Relocate Global Europe, August 2014

FO R H R , G LO BA L MA N A GERS & RELOCATIO N PR OFESSIONALS

Re:locate August 2014

EU RO P E

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SERVICED APARTMENTS

Mixing business and leisure

TECHNOLOGY

Profiling Berlin’s tech centre

EDUCATION

Choosing a school in Europe

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EUROPE LAUNCH ISSUE

Contents 14 24

16

12

NEWS, ANALYSIS & EVENTS 4 Re:editor’s letter

FEATURES 12 Re:technology

28 Re:surveys

Profiling Berlin’s tech centre, plus the latest on London’s digital economy.

Fiona Murchie looks at what’s in store this issue.

Insights from the latest global mobility research reports cover everything from destinations to assignment types.

HOT TOPIC 6 Re:European Union

Ten years of EU enlargement, the political landscape following the European parliamentary elections, and the effects of new sanctions against Russia.

GLOBAL MANAGEMENT 10 Re:managing assignments

The varying cost of living for expats across Europe.

14 Re:enterprise

Practical guidance for companies and investors looking to do business in the UK.

27 Re:trends

Exploring shifts in expatriate demographics since the 2008 financial crisis.

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22 Re:conference

EuRA responds to changing times and global developments.

34 Re:serviced apartments

Trends and challenges for the industry in Europe.

37 Re:finance

European firms in China are adapting to a sober new reality.

24 Re:culture

How destination service providers can enhance assignees’ cultural understanding.

POLICY & PRACTICE 30 Re:mobility policy

Is flexibility the key to attracting and retaining the best talent?

EMPLOYEE SUPPORT 16 Re:education

A step-by-step guide to choosing a school in Europe.

at relocatemagazine.com to download your FREE Asia Pacific, Europe and Latin America digital magazines

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I

to the launch issue “ Welcome of Re:locate Global Europe ”

n this, the first full-length edition of our special Europe-focused digital magazine, we share with you the best in global mobility thinking and practice from around the region, to help organisations of all sizes to manage and retain talent successfully in any location.

Among other insights, we bring you coverage of hot topics and trends from the EuRA Congress in Edinburgh, and the latest facts and figures on the cost of living for expats around the region. Our step-by step guide to finding a good school will be invaluable to relocating families.

In other features, Ray Furlong presents his expert analysis of the current crisis in Ukraine and looks at EU enlargement ten years on, David Sapsted considers Europe’s political landscape following the EU parliamentary elections, and we examine key findings from the latest round of global mobility surveys.

Keep up-to-date with daily news and comment on Europe, and from around the world, via relocatemagazine.com, where you can also register to receive a free copy of our new digital magazines for Asia Pacific (out now) and Latin America (out August).

Please contact us if you have ideas for features and surveys, and let us know the industry sectors you would like us to cover, the challenges you face, and your burning issues. Watch out for news of exciting developments in the autumn, when Re:locate will be celebrating its tenth anniversary.

Fiona Murchie Managing Editor editorial@relocatemagazine.com

Coming soon: Re:locate magazine Autumn 2014

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The Team Managing Editor: Fiona Murchie editorial@relocatemagazine.com

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© 2014. Re:locate is published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein. ISSN 1743-9566.

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HOT TOPIC

EU ENLARGEMENT ten years on

It is now ten years since ten countries joined the European Union. The bloc’s largest-ever expansion has had huge implications and is unlikely to be repeated, says Ray Furlong.

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n 1 May 2004, there was the unmistakable scent of history in the air. In Berlin, in the shadow of the Brandenburg Gate, where the city had once been divided between East and West, market stalls were set up showcasing the culture and cuisine of the ten new member states. There were music, dancing, and fireworks.

The age-old dream of a ‘Europe united and free’ was finally coming to fruition.

The hopes that had fuelled the democratic revolutions that toppled communism were coming to their logical conclusion. Seven former Soviet satellites were ‘coming home’.

This was the symbolism that dominated the day – rather than the accession of Malta, Cyprus or Slovenia (which was formerly part of non-aligned Yugoslavia).

6 | Re:locate Europe | Summer 2014

But there were also concerns in the balmy spring air.

Polls showed that the majority of Germans were concerned that enlargement would expose them to competition from lower-wage, lower-tax economies in the East. There were also fears about crime.

These worries were felt across the older member states, and in part they came to pass. The UK, in particular, has experienced an unprecedented wave of immigration from Eastern Europe, which has had a huge impact on political debate and fuelled the rise of the UK Independence Party (UKIP).

Recently, Labour leader Ed Miliband apologised for allowing migrant workers in. The Germans were so worried that they imposed restrictions on migrant labour for seven years. But these had mixed results. Even before enlargement, Berlin tradesmen

SECTION HEADING

were complaining about cheaper competitors from east of the river Oder.

But many economists argue that the flood of motivated, cheap labour helped boost Western industries during the boom years.

The view on the cultural impact is likewise divided.

While anti-immigrant rhetoric is proving popular across Europe, some argue that new migrant communities have added to the rich cultural diversity of many Western European countries.

The new member states themselves have clearly benefited.

Study, travel and doing business have all become easier.

Their economies have blossomed – although they still lag behind Western living standards.

Perhaps the most instructive comparison is between Poland and Ukraine. A report by the Robert Schuman Foundation said, “In 1990, the GDP per capita in Poland and Ukraine were similar. Two decades later, the ratio was 1:4 between the two countries.�

Clearly, part of this divergence occurred during the 1990s, when Poland was on an obvious path towards EU membership and attracting huge foreign direct investment.

Ukraine has had no such benefits. The two main candidates for President of the European Commission, Martin Schulz and Jean-Claude Juncker, both agreed that they could not imagine Ukraine joining the EU within five years.

Instead, the country currently seems to be slipping into civil war.

Ten years on, the pull of Brussels remains strong. The revolutionary crowds in Kiev rallied beneath EU flags.

Croatia has just joined, and Serbia hopes to follow.

But to anyone watching the current campaign for the European elections, enlargement fatigue is all too discernible across the continent.

For daily news and articles on Europe, visit relocatemagazine.com/europe

relocatemagazine.com | 7

HOT TOPIC

EUROPE & THE UK The post-election political landscape Following the recent EU parliamentary elections, the startling rise of anti-EU parties has been preoccupying the politicians and Brussels bureaucrats. David Sapsted reports.

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n the UK, France and Denmark, right-of-centre anti-immigration parties topped the recent EU parliamentary polls.

In Greece, the hard-left Syriza movement, which opposes EU-enforced austerity measures, took top spot, while the Eurosceptic Five Star movement came second in Italy Even in Germany, which remains the most avowedly proEU nation, the Eurosceptic Alternatives won seven seats.

In fact, although Eurosceptics have doubled their representation in the European Parliament, the make-up of the Strasbourg assembly will remain firmly in the hands of pro-European centre-right and centre-left groupings.

But in terms of national politics, the results could have far-reaching ramifications as mainstream parties attempt to come up with their own anti-immigration, anti-Brussels legislation in a bid to win back the votes they have lost.

This could be a mistake, according to former UK Prime Minister Tony Blair, who told the BBC that it was time to make the case for Europe more loudly and “confront and expose … reactionary forces” such as the UK Independence Party (UKIP) and the National Front in France.

“We are confronted by what I think are these very reactionary forces. We have to take on and expose the fact these parties have no actual solutions to the problem of the 21st century,” he said.

Mr Blair said that Europe had to “get away from this notion that the whole purpose is to diminish the power

8 | Re:locate Europe | Summer 2014

of the nation state, and recognise that Europe works best if nation states come together and cooperate on matters where they need the collective weight of Europe to prevail”.

On immigration, he said, “You have to deal with those parts of the immigrant community who are rejecting the idea of integrating into the mainstream. However, to allow that to trend into anti-immigrant feeling is, in my view, a huge mistake.

“You look a little bit beneath that UKIP façade and you see something, in my view, pretty nasty and unpleasant.

You take London: what a great capital city. Why is it a great capital city? Precisely because it has got a mix of different people.

“By all means have rules and controls, but the idea that the problems of Britain are about immigrants is a backward and regressive step. I think we should contend every inch of that argument.”

However, a Downing Street spokesman said that current UK Prime Minister David Cameron had been telling fellow European leaders that they must “heed the views expressed at the ballot box that the EU needs to change and to show it cannot be business as usual”.

For daily news and articles on Europe, visit relocatemagazine.com/europe

HOT TOPIC

Agony in Ukraine, business in Russia

The European Union has announced extra sanctions against Russia following the downing of Malaysia Airlines flight MH-17, but continues to hold back from measures that would really hurt business with Russia, says Ray Furlong.

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t a 24 July meeting, following the Malaysia Airlines disaster, EU diplomats agreed to add 15 people to the list of Russian citizens covered by its existing sanctions regime of targeted visa bans and asset freezes.

They also banned 18 Russian entities from doing business in the EU. US sanctions have already covered leading Russian companies, including oil giant Rosneft and Gazprombank.

Now Europe has followed suit.

This is a tightening of the screw, but still a calibrated response that only scratches the surface when it comes to economic ties to Russia.

Further measures, such as an arms or financial embargo, have been kept in reserve. Russian gas continues to flow to Europe, and Anglo-Dutch company Shell is able to push ahead in its Siberian fracking partnership with Gazprom.

Russia has condemned the latest sanctions as “illegal, unreasonable and counterproductive”.

But if the international investigation confirms that flight MH-17 was indeed shot down by rebels using a Russiansupplied BUK ground-to-air missile system, more sanctions will surely follow.

Meanwhile, the United States has said it has evidence of Russian artillery firing across the border at Ukrainian positions. If true, this would mark a further increase in Russia’s involvement in Ukraine.

Russia has denied any role in arming the rebels, who apparently have tanks and artillery as well as the ability to

shoot down planes. Rebel leaders have repeatedly boasted of shooting down Ukrainian military aircraft, reports corroborated by the Ukrainian Defence Ministry.

On the ground, Ukrainian armed forces have made significant advances in recent weeks, capturing the rebel stronghold of Sloviansk and forcing the rebels to retreat from the outskirts of Donetsk to the city centre.

Meanwhile, in Kiev, the governing coalition has collapsed and the Prime Minister, Arseny Yatseniuk, has announced his resignation. This sets the stage for parliamentary elections in the autumn. Once again, Ukrainians will cast their ballots while their country is at war.

The economic cost of all this is staggering. A recent report by the Federation of German Industry (BDI) said many businesses were holding off from further investments in both Ukraine and Russia. A poll of investors found 53 per cent of them expected Russia to fall into recession, and 77 per cent expected this in Ukraine.

On 24 July, the International Monetary Fund (IMF) reduced its forecast for Russian economic growth this year to 0.2 per cent from 1.3 per cent, citing capital flight due to Moscow’s role in the Ukraine conflict. It said it expected Ukraine’s economy to shrink by 6.5 per cent.

For daily news and articles on Europe, visit relocatemagazine.com/europe

relocatemagazine.com | 9

MANAGING ASSIGNMENTS

EUROPE’S MOST EXPENSIVE CITIES NAMED

T

he latest edition of ECA International’s costof-living survey has seen Oslo retain its place as Europe’s most expensive city for expatriates.

ECA, which provides information and technology for the management and assignment of employees around the world, carries out its surveys every six months to help companies calculate cost-of-living allowances, so that international assignees’ purchasing power is not compromised while they are overseas.

The surveys compare a basket of like-for-like consumer goods and services commonly purchased by assignees in more than 440 locations worldwide.

Data for some living costs, such as property rentals, utilities, car purchases and school fees, is not included in ECA’s calculations, as they are usually covered by separate allowances.

In this latest survey, London rose through the ranks to its highest position since 2008, thanks to a stronger pound, which has pushed up costs for international assignees.

The UK capital leaped 40 places to become the 46th most expensive city for expats.

The region’s top ten, however, is dominated by cities in Switzerland, Scandinavia and Finland.

True to 2013’s rankings, four Swiss cities – Zurich (4), Geneva (5), Bern (7) and Basel (8) – retain their reputation as costly destinations for assignees and their employers.

Denmark, in tenth place, further emphasises Europe’s status as one of the most expensive regions in the world for international assignees.

Moscow has fallen from third to tenth place regionally, and is down to 22nd position globally, from last year’s fifth place. The rouble fell sharply against the US dollar and other currencies over the year.

A stronger euro has seen Eurozone locations climb the ranking.

10 | Re:locate Europe | Summer 2014

The latest crop of cost-of-living surveys has revealed the most expensive cities in Europe for expats.

Mercer survey sees London surge The strong pound and rising property costs have sent London rocketing up Mercer’s annual rankings of the most expensive cities for expatriates.

The survey compares the cost of housing “of international standards in an appropriate neighbourhood”, transport, food, clothing, household goods and entertainment. Currency movements are measured against the US dollar.

London was 25th in the 2013 listing, but shot up to 12th place in this year’s survey, which looks at the cost of living in 211 cities across the globe.

Other UK cities, including Birmingham, Aberdeen, Glasgow and Belfast, have also seen their positions in the table rise, though they are still ranked between 90 and 120.

“This year, UK cities have surged in the ranking, mainly as a result of a strengthening of the British pound against the US dollar,” said Ellyn Karetnick, UK head of Mercer’s international mobility practice.

“The UK’s soaring housing market has also had an impact, with added pressure on the rental market as many buyers face difficulties in obtaining a mortgage.

“Glasgow and Birmingham have experienced the greatest jumps, as they have had significant cost increases on goods and services and rentals.”

As in the ECA survey, Swiss cities feature prominently: Zurich at number 5 (from 8 last year), Geneva at number 6 (from 7) and Bern at number 8 (from 9).

Other European cities that have seen significant rises include Munich, up 26 places to number 55, Paris, up ten places to 27, and Milan, up 11 places to 30. Mercer said these jumps were mainly the result of strengthening currencies against the dollar.

By contrast, Moscow fell from second to ninth place in the survey.

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TECHNOLOGY

BERLIN’S TECH CENTRE a profile

Berlin is a tech media darling at the moment, attracting headlines speculating that it’s an upcoming contender as the next Silicon Valley and pitting it as a rival to London’s Tech City. Mark E Johnson reports.

B

erlin certainly isn’t short on bragging rights as a hotspot for tech/digital start-ups. Thanks in no small part to its tech scene, it attracted attention in the venture capital world in 2013 by bringing in an impressive €273 million in the second quarter alone, overtaking the UK as the leading target for European investment capital.

A recent report suggests the Berlin tech sector generated an impressive €8.9 billion in sales in 2011, and another claims that tech firms now account for 25 per cent of all companies in the city.

The area boasts a number of success stories. Soundcloud (think YouTube for audio), with its 40 million registered users and 200 million listeners (as of July 2013), is the most obvious poster child, followed by the likes of social games developer Wooga and app maker Zoobe.

12 | Re:locate Europe | Summer 2014

Secrets of success A couple of factors appear to be driving the boom. Zoobe founder and chief executive Lenard Krawinkel told the BBC, “Berlin is sexy at the moment, and it’s cheap, so you can rent space cheaply. You can employ people for far less money than in San Francisco – and even for far less money than in Asia.”

There’s something less quantifiable happening as well, though, according to David Noel, SoundCloud’s VP of Community. He told the BBC that Berlin’s attitude to risk was changing. “If you fail in Europe, you have the stigma of failure that you carry around. When I look at Berlin, that is changing, so we’re not talking about failure as a bad thing, we’re talking about failure in a way that it lets us become better next time”.

There’s also a high level of diversity, with entrepreneurs migrating to Berlin from across the world. “The degree of

TECHNOLOGY

people coming from the engineering and product side is getting better and better all the time, making it easier to recruit and set up a team,” said Maximilian Claussen, a tech investor at Earlybird, to Techworld.

There’s also Berlin’s physical location. Raf Weverbergh, of Whiteboard, sums it up well, saying, “Geographically, its location is interesting – it’s more peripheral than Paris or London, but it does have better access to the Russian and Eastern European markets, which are less mature than the Western European markets.”

And, of course, the influx of start-ups has had a snowball effect, with newer arrivals having been drawn in by scene veterans, growing access to funding and a booming tech culture.

Anecdotal evidence suggests that employment can be somewhat transient for developers, with workers taking on project work rather than permanent positions, but there’s a strong pool of talent on the ground for companies to draw from nonetheless.

Geographically, the tech scene is centred on two areas.

Kreuzberg is the cheaper, edgier district, with a large immigrant population and buildings covered in street art.

Mitte is slightly more upmarket, with a recent influx of commercial developments and shops.

There have been a number of successful exits, including Brands4Friends (£129 million), Citydeal (£109 million), Jamba (£180 million) and DailyDeal (around £109 million).

Lack of investors a challenge As with London, however, the challenge is seen by many as generating a billion-dollar exit to really put the stamp on Berlin as a major player.

Many see the key problem as being a lack of tech investors on the ground, as well as a conservative attitude towards investment. “It’s relatively easy for companies to get [seed] funding up to €500,000, but raising Series A funding, or anything over a million, is hard,” the co-founder of VPN provider ZenMate, Simon Specka, told Techworld.

“Series A is quite risky for investors, because companies are asking for millions, often when the start-up doesn’t even have a cash flow. It doesn’t suit the German mindset, which is quite risk-averse.”

Exit volume is an issue, too. For all the hype Berlin has attracted, the top three in a recent global ranking of cities with tech start-ups created in the last decade to go global or receive significant amounts of capital were Silicon Valley (201), New York (144) and London (90). Berlin was trailing behind, at 27.

Still, Simon Specka said that things had improved dramatically from a situation where there was virtually no venture capital available to tech companies, and the numbers were looking promising for the future. Factor in that the average cost of a workstation (including rent, taxes and maintenance) in Berlin, at $8,410, is a little over half that of New York or London, and the scrappy underdog looks like it may just have the chops to live up to its own hype.

Decade of growth predicted for digital London

By David Sapsted

London’s digital economy is poised to grow by £12 billion and create 46,000 new jobs in the coming decade, according to a new report.

Research carried out by Oxford Economics for Boris Johnson, London’s mayor, suggested that the capital’s digital economy would grow by 5.1 per cent per year over the next ten years.

The study coincided with the publication of an analysis

by South Mountain Economics, supported by Bloomberg Philanthropies, which claimed that the tech sector in London, the South East and Eastern England, including Oxford and Cambridge, was now growing faster than California’s.

Launching Tech Week in London in June, Mr Johnson said, “Tech Week is a superb opportunity to hail the success of London’s tech sector, which, despite only being in adolescence, already makes a tremendous contribution to our economy and is outperforming our rivals around the globe.

“The tentacles of our digital army now spread to every corner of the capital and far beyond.

“We forecast that they will generate a whopping £12 billion of economic activity and 46,000 new jobs in the capital over the next decade.”

Some 30,000 tech entrepreneurs, investors, business leaders and developers from around the world were expected to attend more than 2,000 Tech Week events featuring representatives of companies including Microsoft, Samsung, Google, Eventbrite and Yammer, plus UK success stories such as Mind Candy and Hassle.

The launch of the event coincided with an announcement by Swedish online payments firm Klarna confirming that it was setting up a UK headquarters in London, with a £100 million investment plan.

A company spokesman said, “London is the natural choice not only because it is a base for growth in the UK, but also because it’s a springboard to continued global expansion.”

Mr Johnson’s office also said that King’s College London and the University of Warwick intended to link up with New York University to create a Centre for Urban Science and Progress in London, which would be based at Canada Water, in Docklands, from 2018.

relocatemagazine.com | 13

ENTERPRISE

Setting up

A BUSINESS IN THE UK With tech investment in the UK continuing to increase and the establishment of London’s Tech City, the world’s third-largest tech start-up community, the UK capital now offers more opportunities than ever for technology firms.

Nick Thomas, a Labour and Employment partner in the London office of global law firm Morgan Lewis, provides practical guidance for companies and investors looking to do business in the UK.

A

recent World Bank Doing Business Survey rated the UK as top country in Europe for ease of doing business, and fourth in the world. However, there are a number of key issues that prudent investors should have in mind to ensure that the process of setting up their new UK business runs smoothly, and that the structure they put in place is fit for purpose.

14 | Re:locate Europe | Summer 2014

The workforce An investor has a range of options when considering how to staff its new UK tech business. A traditional employment relationship is still the most common approach, and is generally the most appropriate for senior individuals and/ or employees whom you wish to remain with the business over the longer term.

ENTERPRISE

Employment in the UK brings with it certain core rights, including those relating to working hours, paid holiday, notice, maternity and paternity leave, and unlawful discrimination. Many of these apply from the outset of the employment relationship. However, one of the most significant protections, the right not to be unfairly dismissed, now only applies to employees who have at least two years’ continuous employment.

Variations on the standard employment model, such as fixed-term contracts or zero-hours contracts, are not uncommon, particularly in the context of small and/or relatively new businesses.

A business will also need to consider the benefits package it will offer. In the UK, this will often include pension contributions, medical insurance, life assurance and permanent health insurance. Many start-ups also elect to award share options to key employees. As the value of the business grows, so does the value of the employee’s options, thereby aligning his or her interests with those of the business.

Following recent changes, it is now possible to make such options subject to an employee’s agreeing to take ‘employee shareholder’ status, pursuant to which they waive a number of rights, including protection against unfair dismissal.

Some start-ups prefer to keep some of their workforce at arm’s length by using third-party consultants. In the tech sector, these consultants are often self-employed individuals running their own consultancy businesses. Such consultants do not enjoy the same level of protection as employees, and the arrangement can typically be terminated by either party on relatively short notice.

However, the UK courts will look at substance rather than form when deciding an individual’s true employment status, and so an individual who is, in practice, treated in the same way as an employee is likely to enjoy employment law protection even if they have been labelled a contractor.

For many companies, the workforce represents both their most important asset and their greatest risk. Accordingly, it is important to put in place appropriate safeguards, including provisions relating to confidential information and intellectual property.

A business should also consider using post-termination covenants that restrict employees’ ability to compete after they leave. In the UK, such restrictions will be unenforceable unless the court is convinced that they are reasonable and absolutely necessary to protect a business, so they will need to be drafted carefully if they are to be effective.

Immigration It is important to consider the UK’s immigration rules, both in relation to individuals who are visiting the UK to explore a new business opportunity or set up a business, and in the context of recruiting once a business exists.

Individuals from a country which is a not a member of the European Economic Area (EEA) do not have an

automatic right to work in the UK, and, depending on their nationality, may require a visa before travelling to the UK. Such individuals may be permitted to travel to the UK as a business visitor for up to six months. During this time, they can undertake fact-finding, conduct site visits and attend business meetings. However, they do not have the right to perform any substantive work.

Often, even where a business uses local workers, there remains a need to transfer individuals to the UK from outside the EEA. Once the business is established, it can apply for a Tier 2 sponsor licence, which, if granted, allows it to obtain a work permit for a non-EEA national, on the basis either that they are an intra-company transferee (they have been employed by a related overseas entity for at least 12 months) or that the UK business has completed the resident labourmarket test (it has advertised the role in the UK and there is no suitable local worker available).

Other options potentially include a graduate entrepreneur visa, or, for leading individuals within the tech industry, an exceptional talent visa. An entrepreneur’s visa or an investor visa may also be available for those with significant assets who are looking to establish themselves in the UK.

The business There are many ways of setting up a business in the UK. Options include establishing a new legal entity, setting up a branch of an existing overseas entity, and acquiring or investing in a new company.

Forming a private company limited by shares (a limited company) is the most common approach. It is possible to acquire such companies ‘off the shelf ’, effectively buying an existing shell company which already has in place the necessary corporate documentation and has been registered with Companies House. This process allows an investor to set up a company quickly (generally within three to five days) and relatively cheaply.

Tax The UK tax regime can be complex and is generally very fact-specific. Accordingly, it will always be necessary to seek advice to ensure that the most appropriate and efficient tax structure is adopted.

Generally speaking, a UK subsidiary of an overseas company (like any other UK-resident company) will pay corporation tax on its UK-sourced profits, and, if it elects to do so, on certain foreign profits, subject to double tax relief for foreign taxes.

The basic rule is that all companies that are incorporated in the UK and all companies whose central management and control is exercised in the UK are resident in the UK for tax purposes. However, even setting up a UK branch of an overseas company is likely to create a taxable presence in the UK.

relocatemagazine.com | 15

EDUCATION

EUROPEAN EDUCATION Choosing a school Helping a family to find a good school in their new location has never been more important. Time and again, research has proved that poor family adjustment can be one of the biggest causes of assignment failure. Rebecca Marriage offers a step-by-step guide to choosing a new school, to help families make a smooth transition.

EDUCATION

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t is no secret that relocating with school-age children is one of the biggest challenges a family can face. In the latest Cartus Trends in Global Relocation survey, respondents listed ‘inability of the family to adjust’ as a leading reason for assignment failure. And with assignees with a partner and accompanied by a dependent family representing almost half of respondents, this is a fact that companies relocating their staff around the world simply cannot ignore.

Helping a family find a good school in their new location is one of the keys to ensuring that the family has every chance of adjusting well to their new circumstances. In the UK and Europe, however, the choice of schooling is vast: state schools, private schools and international schools can all be viable and sensible options for globally mobile families looking for a good school, so families will need careful guidance to help them get it right for their child.

Unlike some of the more challenging parts of the world and emerging markets, which can be perceived as unsuitable for families, schools in the UK and Europe can offer the chance of cultural exchange in a wide variety of school types, including some of the world’s longest-established international and local schools. Many state schools in the region are the envy of the world for their quality teaching staff and excellent academic results, and the reputation of some of the big-name private and international schools is known to many.

Choosing a location Finding a home and a school in a new location can seem to be something of a ‘chicken and egg’ scenario, as the most desirable locations often fall within the catchment area of good schools. “Parents should make sure they look for a school before they decide on where to live,” advises Kim Burgess, external relations director at the British School of Brussels. Casting the net wide to start with can help families to understand what they really want from a home and school, and where they would be prepared to compromise.

Oversubscribed state schools in England, for example, will require families to live within their catchment area if they are to stand a chance of being offered a place, so it’s important to ensure that their chosen home is both affordable and falls within the designated area of their chosen school.

European languages and culture Likewise, deciding between local state schools, independent fee-paying schools and an international school will depend on budget, as well as on other considerations, such as length of assignment and the standard of education available in the area. On a longer assignment or permanent transfer, families are likely to want to make more of an effort to integrate into the local community and concentrate on developing the local language, making the country’s state

and independent schools an attractive option.

But regardless of length of stay, a European relocation can offer fantastic opportunities for language learning and new cultural experiences, and many international schools offer teaching in more than one language.

The British School of Brussels, for example, emphasises the importance of acquiring additional language skills at a very early age by offering bilingual French/English classes. “This not only helps to enhance students’ abilities and prospects,” says Kim Burgess, “but also fosters a sense of multicultural community and global awareness.”

Creating a wish list When parents have settled on a budget and a geographical area, they will need to create a clear picture of what is really important to them and their child. The first step is to prepare a wish list of the ingredients that will make up a perfect school – for example, proximity to home, the availability of good sporting facilities, music or theatrical opportunities, or just good and consistent exam results.

Once they have established their wish list, it’s time for parents to start gathering brochures and browsing websites.

At this point, it might be worth suggesting that the family puts together a spreadsheet of schools available to them, and the information that can be gathered, before making a school visit. For example, the facilities, the curriculum which is taught throughout the school (visit relocatemagazine. com/education for information on international curriculum options), details of exam performance, the latest inspection rating, the children-to-teacher ratio, and the numbers, types and cost of extra-curricular classes.

Parents will then be able, very quickly, to eliminate schools from the long list of those available to them and start to create a shortlist of schools which appear to meet their child’s needs.

International accreditation When it comes to selecting an international school overseas, Andrew Wigford, managing director of Teachers

relocatemagazine.com | 17

SECTION HEADING EDUCATION

International Consultancy, an organisation for international school recruitment, suggests that families might also want to consider whether the school is a member of a respected organisation such as COBIS (the Council of British International Schools) or CIS (the Council of International Schools).

“Many of these organisations have codes of practice and standards that schools need to maintain,” Mr Wigford says. “It’s important to look for registered, accredited international schools to ensure the best learning support.”

Education consultant Elizabeth Sawyer, of Bennett Schoolplacement Worldwide, also believes it is wise to remember that ‘international’ is not a patented term and doesn’t have one set definition. “Essentially, any school can hang out a placard that says ‘international’ and give the term its own meaning,” she says “So when families are exploring ‘international’ options, they should investigate the ways in which a school is or is not truly international.”

“You can use curriculum as a guide,” says Andrew Wigford. “The International Baccalaureate and the International Primary Curriculum and International Middle Years Curriculum are all highly respected international curriculum options. These internationally-minded, learningfocused curricula, which are relevant to all children, in all countries, wherever they are living and learning, can be a badge of quality for an international school, and often suggest a strong focus on the learning needs of all children.”

Points for parents to consider on a school visit • Do they feel welcome as they enter the school?

• Are the staff friendly and confident?

• Are pupils involved in the school tour? Are the children friendly, polite and confident?

• How will the school communicate with parents? Does it produce regular newsletters? Can parents see copies?

• What are the displays on the walls like? Are there photos of children engaging in lively, interesting activities, such as field trips and community involvement?

• Are the school resources well treated and respected?

• Will their child have an orientation visit or be given a

• How long has the headteacher been in post? (Provides

• What extra-curricular activities are available, and how

evidence of stable leadership.)

buddy to help them settle in?

many of them are free?

• Can parents take a look at a break time or a lunch period • How much involvement is there for parents in a parents’ to see how the pupils interact? Do children have a good relationship with staff?

• Are the administrative staff friendly and helpful? These

are the people parents will be communicating with on a daily basis.

18 | Re:locate Europe | Summer 2014

organisation? Does the school offer programmes and support for accompanying partners?

SECTION HEADING

relocatemagazine.com | 19

EDUCATION

Visit the schools No matter how much information families gather about their shortlisted schools, there is simply no substitute for visiting a school in person. However, with so many things to consider and lots of schools to look at, parents can easily muddle the information between visits, so it would be worth encouraging them to take notes as they go along.

“Parents should feel free to ask questions and to use the time to get to know the school as best they can,” says Elizabeth Sawyer. “Provided that questions are asked in polite fashion, schools will appreciate parents’ interest, and so they should not feel embarrassed or shy about asking ‘too many’ questions. Good schools like to showcase themselves, and they will be eager to provide information and reassurance.

A Truly International Education in the Heart of Berkshire |

+44 (0)1344 444013 | admissions@wellingtoncollege.org.uk www.wellingtoncollege.org.uk | Crowthorne, Berkshire RG45 7PU

EDUCATION

“Ultimately, parents should be able to feel that they can envision their child in a given environment and feel confident that the school will have the resources and desire to support him or her appropriately.”

For a useful checklist of points for parents to consider when visiting schools, see p18.

Kim Burgess suggests asking if the school provides options for prospective parents to talk to current families.

This enables parents to ask candid questions about the school environment, as well as offering a potential network of essential support after the move. All new families at the British School of Brussels are welcomed into the Friends of BSB association, where parents are able to make new friends, meet other families and get involved in the school community.

Transport One crucial consideration that parents may forget to put on their list of priorities is transport from home to school. Can the school be reached on foot? If not, parents will need to consider whether transporting children by car will become tiresome and costly.

Some fee-paying schools provide school bus services, and some counties in England provide free buses serving state schools, but these will be dependent on exactly where

I love being in BSB’s French/English bilingual class and am learning Italian and Spanish as well because I have so many friends here from around the world.”

Noé (aged 5 years and 4 months)

For more information visit

www.britishschool.be

the family chooses to live, so the details will need to be established.

“Not all schools will have buses going out to every location, and public transport might not be an option for families with young children,” warns Kim Burgess. She also advises checking whether the school buses have supervisors.

And finally, after going through all the carefully planned selection criteria, it is important to remind families that a happy child is likely to be the key to a successful relocation, and, although a school might seem to tick all the boxes, it is important to make the right choice for the individual child.

“Choosing a school for one’s child is not about keeping up with the Smiths or simply having a well-known school name on one’s child’s academic record,” says Elizabeth Sawyer.

“While those things may be nice, what’s more important is to choose the best-fit school for one’s particular child, and to find the environment where he or she will thrive – academically, socially and emotionally.”

For education news and articles, visit

relocatemagazine.com/education

• 1,350 students fro m ages 1-18 years • 70 nati on alities • British-based curr iculum up to age 16 • Students aged 16-1 8 years - on ly sc hool to offer A Levels, IB D iploma and BTEC French/English bilin gu al education avail able for ages 4 -14 years • Outstanding academ ic results • Wide choice of extr a-curricular activities

CONFERENCE

EuRA

responds to change

This year’s European Relocation Association conference attracted delegates from around the world. The key sessions showed that this forward-thinking organisation has its finger on the pulse of relocation as a driver of global growth, as Fiona Murchie reports.

A

ttended by a record number of delegates – 670, from more than 500 different countries – this year’s EuRA conference was held in Edinburgh.

It is interesting to see that what was once a European association event now attracts members from as far afield as Africa, Brazil, India and China, in addition to the USA and Australia.

EuRA’s members include relocation service providers from 86 countries. This reflects the changing nature of relocation, the drive for growth globally, and the importance of emerging markets in the relocation picture.

With a theme of ‘diversify, specialise, personalise’, the association’s latest conference responded to the challenge

22 | Re:locate Europe | Summer 2014

of the times and showed its commitment to change and innovation.

One of the most popular sessions was given by Steve Jones, of Brand, whose rock-star persona made for a lively presentation. To the question ‘what is a brand?’, Mr Jones responded that it was more than visuals, a logo and slogans: the key ingredients were emotions and customers’ feelings.

“You need to grab people’s attention – and attention is a currency – otherwise you don’t exist and nothing happens,” he said.

Mr Jones recommended being consistent – and different.

Quality is obviously important, but it is a given in relocation,

CONFERENCE

so you have to find something else that defines you in a meaningful way.

His other piece of good advice was to create ‘experiences’ for your customers and clients, because you are selling not a product or a service but a rich experience. One of the challenges is that destination services providers (DSPs) may be known for different services by different clients.

However, as Steve Jones explained, you are only what your customers think you are. It is, therefore, worth taking time to do the research with customers so you really understand what they want from you. If you have a separate company or department that delivers something else, give it a different name and live up to your customers’ expectations.

Culture the key to success In the world of relocation, there is no room for cultural ignorance, as Dean Foster, of DFA Intercultural Global Solutions, pointed out.

A cultural expert with many years’ experience of operating in the global mobility environment, he presented a lively session on intercultural support for the 21st century, and set the scene for the environment in which many HR and global mobility managers operate.

The fast-moving world he described is the challenging environment in which EuRA members operate across continents. Today, the clients whom destination services providers support work in virtual multicultural teams. When they go on international assignment, they expect to move seamlessly between China, Dubai and Amsterdam, and to maintain their working relationships and personal networks across borders.

They have their own unique personal and family issues, as well as professional needs.

Dean Foster described a world in which those going on assignment had to be mindful of cultural competences. In their professional roles as international players, assignees are required to be global managers, which demands a juggling act: balancing goals and achievements, implementing global strategies, and being masters of both people-management skills and the bottom line.

They are also often answerable to many bosses – perhaps a faraway HQ as well as their local office. Very often, they need to acquire new skills. Global communications usually require a good command of English, but a second language, or multiple language competence, is clearly advantageous.

As well as being aware of oneself as a cultural being, there is a need to be able to apply cultural knowledge and practise cultural skills, not to mention understanding the work dynamic in the office or manufacturing plant. This is the reality that DSPs have to be aware of when they are supporting an international assignee (see p24), which is why EuRA places so much importance on the value of cultural intelligence in its training.

EuRA is known for its training and quality assurance

accreditation. The Managing International Mobility training programme, delivered via a mixture of online and face-to-face modules, is highly regarded within the industry. Through Oxford Brookes University, EuRA also offers an online programme in intercultural coaching skills.

It is these initiatives, plus the EuRA Global Quality Seal, which help to give members the tools they need to meet the challenges of global growth.

As Dean Foster pointed out, today’s good cultural training needs to be multicultural for multicultural teams. Assignees, he said, “can’t afford merely to survive: they have to thrive”.

There is pressure to perform and to be completely successful in a world of excellence. But how do you prepare people more effectively to take on such challenges?

His answer was that people needed to be trained in cultural competence, but they also needed to be supported.

Technology could help, but development and strategic talent management were key.

Future leaders needed a global mindset, and developing communication skills in a multicultural environment was essential. His message was that training needed to be continuous, with intense customisation and constant feedback.

Companies could no longer afford to concentrate just on the individual and family. Organisations had to provide cultural support across the breadth of their business, in their HQs, regionally and in the field.

Finding innovative solutions A fascinating session highlighted how the chameleon-like DSP is able to diversify to cope with changing markets.

The economic climate in Europe since the recession has thrown up some innovative solutions. Michele Par-Pereg, of Relocate Yourself, described how using technology had brought a new way of working with a traditional market.

She had been encouraged by the response from corporate HR, who were receptive to innovations that helped them to deal with relatively new and growing trends, such as lumpsum payments.

Isabel Cudell, of Moving-ON, based in Portugal, described how her organisation had diversified into the growing student market. By incorporating technology, they had been able to deliver a budget service that capitalised on their considerable knowledge of property sourcing and tenancy management, and had come up with an innovative solution to meet the needs of hard-pressed admissions teams with a housing problem.

The art of personalising your service and putting yourself at the heart of your marketing strategy was powerfully portrayed by a truly global panel. Ira Lemmetyiinen, of Antares Relocation, based in Spain, Marta Roff, of Maputo, based in Mozambique, Kim Ngoc, of DSP Relocations Asia, and Beverly Sunn, of Asia Pacific Properties, provided truly engaging insights into how they had grown their businesses Next year’s EuRA conference will be held in Porto, Portugal, from 22 to 24 April.

relocatemagazine.com | 23

CULTURE

CULTURE IN THE SPOTLIGHT An understanding of culture is key to a successful relocation or international assignment, enabling individuals to settle more quickly and do better business for their organisations.

Dominic Tidey, chief operating officer of the European Relocation Association (EuRA), explains the valuable contribution that providers of destination services can make.

24 | Re:locate Europe | Summer 2014

D

estination service providers (DSPs) across the globe are knowledge specialists. It is their expertise in a multitude of fields that helps corporations, their staff and families to settle into a new life in a new place.

Central to this is their ability to mitigate the likely impact on transferees of the shock inherent in moving from their culture to the new one. Of assignments that end before their planned time, 80 per cent are attributable to a failure to settle into the host culture, and with less than 40 per cent of transferees being given specialised cross-cultural training, DSPs must be the on-the-ground experts.

The traditional approach to training DSPs and their consultants has centred on the research-led dimensionsbased models, but is this traditional approach to training still relevant 40 years on from the first global research project?

In a remarkable 1973 study by Geert Hofstede, data was collected from more than 110,000 people in 70 countries, and it is still an important benchmark. However, other researchers, such as Edward T Hall and Fons Trompenaars, have also contributed significantly, adding dimensions that are particularly useful in the sphere of global mobility.

However, one reason why new pioneers of intercultural theory are looking for different ways of promoting intercultural understanding is that the methodology of the studies doesn’t reflect the true makeup of the societies they examine. Predominantly undertaken with the focus firmly on international business, they fail to take account of wider societal issues such as gender, class, and regionality.

Nevertheless, they form an excellent place to start learning about how to work successfully with people in transition.

Dealing with difference Four dimensions are particularly relevant to both transferees and relocation professionals. The first of these is how we use time.

There are significant differences in the way in which cultures use time and structure activities. For example, one of the most polarised cultures in terms of chronology is Germany. In the business world, this is exhibited in meetings that are highly structured and agenda-driven. The purpose of the meeting is to get the job done, complete all the action points on the agenda, and move forward with the business in hand. This means that interruptions or disruptions are not tolerated.

However, looking at a culture at the opposite end of the chronology scale, such as Italy, a very different dynamic emerges. The agenda is flexible; in fact, the most important item on it is lunch. This is not just because of the Italian love of great food, but more because lunchtime is when relationships are built, or built upon. The business will flow from the trust between the people involved in the meeting.

Without this trust, there will be no business.

How we use time is not just about how we approach a business meeting, but also how we see past, present and future events. Anita Meyer, CEO of am&pm Relocation

Belgium, is keen that her relocation consultants understand the wider impact of this dynamic.

“During conversations with a French executive director,” she says, “one might become gradually aware of his achievements in the past, his excellent marks from a highly respected Parisian university; to him, where you come from impacts on where you are going. This person will be inclined to choose the traditional school for his children, a discreet but classy house for his family.

“A Russian sales manager, however, is more present and future-oriented. His choices are based on getting the most out of today, which explains why a very ostentatiously luxurious house, at the top of his budget, will make him very happy. One individual thrives on the past, the other has eyes for the achievements of his present and his future.”

There are many more ways in which the dimension of time will impact upon the transferee. Anita Meyer again: “In a chronological culture such as the UK, people will wait in line for the bus. If it starts raining, they will not disrupt the queue by leaving this line to stay dry in a bus shelter on the other side of the street.

“To illustrate a synchronic way of acting, there’s the Italian butcher who’s slicing off half a pound of salami, who asks the other customers in the shop whether anybody else needs salami. It makes sense to continue to cut the slices of the same salami, rather than wrapping it up, putting it back in the fridge, and unwrapping it again for the next customer.

Yet the butcher’s question would never be answered with ‘yes, please’ by a Dutch customer, as it is not yet his turn.”

Not knowing the cultural norms of the society you are moving into can cause immediate confusion, isolation and fear. An Italian moving to London will feel very ostracised if he or she is not made aware of the importance placed on queuing. A German in Mexico will feel his colleagues are deliberately disrespecting him if he has not been made aware of the more relaxed attitude to business meetings.

However, we are all individuals and not just examples of our culture, so an understanding of how we use time is useful, but there are still Germans who will be late, and Italians who will follow an agenda! Understanding these intercultural nuances, and acting accordingly, is one of the differences between a great relocation service and a standard one. continues on p26

relocatemagazine.com | 25

CULTURE IMMIGRATION

Ambiguity and risk

Competition or collaboration The second intercultural dimension critical to the global mobility process is whether we interact in a competitive or a collaborative way. Highly collaborative cultures can be identified by how similar the gender roles are, both at home and in the workplace. A strongly collaborative culture such as Denmark’s has an extremely high glass ceiling, with women able and encouraged to achieve great success in business. In socio-political terms, this manifests itself in government support in the realms of childcare, generous maternity and paternity leave, and enshrined laws protecting the roles and rights of women in the workplace.

Highly competitive cultures like Japan’s exhibit much more traditional male and female roles. Women tend to work only until they have children, and generally speaking in less senior roles than their male counterparts. Women transferring from a collaborative to a competitive culture as the transferee or the partner of the transferee will find a tension in the adoption of their new role as a different type of citizen within the new country.

Views of hierarchy How we view hierarchy as a culture is a third important aspect in successful assimilation. Individuals from cultures that place great importance on seniority and hierarchy can, at first contact, be difficult to work with from the point of view of the relocation consultant. Their status is clearly higher than yours, and therefore they may regard what you are trying to do with them as trivial.

In societies which place a low level of importance on hierarchy, managers are informal and on a first-name basis with staff, and value highly the experience of their team members. Therefore, they are more likely to get the most from the knowledge capital of the DSP. The Brazilian CEO moving to Vienna will expect a level of deference which is not within the cultural makeup of the Austrian. It’s easy to see how moving from one end of this spectrum to the other would cause conflict and uncertainty.

But again, working with the person as a distinct individual has to go alongside the knowledge of the wider cultural dimensions, and it is here that coaching and leadership skills will come into play.

26 | Re:locate Europe | Summer 2014

How a culture deals with risk is the fourth fundamental indicator of how well a transfer may go. As Hofstede puts it, “The extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these is reflected in how they deal with risk.”

With the rise of the BRIC countries, this dimension becomes especially interesting. Russians feel very much threatened by ambiguity, and as a result, they have one of the most complex bureaucracies in the world. Detailed planning and briefing in any project is very common.

The Chinese chief financial officer moving into the regional Russian office may find that this need for certainty and clarity very difficult to cope with, as China scores very low on this scale. The Russian colleagues will find the Chinese way of working to be very alien and not structured enough.

Understanding cultural theory For DSPs and relocation professionals, an understanding of intercultural theory and the transfer process is crucial. But it’s also critical in the wider corporate sphere.

One huge growth area in corporate services over the last decade has been leadership and intercultural coaching.

With corporate teams increasingly being made up from diverse cultural backgrounds, fast team assimilation is of critical importance to businesses. DSPs who have successfully diversified into this field have found a whole new revenue stream.

The traditional approach of looking at intercultural dimensions still has great validity, but it’s only a starting point. Innovations, such as developing cultural intelligence, or cultural quotient (CQ), take the traditional approach as a launch pad for looking further into how we can learn to work with the knowledge of the theory, but on a one-to-one basis, respecting the individuality of the person.

At EuRA, we have spent three years developing an online Relocation Coaching Programme, which uses the intercultural knowledge of all participants to build a picture of how best we can work with each other as individuals. In collaboration with the School for Leadership Development at Oxford Brookes University, the programme is truly global, and those DSPs who have so far undertaken the 12 modules have found that they are better able to communicate with, and assist, transferees.

Knowledge of a culture is a way of truly enhancing a visit to a new country, but ultimately it’s knowledge of the individual that builds a strong working relationship.

For culture & language news and articles, visit relocatemagazine.com/

culture_language

TRENDS

© Dulwich College

WHO’S MOVING TO THE UK? FOCUS explores Current economic and demographic trends, in Europe and around the world, have led to changes in the makeup of the UK’s expatriate population. Eva Stock, director of sponsor relations at FOCUS, a community for expats and international professionals, looks at how her organisation’s membership has shifted since the financial crisis of 2008.

W

hile ‘expat’ is often perceived as a dirty word, having connotations of overpaid executives with extremely generous compensation packages, the term today can be used more loosely to describe professionals who undertake an international assignment to meet long-term career goals.

Not only has the definition of an expat changed: the demographics of the group as a whole are evolving. Little more than five years ago, FOCUS saw the traditional senior executive coming to the UK, often accompanied by a wife and children.

Today, we see a wider variety of ‘families’: men with accompanying wives and children, women with accompanying husbands and children, single-sex couples with and without children – and, of course, there are many single professionals.

There has been an enormous increase in the number of dual-career couples, where the partner has given up his or her own career to follow the assignee, leading to a higher demand for career support services for these accompanying partners.

There have been changes, too, in terms of the nationalities that are arriving. Amongst our membership base in 2008, 48 per cent were from North America, 34 per cent from Europe, 7 per cent from Asia, and the remaining 11 per cent from the rest of the world.

In 2014, our membership has shifted to 31 per cent from North America, 42 per cent from Europe, 15 per cent from Asia, and the remaining 12 per cent from the rest of the world. While Americans continue to be the largest single nationality that we see, recently there has been a significant increase in Italians, Indians and French.

With the current economic and political situations in Italy and France, the UK offers an opportunity for career improvement, a solid education for children – with the possibility for them to become fluent English speakers – good healthcare, and a relatively stable fiscal environment.

But this often comes at a price. More and more Europeans are brought over on local-hire or local-plus packages, housing and schooling are not paid for by the company, and assignees often underestimate the costs of these services, in terms of time and money.

Those of us working in the relocation industry must embrace these changes and remain flexible to support the ever-evolving needs of these international professionals.

For further details of FOCUS membership, please email estock@focus-info.org or visit www.focus-info.org

relocatemagazine.com relocatemagazine.com | 27 | 27

MOBILITY SURVEYS in focus The latest round of global mobility surveys gives fascinating insights into where companies are sending their employees, the challenges they face, and how they are using different types of assignment.

I

t’s that time of year again, when some of the relocation industry’s most respected players are publishing their annual global mobility surveys.

One of the findings which this year’s surveys share is a predicted continuing rise in international assignments.

While most respondents to Cartus’s 2014 Trends in Global Relocation: Global Mobility Policy and Practices Survey indicate that their mobility activity has stayed the same over the past two years, 50 per cent expect to see volumes increase during the next two years.

The assignment type in which respondents expect to see the greatest increase is developmental, at 54 per cent. Next are short-term assignments and permanent transfers (both 52 per cent), followed by extended business travel (50 per cent).

In its 2014 Global Mobility Survey Report, Santa Fe points out that assignment activity has grown every year since 2011.

However, while growth in the number of assignments remains strong, the pace of growth has been slowing.

What makes 2014 remarkable, Santa Fe says, is the degree of confidence about the future. This is the first year in which expected growth is higher than actual growth, breaking the trend for cautious prediction of future activity levels.

A resurgent services sector appears to be driving the anticipated growth in assignment activity. While the biggest growth in the past year came from manufacturing-based industries such as pharmaceuticals (43 per cent) and automotive (42 per cent), it is service-based industries that have most confidence about the next 12 months. Consulting companies predict 61 per cent growth, with professional services just behind, at 60 per cent.

28 | Re:locate Europe | Summer 2014

The standard expatriate policy remains the most commonly used among Santa Fe respondents (58.2 per cent), followed by short term (4.5 per cent), long term on local package (36.9 per cent) and permanent transfer (31.1 per cent).

When it comes to assignee profiles, Cartus reports a continuing shift away from the younger, single people who moved into prominence in 2010 and towards an older population, a profile that was more prevalent in 2007. Likewise, the percentage of assignees who are married or partnered and are accompanied, while slightly down from 2012, is still up sharply from 2010. Disappointingly, the percentage of female assignees remains the same as in the 2012 survey, at 24 per cent.

Aligning global mobility with talent management With assignment activity predicted to grow over the next 12 months, attention is turning to how to meet the demand for candidates. Santa Fe’s survey shows that 47 per cent of companies are already linking their global mobility (GM) programmes to talent management (TM), a topic Re:locate has explored extensively, most recently in its Spring 2014 issue.

Of these companies, 36 per cent are able to draw assignees from a talent pipeline, as against only 15 per cent of those without links to TM. Companies linking GM and TM seem to be better at thinking long term, according to Santa Fe: 40 per cent of such respondents assess the success of assignments after they have finished (versus only 21 per cent of those without links to TM), and more than 37 per cent have procedures in

SURVEYS

place to help retain assignees after they return (versus only 18 per cent).

The Cartus research finds that organisations are becoming more aware of the importance of grooming, and keeping, top talent. Global mobility is increasingly seen by its respondents as important to other company strategies, with 31 per cent of respondents saying that there is a close relationship between the GM function and their organisation’s other HR and talent functions, as well as both short-term business goals and strategic global expansion.

Cartus points out that the assignment type predicted to be the fastest-growing over the next two years – developmental – is also typically used as a tool for talent development, with 79 per cent of its respondents considering the main purpose of this kind of assignment to be developing leadership and management skills.

Regarding expat turnover, 61 per cent of Cartus respondents’ organisations do not track the percentage of assignees who resign within two years of finishing their assignment. Despite the high cost of assignments and the risk of lowering assignment ROI when assignees leave the company, 75 per cent do not address post-assignment career tracking. Not surprisingly, both return on investment and career management are high on the list of areas which respondents are most interested in improving.

In 2012, 31 per cent of Cartus respondents said that the availability of local talent was a factor in decreasing their assignments. In this year’s survey, the ability to find talent locally is no longer a big factor in allowing companies to decrease assignments. This may reflect an awareness of the importance of the right training and background for many assignments, or the difficulties of finding skilled talent in emerging markets, or both.

As assignment volumes rise, the methods employers use to deploy talent are changing in response to a more volatile business environment and the added challenge of managing four distinct generations in the mobile workforce, Weichert’s latest Workforce Mobility Survey reveals. Half of the participating companies have embraced flexible measures like partial lump sums (71 per cent), multiple tiered policies (44 per cent), granting more exceptions (22 per cent) and core/flex programmes (21 per cent).

Top destinations In both the Cartus and Santa Fe surveys and Brookfield Global Relocation Services’ 2014 Global Mobility Trends Survey, the US and China continue to head the list of assignment destinations, followed by the UK. In Brookfield’s case, these top three destinations have been unchanged since 2000.

In Europe, according to Brookfield’s data, the countries most often selected for international assignments are Germany (number 5 in the ranking, up from 8 last year), Switzerland (number 7, up from 13), the Netherlands (number 9, down from 6), and Sweden (number 19, not placed last year).

Brookfield says that the majority (56 per cent) of

international assignments relate to the headquarters country of participating companies, either as home or host, and a significant majority of those are inter-regional assignments.

However, intra-regional assignments still account for 29 per cent of all assignments, and whereas previously EMEA was the region with the most intra-regional assignments, it declined by 4 per cent compared with last year.

In contrast, Asia Pacific has been on a steady increase over the last several years, and now sits 4 per cent higher than the historical average.

Cartus respondents name 72 countries as new destinations for their international assignees. These included Brazil, China, India, the United Arab Emirates, Singapore and Australia.

In Brookfield’s findings, the BRIC countries continue to feature prominently in both the top destinations and the top emerging new countries. The overall importance of Latin America is solidifying as Brazil overtakes China as the top emerging country, reported by 7 per cent of respondents.

So far, however, Brookfield finds only modest evidence of increasing mobility volumes to the MINT countries, Mexico, Indonesia, Nigeria and Turkey. Although there is talk of Africa in general as an emerging continent, only South Africa shows a marked increase, up from 15th position in 2013 to joint fourth this year.

In Europe, the emerging new countries for Brookfield respondents are Poland (in tenth place, up from 11th), France (in 16th place), the UK (in 17th place), and Turkey (in 20th place). None of the last three was placed last year.

Looking ahead, Santa Fe predicts the top assignment destinations over the next 12 months to be the USA (12 per cent), China (11 per cent), the UK (7 per cent), Singapore (76 per cent) and Germany (4 per cent).

Challenging locations According to Brookfield’s findings, the countries that represent the most challenges for international assignees, as well as programme managers, are almost identical. China, Brazil, India and the US are among the top locations in both categories.

In Europe, the UK is in seventh place (from 20th last year) and Germany in 20th (not placed last year). Challenges presented by Germany for assignees include increased tax reporting demands, the language, the length of the visa process, and culture. Challenges presented by the UK include payroll setup, lack of availability of reasonably priced housing for expatriates, immigration restrictions, and the difficulties of finding temporary accommodation.

The European countries presenting the greatest challenges for programme managers are Belgium (at number 12, not placed last year), the UK (at number 15, down from number 4), and the Netherlands (at number 18, not placed last year).

Challenges in Belgium include the immigration process and taxes. Challenges in the UK include housing and work-permit issues, minimum salary levels for obtaining visas, and a lack of serviced accommodation in some areas. Challenges in the Netherlands include the new visa requirements.

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POLICY

MOBILITY

POLICY Embracing the generations?

As the debate about the differences between today’s younger generation of globally mobile employees and their older colleagues continues, Emma Trafford, head of client services at international relocation company Robinsons, considers whether a mobility policy that is flexible enough to embrace all generations is the key to recruiting and retaining the best talent.

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n recent years, there has been increasing debate around the differences between Generation Y and Generation X employees, and about the impact these differences can have on the way in which an organisation designs and delivers its global mobility policy.

Many clients ask me how they can create an effective global mobility policy that addresses the needs of Generation Y employees – but is this generation really so unique that it requires its own tailored policy?

Stereotypically, the Generation Y employee is perceived as a technology-savvy social networker with a short attention span, who multitasks to create shortcuts through instant messaging, web surfing and texting. These employees are attracted to work environments that offer flexibility and fun work opportunities, but with a thinly-spread knowledge base. They rely very much on technology and the web to find answers and achieve results.

In comparison, Generation X was the first generation to grow up with computers and mobile phones. Consequently, employees of this generation are technology-proficient, independent and resourceful people who achieve results using a foundation of experience or through business contacts and networks, yet often have a mistrust of institutions and bureaucracy.

Generation Y is usually seen as part of the ‘always connected’ generation, blending connections between personal life and work, whereas Generation X employees tend to be more linear in their communication style, making a

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distinction between workplace and personal communication.

However, is it really fair to say that the whole of Generation Y communicates using multiple platforms, or that this ‘connected communication’ style is not found among Generation X employees? In the context of a global mobility policy, do these differences really necessitate a generation-specific policy?

When we look at some of the world’s industry-leading brands, such as Apple, Google or Amazon, they are often regarded as Generation Y brands, yet in reality the majority of them transcend three generations, and many were founded, directed and managed by Generation X – and, in the case of Apple, a Baby Boomer.

In addition, when we examine the use of social media applications such as Twitter, Skype, Viber and Facetime, it is by no means exclusive to Generation Y. In fact, when you look at the percentage of internet users who use Twitter, 26 per cent of 25- to 34-year-olds are signed up, compared with 33 per cent of 34- to 44-year-olds (source: Kinetic, Moving Minds Panel, 6 March 2013).

Needs-based versus generation-based What does this mean in relation to designing and delivering a global mobility policy and supporting a candidate on assignment? As renowned psychologist Maslow outlined in his Hierarchy of Needs, our actions are often motivated by meeting certain needs.

We all start with basic needs such as food, water and sleep. Once these are met, we move on to more advanced needs, such as safety and security, and then on to more psychological and social needs, such as friendship and love.

So although Generation Y and Generation X employees may be at different stages of this hierarchy, their needs are ultimately the same when designing and delivering a mobility policy.

Accommodation requirements Looking at accommodation needs, for example: on any assignment, the location or standard of accommodation may vary from candidate to candidate, but these requirements are needs-based, not generation-based. A flexible policy provision could provide all employees with the option to spend an allocated amount on accommodation or have cash back if they find cheaper accommodation below the budgeted allowance.

Relationships, such as friendships, romantic attachments and families, are another key need to consider. Many individuals – whatever their generation – now have friends and family spread across the world, so provisions such as home leave should be reconsidered, to ensure that employees can maintain these relationships.

Companies may consider offering a cash alternative rather than a ticketed airfare, to allow the individual to decide where they take leave or holiday, ensuring that social and family networks are maintained.

As candidates progress, they will look to receive reward and recognition, and employers face the challenge of how to manage this at a global level, ensuring that the international workforce is not forgotten when assigned overseas.

Although perceptions again suggest that Generation Y is needier when it comes to feedback, all employees want recognition, and feedback is very individual. Historically, mobility policies have often been poor at providing any real

substance to the recognition process during the assignment, and often refer to the employee’s home-country appraisal process.

In order to maintain a global talent pool, serious consideration should be given to structuring a mobility policy that references the ongoing reward and recognition process.

As employees become established in the assignment location and fulfil their esteem needs, they start to look for self-actualisation through an achievement of all the needs in lower levels of the hierarchy.

So how do we ensure employees continue to feel fulfilled in their assignments, and how do we capture this in the mobility policy? Especially for Generation Y, who is perceived to be a disloyal employee who will jump ship at the end of the assignment if he or she doesn’t reach self-actualisation!

The reality is that, generation aside, if you reward and recognise any employee and help them fulfil their potential, they will be loyal to you as an employer and won’t look to leave for the next best thing. A robust mobility policy, therefore, needs to address how the organisation can support the employee in job fulfilment, not just in the assignment location but addressing their needs post-repatriation to ensure their next move continues to fulfil their needs.

Embrace all generations In conclusion, despite the stereotypical differences between Generation X and Generation Y and the impact these could have on international assignments, would it not be wise to develop a policy flexible enough to embrace all generations?

Yes, you may need to make some assumptions or stereotypical judgements in order to set the mobility policy boundaries, but by breaking out of rigid policy provisions, you can cater for employees’ desire to take control of their assignments, which should ultimately help to attract and retain the best talent.

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SERVICED APARTMENTS

BLEISURE MIXING BUSINESS WITH LEISURE

A heady cocktail too far for corporate HR? Re:locate’s managing editor, Fiona Murchie, shared a panel discussion with Miriam Rayman, cultural intelligence strategist with Flamingo London, and Kelly Murphy, VP of marketing for BridgeStreet Hospitality, at July’s Serviced Apartment Summit in London.

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his lively session, chaired by business travel expert Mark Harris, of the Travel Intelligence Network, left an engaged audience of industry professionals to ponder the potential and pitfalls.

Bleisure sounds such fun. Who wouldn’t want to extend their business trip by a few days and enjoy the delights of a European city or a far-flung exotic location in Asia Pacific? But what would corporate HR say to this blurring of business and pleasure? Is it seen as something that helps to aid retention, a reward for hard work, compensation for working away, a corporate gesture that helps to nurture – or will the drive for cost control and accountability put a stop to a potential trend that the serviced apartment industry may see as a golden opportunity for cross-marketing?

It is true that there is a trend towards more flexible benefits and lump-sum payments, but the majority of companies still offer a suite of relocation packages depending on seniority and destination. According to the latest Santa Fe global mobility report, global mobility and HR are the guardians of the relocation purse strings in about 50 per cent of businesses, with divisional management and business units accounting for 16 per cent, and corporate finance 17 per cent.

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Corporate attitude will also be influenced by corporate culture and the employee brand of an organisation, not to mention the industry sector. Media and creative industry organisations may well have a very different take on the blurring of parameters from the financial sector or government institutions.

Changing demographics mean that stretched middle managers may have family ties that make it essential to keep returning to their home country throughout an assignment, so tacking on a few days’ leisure to a business trip in the region can be very attractive and a way of exploring the wider new location. This is all part of the cultural experience, leading ultimately to doing better business for the organisation.

Kelly Murphy, of BridgeStreet Hospitality, explained that bleisure was definitely an area her organisation was exploring through its six distinct brands of accommodation designed to fit the budget and lifestyle needs of both those on assignment and the business traveller. Indeed, BridgeStreet is about to publish the results of a recent survey, which will reveal how serviced apartment guests fall into the bleisure category.

SECTION HEADING

The term ‘bleisure’ was first coined in 2009 by the Future Laboratory. Five years on, how has the mindset evolved, and what can we learn from that evolution? What socio-cultural forces are impacting on bleisurites, be they travellers or employees, and how do these influence their needs?

Flamingo London’s Miriam Ryman was involved in the original brainstorming that led to the birth of the bleisure concept. It is also about demographics. Back in 2008, she argues, “a whole generation of Millennials were entering the workforce and demanding the set-up be on their terms.

They didn’t want to stay in drab, grey business hotels when they travelled, for a start: they wanted boutique and design hotels. And thus the bleisure traveller was born.

“At that time, we were aspiring towards seamlessness, we longed for life on demand, where we could shop, eat, work whenever we wanted. The bleisure generation was a particularly entrepreneurial type who would turn an evening out over drinks into a networking opportunity, where Facebook could just as easily be a place to win clients.”

But five years on, she argues, things have changed.

She thinks people now want a more compartmentalised lifestyle because “the blurring of business and leisure left us feeling burnt out, and stressed that we weren’t doing either business or leisure particularly well.

“Gone are the days of the dichotomous work/life paradigm, but that doesn’t mean we don’t hunger for a bit of structure now, too. People are developing their own rituals to act as anchors in this increasingly fluid world.

We are putting some seams back into our seamless lives.

The thing is, after five years of being promised seamless

living, we’ve realised it is actually quite stressful and can leave us exhausted.

“So whilst the Bleisure traveller will want to be able to access the ‘new utilities’ of high-speed connectivity and other business facilities, they will also require space to switch off, disconnect from work, and plug into their locale. Smart brands are those that can design products and services for our blurred lifestyles and also help us to compartmentalise when needed.”

If this is true, then the serviced apartment providers can certainly deliver at both ends of the spectrum. Whether it is the provision of extra services or simply making guests feel more comfortable, the industry is already doing a lot to help its business guests plug into the local scene, get to know the neighbourhood, and feel more like locals than travellers.

From restaurant and shopping advice to laying on special events and activities, those at the forefront are already wellversed in helping assignees to feel at home, extending their stay, and welcoming family members. This is one step away from booking the next business trip with the same provider under one of its other brands, which could be perfect for mixing business with pleasure.

With good tracking and management systems in place, who picks up the tab shouldn’t be an issue, and corporate HR can also tick the duty-of-care box if it is easy for the assignee to choose a trusted brand rather than going ‘off piste’ in what may be a challenging location.

What are your views? Let us know by emailing editorial@ relocatemagazine.com

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SERVICED APARTMENTS

the European picture

A number of new trends and challenges were discussed at the Serviced Apartment Summit held in London this summer. Fiona Murchie reports on the European perspective.

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urope is the second-largest serviced apartment market in the world after the US, and although it is relatively young, having emerged over the last 20 years or so, the volume across the regions means it is a force to be reckoned with and has some influence on definitions for the future.

As countries such as Germany and the UK compete for market share in the emerging markets, so their influence is important in the battle of the brands, and in terminology.

Corporate business based in Europe has as strong an influence as corporate business based out of the USA, and perhaps the US global brands need to listen to European businesses if they want a share of their global market. The latest Santa Fe global mobility survey shows that the USA is expected to continue to top the relocation destinations table for the next 12 months but is followed closely by China, with the UK third, followed by Singapore and Germany.

We know from the Global Serviced Apartments Industry Report that the main concentrations of serviced accommodation in Europe fall in London, Paris, Geneva, Dublin, Brussels and Berlin, but the products vary widely, with different standards across countries.

Jo Layton, of The Apartment Service, representing Europe at the Around the World discussion session at the summit, commented that the serviced apartment picture in Europe ten years ago had been hugely fragmented, with virtually no distribution across Europe. Today, she said, there is a huge challenge but also a massive opportunity to make the product clearer.

Ms Layton partly explained the confusion in the European market by the number of languages spoken and the different tax systems, legislations and currencies that make it difficult for global agencies to know what they are selling. She was clear that the industry needed to clarify its offering in order to move forward, and that the global and US providers needed to listen to the buyers in Europe.

For example, although Paris was defined as a mature market in an earlier session given by HVS, with a lot of

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aparthotels and an existing classification by Residence de Tourism of one to five rooms with kitchenettes, in terms of catering for the relocation market, which requires longer-stay serviced apartments, the market was still immature.

Germany has a newly created classification scheme known as Certified Serviced Apartment.

The HVS report states that France, Germany and the UK are all creating clearer industry terms and definitions, if not certification schemes, for serviced apartments, which it sees as imperative if industry-wide understanding, security and transparency are to be fostered.

According to the Santa Fe survey, 76 per cent of the clients surveyed offer temporary housing, with 62 per cent providing destination services support. Net assignment activity is expected to grow by 29 per cent over the next 12 months.

The biggest growth is expected to be in the professional services and consulting sectors.

And who will be moving? Well, it’s the managers, at 58 per cent, with specialists and technical experts following at 44 per cent. Engineers and oil and gas experts are most in demand. Senior executives at president, vice-president or director level will also be on the move.

With short-term assignments now accounting for 46 per cent of relocations, the message for the serviced apartment sector is therefore clear.

Other global mobility surveys, too, show that companies are planning an increase in relocation over the next year, and serviced apartments will be needed, as 76 per cent of companies survey offer temporary housing as part of their benefits package.

With 52 per cent of companies surveyed having only one or two staff in their global mobility team, it is also clear that relocation professionals working for relocation management companies and destination service providers should be the serviced apartment industry’s new best friends if they want a share of the corporate relocation market.

SACO, Broad Quay Apartments, Bristol, UK

SERVICED APARTMENTS

FINANCE

‘NEW REALITY’ IN CHINA

for European firms European firms are adapting to a new sober reality in China by revising down expectations and investment plans.

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he financial performances of European companies in China have weakened further amid tougher business conditions, and a sense of pessimism is becoming entrenched as persistent market challenges show little sign of abating.

This is leading many firms to set more modest expectations and scale back their investment plans for the Chinese market.

However, implementation of meaningful reforms, and, in particular, increased market access, would be likely to spur a re-intensification of European investment in China, according to the Business Confidence Survey 2014 by the European Union Chamber of Commerce in China and Roland Berger Strategy Consultants.

Growth figures for revenue, profitability and profit margins continued to decline across the board for European firms in China, and companies do not envisage these current business pressures easing.

Labour costs are expected to continue to rise, competition is set to intensify, and a Chinese economic slowdown is now regarded as the primary challenge to business in the short term.

The sheer size of China’s marketplace means that it will continue to offer substantial opportunities and remain strategic for European companies, but this new sober reality is leading European companies to trim down their investment plans.

In 2013, European Chamber member companies missed out on an estimated €21.3 billion in revenues because of market access and regulatory barriers. Most European companies feel that Chinese companies continue to receive favourable treatment.

The unpredictable legislative environment and the discretionary enforcement of regulations are identified as the two most significant regulatory challenges. It is,

therefore, not surprising that European companies most want to see administrative reforms, and that increased rule of law continues to be considered the most significant driver of China’s future economic performance.

Meaningful implementation of reforms would prompt European companies to scale up their investment plans in China, but increased market access is the factor that would induce the largest re-expansion of investment.

Jörg Wuttke, president of the European Chamber, commented, “The Chinese economic slowdown and tougher business conditions are starting to bite, and financial performances are getting much tighter.

“Half of European companies already believe that the ‘golden age’ for multinational companies in China is over.

A Chinese economic slowdown is a game-changer that will fundamentally and necessarily alter corporate business strategies. With costs rising and regulatory issues continuing, European companies are starting to put expansion plans on hold.

“Although the reform agenda laid out in the Third Plenum Decision and other policy developments over the last year are regarded as positive, European firms are yet to be convinced that real change will be made in the coming one to two years. Instead, it is market-opening reforms that present an immediate opportunity. A lifting of market access constraints would spur over a half of European companies to re-intensify their China investment plans.”

Charles-Edouard Bouée, president of Roland Berger Strategy Consultants Asia, said that China was still a strategic market for European companies, affording significant opportunities. If there were more positive policy developments, specifically greater market access and lower regulatory barriers, increased investment would follow.

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