International HR Adviser Spring 2023

International HR Adviser

The Leading Magazine For International HR Professionals Worldwide

FEATURES INCLUDE: Making Global Mobility More Sustainable Global Tax Update

Short-Term Business Visitors - Are You Getting Their UK Income Tax And NIC Right? Technology Deployment - Partnering For Success

How Much Does It Cost To Sponsor A Skilled Worker In The UK? What Does Your Mobility Programme Look Like For 2023?

Reshaping Global Mobility • The Human Resources Pool's Changing

How Will AI Affect The Future Of Recruitment?

ADVISORY PANEL FOR THIS ISSUE:

In This Issue

Making Global Mobility More Sustainable

Georgia Wilson, ECA International

Global Tax Update

Andrew Bailey, BDO LLP

Short-Term Business Visitors - Are You Getting Their UK Income Tax And NIC Right?

Andy Kelly, BDO LLP

Technology Deployment - Partnering For Success

Nathan Male & Emma Brown, Deloitte LLP

How Much Does It Cost To Sponsor A Skilled Worker In The UK?

James Walters, Smith Stone Walters

What Does Your Mobility Programme Look Like For 2023?

Cartus

Reshaping Global Mobility

John Rason, Santa Fe Relocation

The Human Resources Pool's Changing

Josh Bersin, The Josh Bersin Company

Survey Shows 8% Average Drop In Employee Engagement Since The Pandemic

Dr Sarah Pass, Nottingham Business School

How Will AI Affect The Future Of Recruitment?

Aine Fanning, Talent Evolution Group

Free Annual Subscription Directory

YOU ARE CORDIALLY INVITE TO

The 2023 Global HR Conference

On Monday 5th June 2023

at The Royal Automobile Club, Pall Mall, London from 12.30pm – 4.30pm

This event is Free of Charge and is for Senior Global HR Professionals only, and will cover:

Sustainability In Global Mobility – Turning Reds Into Green

Sustainability is a global challenge and we can all do our part. Come and discuss market-leading practices, key actions to turn those reds into greens and how to differentiate yourselves to investors and employees alike.

Speaker: James Mathers, Global Mobility Consultant, ECA International

Global Tax Update

Stuart Strong from BDO will discuss updates and issues affecting employers.

How Can Integrating Talent Management With Global Mobility Attract And Retain Top Global Talent?

Join us as we explore real-life case studies of well-developed international hiring programmes that align talent attraction with global mobility. Our seminar will focus on:

• The positive impact such programmes have on retention and overall ROI

• Roles and responsibilities of HR, talent acquisition and global mobility within the international hiring lifecycle

• The benefits of flexible programmes, to both the employee experience and cost containment

• Hw IT integration can support a seamless experience for international new hires. Participants will leave the session equipped with key takeaways that will support them in integrating talent management into their own mobility programmes.

Hosted by Cartus

Buying Mobility Software – Are You Horizontal Or Vertical? – Turning Theory into Reality!

Replacing outdated vertical vendor and systems relationships with a horizontally integrated platform will save you time, improve the UX for your employees and improve data security for your company.

During the last Conference, Tracker Software Technologies (TST) explained the theory around horizontal integration. Nearly a year later, TST will turn theory into reality, explaining how to manage such a project, deliver a horizontally integrated platform and what such a platform looks like when implemented. We’ll explore Stakeholder engagement and integrations with tools and systems that HR and Global Mobility are very familiar with, like HR IS and Payroll systems and others that are not so familiar, such as Travel Management Company systems and Online Booking Tools.

Hosted by Tracker Software Technologies (TST)

A Brief Summary Of Some Recent Immigration Changes And What Is The Real Cost Of A UK Visa?

The cost of sponsoring migrant works can run into tens of thousands. We set out what costs a business may be liable for when sponsoring a work visa, including which of those can be passed on to the employee. We examine when a refund can be obtained for visa fees and drill down into some considerations for a cost-effective mobility programme.

Hosted by Smith Stone Walters

To register your free place at this event that is organised by International HR Adviser, please email helen@internationalhradviser.com with the name/s of those who would like to attend, along with your/their job title and company name.

We look forward to seeing you there!

Making Global Mobility More Sustainable

Sustainability is rising up the agenda for organisations and individuals alike, so it follows that the green credentials of mobility programmes are now coming under greater scrutiny. Yet ECA’s Global Mobility Now Survey showed that only 3% of organisations’ global mobility (GM) teams believe they are successful in achieving sustainability. This is unsurprising given that mobility is in the business of moving people around the world. However, whether it is through the choices of the business or the assignees themselves, there are ways to cut or minimise the impact of global mobility on the environment at each stage of the assignment process.

Relocation (And Repatriation)

The first point to consider – do all your assignees actually need to go on an assignment in person? Facilitating virtual assignments is one way to reduce your GM programme’s carbon footprint, with just under half of organisations either already encouraging this option, or planning to do so, specifically as a means of making the programme more sustainable. However, not all assignments can be done remotely and those that can might still have a high carbon footprint if they involve assignees regularly visiting colleagues with whom they are working.

When making assignments virtual is not viable, the impact of air travel to and from the assignment locations is a major area of concern but there are some options for those looking to limit or mitigate the environmental impact. Sometimes the use of flights to travel internationally can be avoided; for certain routes, assignees may be in a position to travel by train, and virtual look-see visits for prospective assignees are becoming more common. Nevertheless, it is likely that some air travel will be necessary, in which case companies could offset the carbon emissions by investing in equivalent reductions in emissions elsewhere. Discouraging the use of business class will also help as these seats have a higher carbon footprint per seat than economy class ones.

Similarly, the shipment of assignees’ belongings can have a sizable carbon footprint. Relocating to another country will always require assignees to take some items with them. What companies can do is seek to balance the needs of the assignee and their family with the best approaches environmentally.

One way of doing this is to offer flexibility – so the assignee can find the mix of air freight, surface freight and excess baggage that works for them – while also encouraging sustainable choices by providing information on alternatives where they exist. For example, shipping furniture is rarely a necessity. Companies could instead give assignees a cash allowance and encourage them to rent furniture for the duration of the assignment, or a housing budget sufficient for renting furnished accommodation. A cash allowance could also be used to purchase furniture locally; this could be more sustainable than shipping furniture, but of course the purchase of new items comes with an environmental impact. There are ways to minimise this, however; assignees could be encouraged to buy from companies with sustainable practices who source materials locally, or to even consider high quality second-hand furniture. Disposing of any purchased furniture at the end of an assignment should of course be avoided –it could be sold or donated, or potentially even retained and reused if there is a steady flow of new assignees into the same location (although this last option could prove difficult in practice).

One thing to bear in mind is that the cost and availability of furnishing options can vary drastically from location to location, so make sure that you are well-informed on the possibilities and constraints in each host country. For example, furnished accommodation is extremely rare in Zimbabwe, and there are no furniture rental companies, so furniture purchase is the only alternative to shipping there. Meanwhile, furnished accommodation can cost the same as unfurnished in some countries, but 50% more in others.

During Assignment

While transport during the relocation stage can have a huge environmental impact, travel during the assignment itself is also an area where companies and assignees can look to make more sustainable choices. Rather than providing a car as a benefit to your assignees,

a public transport allowance could provide an excellent, more sustainable alternative. This, however, will depend heavily on the location of the assignment. For example, while it is typically much more convenient to use public transport in Hong Kong than to drive, many cities in the USA are not well served by public transport.

Another option is to provide electric cars to assignees. Not only are electric cars more environmentally friendly than petrol and diesel cars, they have the added benefit of lower long-term running costs than regular vehicles and many countries offer incentives to encourage electric car ownership, such as subsidies and preferential tax treatment. However, the viability of this option will again depend on where your assignees are based, as well as many other factors: the distance travelled regularly, the range of the car between charges and the domestic charging infrastructure, including whether you can charge it from home. Make sure that you have the data you need so that you can easily assess which locations are likely good candidates for an electric car benefit and to help you calculate the budget needed to provide it.

It may even be possible to avoid the need for cars or public transport altogether, if the accommodation provided to assignees is very close to the office, and near the school of any accompanying children. However, areas within walking distance of city centres or popular schools are likely to come at a premium. An assessment would need to be made case by case, but getting around on foot or by bike is a prospect that may be more realistic for, say, unaccompanied short-term assignees in a city centre serviced apartment than it would be for accompanied long-term assignees with more complex needs around space and bedroom numbers, access to outdoor spaces and school runs.

The actual buildings housing your assignees also have a role to play. You may consider ensuring that you provide more recently built homes to your assignees, which usually have far superior insulation than older properties and will therefore help your assignees use less heating and air conditioning. Lowering energy consumption is a key tenet of sustainability. If you pay the utilities costs of your assignees, this might encourage gratuitous energy usage. Therefore, in considering a well-insulated building, you may want to consider replacing the provision

of utilities benefit with an allowance based on typical costs or to include utilities in your cost of living index instead. In the latter case, assignees will be responsible for paying for their own utilities but protected from a difference in cost between the home and host countries through the COLA.

Can Flexibility Promote Sustainable Choices?

Flexible approaches to benefits are becoming increasingly popular. A quarter of companies participating in our Benefits for International Assignments Survey last year are already taking such an approach for ongoing assignment benefits, but almost the same number of companies said they were considering doing so in the future. It’s even more common for companies to use a flexible approach to relocation benefits; two in five report doing so, with another one in five considering implementing this. Most companies taking this approach provide assignees with a fixed lump sum they can allocate as required, and the remainder are evenly split between a core & flex approach and a managed lump sum approach.

Many companies already using a flexible approach have not yet considered their approach through a sustainability lens but could easily do so. If assignees are left to their own devices, there is no guarantee that some won’t apportion an outsized amount of their allowance or budget to shipping and increase their carbon footprint. Therefore, proactively educating assignees about sustainable choices may be the best approach – and in fact, making assignees feel empowered to take ownership over more of their own carbon footprint and sustainability, and think more carefully about what they really need to relocate to establish a comfortable life in their new home. Whereas, under the traditional approach of companies providing a fixed suite of benefits (either in kind or as cash), assignees may be more likely to distance themselves from the environmental

impact of their assignment, seeing this as the company’s problem and being incentivised to make full use of all entitlements on offer.

Sustainability From Your Vendors

Increasingly, clients rightly expect their vendors to contribute to their sustainability goals. A third of organisations currently consider sustainability when it comes to choosing GM vendors, and this is likely to increase – two in five participating companies in our Global Mobility Now Survey plan to do this in the future.

Being picky about your vendors may have the downside of reducing the choice of services, but ethically minded assignees will feel reassured that the company has carefully selected partners who can demonstrate that they are taking proactive steps towards sustainability and are committed to reducing their environmental footprint. Relocation and shipping vendors are of course key ones to examine, but all of your global mobility providers – throughout the assignment lifecycle – should be mindful of their impact on the planet and actively playing their part in reducing ecological harm.

Perfection Is The Enemy Of Progress

Most companies are at best in the earliest stages of embedding sustainable options and practices into GM programmes, while many others are unsure where to start, or wonder if it is even possible to be sustainable when international relocation is essential to the business. But there are lots of simple initiatives you can begin with, and if you are concerned about balancing assignee satisfaction with sustainability, then giving assignees an active role in achieving sustainability objectives may help them feel they can make a positive difference and encourage their engagement with the issue. Sustainability is already important to most individuals and if organisations lead

by example in prioritising sustainability goals, and if they empower assignees with education and support, assignees are more likely to make greener choices and take satisfaction from playing a part in reducing the organisation’s environmental footprint.

GEORGIA WILSON

Key

Account Manager, ECA International georgia.wilson@eca-international.com.

Georgia is part of ECA’s Client Services team, working with some of ECA’s key clients in northern Europe. With over a decade of experience in the global mobility industry, Georgia advises major multinational companies on current mobility practices and supports the use and development of software solutions. She also regularly contributes to ECA’s blog and events on a wide range of mobility topics.

Global Tax Update

GERMANY

New administrative opinion disrupts practice for temporary employees

Contained within Germany’s Income Tax Regulations 2023, is a change in the administrative opinion regarding the calculation of the income tax deduction for employees who are not working continuously in Germany. Specifically, this concerns the question of which income tax table should be used to calculate the tax due in the case of temporary employment in Germany.

If an employment relationship does not exist throughout a full month, the income received during this period is to be converted to individual calendar days. The income tax due results from the amount of the income tax day table multiplied by the number of calendar days worked. For tax purposes, these cases are referred to as a partial income payment period. The application of the daily income tax table results in a higher tax burden than the application of the monthly income tax table.

If the employee was at work in Germany only temporarily during a calendar month, working days falling within the income payment period for which the employee did not receive taxable wages were previously also to be counted if the employment relationship continued. According to the previous administrative interpretation, no partial income payment period resulted for income tax purposes if an employee either starts or stops doing work abroad (work that is tax-exempt under a double taxation agreement or under the Foreign Employment Decree (Auslandstätigkeitserlass ) for the employer in the course of the month, or if the employer works part of the time in Germany and part of the time abroad during the income payment period.

Effective 2023 - despite the unchanged legislative situation - working days on which the employee received wages, not subject to domestic income tax deduction, should no longer be counted when calculating the income payment period (e.g., receipt of taxexempt income under a double taxation agreement or employment in Germany on a daily basis only). This results in a considerably higher income tax burden for the persons affected, for which no legal basis is apparent in view of the (in our opinion) unambiguous wording of the law.

As an example, a pro rata taxable salary in Germany of EUR 1,000 based on five working days per month, will result in a tax burden of approx. EUR 225 as of 2023. Under the previous regulation applicable until 2022,

the income tax based on the monthly table would have amounted to EUR 0.

For individuals with limited tax liability, given the basic settlement effect of the withholding, this higher tax burden will also be – in many cases - permanent. For EU/ EEA nationals who are resident or ordinarily resident in one of these states, an application assessment can be carried out, but this again involves greater time and effort. Moreover, an application assessment would also lead to the tax-exempt foreign income having to be taken into account within the framework of the so-called progression proviso (a determination of the applicable tax rate).

The regulations also apply to taxpayers with unlimited tax liability. However, those taxpayers are likely to have already made an assessment in the past, into which the higher income tax deduction will then flow in the future and be offset accordingly.

for German working days, and thus take on a corresponding additional burden. In this respect, whether and how the employment contracts would have to be amended would have to be examined.

BDO Comment

Given Germany’s shortage of skilled workers, the higher tax burden does not contribute to making the country more appealing as a favourable location on the labour market. The possibility of disputes between employers and employees cannot be ruled out.

Inflation Compensation Premium Free Tax And Social Security Contributions

Germany’s upper house of Parliament recently approved a measure that would give all employers the opportunity to provide their employees a special payment of up to EUR 3,000 as an inflation compensation premium, free of tax and social security contributions.

The inflation compensation premium is part of the "Act on the Temporary Reduction of the Value Added Tax Rate on Gas Deliveries via the Natural Gas Grid" and the so-called "Third Relief Package" from the federal government.

The law has been forwarded to the federal president for signature and will then be promulgated in the Federal Law Gazette. It will enter into force retroactively as of 1 January 2022.

Tax Exemption

Since the new regulation cannot be derived from the relevant legislation in this context, it may well be possible to continue to calculate the income tax on the basis of the monthly table, as has been done to date, if the amounts involved are large enough. However, the tax office would have to be informed of this deviation. Since the tax office is unlikely to follow this due to the self-imposed obligation of the tax authorities under the regulations, an appeal would have to be lodged against a corresponding decision by the tax authorities, and legal action would also have to be considered.

If the income tax is to be determined on the basis of the daily table, as now advocated by the tax authorities, a decision would have to be made as to whether the employee is to bear the income tax incurred or whether the employer is to assume the consequences of the net income agreement

According to the legal wording of the German Income Tax Act, "Tax-free are [...] benefits granted by the employer in the period from 26 October 2022 to 31 December 2024, in the form of subsidies and benefits in kind in addition to the remuneration owed in any case to mitigate increased consumer prices up to an amount of EUR 3,000."

The basic prerequisite for tax and contribution exemption is that the benefit is provided in addition to an employee’s regular salary. Benefits paid by the employer for employment are only paid "in addition to the wages owed in any case" within the meaning of the German Income Tax Act if:

• The benefit is not offset against the entitlement to wages

• The entitlement to wages is not reduced in favour of the benefit

• The benefit for a specific purpose or use is not granted in lieu of a future increase in wages already agreed upon; and

• If the benefit is discontinued, the salary is not increased. All the above conditions must be met.

The regulations also apply to taxpayers with unlimited tax liability

The preferential treatment therefore does not apply if:

• A bonus is paid and in return the monthly wage or other bonuses or special payments are reduced

• Bonuses, special payments or other salary components already owed are to be fulfilled "as a substitute" by the bonus; or

• The wage is temporarily reduced and is increased again after the inflation compensation premium has ceased to exist. The inflation compensation premium is an allowance that benefits employees even if an amount higher than EUR 3,000 is paid. However, the portion in excess of EUR 3,000 is fully taxable and subject to social security contributions.

The bonus can also be granted in the form of a benefit in kind (for example, a voucher, a bicycle, a smartphone or a tablet).

Payment of the inflation compensation premium is voluntary for employers. Employees have no claim to the bonus; it is merely a favour under tax law in the event the bonus is paid. In order to be tax-exempt, the bonus must have actually accrued to the employee; that is, it must have been paid out by 31 December 2024 at the latest.

BDO Comment

The benefit is valid from 26 October 2022 to 31 December 2024. The long period is intended to give businesses a high degree of flexibility. However, employers who would like to pay all or part of the inflation compensation premium to their employees this year need to act, as payment would have to be arranged for the December wage payment period at the latest.

SPAIN

Amendments to special tax regime for inbound expatriates

Effective 1 January 2023, Spain’s special tax regime for inbound expatriates has been amended to improve Spain's tax competitiveness and attract talent from abroad.

The requirements for applying to benefit from the special tax regime have been relaxed, and now highly qualified entrepreneurs and self-employed workers who provide services to emerging companies (startups) may apply. In addition, spouses and children under 25 may also apply for the special regime.

Individuals who move to Spain and acquire tax residence in Spain may opt to be taxed under the Non-Resident Income Tax (NRIT) rules instead of being taxed under the Spanish Personal Income Tax (PIT) rules. This would imply being taxed at a flat rates of 24% on Spanish-source employment income up to EUR 600,000.

The special tax regime will apply during the tax period in which tax residence in Spain is acquired (once the individual has moved to Spain) and during the five following

tax periods, without prejudice to cases of renunciation or exclusion.

The requirements for applying the special regime include the following:

• The individual must not have been tax resident in Spain during the five tax years before moving to Spain

• The move to Spanish territory must have one of the following purposes:

• A work contract (this requirement is met when the individual signs an employment contract with a Spanish employer or when he is relocated to Spain by the foreign employer pursuant to an assignment letter to a Spanish entity)

• Appointment as administrator of a Spanish entity, if the individual does not acquire an ownership interest in that entity, or if he/she does, the ownership interest does not render them related parties under Spain’s transfer pricing rules

• To work remotely from Spain through the exclusive use of computer and telecommunication means and systems. In this case, a relocation order from an employer is not necessary, as long as the individual has an international telework visa

• To carry out economic activity in Spain that qualifies as entrepreneurial activity

• Highly qualified professional providing services in Spain to start-up companies or carrying out training, research, development and innovation activities, for which the individual will receive remuneration that represents more than 40% of the total income from business, professional and personal work

• The individual may not obtain income that would be classified as obtained through a permanent establishment situated in Spanish territory, unless the purpose of the move to Spain is described in the last two points above.

Individuals taxed under the special tax regime will be subject to personal income only on income obtained in Spanish territory, except for employment income. All employment income obtained by the individual (in Spain and abroad) during the application of the special regime will be considered obtained in Spanish territory. If the work performed abroad is also taxable in the other country, the individual could apply for an international double taxation deduction. Spain, as state of residence, would apply a tax credit to avoid double taxation.

BDO Comment

There is a strict six-month deadline to apply for the special tax regime. The Spanish tax authorities deem this period to begin from the date of commencement of the employment activity in the Spanish Social Security or the documentation that allows the maintenance of home legislation of Social Security.

UK

Employment intermediaries – Have you done your due diligence?

The use of employment intermediaries has never been more prevalent than today, as the modern-day workforce becomes more flexible and transient.

Intermediaries are increasingly an attractive means of engaging workers for several reasons, notably the flexibility they offer in onboarding workers quickly, often for short engagements. Intermediaries also reduce internal administrative duties, particularly when it comes to operating payroll and the statutory payments associated with employment.

Despite the benefits employment intermediaries offer, recent court decisions highlight the risks they may give rise to. The following cases demonstrate the complexities involved, from both an employment tax and a legal perspective.

Employment Contracts

The rulings in Mainpay Ltd v HMRC and Exchequer Solutions Ltd v HMRC provide two examples in the last 12 months where agencies have come under scrutiny. In both cases, HMRC were successful in recovering income tax and National Insurance Contributions (NIC).

The issue before the courts was whether the intermediary companies employed the individuals under an overarching or umbrella contract of employment, which would cover all of an employee’s assignments and any gaps between those assignments, or whether instead there was a series of separate contracts of employment covering each individual assignment.

If there is an overarching contract of employment in place, each place of work is classified as being a temporary workplace and expenses can be reimbursed on a taxfree basis. However, if each assignment is covered by an individual contract, each place of work is considered to be a “permanent workplace” and any expenses that are reimbursed must be subject to tax.

The intermediaries in these two casesMainpay Ltd. and Exchequer Solutions Ltd - operated on the basis that the contracts held with workers represented overarching contacts of employment. In the Mainpay Ltd, case, the intermediary had obtained specific legal advice on the subject years before. As a result, both intermediaries allowed for income tax deductions in respect of expenses incurred by workers travelling to and from home and their workplace, on the understanding that travel linked to the end-user’s workplace qualified under the “temporary workplace relief” legislation.

In fact, the contracts between the intermediaries and the workers were merely framework agreements. A subsequent

contract would be entered into for the worker to provide their services to an enduser, making that the permanent contract for their services.

HMRC argued that income tax relief was unavailable because, whilst each engagement with an end-user was temporary, it represented the entire period during which the worker held the employment. Consequently, income tax relief under the “temporary workplace relief” legislation would be unavailable in respect of any commuting costs.

The courts sided with HMRC in both cases, leaving the intermediaries with significant liabilities to settle dating back multiple tax years.

Holiday Pay Entitlement

In the recent case Harpur Trust v Brazel, the claimant was engaged on a part-year contract at a school. In calculating the claimant’s holiday entitlement, the school utilised the 12.07% formula, as was common practice for employees who work irregular hours.

In adopting this approach, the calculation seeks to arrive at a proportionate amount of pay for irregular hour workers compared to their full-time counterparts. The claimant insisted this was unfair, resulting in a claim being made and the ensuing court case.

The court found the employer’s method of calculating entitlement incorrect, and concluded that the holiday entitlement should instead be calculated in line with the method used for full-time workers. In reaching this conclusion, the court recognised that this approach could result in a part-time employee’s entitlement being proportionally greater than that of a full-time employee. However, it concluded that this was not a reason to deviate from the method of calculating entitlement as outlined in the legislation.

Given that intermediaries typically engage workers on irregular/zero-hour contracts, it’s imperative that they take note of this court ruling and update policies and processes accordingly.

BDO Comment

In light of the examples noted above, stakeholders should consider their supply chains now more than ever, particularly end users and agencies.

Organisations looking to engage workers via intermediaries should conduct the relevant due diligence before recommending “preferred” intermediaries. Due diligence should seek to clarify the policies and processes intermediaries have in place and should be conducted jointly by employment tax and legal professionals.

Typically, any marketing material that promises overly generous deductions or savings is at risk of not being compliant with relevant legislation.

Intermediaries, on the other hand, need to ensure that they are up to date with all relevant legislation and that any historic advice has been checked to ensure it remains relevant.

The agency business model is well known for operating on tight margins, increasing pressure to find new and creative ways to attract workers to grow profits. At the same time, the legislation relating to intermediaries has tightened over recent years, with the goal of achieving parity with the traditional employer/employee model and ensuring HMRC receive the tax revenue due. Consequently, ongoing monitoring of existing policy/process is vital to avoid unintended consequences down the line.

coverage and increase retirement savings while simplifying and clarifying retirement plan rules.

Every employer, whether for-profit or tax-exempt, that currently maintains a qualified retirement plan or is evaluating a future plan, should consider implementing these new rules, since the changes are generally beneficial for employees.

Unless the Internal Revenue Service announces otherwise, employers that operate in accordance with the mandatory or optional changes in the law as of the provisions’ applicable effective date, have until the end of the plan year beginning in 2025 to adopt the written amendment. Government employers have until the end of their 2027 plan year to amend the plan document.

BDO Comment

While many of the retirement plan provisions in SECURE 2.0 are not effective until later years (including some, like the new federal “Saver’s Match” and mandatory paper benefit statements, that will not take effect until 2026), a number of important provisions require immediate attention. Some of the changes are especially helpful to small employers.

Almost all workplace retirement plans will need to be reviewed for possible amendments and operational changes to reflect SECURE 2.0.

While further guidance on many of the new provisions is needed, employers should review their plan document and operations in the meantime to determine what, if any, amendments will be needed, what operations need to be changed and what systems or processes should be updated.

USA

SECURE 2.0 Act of 2022 introduces key changes for workplace retirement plans

The Consolidated Appropriations Act, 2023, signed into law in December 2022 by President Joe Biden, includes the SECURE 2.0 Act of 2022, which introduces over 90 changes to the federal rules governing workplace retirement plans.

This landmark legislation builds on the original SECURE Act that was enacted in December 2019, and aims to expand

Given that intermediaries typically engage workers on irregular/zerohour contracts, it’s imperative that they take note of this court ruling and update policies and processes accordingly

Short-Term Business Visitors –Are You Getting Their UK Income Tax And NIC Right?

In the course of our work, we frequently support companies needing guidance on the tracking and payroll reporting of their Short-term Business Visitors (STBVs). The UK is one of a small number of jurisdictions where there is scope for the relaxation of PAYE (Pay As You Earn - i.e. UK wage withholding) where overseas employees visiting the UK are eligible for relief under the terms of a Double Taxation Agreement (DTA). It is also a jurisdiction where the tax authorities closely scrutinise that companies correctly operate PAYE for their STBVs. The means of obtaining relief from PAYE is by entering into a Short-Term Business Visitor Agreement (STBVA; also known as an Appendix 4 arrangement) with HM Revenue & Customs (HMRC) which is a one off, blanket level agreement between the company and HMRC. The company in return is required to have a robust means of tracking STBVs into the UK, assessing whether they meet the employment income conditions of a DTA and submitting an annual informational report to HMRC by 31 May, following the end of the UK tax year (5 April).

Renewed HMRC Focus Of STBV Reporting

Over the past couple of tax years, HMRC has received fewer STBV submissions due to the pandemic and subsequent travel restrictions. As a result of the administration of the Corona Virus Job Retention Scheme, HMRC have also had less resource dedicated to review submissions and follow up with companies to check all the conditions

were met for legitimate relaxation of PAYE. However, we are now seeing ‘nudge’ letters from HMRC reminding companies of the need to robustly track their STBVs, ensure they are correctly identifying that relief from UK tax is legitimate, and reminding that they are expecting submissions by 31 May 2023. This article sets out to cover some of the categories of STBVs that cannot be included on a STBVA, which companies often do not correctly identify and into which HMRC may probe. This article is not exhaustive in identifying such categories, but aims to dispel the misconception that a DTA can always guard against a liability to UK tax, and highlights the perils of excessive fixation solely on the ‘183 day rule’.

and the reputational risks involved in noncompliance relating to statutory directors.

For many reasons, it is common within international groups for directors to be employed and paid by one company, but also to hold directorships in several of the group’s businesses across a range of countries. Costs relating to remuneration or travel and subsistence costs may be borne in, or crosscharged to the UK, but even where they are not, UK reporting obligations will arise, which are likely to include operation of PAYE and NIC (National Insurance Contributions – i.e., UK social security) and filing of Forms P11D (expenses & benefits form).

In some cases, non-resident individuals will be appointed as non-executive directors because of the skills they can offer the company, but because they are non-resident and may be considered self-employed in their local jurisdiction (as is not uncommon for statutory directors), the UK reporting and payroll requirements can be overlooked. The overseas implications and obligations for the company will also need to be understood and complied with. This can extend to corporate tax and transfer pricing issues.

Why Is Reporting Compliance For NRDs More Problematic?

The complexity, particularly in a group company situation, is understanding the purpose of business visits to the UK, and whether the UK trip is in the capacity as director, or solely for some other purpose relating to their overseas employment. In the absence of clear information to the contrary, the assumption from HMRC will be that the visit was in capacity as a UK director.

Category 1: Non-Resident Directors (NRDs)

We will devote particular focus to NRDs due to the ease of HMRC identifying them

The frequently used reporting relaxations for other STBVs such as EP Appendix 4 (STBVA) and EP Appendix 8 (PAYE Special Arrangement for STBV; see ‘Branch employee’ section below) do not apply to board directors. If an NRD is a statutory director of a UK group company, they are an ‘office holder’ in that company and any UK duties (board meeting or wider director responsibilities) will trigger a PAYE liability. Therefore, even if an NRD usually attends UK board meetings remotely (by Zoom etc.), but comes to the UK for as little as one meeting a year, an obligation to operate PAYE and report for RTI (Real

We will devote particular focus to NRDs due to the ease of HMRC identifying them and the reputational risks involved in non-compliance relating to statutory directors

Time Information) purposes

will

arise. There is also a very limited exception for “incidental duties”, but this is qualitative not quantitative, and any work in relation to the directorship will trigger PAYE obligations.

The issue of expenses paid while travelling to the UK to carry out director duties is also complicated: travel costs to and from the UK may be exempt for non-UK domiciled directors, but the facts and circumstances need to be reviewed. Hotel, subsistence, and other costs will usually be taxable as the location where the board meets are likely to be the director’s ‘permanent workplace’ in the UK.

When it comes to the operation of PAYE, the practical pay arrangements for the individual can be problematic. Where duties arise in the UK, HMRC disregards the fact that the individual may be paid for all group directorships from an overseas parent company; the PAYE obligations for those duties fall on the UK company. Details of overseas remuneration will be required to determine the amount on which PAYE needs to be operated, and strictly PAYE should be operated on 100% of the remuneration in the absence of agreeing otherwise with HMRC. It will also need to be agreed how the PAYE will be withheld from the individuals overseas pay.

Does The NIC/Social Security Position For NRDs Follow The Income Tax Position?

The NIC/social security position is different to income tax, and both the company and employee can be liable to pay social security in both the UK and their home country in full, without any relief available for the double charge.

Whether or not the UK duties of an NRD trigger UK NIC depends on the director’s country of residence and whether there is a social security agreement between the UK and that country, which will enable a ‘certificate of coverage’ to be obtained to provide exemption from UK NIC. Even where a ‘certificate of coverage’ could be arranged, unless one has been obtained, NIC needs to be operated.

For countries with which the UK does not have a social security agreement, there is a limited administrative concession which may relieve the obligation to operate NIC. Broadly, the concession can apply if the individual makes brief visits to the UK (two nights or less) to attend board meetings only, and attends no more than 10 board meetings a year (or a single board meeting of up to two weeks). Unless the terms of the concession are met in full, then NIC remains due, and all UK directorships need to be taken into account for this purpose.

As there a number of countries with which the UK does not have a social security agreement, the compliance considerations

and obligations need to be understood and managed on an individual basis. For example, the position will be different for an NRD who resides in the USA (where there is a social security agreement), compared to an NRD who resides in Australia or South Africa (there is no such agreement).

How Can HMRC Check Up On NRD Compliance?

For NRDs it is very simple for HMRC to check whether there is potential non-compliance. The UK company’s NRDs will be listed on their Companies House record, and this includes information on their nationality and country of residence, even if the address given is that of the UK company. Cross-checking this data against the company’s PAYE (RTI) submissions can immediately highlight where PAYE is not being operated on one or more of the NRDs in a tax year. Failure to operate PAYE or NIC where required will lead to interest and penalties, potentially scrutiny into wider compliance (including other taxes) and will have implications for Senior Accounting Officer (SAO) reporting for companies within the regime. Getting the tax reporting position wrong can also result in a strained relationship with the director who may understandably be disappointed to have their name associated with noncompliance, even if inadvertent. In these times of increased scrutiny of companies’ tax governance, there are also reputational risks for the business.

employee has to be present in the UK for no more than 183 days in a stipulated period; more often than not in any 12 months period, but depending on the treaty, sometimes in the UK tax year.

For STBVs to be exempt from UK tax under a DTA, one of the other multiple conditions to be met is that the employer of the STBV is not a UK resident company. This presents a challenge to a UK company where there are employees of overseas branches who visit the UK for business purposes. Such employees whilst normally based overseas, under employment contracts issued under the relevant jurisdiction’s employment law, have a UK legal employer. The existence of a UK legal employer precludes them from inclusion on a STBVA and necessitates the operation of PAYE when they work in the UK.

It is fairly common for companies to include STBVs from their overseas branches on a PAYE Special arrangement for STBVs (also known as an Ep Appendix 8). This necessitates a one-off agreement with HMRC.

The Annual PAYE Scheme was introduced to combat the impracticality for employers of having to deal with employees that do not qualify for inclusion on an STBVA. It allows them to account for their work visits to the UK for the whole tax year and operate PAYE at the tax year-end, with tax due and the associated RTI reporting to happen at month 12. This applies only to limited categories of visitors.

A company needs to make an application to operate a scheme, then report, calculate and pay the appropriate tax by 31 May, following the end of the tax year. The calculations need to take account of all employment income received, including bonus payments and equity-based incentives.

The Appendix 8 arrangement only applies to an STBV whose UK workdays in the UK tax year do not exceed 60 workdays, allowing certain days of incidental work to be excluded from this count. If the STBV triggers a UK tax liability and they do not meet the terms of the Appendix 8 agreement, the STBV should be included on the normal (monthly) PAYE scheme.

Category 3: Employees For Whom The UK Business Functions As The ‘Economic Employer’

Category 2: Employees Of An Overseas Branch Of A UK Business

It is relatively well known in global mobility circles that one of the conditions of the employment articles of DTAs that has to be met for exemption from UK tax, is that an

As well as the requirement for an employee to have a non-resident employer, there is also the requirement that the employee is ‘paid by and on behalf of a non-resident employer’. In other words, for the relevant condition of the employment article of the DTA to be met:

1. A UK business should not ultimately bear the costs of the STBV’s remuneration – by direct payment of or recharge from the overseas legal employer, and

In these times of increased scrutiny of companies’ tax governance there are also reputational risks for the business

2. The UK business should not function as the ‘economic employer’ of the STBV even in the absence of direct payment or recharge of the employee’s remuneration. If the UK does not pay the direct remuneration or bear the ultimate cost of the remuneration via a recharge, a further analysis is required as to whether the STBV is nonetheless ‘integrated’ into the UK business and whether the benefits and risks of that STBV’s work sits with the UK business. Also, regardless of whether costs were born by the UK company, should they have been under Transfer Pricing principles.

A number of years ago, HMRC published a non-legally binding concession that they would not pursue the ‘economic employer’ point, where employees were present in the UK for fewer than 60 days (workdays or non-workdays) in any substantive period (generally taken to be any 12 month period), but issued examples to indicate that they would disallow the concession in the case of employees integrated into a UK business or where there were repeat visitors to the UK of close to 60 days per 12 month period.

Whilst STBVs who are considered to have a UK economic employer can in principle be included on an Appendix 8 arrangement, if they are present in the UK for more than 60 workdays, PAYE would need to be operated on a monthly basis on a normal payroll.

Summary

In a fast-paced commercial environment, it can be easy to lose track of some of the many UK obligations relating to STBVs. But sadly, mistakes can be costly. We have worked to assist many organisations that entered themselves into STBVA arrangements without setting up appropriately robust means of tracking their international travel, and who did so without an appreciation of the nuances of the rules as to whom can be included on an STBVA and whom cannot. After the relatively quite years of the pandemic, companies can expect to see a return to HMRC employer compliance activity in this area.

Our specialist Global Employer Services team can work with you to review the position for STBVs, resolve any outstanding issues and help you put procedures and policies in place to underpin your compliance processes going forward. Our cutting-edge technology can aid the tracking and identification of tax issues in relation to your STBVs. Through our international network we can also provide guidance on the tax and social security implications in the jurisdiction of tax residency and advice on the tax and social security of STBVs to overseas jurisdictions. The UK is not alone in keeping a close eye on company compliance in this area.

ANDY KELLY

Andy Kelly is a Partner in Global Employer Services at BDO LLP. He has over 20 years’ experience in the field of expatriate taxation and supporting companies on global mobility tax, social security and the formulation of their policies. BDO can provide global assistance for employment related issues and matters arising from international assignments. If you would like to discuss any of the issues raised in this article or any other expatriate tax matters, please do not hesitate to contact Andy Kelly on +44 (0) 20 7893 2444, email Andrew.kelly@bdo.co.uk or Andrew Bailey on +44 (0) 20 7893 2946, email Andrew.bailey@bdo.co.uk

Technology DeploymentPartnering For Success

There is no denying that technology is central to our ability to perform our jobs effectively. However, technology does not always arrive neatly packaged ‘with a bow’ ready to use. Every organisation is unique, and this requires the need for configured services to align with company culture and processes. The adoption of new technology into any part of a business, whilst often heralding excitement at the change, can potentially overwhelm those tasked with deployment. It can be a period of intense time-investment, requiring process re-engineering as well as housekeeping tasks, such as data cleansing, in addition to the overall objective of system delivery. Such implementations are often undertaken whilst having to continue to manage the ‘day job’ commitments.

In a 2018, ERP implementation study carried out by Mint Jutras(1), 12% of respondents noted 'poor quality of software' when asked what went wrong during implementation. The top two problems noted during implementation were 'inadequate testing' and 'inadequate business process re-engineering'. These statistics highlight that a successful implementation is not solely dependent on vendor configuration and deployment, but also on the ‘ripple effect’ that deploying technology into the business can have and the need to prepare for this impact.

Signed, Sealed… Now To Deliver

Imagine the scenario. You have just been through a rigorous technology procurement process, with multiple vendors demonstrating their latest features and functionality, each with their own unique selling points. Once through this process, having selected your chosen vendor, you now have to engage the vendor in a contracting process. At this point it would be easy to take your foot off of the pedal, but during this scoping and contracting period you actually have your first opportunity to set the project up for success.

It is important that amid the proformas and legal jargon of service contracts that you clearly articulate and capture the critical success factors for your business. These are typically the features and functionality that the system needs to deliver immediately at go-live. Most technology providers are aiming for the ‘holy grail’ of a standardised implementation, but each client is different and solutions need to fit around the processes and procedures critical to business operations. Some examples - think back to the sales cycle. What were you told could be an additional feature? What user-defined fields and reporting requirements are there specific to your business needs? What functionality did the vendor state is in development and yet to be released? It is critical to really question your implementation partner “Will these features be ready for our go-live?”.

Take The Lead

With the excitement of a new technology platform finally being on its way, it is important to get your team ready and to set realistic expectations about the road ahead. As business processes become more complex, so too can projects where technology is involved. This can be magnified where global teams are involved, with competing requirements across various jurisdictions or business units, varying budgets and a broad

range of stakeholders. It is in this period of excitement and readiness that someone, sometimes inadvertently, hands themselves or gets handed, the role of project lead. Often it is the person who also has the deepest subject matter expertise (‘SME’) that is asked to drive implementation requirements, e.g., the Head of Payroll is often nominated as the project lead on a payroll implementation. Once appointed, the project lead becomes the figurehead and central point of contact for everything related to the project.

The role of project lead can very easily become all-encompassing, seemingly without boundaries on where the role starts and stops. More than occasionally a project lead can also assume the role of project manager and “although these positions are often considered interchangeable and they can be assumed by the same person, they are different and each one plays an essential role within a project” (Forbes, 2021 (2)). Clearly defining roles across the whole project is important (see figure 1.1), but particularly at the project lead and project manager level so as to remove any opportunity for confusion as well as the danger of one person taking on too much responsibility and becoming a bottleneck. If the project lead is also a deep technical SME, then it is paramount that this role is clearly ringfenced from that of the project manager and they operate independently for project success.

Figure 1.1

Setting Your Organisation Up For Success – What Is Within Your Grasp?

Trends are emerging whereby it is recognised that the software itself is often not to blame for failed implementations, rather, points of failure sit outside of the technology configuration (see figure 1.2 (3)).

Building The ‘A’ Team

Successfully implementing a technology solution is a challenge, and the effectiveness of the project team can be a key factor in success. Of course, everyone wants the ‘A’ team, but realistically this isn’t always possible due to competing business demands and priorities, as high-performing employees are often critical to day-to-day operations that also need to continue. The project lead will need to decide where critical SMEs are required and where less experienced team members, who may have greater availability, could be utilised. It is important to also secure longevity in these roles; that is, someone who will see the project through from start to finish.

Work with your implementation partner to really understand roles and expectations, on both sides, in terms of capabilities, time investments and to map the right people to appropriate project roles. Finally, project leaders need to be sensitive to the fact that employees taking up roles in the project team are often asked to continue with responsibilities in their existing roles. A strong project lead will focus on team engagement and morale, setting clear goals and objectives for each team member, whilst highlighting the potential career benefits afforded by their involvement.

Communication Is Key

The Deloitte survey respondents cited “ineffective communications” as the second biggest barrier to a successful technology implementation. We have all heard the phrase “communication is key”, and this is certainly true when it comes to project deployment. The reason for it being cited as a top barrier is likely due to the fact that communication strategies are often significantly underestimated and therefore not appropriately planned for. In some ways this is understandable; we tend to complete our day-jobs informing only those people who really need to know, purposefully removing others from the cc: line of emails to avoid bombarding inboxes. The opposite is true for implementations. We have to remove the tunnel vision glasses and think about all stakeholders, even those who may be considered peripheral to the project, who still need to be informed of headlines and outcomes as they will ultimately be affected by the change. This is where it becomes critical to have a strong, well thought through communication plan that delivers regular and relevant updates for the duration of the project.

At a project team level, remember that not everyone will be a natural communicator. Within the project, regular meetings and channels of communication need to be established to give people the opportunity to share their updates and understand risks and dependencies from other workstreams. Setting up a meeting cadence is one thing, but then the project lead needs to ensure that the commitment to attend is honoured by the project team and that they remain accountable for their input and engagement. All too often, with competing business priorities, team members will, over time, start to reduce their attendance, or limit it to those agenda items they feel are important. Strong governance and ownership are key to ensure this is avoided.

Focussing Project Management On The Right Areas

Many of us will have been exposed to the misguided view that project management is simply “good organisation”. This perspective is inaccurate. Project management requires a specific technical skillset, and is a vocational career choice for many professionals. All too often organisations approach large-scale technology implementations using existing team members who are available to do the role, those in need of a development opportunity, or perhaps, per above, just those who are seen as ‘good organisers’. This person can often hit the ground running, but as overlapping commitments and priorities develop, they may become quickly overwhelmed by multiple ‘spinning plates’. Before you know it, a lack of control around core project management can arise – the linchpin that the rest of the team have been relying on to know what to do, and by when.

What is required from the outset is someone with a strong background and expertise in project management, and an ability to execute a consistent and robust methodology, whilst coordinating areas that may not be in the vendor’s delivery scope, but are important for overall project success. This can include change management, training and ongoing support, and enhancements post go-live.

Your vendor implementation partner will no doubt have a project manager on the team, which may result in a sigh of relief, but this role may be biased towards managing and coordinating items that the vendor is most interested in, e.g. having the system configured by multiple developers and scheduling system refreshes. Thus, the vendor project manager may be less focused on how you are handling key stakeholder engagement or your own change management. Having a strategy to address these equally important areas is critical.

Budgetary And Cost Considerations

What is the cost of purchasing a new piece of technology? One might answer in a literal way, simply looking at software licence costs and vendor implementation costs. There are however, additional technology-related costs, people costs and contingency costs to consider. Contingency costs may be hardest to gain approval for in the original project budget as leadership may anticipate only those tangible hard costs when they sign off. When contracting it is important to give this cost line-item careful consideration to safeguard your project. Scope-creep can indeed ‘creep into’ a project when you least expect it, and project leaders need a mechanism to respond in a way that limits interruption to project milestones and deadlines.

If you expand the scope of the project, e.g., there is an additional third-party vendor requiring an interface, it is more

Critical to have a strong, well thought through communication plan that delivers regular and relevant updates

than likely that this will have two critical and fundamental implications – (i) time required to implement will increase, and (ii) the cost from the vendor to the business may increase. This again relates to the point raised on contracting, it is imperative that your implementation partner fully understands your business operations to appropriately scope from the outset. However, if items are later mutually agreed as additional scope, having an accessible contingency fund available in the budget can ease financial pressure and limit detrimental impact on project progress.

1.3

Story from the field…

What's the difference between a successful project and a £100 million mistake? A steering commiXee that works. One electric u:lity company's steering commiXee made all the difference to the success of their technology implementa:on, because they were engaged, were passionate about the program, and were outcomes-focused. The CEO set the tone from the top: he was never late to a mee:ng, never le] early, and always par:cipated. As a result, the rest of the steering commiXee was equally commiXed. In addi:on, each steering commiXee member had an area on the program they were par:cularly passionate about, and developed a set of simple talking points that relayed the tangible benefits of the changes. And when the project hit roadblocks, they were quick to communicate these talking points, to espouse the program charter, and to mi:gate any unproduc:ve dissen:on from business line leaders. Ac:ng as the captain of the ship, the steering commiXee was able to help the program stay its course and achieve impac_ul results.

the project stays aligned with the organisation’s strategic goals, and (iii) that the anticipated return on investment will be realised (see example in figure 1.3 (4)).

Project Management Office (‘PMO’) – That Extra Set Of Hands

The Importance Of Leadership Alignment

Lack of leadership alignment may occur when your key stakeholders do not engage with the project for the long-term. All too often leadership are around in a shortterm capacity; the implementation team get sight of their leadership at kick-off, project close down (and eventual go-live celebrations) and likely during an escalation or two in the middle.

Leadership should be fully onboard with the project and should be active advocates for it, with the understanding that the implementation is critical to business operations. As such, budget support, resourcing and communications all need to echo this.

As part of the project management approach a ‘Steering Committee’ or ‘Project Board’ should be set up. This is a group of influential decision-making executives who take responsibility for (i) ‘steering’ the project to the desired business outcome, (ii) ensuring that

The criticality of getting project management right on your implementation can make-or-break the timelines, cost and overall project success. One market observation is that organisations are now recognising from the outset that the implementation journey will not be a straight line and internal resources may often be stretched and/or lacking in experience of technology transformations.

To address this, organisations are increasingly looking externally to SMEs that can set up and run the ‘Project Management Office’ (‘PMO’) during the project lifecycle.

What Does The PMO Do?

Manage The Implementation: the PMO, led by a project or programme manager (dependent on scale and number of workstreams), is responsible for the coordination of the moving parts, both with the implementation vendor and internally within the organisation. This provides the project lead with the bandwidth needed to deliver on the strategic role of the project (and often technical SME); ensuring resources are secure, team morale is at a high, and that the objectives that the business needs to meet get realised.

Operational Readiness: the PMO can bring

industry insights and experience to get your team ready ahead of the implementation. This involves getting the right team in place, preparing for the imminent data requests coming your way and making sure you have a route to access and pull the multiple sources of data needed and will work through cleansing this ahead of time. This readiness support delivers an extra pair(s) of hands which organisations typically need to help manage the activities that are timeconsuming, complex or require significant data support.

Testing Strategies For Execution: this is one of the areas of technology implementations that has the potential to create some of the greatest risks to the project, yet it is also an area where a lot is expected from the client implementation team who may have limited prior experience of software testing. There are very specific methodologies, approaches and tools that are used to conduct testing with a lot to prepare for. The PMO is skilled at breaking down this area of the project into meaningful and manageable activities whilst using best practice scenarios to support test script design to ensure an organisation is testing the full capabilities of the system before giving the green light to the vendor.

Provide Organisational Change Management: you only need to type this into a search engine to be inundated with the broad spectrum of thought leadership surrounding change management. Whilst there is much to be read on the matter the articles tend to have a widely accepted common theme;

Figure

The criticality of getting project management right on your implementation can make-or-break the timelines, cost and overall project success

it’s something that is important to get right. All too often project leads treat this as a discrete activity scheduled into the latter period of the project when it should be incorporated throughout the project lifecycle. The PMO should incorporate change management into the plans, establish what the change curve will look like, and how the impacted parties will be managed which removes the danger of end users, business functions and customers rejecting adoption of the technology after all the configuration effort.

Key Takeaways

Technology implementations will always require a significant amount of investment from people contributing to the day-to-day project activities, right through to leadership investing their time to champion the business through the change. The timelines are usually a marathon not a sprint, and reserves of motivation are needed to get through the bumps along the way. Here are some key takeaways to keep in mind ahead of going into your implementation that will help set you up for success:

1. Strong pre-planning before starting with your vendor to align internally on business goals, budgets, and team selection. Don’t underestimate this phase.

2. Robust implementation methodologies that the whole team, both vendor and customer, understand and can get onboard with. Maintaining team morale will be critical.

3. SMEs need to be timely in what they execute and be advocates for the new technology. Some users that you

rely upon may be in a comfort zone using the existing technology and miss opportunities to create more efficient processes in the new technology.

4. Put an emphasis on continual change management, don’t leave it until the last phase of the project. This will provide the business with confidence that the technology will land and be adopted by the business and wider users.

5. Draw in specialist consultancy skills for any gaps you might have e.g., if you don’t have a data conversion specialist look to the market, if project management does not exist in your team seek professional support. Whilst these are additional expenditures, taking the decision to get the job done by experts will reduce the risk of prolonging your implementation due to poor execution.

References:

(1) Mint Jutras: The Real Facts About ERP Implementation. https://ultraconsultants.com/ wp-content/uploads/2021/02/Real-FactsAbout-ERP-Implementation-final-rev-2.12.19.pdf

(2) Five Differences Between A Project Manager And A Project Leader https://www.forbes. com/sites/forbesbusinesscouncil/2021/06/03/ five-differences-between-a-project-managerand-a-project-leader/?sh=a2e46246a14d

(3)Deloitte 2012-2013 survey “Insights for leading your large-scale technology implementation”

https://www2.deloitte.com/content/dam/ Deloitte/us/Documents/human-capital/ us-fanatical-about-smart-start-120514.pdf

(4) Deloitte 2012-2013 survey “Insights for leading your large-scale technology implementation” https://www2.deloitte.com/content/dam/ Deloitte/us/Documents/human-capital/ us-fanatical-about-smart-start-120514.pdf

D: +44 20 7007 8364

D: +44 20 7007 9218 E: emmalbrown@deloitte.co.uk

DELOITTE PAYROLL AND WORKFORCE MANAGEMENT

Our mission is to define the payroll func:on of the future, for the workforce of the future. We created Deloitte Payroll and Workforce Management to deliver, transform and disrupt. We work with client organisations to solve the most complex challenges driving employee experience, efficiency and value. We deploy Deloitte market knowledge, subject matter expertise and insight to rethink the payroll and workforce management function. We focus on a range of areas, including global payroll delivery, strategy design, operational optimisation, vendor selection, technology implementa:on, automation and ecosystem design. Find out more here: https://www2.deloitte.com/uk/en/pages/tax/articles/payroll-andworkforce-management.html

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.

Put an emphasis on continual change management, don’t leave it until the last phase of the project

How Much Does It Cost To Sponsor A Skilled Worker In The UK?

As the UK economy continues to grapple with skills shortages and a record number of job vacancies, many employers are turning to international recruitment for the first time, in order to fill critical roles within their business.

The Skilled Worker route is the most commonly used immigration route for employers looking to recruit overseas nationals to work in skilled roles. Employers looking to hire migrant workers under this route must obtain permission from the Home Office by applying for a sponsor licence.

A key concern for many businesses new to sponsorship is the cost involved with recruiting Skilled Workers from overseas. The Home Office charges various different fees, some of which must be covered by the sponsoring employer and others which are usually paid by the visa applicant.

When it comes to calculating costs, there are many different factors to consider and therefore the amount payable by the applicant and the sponsor can vary greatly according to the individual circumstances of each case.

Below, we set out the various Home Office fees that employers will need to consider when applying to sponsor a worker under the Skilled Worker route, alongside some case study examples.

Sponsor Licence Application Fee

If your business does not already hold a valid sponsor licence, you will need to apply for one before you can begin sponsoring Skilled Workers. The Home Office application fee is £1,476 for medium or large sponsors, or £536 for small or charitable sponsors. Once granted, a sponsor licence is valid for four years.

Visa Application Fee

The application fee for a Skilled Worker visa varies depending on the length of time listed on the Certificate of Sponsorship, whether the application is being submitted from inside or outside the UK, and if the job is in a shortage occupation. The application fee can therefore vary from £479 to £1,423 depending on the individual’s circumstances.

Immigration Health Surcharge

Case Study 1

NHS during their stay. The IHS is currently £624 per person per year, or £470 per year for under-18s.

Dependants

Under the Skilled Worker route, main applicants can apply to bring their partner and children to the UK with them as their ‘dependants’, if they are eligible. Dependants are also charged a visa application fee at the same rate as the main applicant and must pay the applicable IHS fee. For Skilled Workers applying with multiple dependants, the costs can therefore run into thousands of pounds.

Maintenance Funds

Main applicants for a Skilled Worker visa must usually show that they have maintenance funds of at least £1,270 unless they have been in the UK with a valid visa for at least 12 months or their employer can cover this cost for them. Any accompanying dependants must also have a certain amount of money available. The amount required is £285 for a partner, £315 for one child and £200 for each additional child.

The below example outlines the costs for a single Skilled Worker (no dependants) being sponsored for three years by a small sponsor in a shortage occupation.

Visa application fee £479

APPLICANT FEES

SPONSOR FEES

Case Study 2

Immigration Health Surcharge £1,872

Maintenance funds £1,270

Immigration Skills Charge £1,092

Certificate of Sponsorship £199

TOTAL = £4,912

The below example outlines the cost for a main applicant being sponsored by a medium or large sponsor for five years, with three accompanying dependants (a partner and two children).

Visa application fee £4,940

APPLICANT FEES

SPONSOR FEES

Immigration Health Surcharge £10,940

Maintenance funds £2,070

Immigration Skills Charge £5,000

Certificate of Sponsorship £199

The Immigration Health Surcharge (IHS) allows migrants to access healthcare on the

TOTAL = £23,149

Under the Skilled Worker route, main applicants can apply to bring their partner and children to the UK with them as their ‘dependants’, if they are eligible

Immigration Skills Charge

Sponsors are required to pay the Immigration Skills Charge (ISC) for each Certificate of Sponsorship they assign, unless an exemption applies. Medium or large sponsors must pay £1,000 for the first 12 months of employment and £500 for each additional six-month period. Small or charitable sponsors are charged a lower rate of £364 for the first 12 months and £182 for each additional six-month period.

Certificate Of Sponsorship

Sponsors are charged a fee of £199 for each Certificate of Sponsorship they assign to a Skilled Worker.

Additional Fees

Additional charges may apply during the application process, depending on the applicant’s circumstances. These include (but are not limited to) the following:

• Optional Priority or Super Priority service fees

• English language test fees

• TB test fees.

Expert Support With Skilled Worker Sponsorship

If your business is looking to begin an international recruitment drive and requires

Join

legal support in the process, Smith Stone Walters can help. Our team of qualified immigration advisors are on hand to guide your business through the entire process. To speak to a member of our team about your requirements, please call us on 0208 461 6660 or email info@smithstonewalters.com.

2023 Global HR Conference

Monday 5th June 2023 at The Royal Automobile Club, Pall Mall, London

They will be covering the following topics:

Sustainability In Global Mobility – Turning Reds Into Green Global Tax Update

How Can Integrating Talent Management With Global Mobility Attract And Retain Top Global Talent?

Buying Mobility Software – Are You Horizontal Or Vertical? – Turning Theory into Reality!

A Brief Summary Of Some Recent Immigration Changes And What Is The Real Cost Of A UK Visa?

This event is for Senior Global HR Professionals only and is free of charge to attend. If you would like to register, please email helen@internationalhradviser.com with the name/s of those who would like to attend.Further information can be found on page 2.

We look forward to seeing you there

Sponsors are required to pay the Immigration Skills Charge (ISC) for each Certificate of Sponsorship they assign, unless an exemption applies

What Does Your Mobility Programme Look Like For 2023?

Employee experience, programme optimisation, and managing a remote workforce are just some areas HR and mobility professionals will have to consider when creating a mobility strategy that meets both near- and long-term needs this year. That’s according to a recent survey report published by global mobility service provider, Cartus. Entitled “What Does Your Mobility Programme Look Like for 2023?”, the report received 59 responses representing a number of industries, including manufacturing, construction, tech, consumer goods, pharma, food services, logistics, retail, oil and gas, finance, life sciences, and aerospace.

Global Mobility Priorities

When asked what their top global mobility priorities are for the year, respondents to our survey highlighted three stand-out areas:

• Employee experience

• Programme optimisation

• Compliance.

Two of these three trends (employee experience and compliance) were top priorities listed by respondents in the same survey last year (“What Does Your Mobility Programme Look Like For 2022?”). Although programme optimisation, or finding the most effective way to deliver mobility, is not a new industry trend, it appears to be an emerging priority for companies this year.

Employee Experience

Unsurprisingly, employee experience is the top focus, most likely due to the many challenges mobile employees experienced in 2022 with supply chain slowdowns, high costs, complex immigration requirements, a lack of affordable temporary accommodations around the globe, and mortgage interest rate spikes in places like the UK and United States.

To counter this pressure, many global mobility teams offer flexibility in their policies, whether that is by adding inclusive policy language and support, tiering policies, focusing on duty of care, or providing core

and choice policies in which the employee can choose diverse support suitable to their family’s specific needs. In addition, organisations continue to distinguish between company-sponsored moves and those initiated by the employee.

Programme Optimisation

Global mobility managers today are looking to adopt technology solutions that streamline and optimise the most effective way to deliver mobility (including remote workers and business travellers), track demographics, and reduce complexity. Overall, there appears to be a need among survey respondents to improve programme consistency and structure, programme flow, and automation.

Compliance

The rise in the number of remote workers may be the reason compliance made this survey’s top three priorities for 2023. Another factor could be the rising digitisation of compliance, which makes it easier to share information across borders, enabling different governing authorities to work together to identify noncompliant individuals.

For those with a remote workforce, we recommend having a formal policy and deciding who within the business owns the policy. This will help mitigate potential compliance complexities. Robust remote worker policies should aim to achieve a balance between ensuring an organisation adheres to local and global laws and legislation while providing employees and future talent with the flexibility they desire.

Global Mobility Challenges

When looking at the top mobility challenges for 2023, the results from the survey reflect similar findings found in the 2022 report. Respondents cited rising global costs in a difficult macroeconomic environment, talent availability and deployment, and the evolution of mobility to fully incorporate cross-border or remote work moves.

Notably, unlike last year where respondents cited compliance as a top challenge, it was omitted this year, although it did make the 2023 top priority list. This shift may be due to the new work environment, which has meant - in addition to being a challenge - compliance has now also become a focus and priority for companies.

Rising Global Costs In A Difficult Macroeconomic Environment

Identified as the most anticipated challenge in 2023, rising costs have meant HR and mobility professionals must seek ways to reduce cost to offset market increases. In addition, they must balance that need simultaneously with one that strives to deliver an excellent relocating experience for the assignee and their family.

Encouragingly for the long-term, programme costs are expected to decrease as timely shipments of goods return and housing and temporary accommodations become more available. For the near-term, developing a suite of global mobility policies commensurate with the employee level or the purpose of the assignment/transfer can help to contain relocation costs. Whether that requires additional policies added to your existing policies, or looking at a more flexible approach contained by a pre-approved budget, may depend on your company’s culture and philosophy.

Adopting a more flexible approach to mobility may combine these two seemingly competing focuses (cost containment and employee experience). Policies may be targeted, tiered policies by level or move purpose, or core/flex policies providing relocating employees with choice and control while presenting opportunities for cost containment. A core/flex approach provides the assignees the benefits they need and cap the amount an individual can cash out from unused relocation services.

A flexible policy approach can also provide the innovative and inclusive options that need to be implemented as part of macroorganisational initiatives. Such initiatives can influence mobility policy and enhance the employee experience - e.g., allowing a friend or relative to join a single-parent assignee on the final trip to help babysit children while the assignee unpacks and settles in.

Talent Availability And Deployment

Survey respondents cited talent availability and deployment as another key challenge this year. It relates to attracting key talent in competitive markets and then ensuring you retain talent by providing them with the relocation benefits they expect, which almost always relates to providing them with some type of choice and flexibility.

In addition to the critical role flexible policies play in delivering a positive employee experience, mobility programmes should also reflect Diversity, Equity, and Inclusion (DEI) and Environmental, Social, and Corporate Governance (ESG) or sustainability options.

For DEI, proactively reviewing mobility policies to add inclusionary language or letting new hires know about Employee Resource Groups are great first steps to ensuring employees feel they belong. Follow-up initiatives may include addressing family-specific needs in mobility policies - e.g., wheelchair accommodations/accessibility, nonvisible disabilities, and safety and security measures, which further demonstrate an employer’s inclusive approach and dedication to duty of care.

From an ESG or sustainability perspective, providing some candidates with an inclusionary policy that addresses their “green” interests, for example, may convince them to join an organisation. Seeking sustainable resources and solutions from suppliers - e.g., reduced packaging and recycling, discard and donate, and providing virtual communications instead of paper copies - can go a long way with an employee or candidate considering an assignment with your company. Encouragingly, 76% of respondents have a corporate sustainability strategy covering their whole business and supply chain.

Evolution Of Mobility

As the corporate relocation industry evolves, global mobility teams inevitably encounter new challenges, including remote work, selfinitiated moves, and compliance for crossborder moves/business travellers. Allowing employees to work remotely can expose companies to potential compliance, tax, and immigration risks, but it can also significantly benefit organisations by expanding talent pools; attracting, developing, and retaining employees; and reducing facility costs.

The global mobility function must balance and integrate flexible working and location preferences with the organisation’s preferred ways of working. In addition, it is important to understand how these areas impact talent pools.

Policy Redesign

As the global landscape continues to evolve, so too have the needs of relocating employees and their families. Meeting the requirements of a multi-generational and increasingly varied employee base is one of the most significant challenges global organisations face today. To attract, develop, and retain the best talent and provide sufficient duty of care, businesses are looking for innovative ways to approach mobility

policies, with more than half of respondents (56%) considering a policy redesign in 2023, up 17 percentage points from last year.

Most responding companies (64%) are considering redesigning both US domestic and international mobility programmes. The top reasons for doing so reflect current priorities and challenges for 2023: flexibility, cost, and a focus on talent (e.g., employee satisfaction). Additional reasons cited by respondents included diversity, equity, and inclusion, and employee volume.

Pressure On HR And Mobility Professionals

Trends previously mentioned (cost containment, DEI, competition for talent, remote workers) each come with their own set of projects, initiatives, and focuses that the global mobility function is expected to deliver. Coupled with a lack of time and resources, this could be argued to be the biggest challenge facing HR and mobility professionals today.

David Pascoe, Executive Senior Vice President, Global Talent Mobility, EMEA and APAC, Cartus, comments, “Today, relocation plays a significant role within many organisations, and that has increased pressure on HR and mobility professionals. However, the challenges to effectively manage this additional work include a lack of resources, the increasing complexity of mobility support required by assignees, and the wider needs of the business.”

“If we consider the increase in distributed workforces, for example, HR and mobility professionals can often feel overwhelmed

by the volume of remote work requests they receive, not to mention the need to meet often-changing and complex immigration laws. In fact, according to Cartus’ Remote Work Landscape Pulse Survey Report, 25% of respondents estimate that managing remote work requests may take up to 40 hours per month".

“Whether remote work, cost containment, or competition for talent, without a robust solution in place - such as integrated technology or partnering with a relocation services provider - key mobility priorities like these can become a significant challenge, impacting the productivity and overall success of HR and mobility teams”.

With new and evolving challenges and priorities, both within mobility and from wider economic influences, the need to build an innovative and strategic mobility programme remains critical.

CARTUS

For more information on how Cartus can help support your mobility needs, please email cartussolutions@cartus.com.

Scan the QR codes below to access Cartus’ latest research.

Today, relocation plays a significant role within many organisations, and that has increased pressure on HR and mobility professionals

Reshaping Global Mobility

On the surface, the ability to use a laptop anywhere in the world and start working seems straightforward. However, this research highlights risks and consequences - from compliance, financial, commercial and people perspectives.

If an organisation has 80,000 employees of which 400 have cross-border remote arrangements, the paradox that is while they represent 0.5% of the workforce, the time to provide advisory support and track them is disproportionate.

The Associated Risks And Penalties Could Be Substantial, Including;

• Creating a permanent establishment and exposure to tax on corporate profits. Breach of compliance regulations

• Breach of contractual client obligations (on-site working, not remote).

The Two Fundamental Principles To Be Determined For The Organisation:

• What is our philosophy for this type of international work arrangement?

• What risk thresholds are we prepared to accept?

Management of cross-border remote working (CBRW) has fallen squarely on the shoulders of Global Mobility (GM), expanding their scope and visibility at board level. GM are there to review, advise and manage the process, and guide management on the implications of their decisions.

Global Mobility Are Not The Decision Makers In Every Case

GM leaders report making stronger connections with other functions, including IT, security, tax, real estate and human resources, as the implications of remote working have more inter-dependencies than initially imagined.

Therefore, it is critical for organisations to set their own position on CBRW, to educate managers and employees, and set expectations at source - avoiding continual, time sapping, and reactive fixes of exposures when cases are uncovered.

Communication and education also play different but critical roles in the process. And while transparency is key for all organisations, the level of cascade varies between frameworks and guidelines only for line management through virtual workshops for all employees.

Overwhelmingly, requests for this work arrangement are employee driven - by a return to their point of origination, extended families (which may also be humanitarian care), or lifestyle - as well as attracting and retaining key talent.

Interestingly, several organisations reported it tended to be more junior or mid-level employees requesting these arrangements, but in reality, and unsurprisingly, they were more likely to be approved for must keep talent or senior leaders.

Whilst technology has enabled much greater flexibility for people to work remotely, a country’s infrastructure could pose a threat to data security. This is a particular consideration for organisations handling sensitive client data such as financial or defence projects, or their own organisation’s data. A one-time risk review is insufficient, and ongoing assessment, essential.

work, or additional cost), whilst others tolerate it. One FMCG representative remarked about key talent and senior leadership, “We will do what it takes, but the company does not want to incur any costs or compliance risks unless exceptional circumstances apply”.

In terms of governance, those who have implemented frameworks during the COVID19 pandemic (mid to late 2020), believe they have established greater controls and use a series of methods to identify potential cross-border work arrangements: for example, formalised requests protocols, or immigration and travel requests and business travel tracker tools.

Having a gated/filter qualifying criteria approach not only takes the pressure off Global Mobility, senior management and other functional teams to review cases - it will, in the longer-term, set the right organisational mindset for employees to appreciate the rules, be informed and understand the need for compliance and duty of care before seeking approvals.

Immigration Is Seen As A Critical Yes Or No ProcessAnd It Either Stops There Or Continues With Other Key Compliance Filters Such As Tax

Our online survey findings reported that where organisations have been in breach, the financial penalties are not severe (only 3%) but this may change over the next 12-24 months.

Achieving a preferred CBRW framework and rules requires informed engagement and the views not limited to key stakeholders at board level, but also regional and functional levels, too. In decentralised organisations, local business policies and country legislation may differ - it is therefore essential to achieve a harmonised approach, especially in countries where others offer CBRW as a competitive talent attraction tool.

Scope And Context

One Size Does Not Fit All For Cross-border Remote Working

Our interviews highlight sectors, but by the very nature of their work, product and services, have different attitudes and tolerance levels of CBRW and work from anywhere (WFA)combined with lesser or greater governance and awareness of when it occurs.

Some have zero-tolerance (culture/ mindset, security due to the nature of their

In this report, we explore key learnings and insights on how different sectors have addressed or modified approaches to cross-border remote working and work from anywhere.

In the summer of 2022, eleven global organisations shared their insights on how cross-border remote working had evolved in their businesses. Sectors represented were consulting, defence, FMCG, financial services, global health technology, IT and performance sport. Additionally, an online survey of more than 100 global organisations was conducted to add further dimension.

Whilst technology has enabled much greater flexibility for people to work remotely, a country’s infrastructure could pose a threat to data security

The combined global workforce for those who contributed, either by interview or online, amount to over two million employees operating on a truly global basis. In the online survey, half of the organisations operate in up to 24 countries, three quarters in up to 50 countries and a quarter in more than 50. 12% are in over 100 countries.

The research is focused specifically on those who live and perform most of their work in one country - but employed in another - which benefits from their work and from where they are paid. The research includes cases of WFA requests, which have gathered momentum over the past two years, especially in the IT sector.

Note: Frontier Workers (those who are employed and work in one country, but live in another) are not included in the report as, despite the similarities, they raise very different issues.

Cross-border remote working arrangements are not a new phenomenon. However, for some sectors, one major outcome of the COVID-19 pandemic has been a seismic shift in requests for remote working or work from anywhere.

One respondent to our online survey confirmed they had 3,000 applications a year to work cross-border. Another estimated 50% of their global workforce were undertaking cross-border remote working.

Key Considerations

• The COVID-19 pandemic, in many cases, demonstrated that employee productivity and effectiveness whilst functioning remotely has been sustainable, if not always desirable, from an organisational perspective

• As pressure continues to intensify for global talent attraction and retention, how important is it for organisations to embrace cross-border remote workers as another formalised international work arrangement?

• CBRW could impact whole organisations and not the relatively smaller cadre of international employees contained in a visible, formalised Global Mobility programme

• As employees and candidates feel empowered to push for more personalised work-life choices, so the organisational response requires more connected, intuitive leadership in the face of uncertainty, ambiguity and evolving legislation on a global scale

• This is all happening during a time of increasing global talent scarcity.

Legislation

States are increasingly introducing remote worker legislation. During our research, we learnt that the European Commission is in the early stages of considering laws or guidelines on this subject.

• In many countries these new laws give workers some rights to request remote working from their employer

• In most cases this right to request remote working does not impose a legal obligation on the employer to agree to requests

• However, some states, e.g., Portugal, do set-out scenarios where remote work requests should be granted

• There are also increasing numbers of countries (over 40, including Croatia, Germany, Greece, Hungary, Mexico, Norway, Portugal, Spain and the UAE) which are making legislative provisionoften known as digital nomad visas - to formalise the status of foreign nationals who live in their territory, but whose work is elsewhere. This is, of course, in addition to existing compliance legislation

• Nations are also starting to more proactively assess the tax positions of remote workers - especially as they see income related tax revenues shift away from their Treasuries.

Key Findings

1. Global Mobility Teams Have Amplified Visibility With Leadership Due To CBRW And WFA

Organisation Insights

CBRW has fallen into the remit of Global Mobility, expanding their scope and visibility in the organisation.

Survey Analysis

Who takes ultimate responsibility for approving cross-border remote working in your organisation?

• 28% Business Head

• 17% Global Mobility/HR

• 14% HR Director

• 10% Board Members

2. Sector And Organisation Culture Drive Acceptance Of CBRW And WFA

Organisation Insights

The corporate interviews highlight that organisational risk appetite and risk awareness vary by size, sector, leadership attitudes and roles.

Some organisations will not entertain it, so simply say “no or stop”. Make-andmeet organisations reliant on in-person production and selling activities have less tolerance for these arrangements.

The strictest approaches were taken by organisations with the highest regulatory, information security burdens and contractual client obligations.

At the outset, it is important to establish board-level philosophy of the acceptance and tolerance of these work arrangements.

For some roles, the talent marketplace is not industry aligned, for example a

technology professional working at a bank also has cross-over career opportunities in other sectors, which may have a different attitude to CBRW and WFA.

Survey Analysis

What is your best estimate of how many crossborder remote workers you have globally?

• 65% have less than 200

• 19% were unaware

• 11% have more than 500

• 5% have 201-499

In line with our interviews, for those where this arrangement fits their business model or are larger organisations, it is more likely to have taken action to establish governance. For the majority (65%), how much time is spent managing these cases depends on whether they have a structured programme in place.

3. Drivers Organisation Insights

Point of origination, extended families (which may also be humanitarian care) lifestyle as well as attracting and retaining key talent are key drivers.

A senior global reward leader said, “The extended family is coming back into being because welfare is requiring it”.

Survey Analysis

What has been the most significant impact on remote, cross-border working arrangements for individuals and teams?

• 34% unknown - no formal assessment

• 25% effective for certain roles such as projects

• 18% discovered many unknown and unauthorised CBW cases

• 13% effective for all types of work or roles

• 6% unsuccessful - cost and compliance outweigh benefits.

The findings suggest it is not a universally effective work arrangement, and more evaluation of the return on investment is required.

4. Talent - Some Sectors See A Competitive Advantage In Offering CBRW Or WFA e.g. Up To 30 Days Per Annum Policies

Organisation Insights

Cross-border working permissions, as exceptions, are given to the scarcest talent in organisations. The exceptions could be a cross-border arrangement or formalised assignment. One organisation shared, “The business view is that if we have real talent, we will do whatever it takes”.

All organisations are seeing workplace agility and flexibility including country flexibility, as a key feature of recruitment demands and negotiations. Only one organisation interviewed adopted a rigid approach, where job and location had

to be the same even for the most senior talent or employees.

One high-performance sports organisation was already using CBRW pre-pandemic. They continue to build the best teams with the best talent, regardless of location – which for them, was business as usual.

Survey Analysis

Do you limit or cap cross-border remote working by time?

• 37% no

• 34% yes, typically up to 3 months

• 15% yes, typically up to 6 months

• 7% yes, more than 1 year or no limit

• 6% yes, typically up to 12 months

These responses suggest that for WFA arrangements, up to three months are most frequently reported. Some organisations were generally more risk-averse, with a cap between ten and 30-days. Six months being the exception.

For long-term CBRW, other employment approaches could be used. One organisation uses hosted heads, employed in country

A, but working for the benefit of country

B. To achieve this, the correct compliance protocols are established. Alternatively, organisations reported for key/senior talent they would formalise into traditional short or long-term assignment positions.

Our poll suggests that limited risk has impacted respondents, but it is prudent to have the right processes in place to mitigate potential compliance breaches.

6. Early-Movers Who Has Established Governance And More Likely To Be Efficient And Effective In Managing New Cases?

Organisation Insights

Those with policies, frameworks, processes, communication protocols and tracking tools believe they can more easily manage new cases arising from compliance breaches, or via some other business discovery.

A key learning from this group is the requirement for infrastructure and local business connection to ensure the employee continues to make a connection with, and contributes to, the business.

Survey Analysis

Over the next 12-months, what changes will, or might you make, to your cross-border travel programme?

• 19% educate stakeholders on noncompliance risk

• 18% none

• 16% introduce a technology solution to track business travellers

• 16% limit business travel to critical trips. How compliance is governed varies by organisation, but is likely to be a combination of people, process and technology.

employee works - or follow the reward in the country where they reside?

There is a tension between flexibility and compensation for example - the longer an employee performs their role from another country, the stronger the logic to move them to local compensation. This potentially has an adverse impact and creates organisational retention issues.

As a wider point, where employment and social taxes are triggered, organisations are leaving this to be borne by the employee. The same is true for commuting costswhich are for the employee’s own account. They will, however, fund the structural set-up costs for compliance, such as shadow payrolls and potentially tax preparation support.

Conclusions And Key Takeaways

The approach and standpoint to managing these challenges depends on the organisation’s size, available resource (or willingness to allocate) - and the investment of executive time. While there are currently few reports of substantial penalties, it is dangerous to assume it will not have an impact.

Without a strategic plan, policies and process, this could consume a disproportionate amount of time, compared with the needs of the vast majority of employees - presenting organisations with potential risk.

Considerations for thinking outside and inside the lines on cross-border remote working include:

Organisation Insights

All organisations reported a gated or funnel filter and a formalised request managed by Global Mobility.

Right to work is a definite requirement, and other factors impacting IT data security/business/personal safety and security and triggering payroll compliance also need to be approved. Where organisations are assessing Permanent Establishment (PE) risk, certain countries result in lower thresholds, i.e. spending less time in the country.

Survey Analysis

Has any type of cross-border remote working impacted the organisation?

• 44% unknown

• 35% no

• 13% other

• 6% impact on commercial activities

• 1% significant fines (PE) - more than €100K

• 1% alleged breach of client contract

• 1% lawsuit for breach of client contract

Having governance in place is a combination of effective internal management and external compliance.

No process is 100% guaranteed, but where a breach has occurred, having protocols in place enables quicker resolution, and externally demonstrates to government authorities that a pro-active approach is taken, which could mitigate penalties and fines.

7. Approach, Education And Communication Organisation Insights

Generally, organisations are taking a reactive approach as cases arise, rather than proactively searching for them. Only by exception are organisations using IP addresses as a way of discovery. In these cases, the focus is on tracking assets and data, not the individual, as part of contractual client agreements.

Several larger organisations with defined policies and protocols have implemented organisation-wide communication, sponsored by leadership, to ensure the organisation’s position. Others have reported a wait until it occurs approach, to avoid requests for CBRW or WFA.

There is a careful balancing act between protecting time, resource and costs - and creating a demand and entitlement.

8. Reward Organisation Insights

There is a split approach to how to compensate longer-term CBRW employees. Market-rate for the country for whom the

Organisation

1. Culture drives attitudes to crossborder remote working

What is the C-suite mindset and philosophy on hybrid (remote versus in-office) presence?

2. Strategic workplace design

Is this a structural change to work, or a shortterm work variation request?

3. Does one size fit all?

In large organisations, different roles have individual needs for in-person presence and teaming.

• Have flexibility and do not be too rigidbecause that simply does not work.

• If you are zealous, you will spend an organisation’s profit on compliance issues - not what the senior leaders want.

4. Ensure you have a referee

Differing groups and stakeholders have alternative views. Ensure you have someone on the team setting the approach, coordinating and managing the breadth of opinion.

Talent

5. Does this align with talent needs?

Who benefits, and are CBRW roles for more junior employees declined?

• They cost time and money and can create risk. If you are going to make the required investment, align with the right level and talent

5. WFA Varies Between Organisations. Some Are More Conservative, With A Cap Of 10-Days As An Extension Of Holiday; Others Allow Up To 30-Days, And The Outliers At 60-Days - Without Further Review

• If you are telling people to go back to their base (employment) location and they do not want to, be prepared that you may lose that talent.

6. Human approach

Employee wellbeing should be top priority

- balance getting people back to their base location, with a more flexible, human approach.

7. The extended family is back

Employee care and related responsibilities are driving more occurrence of cross-border working.

8. Reward - beware of contradictions

In the real world, flexibility comes with challenges. What should the employee be paid; how does that change with a remote working role?

Governance

9. Connection, contribution and local infrastructure

Cross-border remote workers cannot just be placed anywhere. They need an organisation, support to enable them to function, and for their role to succeed.

10. Target minimal cases that require review

Building a system that pre-approves cases means your resources are focused on a smaller number of the complex, more risky cases that need attention.

11. Setting thresholds

Detailed thinking is key. How many days, how many countries, over what period, how many trips, what roles?

12. Provision (price-in) things not going to plan Thresholds you set may be seen as absolute entitlements by employees. So trips of the maximum duration and planned by employees. When things do not go to plan, thresholds can be breached. Consider lower thresholds, pricing-in an extension, illness or missed flights.

13. Do you remain current on legislation?

Existing and potential - the European Commission is assessing and compiling legislation to be applied across the EU, giving employees the right to work from anywhere.

Implementation

14. Educate line managers to avoid and not make decisions

This is a complex technical area. Focus on explaining what decisions can and cannot be made by line managers, rather than educating how to make them.

15. How do you measure success?

Tailor to the organisation’s business and purpose, for example, in FMCG as a business that makes and sells things - the growth of the business is our key metric.

AMERICAN IN BRITAIN

for Your American Employees in Britain

JOHN RASON

Our quarterly, glossy magazine is for American expatriates living and working in Britain, and features a number of regular articles including Tax Advice, Wealth Management, Travel, Theatre, Healthcare, Restaurant Reviews, Arts & Antiques, Legal Matters, Days Out With The Family, Sports, Hotel Reviews, International Schools & Education, Expatriate & Women’s Clubs News, US Embassy Corner and other specialist features relevant to this community.

We offer Americans a free annual subscription, or we can deliver a bulk quantity to your office for you to distribute to your American employees as part of a benefits package. For information, please email helen@theamericanhour.com, or ask your American employees to email Helen directly.

We also send out a monthly email newsletter and organise events and parties for Americans living in the UK.

If you would like further information, please email helen@theamericanhour.com, and feel free to ask your employees to contact Helen directly.

Help your American expatriate employees in the UK, by sharing information about these services now!

The Human Resource Pool’s Changing

Three big workforce trends are shaping the future of work: diversity, longevity, and scarcity. To take just one metric, by 2045, the white population of the US will no longer be the majority, for instance. To inspire and attract tomorrow’s multi-faceted workforce, companies must understand the business need for diversity. In parallel, CEOs and CHROs face an ever-growing need to build organisations as diverse as their customers will be.

Here, HR’s role is central: Does your company have a culture of psychological safety, equity, and inclusion? Do people listen to each other?

The second issue is that the available workforce is getting older. By 2030, 25% of US workers will be over the age of 55 - a percentage that will continue to increase. There are two reasons for this: increasing longevity, coupled with a very low fertility rate.

Imagine your company with five generations working together, and how multi-faceted their expectations will be: 20 year-olds looking for new relationships, career guidance, constant communication, and excitement; early family creators needing flexibility for childcare and child activities; middle-aged workers who want promotion and to improve their standards of living; older workers desirous of purpose, meaning, and work that fits their older eyes, hands, and legs.

It’s time to get serious about new ideas like reverse mentoring (young workers mentoring older ones), part-time careers for older folks, job sharing and accommodations for ageing eyes, backs, and hands.

The third demographic challenge is the overall size of the workforce is shrinking. That means that for now, and probably for the rest of your working lifetime, workers are the ones in charge.

Industries, Jobs, And Careers Are All Being Rapidly Redefined

Industries are converging, creating a massive war for certain skills. Gas making car manufacturers are now building electric vehicles, batteries, and EV power distribution

networks; oil and chemical companies are getting into hydrogen and energy systems, and so on.

To stand any chance of surviving this tsunami of change, the job architecture and structure of your business must adapt. No company can hire its way to growth any more - not only are there fewer workers to choose from, but the high-demand skills are in very short supply.

HR leaders need to respond by looking at recruiting, retention, re-skilling, and redesign of jobs in one integrated system. There is a massive effort to build skills models and assess skills, as well as for improved internal mobility, talent marketplaces, and new ways of nurturing high-value talent from currently low-status employees.

hundreds of thousands of skills, each of which might trend up or down, based on technology or business shifts.

A skills-based organisation deals with this by using data to focus on who to hire, who to promote, and how to develop people. This new, dynamic way of managing people is not the same as old-style competency management. Simply doing a skills taxonomy is not a good way to proceed, in other words; instead, think capabilities first, skills second, and look to real world data to track which skills you need.

Hybrid Is The Future

The new way of working isn’t just about “hybrid.” Companies are redefining the whole idea of the workplace to create better models for modern teamwork, performance management, alignment, and multi-functional working. They need to figure out how to make multiple bosses, projects, and assignments all work in parallel, and often in cyberspace.

That’s why we’re seeing a whole next gen of HR and workplace technology for everything from scheduling, workplace optimisation, real-estate planning, presence awareness, mobile video, and similar productivity tools.

Hybrid work also requires cultural strength. Managers must learn to be not just comfortable with remote, but also how to lead, listen, and help in that context. Rather than mandate “days in the office,” I urge companies to build a set of appropriate, organisation-specific tools and guidelines.

And ensure your front line workers are included - all your shop floor sales assistants, cooks and baristas, nurses, pharmacists, drivers, manufacturing workers. They need post-pandemic autonomy and flexibility just as much, if not more so.

Yes, You’ll Still Be Talking A Lot About Skills This Year

One of the hottest discussion topics in HR right now is skills, but skills and skills-based strategies are not a replacement for the competency models we spent so much time and effort building. “Skills” is different, so warrants a different approach.

In the competency model era, we selected competencies from a book and matched them each to a job. Today, that doesn’t work. The “skills” needed in software engineering change every few months. We live in the context of tens to

Not Just Global, But Workforce Sustainability

Global companies are framing a new idea: “People Sustainability.” This is a combination of more conscious support for employees on physical and mental health, but also financial wellbeing. And this is happening against a new background of the need to be aware of contractor health and safety, non-discrimination/DEI, child protection, a right to collective bargaining, freedom from sexual harassment, and the right to have leave for personal needs.

To stand any chance of surviving this tsunami of change, the job architecture and structure of your business must adapt

Instead of looking at fairness, equity, belonging, and well-being at work as separate projects, a better approach may well be to unify them into one roof under the label of “long term organisational sustainability”.

Rethinking Leadership

One of the largest and most fragmented markets in HR is leadership development. I foresee most companies seriously revisiting their leadership models this year, as so much has changed in business; today, leaders don’t “manage” or “direct” people very much any more, and instead they empower, train, support, align, and move people around.

On that basis, a big theme for 2023, is how to balance the new world of empathetic, flexible leadership with the need for everincreasing productivity. We learned a big lesson during the last economic cycle - you can’t just hire to grow and expect that to always work (look at Meta and Amazon’s layoffs, for instance).

Now is the time for leaders to be more deliberate, careful, and strategic in their hiring. Another key to leadership in 2023 is listening. After all, every great new idea for job redesign or new work processes will likely come from a passionate, well-intended employee.

Performance Management In The Flow Of Work

If revenues slow, companies will look at layoffs. How to make these decisions in context with the performance process?

The good news is that we’re moving to more of a continual performance model and away from the inflexible annual appraisal. We’re seeing a lot more OKRs (mutually agreed objectives and key results), more formal check-in processes, and new tools that let team leaders manage performance “in the flow of work”.

Success Factors, which pioneered cascading goal software in the early 1990s, has introduced a team-management, OKR-based system, that lets you manage performance among matrix teams, hierarchical teams, and individual contributors; Microsoft is bringing OKR-based goal management into your MS Teams workspace. Fuel 50, which is primarily a career management and talent marketplace platform, has added performance management functionality, for example.

Keep Pay Equity And Non-Cash Benefits Top Of Mind

This last year has been the most disruptive period in pay practices I’ve seen in a long time. Every company has been raising pay, changing pay models, and benchmarking pay, at a fevered pitch. Our research shows that it’s not the gross amount that is the only thing workers care about; they are six times more impacted by pay equity than they are level of pay.

In other words, if you want to allocate budgets well, fix the disparities in pay before you give everyone a raise. Every time a new person is hired, promoted, or moved, your pay system may need adjustment. Salesforce, for example, spends millions of dollars every year to keep on top of pay equity issues - a process that’s built real trust with employees.

By the same token, you reward people in more ways than just money - in 2022, US employers paid over 30% of their total payroll in “non-cash” benefits (e.g., insurance, leave, educational benefits, etc.). Keep an eye on keeping competitive on this front - if the reward system helps your people stay focused and productive, the pay-off is always massive.

Consciously Supporting Workforce Well-Being

CEOs, CFOs, and CHROs understand that today, when both business landscapes and technology change so fast, skilled and highly engaged employees are the most important asset they have. As a result, once considered a benefit to be offered along with vacation and insurance, well-being is now a defined strategy for corporate growth.

workers work more than 50-55 hours, their total work output decreases, for example.

Maybe we’re finally figuring out that the old industrial model of 8-5/five days a week just no longer applies.

Productivity = Company AND Employee Satisfaction

There are only two ways to grow: hire more people - or make the company as a whole more productive.

Global business has focused more on the former and ignored the latter. As a result, productivity growth has been disappointing - but now times are tougher, we have to go there.

So, only ever hire if that new member will definitely/in a provable way, boost the productivity of the entire team. Don’t just fill the slots. Every new HR process or policy you create should only ever improve productivity, not reduce it.

You’ll also want to do this as productivity creates employee engagement. When people feel productive, they love their jobs; when they feel they are wasting their time, they quietly quit or move on. Your people should only ever be doing the jobs that best leverage their credentialed and valued skills, not wasting time on admin.

Expanding The L&D Conversation

Organisations have been leaning heavily on content libraries, programme design, tools, and systems. That means many have lost sight of the real goal in L&D; facilitating employee growth. By going beyond development, you are much more likely to build skills to secure your future.

As an L&D leader, 2023 should already feature either solid plans or early achievement in things like talent marketplaces to build employee skills through projects, gigs, mentoring, relationship building, etc., as well as capability academies where business leaders and L&D create internal teaching support for needed capabilities, skills, and growth.

You should also be looking at tuition-free education to build capacity in particularly constrained roles - a trend we say is less of a career path, and more of a career “pathway”.

Cherish Your Recruiters

Well-being is also something we have to deal with, as delayed stress and burnout from lockdown is a real factor now. One of the largest US telecommunications providers told me 68% of its employees felt they had too much to do.

Employee burnout is a management problem, not a personal issue for each worker. HR can help by fighting for things like space for teams to rest, reflect, learn, and grow, and push for permanent new ways of worth like four-day work weeks. Data shows that once

A key learning for the sector over the past few years is that while technology is important, the real key to high-performance recruiting is the strength, skills, and relationships of your recruiters.

To maximise this insight, organisations should focus on making recruiters the kings and queens of talent acquisition. Stop seeing them as just salespeople, and more as trusted advisors who can help decide if a candidate fits your culture, and arm them with powerful tools for sourcing, assessment, and selling you as a brand.

Well-being is also something we have to deal with, as delayed stress and burnout from lockdown is a real factor now

Having said that, you’ll struggle even more than usual in a tight labour market this year without having a fantastic employment brand. This is a leadership job, not an HR programme.

People Analytics Continues To Evolve

In the 1980s and 1990s, “people analytics” focused on understanding pay, rewards, the annual engagement survey, and to some extent capturing data on employee retention and engagement. Then, we added other dimensions like culture, organisational network analysis, and started looking at things like DEI.

But the field has hardly stopped still, and now we have more and more tools that give us even better insights into employee sentiment, activity, and productivity. People analytics has in effect expanded from an experiment in psychology to a business function delivering data-based insights across all areas of the business (not just HR).

But we have to focus on a new problem: can we use HR data to help the company grow? Here, look for the imminent explosion of interest in ‘talent intelligence;’ harnessing all your data to do things like tell the CEO with specific

numbers and projections how many people you can hire, re-skill, and grow or which jobs you can redesign.

New HR Tech Orientations

Meanwhile, the HR tech market is taking on a new form: integrated skills-powered talent platforms that create, infer, or store skills. Every HR vendor, from Oracle to SAP Success Factors to Workday, Gloat to Cornerstone, Eightfold to Beamery, wants to be the “system of record” for skills.

Until this shakes out, keep an open mind, and only work with vendors committed to API-based openness to other systems if you demand it. And keep an eye on AI, which has just become ubiquitous in our world.

A New Business “Operating System” With HR At Its Heart

The pandemic forced HR to become focused on infection prevention, working at home, well-being, and mental health. Think about how many new policies you built over the last three years by working with colleagues across the business - this is what HR needs to look like now.

Going forward, everything we do in HR should be part of such integrated, crossorganisational, working.

BERSIN

Josh is an analyst and thought leader specialising in the global talent market and the challenges and trends affecting business workforces around the world. He founded Bersin & Associates in 2001 to provide associated research and advisory services - a business he later sold to Deloitte when it became known as Bersin by Deloitte. In 2019, he launched The Josh Bersin Academy, the world's first global development academy for HR and talent professionals, and he is currently the CEO of its sister human capital advisory firm, The Josh Bersin Company.

www.joshbersin.com

The 2023 Expatriate’s Guide to Living in the

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Embassies & High Commissions

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In the meantime, please visit our website www.expatsguidetotheuk.com which is the digital platform for the Guide.

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Survey Shows 8% Average Drop In Employee Engagement Since The Pandemic

Average employee engagement has dropped by 8% since the pandemic, according to a survey of more than 800 workers.

The research was carried out by Nottingham Business School (NBS), part of Nottingham Trent University, and Engage for Success (EFS), who were supported by the CIPD.

An online survey conducted in 2022, asked a representative sample of the UK population to self-report their levels of engagement across four main areas - engagement with their job, their colleagues, their manager, and their organisation. It also required them to reflect on their experiences during the pandemic.

The results - which form the first EFS Employee Engagement Index - showed that employee engagement significantly dropped by 11% during the pandemic for the majority of employees across all of the areas of engagement measured. Only a 3% creep in recovery has since been seen, with employee engagement in the UK now rated as 8% lower than before the pandemic.

However, the drop in engagement was clearly impacted by the organisational response and the methods used to engage with employees during the pandemic. Employers who used a variety of methods, providing options to their employees, were relatively insulated by the drops in engagement.

Respondents who stated their organisations offered them no online health and wellbeing initiatives during the pandemic reported a 13% drop in engagement. This dramatically compared to only a 1% drop for respondents who reported their organisations provided four or more health and well-being initiatives. Similar findings were seen for learning and development, communication channels and employee involvement methods.

Almost half (44%) of respondents reported having no learning and development opportunities available to them by their employer during the pandemic.

The degree of drop in engagement also varied across position, demographics, and personal circumstances. Engagement of respondents on furlough was lower than for non-furloughed workers and remains lower.

Co-lead researcher Dr Sarah Pass, senior lecturer in Human Resource Management at NBS and EFS board member, said: “Our

findings show the importance of getting the organisational response right during times of crisis and uncertainty for employees.

“Organisations that involved, supported, and developed their employees saw minimal drops in employee engagement during the pandemic and are almost back to current levels. Whilst those who did little have seen both significant drops in engagement during the pandemic, and a minimal creep since”.

“Findings also highlight the fundamental role of the line manager, with frequency of interactions with managers linked to levels of employee engagement”.

The EFS Employee Engagement Index will now be introduced annually on a national level but can also be used by individual organisations to give them insight into areas they may wish to develop, and empower them to gain a fundamental understanding of employee engagement in their organisation.

Jonny Gifford, senior adviser for organisational behaviour at the CIPD, the professional body for HR and people development, said: "The pandemic posed a huge disruption to working lives and many organisations are still establishing what the ‘new normal’ is for them. Employee motivation, commitment and how people identify with their organisations need to be at the heart of this.

however, the lack of rebound is deeply concerning, especially in the current climate. Organisations need to act and put the people issues at the centre of the business agenda if they want to successfully meet the uncertainties and opportunities ahead”.

The findings have been published in full in the UK Employee Engagement Survey 2022 report, including a foreword by David MacLeod and Nita Clarke, co-authors of the MacLeod Review and co-founders of Engage for Success, and Peter Cheese, chair of the EFS board.

DR SARAH PASS

Senior lecturer in Human Resource Management at NBS and EFS board member.

About Nottingham Business School at Nottingham Trent University

Nottingham Business School (NBS) at Nottingham Trent University (NTU) is a leader in experiential learning and personalisation of business, management and economics education and research, combining academic excellence with positive impact on people, business and society. NBS has an unrivalled level of engagement with business, public and voluntary organisations. With more than 8,500 students, NBS is also one of UK’s largest business schools.

“After a period of extreme disruption, now is a good time to rebuild engagement with a strong focus on development opportunities, well-being support and rebuilding communications and interactions. This will help organisations attract, retain and get the best out of people and is key to individual and organisational success".

Dr Pass added: “A drop in engagement during the pandemic is understandable,

NBS is Quadruple+ Accredited by EQUIS, AACSB, EFMD BA for International Business, which are globally recognised hallmarks of excellence and quality for business education. NBS is also accredited by Small Business Charter, providing support and development for SMEs. The school is also a PRME Champion and held up as an exemplar and beacon by the United Nations Principles of Responsible Management Education (PRME).

A drop in engagement during the pandemic is understandable

Cpl's Talent Evolution Group Q&A: How Will AI Affect The Future Of Recruitment?

HR and talent specialists play a critical role in managing an organisation’s most valuable asset – its people. From attracting and retaining new talent to developing environments that care for and protect staff’s well-being, HR and talent teams are responsible for ensuring top productivity and engagement from a workforce.

With the leverage of AI tools like ChatGPT, professionals can streamline processes and achieve greater efficiency. However, business must take responsibility of ensuring that jobs completed with AI are done so securely, effectively and indiscriminately.

Let’s delve into the ways AI will affect the future of recruitment and how talent specialists can prepare.

Q: Will ChatGPT change the way people apply for jobs?

A: The promise of ChatGPT is to automate tasks that we used to think were the exclusive domain of humans. Whether it changes the world of recruitment ultimately comes down to whether it delivers on that promise.

If it does, the impact will be huge. ChatGPT touches anything that involves language: CVs, cover letters, emails –perhaps even scripts for telephone and in-person interviews. But the big question is competence. Can ChatGPT truly match human efforts?

For now, at least, the answer appears to be “No”. The outputs ChatGPT generates, though often passable, tend to be generic. It lacks the unique spark that distinguishes exceptional candidates. There are also big issues with its depth of understanding. Ask ChatGPT to share genuine expertise on a niche topic and it will often get its facts wrong. Neither of these weaknesses bodes well for a job application.

With that said, a little human help goes a long way. A human editing ChatGPT’s output could produce a better result than either one acting alone. As the technology

improves, it’s even possible that the human element could fade away entirely.

Q: How about recruiters? Will ChatGPT free up their time to focus more on strategy and less on admin?

A: For us, the role of ChatGPT starts and ends with automation. At no point should outputs from ChatGPT be instrumental in making decisions.

Potential short-term applications of ChatGPT will likely be low impact. For example, creating a CV template to pass along to a candidate. Even in these instances, though, the role of human oversight – of sense-checking outputs to ensure they are of a high quality – will remain absolutely crucial.

Q: There is a concern that there will be a bias in documents produced by ChatGPT. What Are your thoughts on this? And how may this affect the recruitment industry?

A: It’s certainly a problem. Language models work by aggregation, meaning they take in huge volumes of data and average it out to answer specific prompts. Inherently, that means they are going to reproduce biases that exist in society at large. For recruitment professionals, that’s a huge problem –because our aim should always be to strive for a better society, not merely perpetuate existing power structures.

If ChatGPT usage becomes widespread, it’s imperative we stay wise to the prospect of bias. It’s never going to be a valid excuse to simply blame ChatGPT for an instance of bias or discrimination. Recruitment organisation must take ownership of their attitudes and perspectives – that’s true now, and will remain so in the future, regardless of what technological advances await us.

Q: There have been experiments whereby ChatGPT has sat and passed exams. Will this affect recruiters’ ability to effectively filter candidates?

A: Yes and no. On the one hand, it’s undeniable that ChatGPT has access to a vast amount of knowledge, which it can harness and reproduce to serve a variety of purposes. A candidate could quite plausibly get ChatGPT to write a document they would have been unable to write themselves, then edit the output to put their own stamp on it.

That said, there are certain hard limits on ChatGPT’s usefulness. An obvious one is the brute facts of a candidate’s employment history – recruiters will still be able to check up on references and establish the truth of those claims. ChatGPT also won’t be much help in an in-person interview, particularly one where the candidate must complete a task assigned to them then and there.

We expect to see recruiters adjusting their methods in response to ChatGPT. Ultimately, recruiters want to find out the ways in which candidates are distinct from one another – how their skill sets differ. Even if we’re accepting ChatGPT as a valid way to assist with CV writing and other tasks, that’s still only one skill – there’s much more to a candidate than that. Accordingly, if the use of AI becomes widespread, recruiters will simply find new ways to surface those unique traits that makes candidates special.

Q: What consequences may candidates face, if using ChatGPT inappropriately when applying for job roles?

A: This will vary depending on the recruiter they are working with and the company they are applying to. However, all applicants should be conscious that several tools exist for checking whether a given piece of text was generate by ChatGPT. Though none are 100% accurate, they could nevertheless be used to justify a hiring manager’s suspicions if they suspect a CV or cover letter displays ChatGPT’s hallmarks. The decision on whether to use such tools ultimately sits with the decision makers, but their very existence should give applicants pause if they’re considering using ChatGPT.

Having said that, enforceability is an issue. Savvy candidates may edit ChatGPT’s

responses into their own words, or even use tailored prompts to encourage ChatGPT to depart from its default tone of voice.

Q: Do you predict that there will be restrictions placed on the use of ChatGPT in recruitment e.g., for security reasons?

A: We’re conscious of a few news stories where big companies have banned the use of ChatGPT. A notable case was the financial services company JPMorgan Chase. But they didn’t specify a reason for banning ChatGPT beyond their existing guidelines about the use of third-party software. So, on the surface at least, their reasons for the ban don’t seem related to any security threat from AI technology.

It all comes back to the same question of enforcement. If ChatGPT can do a job effectively, employees who use it are going to benefit. And when the tool is public, can you really stop people using it?

A more likely future is one where ChatGPT usage becomes accepted as a part of normal working life. Recruitment professionals – just like workers in all other domains – will come to understand its benefits and limitations. They’ll use it when it helps them do their job more effectively and stick to more traditional methods where ChatGPT is of no help.

Q: To what extent do you feel there is a risk of great candidates being left out of a recruitment process due to relying on AI technology? For example, if AI is used to scan CVs for specific words.

A: The important context is that this already happens. Some companies use software to scan for keywords; others instruct their recruiters to manually look for those keywords. It’s easy to see how this

process could be counter-productive when implemented in an unsophisticated way. What about the candidates who express their qualifications in a more creative – but equally valid – fashion? We don’t necessarily want to punish candidates who dare to break the mould.

With ChatGPT, the logic is the same. We look at the outcomes and ask whether this outcome is favourable. Perhaps ChatGPT goes beyond the capabilities of legacy resume-scanning software. If so, great – but how can we use that capability to actually improve our filtering processes? Any errors that follow from that can be remedied by keeping humans in the loop to review where necessary. We shouldn’t be afraid of automation – but we need to make sure we preserve the highest possible levels of rigour.

Q: As a business, how has Cpl’s Talent Evolution Group incorporated the use of AI into the workplace? And what impact has this had on your staff?

A: This year we have begun trialling CRM Analytics within our database. CRM Analytics is a Salesforce-native scalable AI-powered data and analytics platform that allows us to imbed predictive insights and recommendations into the workflow based on the aggregated data within the system. This will encourage our consultants to maintain a data-centric approach to their client relationships and facilitate bespoke, relevant experiences for all.

Additionally, we have implemented the use of DaXtra Parser into our work at Cpl’s Talent Evolution Group. Utilising a combination of machine learning and natural language processing, with heavy focus on semantics, DaXtra Parser differentiates keywords and their use within text while parsing CVs onto the database. These branches of AI help our consultants in the differentiation of job titles, locations and skill level.

Cpl’s Talent Evolution Group: Cpl’s Talent Evolution Group is part of the Cpl group of brands and businesses – a transformational talent solutions organisation which provides services across the full talent spectrum.

Over the past 30 years, Cpl has grown to include many specialist teams and brands. From recruitment and flexible workforce solutions to advisory, business and service outsourcing, the business works with many of the world's most respected organisations in Ireland, the UK and Europe.

Acquired by OUTSOURCING Inc., in 2021, the combined organisation has access to a global sourcing and delivery network of 250+ sister companies across 39 countries, spanning six continents.

ÁINE FANNING

Managing Director of Talent Evolution Group (TEG),is well versed and passionate about all things relating to recruitment, talent attraction and blended workforces. With over 15 years’ worth of global recruitment experience, Áine is a multi-disciplinary leader of recruitment, service delivery, HR & talent experience and insights professionals' teams. Áine has specific expertise in supporting organisations that need to upscale quickly with recruitment outsourcing and managed services.

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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

Salisbury House, 29 Finsbury Circus, London, EC2M 5QQ

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.

To advertise your services to our Global HR readers in this Directory please email helen@internationalhradviser.com for further information.