchies at work and how employees are culturally expected to behave accordingly.

Will the employee be relocating as a single individual, or with a spouse? Taking this into consideration, training should cover how to build social connections in a new culture to avoid feelings of isolation in an uncertain environment.

Intercultural training programmes need to be customised and tailored to reflect the profile of the individuals being relocated, depending on their needs, requirements, and stage of life. Programmes need to include skill building and examples that are relevant to the participants so that what they learn in the training room is instantly actionable when they leave.

Final Words

Intercultural training holds significant weight for employees relocating overseas, in a professional and personal sense, helping employees to assimilate comfortably, meet business objectives, and improve their overall wellbeing as they settle into unfamiliar surroundings.

But this training in the world of work doesn’t only benefit employees working overseas; it is a huge part of general learning and development. With the affordances of technology and the ability to jump

on a Zoom call with anyone around the world, workplaces have now expanded to accommodate different cultures within a team, in addition to international clients. We all work in multicultural environments to some extent, and elements of culture will always integrate into our personal and professional lives. Yet, whether at home or abroad, intercultural training at its core is about understanding, awareness and appreciation of the varying cultural behaviours across the globe. And as the world of business becomes increasingly global, this form of training will only stand to become more important for the employees of tomorrow.

Global Director of Intercultural, Language and Partner Support Services at Crown World Mobility.

Jo Danehl has worked in the commercial training industry for over thirty years and the past twenty years have been within global mobility. In 2004, she relocated from her home country, the UK, to the USA to head up a global account management team where she worked closely with both large multinationals and smaller organisations. She has also held roles in operations and product development.

In 2013, Jo joined Crown to lead the Global Skills team and provide strategic guidance on how clients can best build global competence within their organisations and leverage cultural difference. She has spoken at a number of mobility and HR related conferences linking global skill building to operational success and has been a frequent contributor to Crown and non-Crown publications around the world.

Cell: (00) 1 312 632 9487

Email: jdanehl@crownww.com

JOANNE DANEHL

The Era Of Digital Compliance

Currently, the UK has one of the slowest and most convoluted recruitment processes globally due to outdated procedures and legislation surrounding recruitment and pre-employment checks. The recruitment operations need to speed up, without compromising safety - utilising digital platforms, and other technologies is crucial to achieve this.

The Covid-19 pandemic further highlighted these lengthy processes. In the face of adversity, the government quickly adapted its legislation and opened the door to the beginning of the digital era of recruitment compliance for the UK. However, though some processes did develop, the temporary measures have not gone far enough, and more enhancements are needed.

In the post-pandemic world, businesses are capitalising on remote working and are reaping the benefits. Employers can expand their candidate pool and, for many, the need for face-to-face meetings have reduced considerably.

The UK government needs to better accommodate the requirements from businesses that are allowing employees to work remotely. This means that recruitment processes and pre-employment checks must align with this hybrid model, through digital platforms and new technology.

The Shift From Manual Verification To Digital

With social distancing measures firmly implemented, 2020 saw a shift from manual verification of ID documents to digital remote checking for companies. Being able to confirm this documentation via a live video link to establish things such as a candidates’ Right to Work (RTW) eligibility or identity meant that recruiters, employers, and candidates alike saved a great amount of time. This also meant that candidates were able to stay at home without the need to travel, providing an overall easier and smoother process for document verification. This was followed by the evolution of Identity Service Providers (IDSP), a technology that allows documents such as passports, ID cards and driving licences to be verified digitally. Some of these IDSPs have facial recognition technology built into them which compares a live selfie

against the image on their ID document to check for facial similarity. The IDSPs can also check documentation codes, such as passport chips, automatically with Home Office records, to find out whether the information is legitimate and a record is taken of discrepancies or attempts to ‘trick the system’.

verifying documentation. Although the information that a recruiter, or compliance team is given may be genuine, sometimes the person presenting is different. Therefore, the use of AI technology means that, not only can it confirm the physical presence of the person and the authenticity of the document, but it can also conduct a comparison which confirms that the identity and documentation is legitimate.

As well as accuracy being enhanced through digital RTW checks, there is also the matter of time. During a committee meeting about the Data Protection and Digital Information Bill, Keith Rosser, Director of Reed Screening and Chair of the Better Hiring Institute, called for a modernisation of the hiring process.

Rosser stated that ‘in a recent study of 70,000 hires, or people going through a hiring process, 83% - some 58,000 - opted to take the digital identity route. They did it in an average time of three minutes and 30 seconds’, clearly emphasising the benefits to candidates.

Time, speed and accuracy are paramount in the world of recruitment. The markets are the most competitive they have been, and candidates are sought after, therefore we need to be offering an efficient, fast, and safe recruitment process, which digital identity processes offer.

Legislative limitations

Despite the digital RTW checks being given the green light from the UK Home Office, the legislation can still go further, and there are some limitations with the current abilities of the technology and the legislation that surrounds its use.

Unfortunately, the legislation neglects a large proportion of the workforce. In its current standing, only in-date British and Irish Passports and Irish ID cards can be used for digital RTW checks. For many, the economic burden of holding an in-date document is too large, meaning that alternative RTW documents must be verified manually.

In October 2022, the government updated its RTW legislation following the temporary adjustments that had been in place for the previous two years. This meant that everyone had to use an IDSP to complete a Digital RTW check, or organise for manual verification of documents and candidates to take place.

The use of IDSP technology offloads the risk of human error when it comes to

This runs the risk of alienating the worker from applying for remote jobs further afield, as they may fear their documents cannot be checked digitally. This is a process that requires some reflection in order to become fairer, more inclusive, and accessible for everyone.

Looking Towards The Future

In May 2023, the government launched a specific All-Party Parliamentary Group (APPG), focused on Modernising

The IDSPs can also check documentation codes, such as passport chips, automatically with Home Office records, to find out whether the information is legitimate and a record is taken of discrepancies or attempts to ‘trick the system’

Employment (MODE) and hiring. The APPG is centred around three important things: the future nature of jobs, digital hiring, and improving labour market standards for all - a huge step in the right direction for the UK recruitment market.

There are talks within the APPG MODE of linking digital platforms together to enable faster and more accurate recruitment. This could include linking HMRC databases to digital verification processes, enabling recruiters to refer to that instead of CVs and references, that can offer limited information from companies due to the increased GDPR laws on data protection.

Hopefully, this will evolve and lead to the DBS allowing digital documents to be verified rather than physical documents, with all DBS certificates being sent in digital format.

These steps by the DBS will work to further speed up their overall services and in turn the recruitment processes for companies like us.

Embracing The Future

To say that a digital onboarding process would not be beneficial to a business is an outdated approach to the evolution of the UK recruitment industry. Without businesses capitalising on these platforms and ways of working, they will not be able to offer a competitive edge for attracting talent. By failing to keep up with the digital evolution, companies run the risk of offering a slower onboarding process which candidates will respond negatively to.

For the digital platforms to be successful however, there is extensive amounts of work and amendments needed by the UK government to create policies that not only allow for the use of them, but also offer stringent frameworks for providers and systems, ensuring that they are compliant with not only the policies themselves, but Employment Law and GDPR.

The last three years have offered a glimpse into the future of digital recruitment compliance. The door has been opened for a faster, safer, and more inclusive recruitment process for the UK.

It is now time for the policies and legislation to go further, and for the government and governing bodies to strengthen their policies and processes to make them not only accessible for

everyone in the UK, but to also enhance our employment market globally to make us one of the most attractive and leading countries for recruitment.

CHLOE DICKENSON

Compliance Manager at Sellick Partnership.

In addition, the Disclosure and Barring Service (DBS) launched its five year business and strategy plan in 2020, a strategy that has evolved over the last year and adapted to align with the ‘post COVID era, embedding the hybrid-by-default working approach’. The DBS has focused on enhancing its technology which allowed for fast-track barring applications, and allowed ID documents to be verified via a live video link over the last three years to improve their processes and services.

The new focus for 2023-2025, is to continue automating and reducing manual steps of processes, thus speeding up their services and allowing more focus on improving the accessibility of their services.

Chloe started at Sellick Partnership in August 2021 as a Compliance Coordinator and has recently been promoted to Compliance Manager. With 6 years’ experience in compliance, a key part of Chloe's role is to mitigate risk for the business and ensure all temporary candidates are fully compliant with both Government, Framework and MSP legislation.

In May 2023, the government launched a specific All-Party Parliamentary Group (APPG), focused on Modernising Employment (MODE) and hiring

The last three years have offered a glimpse into the future of digital recruitment compliance. The door has been opened for a faster, safer, and more inclusive recruitment process for the UK

Workplace Technology Predictions

Workplace technology and the innovation around it is a topic that’s often subject to heated debate. For every article claiming that some new offering is central to the future of the modern workplace, there’s another citing it as a threat to jobs, or as simply overhyped. We regularly survey business leaders and other professionals from the UK, USA, and around the world, to get a feel for the changes that are really taking place in a range of different industries – and to establish what’s likely to come next.

• Searches for ChatGPT rose from less than 5,000 in November 2022 to over 11.2 million* in June 2023 – but can tools like this be trusted with critical business decisions, as some people suggest?

• In 2015, it was predicted that up to a

quarter of all jobs would be replaced by smart software or robots by 2025 – how far off are we from that prediction now?

• Are the 47% of finance leaders who predict workplace use of ‘human technology implants’ by 2030, right?

The Advanced Annual Business Trends Survey recently discovered that finance workers, in particular, had bold predictions for the future use of things like AI, human technology implants, and embedded technology. In this report, we take a closer look at what those predictions might mean for employees around the globe, which are most likely to be accurate, as well as the considerations People and Culture teams need to keep in mind as adoption gathers pace.

What Finance Professionals Predict For AI And Workplace Tech

We spoke to more than 5,000 senior decision-makers to get their thoughts on the future of AI-based technology and robots in the workplace. Among finance professionals,

we found some particularly interesting insights - for example, almost half of those in CEO/MD positions expect microchips and other human technology implants to be in workplace use by 2030, along with 32% of finance professionals overall.

A large number of respondents also felt it likely that AI will be used to make critical business decisions by 2030, though just 19% of finance professionals overall expect the workplace to be positively transformed by robots and AI-based technology. The latter finding is likely related to the fears held by many regarding job security in the world of ever-developing automation and AI adoption.

• A recent report from the Organisation for Economic Co-Operation and Development (OECD) found that more than a quarter (27%) of jobs could be easily automated in the near future, noting that finance, medicine, and legal activities were all among the high-skilled categories where jobs were at greatest potential risk from automation.

"The automation revolution has already started within the finance sector”, says Nadine Sutton, Principal Product Manager at Advanced Financials. “Some worry that this will lead to widespread job losses. However, the journey towards true AI is a slow one, so there is plenty of time to figure out where people fit in”.

"In the meantime, finance workers can enjoy fewer repetitive tasks in their daily routine and get involved with more fulfilling work around strategy and innovation. It is also likely that new (and previously unimagined) roles will be created due to the technologies that are emerging. This will give employees an opportunity to learn and adapt, which assists with their ongoing development and career prospects”.

Stephen Dews, CFO at Advanced says: “The capacity of AI to evaluate massive datasets in much less time than a human makes it a game-changer for professionals analysing financial markets and forecasting outcomes. It will soon be as much a part of the normal toolkit for CFOs who are seeking deeper insights into their own business data, as the calculator was in a previous era”.

“Accurate market prediction, forecasting, budgeting, and planning skills are an inherent part of the CFO’s role. When AI can handle massive datasets, and used correctly can provide key information at a granular and macro level for improved decision-making, why

wouldn’t a CFO embrace this technology? It is our job to consider what is likely to happen and how to best prepare for the future”.

He adds, "I predict that the more we use AI and other new innovations like VR, the more time we will have in our working days to use this information wisely. But it’s important to remember AI is heavily reliant on the quality of data it is fed. So, it’s absolutely crucial finance leaders do all they can to ensure their data is accurate, complete, and accessible, if they are to reap the full benefits of this technology".

Meanwhile, predictions of commonplace technology implants may be a long way off. Ever since a US company microchipped 50 of its employees in 2017, there has been an online debate around the future of such technology, with at least 11 US states having banned employee microchipping at the time of writing. But many workplaces are yet to adopt more straightforward technology such as Cloud computing, and only 40% of our respondents across all industries said that their organisation’s leadership were prioritising technology investment at present.

The Fact And Fiction Of Previous Tech Predictions

Over the years there have been plenty of waves of excitement around the “next big thing” in technology, with some predictions living up to expectations and others failing to take off.

Worldwide interest in Web3, for example, has dropped 50% since January 2022**,

having been tipped to be the future of online life not long ago. Famously, Ethernet inventor Robert Metcalfe once predicted that the internet would catastrophically collapse by 1996 - a prediction it’s safe to say couldn’t have been further from the truth.

One thing that is worth considering is the disparity between what people imagine new technological advances to look like in practice, and what they really mean.

Our Digital Natives Report found that 40% of Gen Z workers were already using AI in their everyday working lives, while 36% were making use of wearable (though not implanted) technology. Predictions of physical robot co-workers from years gone by may not have materialised, but instead been realised through the AI revolution we are now experiencing.

Younger generations entering the workforce expect to see the same standards of technology in the workplace that they interact with in their everyday lives. For some, that means meetings with remote teams taking place in augmented reality settings - for others, it’s having AI on hand to develop creative ideas, or to reduce the amount of manual activity needed to tackle more monotonous tasks.

• As many as 80% of Gen Z and 81% of Millennial respondents said they are happy to work alongside robotic technology if it means fewer manual processes

• 64% of Generation Z think a robot would be better at decision-making than their boss if it

had access to the right business intelligence, a stark contrast to the 39% of the over 55s who said the same in our survey.

“Today’s digital natives, the generation that has grown up with the internet and Cloudbased technologies, are much more open to the role that technology will play in their working and home lives”. Alex Arundale, Chief People Experience Officer at Advanced HR says. “Employers can leverage those skills and expectations to help build a sustainable skills pipeline for the future”.

“Many of the recent conversations around AI and new technologies conclude that technology is only as good as the people that use it. AI will be most effective when used by human employees that bring other characteristics such as empathy, instinct, and a sense of justice, with moral and ethical distinctions”.

What People And Culture Teams Need To Know About New Innovations

A recent OnePoll survey found that 77% of hybrid and remote workers would be more committed to their role if their company provided them with better technology, with 11% of IT workers having actually left a role in search of one with better tech, and 42% saying they were applying for other roles because of a desire for better workplace technology. The average worker loses around 102 minutes of productivity each week due to issues and frustrations with tech.

AI will be most effective when used by human employees that bring other characteristics such as empathy, instinct, and a sense of justice, with moral and ethical distinctions

“To remain competitive, agile, and innovative, organisations need to provide what workers want, so their people can add more human value and to ensure they don’t lose this talent to competitors”, Says Alex Arundale. “To do this, they need to tune into what their people are telling them and explore digital transformation options to help bring about the necessary change”. 93% of respondents in the OnePoll survey also said that job satisfaction and employee retention would increase if companies invested more in tech.

New technology typically comes with new risks, particularly in the early stages when possible negative outcomes are yet to be revealed and worked through. From cybersecurity risks to ethical implications, the sought-after innovations that improve our working lives can also create a whole new set of challenges for business leaders.

One of the risks that has already emerged around new business technology is the proliferation of an ‘always on’ culture and the associated risk of burnout. The Advanced Trends Report found that 85% of business professionals are working extra hours, 38% because they have too much work to fit into their contracted time. It is particularly difficult to set boundaries between home and work life when working from home. One of the ironies of the popularity of flexible and hybrid working is that while many

people embraced it as a way to get a better work-life balance, some have instead found blurred boundaries increasing their levels of anxiety and stress.

Workplace surveillance and employee monitoring systems are also among the tech that is gaining popularity, particularly now that large sections of the workforce work remotely. The pandemic triggered a widespread surge in employee monitoring, where some bosses leveraged surveillance software to keep tabs on productivity when teams shifted to working from home.

• A recent TUC survey of more than 2,209 workers in the UK, showed that 60% believed they had been subject to some form of surveillance and monitoring at their current or most recent job, up from 53% in 2020. Being watched can have a hugely negative impact on employee morale, making people feel less trusted and more micro-managed than before. “The creeping role of AI and tech-driven workplace surveillance is now spreading far beyond the gig economy into the rest of the labour market”. The TUC says, noting that the financial service sector has the greatest proportion of workers reporting surveillance (74%).

The union body warns of a huge lack of transparency over the use of AI at work, with many staff left in the dark over how surveillance tech is being used to make decisions that directly affect them.

Alex Arundale explains: “Having some autonomy over how they work, when they take breaks, and working at times when they feel most productive is an important part of employee wellbeing. Feeling under constant surveillance can cause anxiety and increase the risk of burnout, making it counterproductive for the employer”.

“Some employers are now providing wellness trackers to help their staff improve their health and wellbeing, potentially giving the business access to personal medical data about those workers. Others are using remote worker monitoring software to manage employees working from home. Embedded human microchip technology may be the next step forward from these technologies and will certainly open a Pandora’s box of ethical questions around privacy, data ownership, and security”.

Many HR professionals would argue that well-designed continuous performance management tools are a much better way for employers to keep an eye on productivity, with a focus on the quality of output instead of the quantity of hours worked. These tools encourage frequent and regular communications between managers and staff, the setting of small, incremental goals with recognition of successes that helps to build employee engagement and improves the employee experience.

The latest Cloud technology can allow HR teams to listen and act on employee

The latest Cloud technology can allow HR teams to listen and act on employee concerns quickly and effectively, by giving easy access to information and workflows anytime, anywhere

concerns quickly and effectively, by giving easy access to information and workflows anytime, anywhere. Additionally, automating repetitive tasks through AI frees up HR professionals’ time to invest in employee wellbeing, while flexible workflows can ensure HR teams are able to react quickly to employee feedback.

An Expert View On The Future Of Everyday Workplace Technology

“Employers need to consider the proportionality and necessity of new technologies, weighing convenience against the impact new additions might have on employee morale”. But it’s also important that the familiarity workers have with legacy systems is not a reason for sticking with less effective solutions. This will end up costing the business more – in lost productivity, in their diminished ability to attract new talent, and the expense associated with systems that are reliant upon highly experienced/specialised IT professionals for vital maintenance”.

“As these systems are eventually phased out, organisations will struggle to find the legacy support they need. IT professionals entering the workplace are focused on the Cloud, as well as other emerging technologies they expect to be their bread and butter in the future. Cloud-based systems are ideal for remote working, for example, increasing work opportunities for those with disabilities, long-term and chronic health conditions, or where geography makes access to the workplace difficult. This also supports greater Equality, Diversity, and Inclusion (EDI) in organisations that use the Cloud for all business-critical functions”.

“Technology exists to make our lives easier, hence workplace technology should make working easier. The digital solutions that we use now are streamlining processes, reducing arduous and time-consuming workflows, enhancing communications, and allowing teams to share one true version

of information immediately. In short, technology has taken much of the legwork out of many roles, allowing people to focus on more rewarding tasks such as strategy, creativity, innovation, and collaboration”.

Stephen Dews adds; “These new technologies will create new opportunities and roles too. Just as not so long ago, SEO experts and Cloud technology developers were unheard of, so too there will be many new areas of expertise required to develop, manage, and monitor technologies such as AR, VR, and AI. There will be an increase in functions that revolve around legalities and compliance within these technologies that will also be helped by the same solutions”.

“AI is already helping to automate compliance checks across vast datasets, helping people to effectively monitor activities for potential violations. This is vital as it protects the business and individual employees from making mistakes and their potentially ruinous consequences. Forwardthinking CFOs are already embracing the power of new technologies to protect their businesses, their customers, suppliers, and employees from perilous scenarios, as well as elevating their function to greater efficiency, productivity, and profitability”.

References:

Additional sources of information referenced

* Ahrefs Keyword Explorer global data

** Google Trends

BlogFinancial ManagementAdvanced FinancialsHRHuman Resource

ALEX ARUNDALE

Alex Arundale is Chief People Officer at Advanced. She has been responsible for devising and implementing a range of innovative strategies to lead the company’s talent management. Advanced is a dynamic British software and service business with over 20,000 global customers, providing missioncritical software that helps customers accelerate and transform digitally. Advanced's Enterprise Resource Planning (ERP), Human Capital Management (HCM) and vertical market software solutions make a difference to millions of lives every day by making the complex simple, inspiring innovation and delivering exceptional customer service. Advanced works with organisations in all sectors, from healthcare to legal, and of all sizes – whether they want to move to the Cloud, invest in ERP, manage core business functions through one unified system or upgrade their legacy applications. Advanced's customers include the NHS, Department for Work and Pensions (DWP), London City Airport, Virgin Money, Caffè Nero, Harvey Nichols, Woodland Trust and Norwich City Council www.oneadvanced.com

AI is already helping to automate compliance checks across vast datasets, helping people to effectively monitor activities for potential violations

Retaining Trust In The Virtual World

The post-pandemic shift to hybrid and, sometimes, fully remote working creates new challenges for corporate leaders and management. There are many competing factors involved in working out how to structure any firm’s working arrangements. The public debate reflects the varied interests involved, from real estate investors to employers trying to work with new ways of ensuring that client delivery is maintained, but in ways that allow employees to best balance their lives. This is especially important for those with caring responsibilities and those for whom more flexible ways of working enable them to make the best contribution to their workplaces.

The financial services industry has additional concerns to contend with as businesses in this industry continue to iterate their working models. Unlike other industries, the move to remote and hybrid working brings with it compliance requirements. Businesses in the financial services industry have requirements to ensure there are satisfactory arrangements in place to meet regulatory obligations. The expansion of hybrid and remote working has made employee monitoring even more critical and compliance officers have focused on how to best keep track of employee activity in these new settings.

This is not an abstract concern. 73 percent of all teams are expected to have remote workers by 2028, according to CNBC’s “How millennials and Gen Z are reshaping the future of the workforce” report. The issue is how can compliance officers keep track of employees in financial services businesses? And how can they do that in a way that meets the demands of regulators, but without being needlessly intrusive?

For certain functions within financial services businesses, employee monitoring is an accepted fact. It is an established compliance activity which financial services businesses implement for purposes such as the prevention and detection of data breaches, employee engagement, increasing privacy and improving unproductive business operations. However, new monitoring

technology involving the use of Artificial Intelligence (AI) and Machine Learning (ML) is starting to evolve. As with all new technology it is important to gauge how it improves business processes whilst helping to sustain, rather than degrade, employee trust.

These systems need to be governed by clearly defined monitoring policies. The lack of employee monitoring policies in a company may result in the misuse of employees’ private data. This undermines the fundamental right to privacy; businesses and employees must be informed of the relevant regulations in place. Policies also need to keep up with the aforementioned changes in technology. This is important when AI and ML systems can process vast amounts of personal data very quickly. Having policies in place that make it simple for employees to understand what data is being collected, the rationale for that collection and how it is used is vital to ensuring trust.

such activity unless the users are informed about the tracking. Employees would also be aware that they are not allowed to use their personal communication networks to communicate work-related details.

Inaccurately crafted employee monitoring policies may breach an individual's fundamental constitutional rights. Precision is key. It’s important that businesses are aware of, and compliant with, the relevant laws in those jurisdictions where they operate.

In the US monitoring policies are governed by the Electronic Communications Privacy Act of 1986 (ECPA). This safeguards individuals from unauthorised interception of electronic communications. It limits the ability to read computer transmissions, conduct wire taps and trace telephonic communications and stored electronic communications. Cybersecurity-related investigations are increasing, so it is important to be aware of these laws.

In the EU, it’s the General Data Protection Regulation (GDPR) which governs monitoring policies. Most employee monitoring measures are lawful in the EU. However, the practices must be compliant with the provisions of the GDPR. The GDPR holds organisations accountable for protecting the personal information they obtain from employees. It focuses on what data is stored by a company, how the data is updated and how the collected data is protected. The use of stringent and intrusive electronic monitoring techniques however, could have a detrimental effect on staff morale. The GDPR mainly covers the EU, but compliance with the regulation is incumbent upon any organisation that deals with data subjects based in EU member states.

In whichever jurisdiction a financial services business operates, it is important to keep in mind some key principles when setting employee monitoring policies. For example:

According to general employment laws, an employer is permitted to digitally monitor employees. In the US, Federal and State laws detail how far an employer can go with the employee monitoring programmes. In other jurisdictions such programmes are governed by nationally applicable laws. There are some monitoring processes applicable to most monitoring policies and laws though, for example, if an employee uses a business asset for an activity unrelated to the business, the company does not require any consent to monitor

• Determine legitimate reasons: The reasons for employee monitoring needs to be well defined, to enhance employee cooperation. This could include improving the security of staff and company assets or increase company productivity by monitoring employees' work to facilitate analysis and reporting. The thing that many firms mishandle is the latter. Too often data analysis based on employee monitoring is misunderstood by employees as the employer virtually standing over them, tracking every single action they make.

According to general employment laws, an employer is permitted to digitally monitor employees

To guard against damaging trust in the employee-employer relationship, it is vital that monitoring is proportionate whilst meeting regulatory requirements.

• Maintain transparency: Employees should be aware that they are being monitored; the stored data, which may include personal information, needs to be kept secure. To the point around analysis, there should also be transparency about how monitoring data is analysed and what corporate actions are linked to the use of that analysis.

• Have a standard policy: Employeemonitoring policies should clearly define what employee data is stored and what is not. This protects an individual’s fundamental right to privacy.

• Acquire consent: Employee-monitoring policies require employee consent. It will ensure they do not keep or save personal information on company-provided laptops or smartphones. The best leaders manage with the buy-in of their people; the worst by corporate fiat.

• Use of authenticated systems: The company is responsible for the security of personal data and surveillance recording of employees. Ensuring security while using third-party software or personnel is vital for avoiding misuse of personal data.

The message for employers navigating permanently changed methods of working is that employee monitoring policies need to be updated to reflect these and that new technology can be an aide to ensuring firms in the financial services industry continue to meet or exceed what regulators require. With new technological solutions comes with it a need for more explanation for employees of

how these monitor their work product and working patterns. Deployed thoughtfully, employee monitoring policies can help both the employee, their team, and the business, not just to remain compliant with local, national and supranational regulations, but also to optimise the way they work. In doing so, both performance can be assured and employee trust sustained.

AVADHESH DIXIT

Chief Human Resources Officer, Acuity Knowledge Partners

Avadhesh Dixit is the Chief Human Resources Officer of Acuity Knowledge Partners and also leads the global organisation’s CSR activities. He joined the business in 2016 and is based in our Gurgaon office. Avadhesh has 20 years of experience in human resource management at companies in the UK, Ireland, the US, and Europe. Prior to Acuity, he was Vice President and Head of HR at GE Capital Business Process Management Services Pvt Ltd and the GE Capital-State Bank of India JV. Previously, he held HR leadership roles at CMC Ltd and Tata Consultancy Services Ltd.

He holds an MBA in Human Resources from Delhi School of Economics of the University of Delhi, with a graduate degree in Economics. He is certified as a Global Professional in Human Resources (GPHR) by the Society for Human Resource Management (SHRM), USA, and is a regular speaker at Indian national HR and CSR conferences. www.linkedin.com/in/avadheshdixit/?ppe=1 E: contact@acuitykp.com

INTERNATIONAL HR CONSULTANTS

DELOITTE LLP

Stonecutter Court, 1 Stonecutter Street, London, EC4A 4TR

Contact: Danny Taggart

Telephone: +44 (0) 20 7007 1832

Fax: +44 (0) 20 7007 1060

E-mail: dtaggart@deloitte.co.uk

Website: www.deloitte.co.uk

Whether you are creating your first international mobility programme for employees or addressing fundamental changes to an existing programme, our International Human Resources team can help. Deloitte provides consulting support that has an appreciation for each company’s size, background and unique cultural environment, aligning your international programme goals with corporate business strategies. Our consultants have developed deep expertise in many fields based on first hand experience with many of the world’s leading organisations: international assignment policy and process design, benchmarking, service delivery modelling, improving vendor management and helping our clients become more compliant and their administration more cost-effective.

RELOCATION ASSOCIATIONS ASSOCIATION OF RELOCATION PROFESSIONALS (ARP)

9&10 Diss Business Centre, Dark Lane, Diss, Norfolk, IP21 4ND

Contact: Tad Zurlinden

Telephone: +44 (0)1379 651 671

Fax: +44 (0)1379 641 940

Email: enquiries@arp-relocation.com

Website: www.arp-relocation.com

The ARP is the professional association for the relocation industry in the UK. The ARP’s activities include seminars throughout the year, an annual conference, the publication of an annual Directory of Members and a website, which is updated regularly.

THE EUROPEAN RELOCATION ASSOCIATION (EuRA)

9&10 Diss Business Centre, Dark Lane, Diss, Norfolk, IP21 4ND

Telephone +44 (0)1379 651 671

Fax: +44(0)1379 641 940

E-mail: enquiries@eura-relocation.com

Website: www.eura-relocation.com

EuRA is an industry body for Relocation Professionals in both Europe and Worldwide. EuRa have launched The EuRA Quality Seal, the world’s first accreditation programme for relocation providers. This pioneering initiative provides a straight forward, cost effective audit to reflect your company’s excellence in providing relocation services.

SCHOOLS

ACS INTERNATIONAL SCHOOLS

ACS International School Cobham Heywood, Portsmouth Road, Cobham, Surrey, KT11 1BL, England

ACS International School Egham London Road (A30)

Egham, Surrey, TW20 0HS, England

ACS International School Hillingdon Hillingdon Court, 108 Vine Lane Hillingdon, Middlesex UB10 0BE, England

ACS International School Doha

Al Oyoun Street, Al Gharrafa

PO Box 200568, Doha, Qatar

Telephone: 01932 869 744

Email: cobhamadmissions@acs-schools.com

Website: www.acs-schools.com

Contact: Dean of Admissions

ACS International Schools were founded in 1967 to serve international and local communities. The schools are non-sectarian and co-educational (day and boarding), enrolling students aged 2 to 18 years. The UK based schools have over 30 years’ experience of teaching the International Baccalaureate, and ACS Doha offers an international and American curriculum.

TASIS THE AMERICAN SCHOOL IN ENGLAND

Coldharbour Lane, Thorpe, Surrey TW20 8TE

Contact: Sarah Travis

Telephone: 01932 582316

Email: ukadmissions@tasisengland.org

Website www.tasisengland.org

TASIS England's diverse student body includes over 50 nationalities and many in the school community have experienced the challenges of relocation. Along with well-established welcoming programs, families receive ongoing support as they cope with the practical and emotional aspects of their transition to life in the UK. Taught in small classes, students (ages 3–18) benefit from a balance of academics, arts, athletics, activities, and service leadership. Excellent exam results and oneto-one college counselling enable 97% of TASIS graduates to gain acceptance to their first- or second-choice university in the UK, the US, and worldwide.

SERVICED APARTMENTS

THE ASSOCIATION OF SERVICED APARTMENT PROVIDERS (ASAP)

Suite 3, The Business Centre, Innsworth Tech Park, Innsworth Lane, Gloucestershire GL3 1DL

Contact: ASAP Office

Telephone: +44 (0)1452 730452

Email: admin@theasap.org.uk

Website: www.theasap.org.uk

Twitter: @ASAPThe

LinkedIn: The Association of Serviced Apartment Providers

ASAP is in the industry association representing, promoting and improving the serviced apartment sector. Our 124 members including serviced apartment operators and agents represent in excess of 25,000 serviced apartments in the UK, Europe, USA and Canada. When booking your serviced apartment, look for our Quality Accreditation kitemark which confirms the operator is fully compliant with all the core legal, health and safety practices and means you can book with confidence.

TAXATION

BDO LLP

55 Baker Street, London, W1U 7EU

Contact: Andrew Bailey

Telephone: 020 7893 2946

Fax: 020 7893 2418

E-mail: andrew.bailey@bdo.co.uk

Website: www.bdo.co.uk

BDO LLP is the award-winning, UK Member Firm of BDO International, the world’s fifth largest accountancy network with more than 1500 offices in 162 countries.

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

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

GLOBAL TAX NETWORK LTD

1st Floor, Andrews House, College Road, Guildford, GU1 4QB

Contact: Richard Watts-Joyce CTA, ATT

Telephone: +44(0) 207 100 2126

Email: rwattsjoyce@gtn.uk

Website: www.gtn.uk

Twitter: @GTN_Tax

LinkedIn: www.linkedin.com/company/globaltax-network

Global Tax Network Ltd is the UK member of Global Tax Network (GTN), an international affiliation of professional firms in over 100 countries specialising in global mobility tax consulting. We provide assistance to employers with the tax administration of international assignment programs and private client services to high net worth individuals, non-domiciles, professional sportspersons and entertainers. Our consultants include members of the Association of Taxation Technicians, Chartered Institute of Taxation, and US Enrolled Agents.

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