Re:locate F O R H R , G LO B A L M A N A G E R S & R E LO C AT I O N P R O F E S S I O N A L S Autumn 2012
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USA Still the bright star of relocation?
International Hotspots and policy trends
Cultural competence Why it matters
Education
New term – all change
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AUTUMN 2012
CONTENTS :
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CONTENTS 4 6 8 12 16
30 32 36
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54
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Re:editor’s letter Fiona Murchie looks at what’s in store this issue. Re:news & views Key industry happenings, personalities, and comment. Re:hot topic Developing a global mindset can benefit employers. Re:international mobility Recent location trends, and their implications for relocation policy. Re:USA focus Relocation issues in the numberone destination, including property and education. Re:culture Cultural competence – and why it matters. Re:research Cross Cultural Kids: driving forward a multinational world? Re:Australia Current issues for employers in Australia, and those managing assignments to the region. Re:international policy New trends in compensation, compliance, and cost control. Re:tax How the UK’s new Statutory Residence Test will affect international assignees. Re:awards Launching this year’s Re:locate Awards. Re:social media Benefits to HR and those managing relocation and international assignments. Re:UK hotspots Scotland and Oxford as magnets for relocation and inward investment. Re:education Latest UK changes, plus schooling issues for families relocating to Australia.
USA
International
UK hotspots
Education
4
Re:locate
AUTUMN 2012
TheTeam
is open “forBritain business. Let’s
Managing Editor: Fiona Murchie editorial@relocatemagazine.com Design: Gulp Creative hello@gulpcreative.com
show the world what we can do!
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Tel: +44 (0)1892 891334 Re:locate 2012 Party, 29 November To celebrate what has been great year for Britain and look forward to the next one, Re:locate is holding an evening networking event on Thursday 29 November. This will be a great way to thank your team for their efforts and start the Christmas festivities. For further details, see www.relocatemagazine.com If you can donate prizes for a raffle or help in any way, please contact Mireille Applebee on 01892 891334.
The message of the London 2012 Olympics and Paralympics is clear: Britain is open for business. For a few weeks, the UK was at the centre of the international stage. The relocation profession in its widest possible sense, with those managing international assignments and mobility, is at the forefront of international business every day. Let’s continue to show the world what we can do! There are relocation hotspots in the UK and worldwide, and companies doing innovative things that are turning around the economy. We shall continue to report on them through Re:locate magazine and the website. The 2012/13 Re:locate Awards, launched in this issue, recognise all those who contribute to our growing profession. In this issue, our international destinations are the ever-popular USA and Australia, and our UK hotspots are Oxford and Scotland. Our spotlight on the USA continues this autumn via the USA section of our website. London’s Games have inspired a generation to get involved in volunteering. As The Jubilee Hour approaches nearly two million hours pledged, we share on our website highlights of some of the work undertaken this summer by the relocation profession. It would be great if we could reach 2,000 hours by the end of the year. Let us know what you are doing, or if you want help with ideas or projects to support, and let’s continue into 2013 the good start we’ve made. Sign up for our HR Global Mobility Knowledge Share Conference on 24 October (see p10), and don’t forget to book your places at the Re:locate networking event on 29 November. Follow us on Facebook, LinkedIn, and Twitter. Fiona Murchie Managing Editor
Coming in the WINTER 2012 issue of Re:locate magazine • PENSIONS
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© 2012. 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.
• INTERNATIONAL
Flexpatriate policies and trends
• COUNTRY PROFILES Focus on Asia Pacific
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Re:locate
: NEWS & VIEWS
AUTUMN 2012
Industry:News & Views If you have news and views that you’d like to see aired on these pages, contact us at editorial@relocatemagazine.com
OLYMPICS HIGH: the Brits pulled it off! The London 2012 Olympic and Paralympic Games were a source of pride and inspiration for the whole of the UK. Relocation and mobility professionals must build on that success, writes Fiona Murchie. During this summer of celebrations, Re:locate has kept readers abreast of how companies from across our industry have been keeping the relocation show on the road. It is evident that, thanks to meticulous planning and preparation, business continued very much as usual during the Olympics and Paralympics. From the behind-the-scenes work of UK inward investment to Boris Johnson’s PR for London and the countless
organisations of all sizes just getting on with things, the message is loud and clear: Britain is open for business – not just London, but the whole country.
GLOBAL BUSINESS CENTRES: report highlights rentals market A new report from property company Knight Frank, which examines the rentals market in key business centres around the world and the increasing demand for prime rental properties by assignees working for multinational firms, will be a useful tool for those managing global mobility and international assignments. The Knight Frank Global Corporate Lettings Review 2012 finds that economic instability is the factor most critical to future demand in corporate global lettings. Hong Kong and Singapore have both seen an upturn in expatriate demand, owing to new industry sectors and emerging markets. Since their 2009 lows, prime rents in London, Hong Kong and New York have seen growth of 26 per cent, 16 per cent, and 38 per cent respectively. A disparity between budgets and expectations is resulting in employees’ taking more ownership of their home searches, rather than relying on HR. Younger executives are showing a growing willingness to expand their searches to more peripheral locations, to secure a larger property at a lower rent. Don’t miss our USA (p16) and Australia (p36) features.
The relocation profession, in its widest possible sense, with those managing international assignments and mobility, is at the forefront of international business every day. Let’s continue to show the world what we can do! The big lesson from the Olympics is that it will be so much better if we all pull together. That wall of sound that reverberated around the athletics stadium, on the streets of London during the marathon, on the tennis courts at Wimbledon, or during the equestrian events in Greenwich Park or the rowing at Eton Dorney, helped athletes to cross the finishing line, and strike gold.
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AUTUMN 2012
NEWS & VIEWS :
ARP appoints NEW CHAIRMAN Simon Robins, sales manager of Connells Relocation Services, is the new chairman of the Association of Relocation Professionals (ARP). Said Mr Robins, “As the new chair, I am keen to find ways of promoting the association and attracting new members. Formed in 1986, the ARP is the professional body for relocation providers in the UK. It upholds high standards and best practice across the relocation industry, as well as delivering training programmes and continuing professional development.
ATLANTA top relocation destination for US companies Atlanta, Georgia, is currently the most attractive destination for relocating US companies, according to the new US Talent Relocation Survey from recruitment firm Heidrick & Struggles. Fourteen Fortune 100 companies are based in the city, and their presence has created a solid economy and dynamic real-estate market that are attractive to a range of relocating companies and individuals. Companies will also be interested by the international links that Atlanta is developing. For instance, the Sunday Times has reported that Scotland, a country with lucrative mineral resources, has established a bond with the city during the last decade. For more on the relocation scene in the USA, see p16. Don’t miss our Scotland feauture (p54).
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GLOBAL RELOCATION survey results released Despite the challenging global economy, 57 per cent of multinational companies expect to increase the number of employees they transfer this year and next, according to the 2012 Trends in Global Relocation Survey from global relocation services company Cartus Corporation. The survey, which was conducted during the first quarter of 2012 among 122 multinational firms based in the Americas, Europe, the Middle East, Africa, and Asia Pacific, also highlights a trend towards tightening expatriate benefits and a shift to alternative, temporary assignments. Among the study’s wider findings is that, despite respondents’ anticipated increase in relocation volume, companies are changing the way in which they deploy employees. This is in line with the results of other mobility surveys. The Cartus survey also found that organisations were trimming benefits and reducing assignment lengths. We cover highlights of the survey in our USA (p16) and Australia (p36) features.
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: HOT TOPIC
AUTUMN 2012
Developing a global mindset As the range of international destinations widens, and reliance on international assignees to open and develop new markets increases, so the need for assignees to have global understanding gains prominence. Sue Shortland reports on the benefits organisations can obtain by developing a global mindset.
T
he relationship between talent management and international mobility is increasing in importance. According to the Worldwide ERC and Towers Watson Global Talent Mobility Survey: Regional Differences in Policy and Practice, 67 per cent of Europe-headquartered, 53 per cent of US-headquartered, and 21 per cent of Asian-headquartered companies have an organisational-development/talentmanagement group with primary responsibility for talent management, while 50 per cent of respondents indicate that international-assignment decision-making is linked to an integrated talent-management process. Yet internationalassignment destinations no longer most typically lie within the traditional US/UK pairing, creating significant challenges for assignees and their employers. Santa Fe’s Global Mobility Survey Report: Exploring the Changing Nature of International Mobility identifies Brazil, Russia, India and China as increasingly important, but challenging, destinations for international assignees. High-potential future locations include Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey, and Vietnam. This suggests that assignees will increasingly require a global mindset to adapt
to the very different social customs and societal attitudes in these locations, and their employers will need to prepare accordingly.
Marks & Spencer: a case study Organisations, such as Marks & Spencer (M&S), that have traditionally relied upon a domestic strategy for growth are turning to international markets for expansion. This results in the need for understanding of global leadership competencies, cultural awareness, and language training. While the traditional solution to assignee preparation rests with external cultural awareness and language courses, an integrated approach to understanding and developing leadership behaviours, delivered internally – for instance, within an organisation’s learning and development function – can add significant value. At a recent forum, Mike Vinsen, retail learning and development manager at M&S, highlighted the positive outcomes of transforming an entire workforce and corporate culture by instilling a global mindset through a mixed delivery of external consultancy and internal training. While noting that achieving a global mindset is a difficult journey, he
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: HOT TOPIC
made it clear that such a change-management strategy pays long-term dividends. The M&S case study of its change in leadership and global strategy, its return to Paris (after withdrawal from the French market for several years), and its entry into new markets, such as China, is interesting, in that it highlights how overcoming language barriers is insufficient by itself: understanding of behaviours and relationships is required as well, in order to create real partnership with local nationals and success in local markets. For example, in its French operation, M&S began by exporting its culture and products, applying its learning and development approach through simply translating training programmes into French. However, this did not achieve the desired results; aspirations, expectations, and relationships with customers and colleagues simply did not work out: locals needed more guidance and support – they wanted the learning and development manager responsible for training them to understand their culture. Once this issue was recognised, M&S responded by developing a modular approach aimed at the 100 top leaders in the firm, with workshops to explore what culture means and what the company expected its people to understand. It was recognised that the UK-centric approach was inappropriate, and that attention needed to be paid to relationship building. For instance, cultural differences had to be addressed, including the hierarchical French approach to management, the different concept of time, and the emphasis placed on managerial appearance (managers should look like managers, and, therefore, wear suits). Workshops were developed to
AUTUMN 2012
create understanding of M&S’s other new market entries, such as China. Workshop training can be very valuable, especially when it combines and addresses organisational and societal cultural differences. However, if not followed up, competencies gained can easily be lost. M&S, therefore, developed a cultural e-learning programme to build on its workshop learning programmes, addressing key skills sets and dos and don’ts (such as dealing with bribery and gift-giving) in its countries of operation. A blog was set up, so that members of the online community could discuss what they were doing differently as a result of their training and international experience. Managers and graduate trainees also attended events, to share cultural experiences and develop a true dialogue. The benefits and popularity of these cultural awareness events have grown to such an extent that there is a waiting list to attend them. The payoffs of developing an organisational global mindset have included gaining a better understanding of clients, the building of relationships internally, and the development of a globally-aware workforce (not just those going on assignment). M&S now has some 450 people with international experience who are not working internationally, giving a global flavour to the company and international business success.
For the latest international assignments and cross-culture news and articles, visit www.relocatemagazine.com
Free Conference! You are invited to an HR Global Mobility
Knowledge Share Conference Wednesday 24 October, Knight Frank, 55 Baker Street, London W1, 9.00 am to 3.00 pm As part of its support for The Jubilee Hour, Re:locate is running a free one-day conference for HR. This is designed to give those in the charity and not-for-profit sectors access to high-level presentations combined with facilitated knowledge-sharing sessions with HR colleagues from the private sector. Those from the charitable sector will have expertise to impart about sending employees to particular countries – cost-saving measures, crisis management, evacuation procedures, employee engagement, and remote-working knowledge, for example.
In return, those from the private sector can share latest mobility, talent-management and policy trends, and technology advances, plus tax, immigration, pensions, and employment insights. Make the most of this opportunity to solve problems, extend your network, benchmark, and give time to the professional development of charity colleagues. Let us know what topics you would like us to cover. Email fiona@relocatemagazine.com Venue kindly donated by Knight Frank.
Places are strictly limited. For full details and to book, see www.relocatemagazine.com, or contact Katarina on 01892 891334 or katarina@relocatemagazine.com
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: INTERNATIONAL MOBILITY
AUTUMN 2012
Top spots, hotspots and policy implications The range of destination locations for international assignees is widening. While traditional host countries remain popular, the list of new locations includes newlyemerging markets as well as developing ones. In addition, the record of sending locations is lengthening, resulting in an ever-complex matrix of home/host expatriate combinations. Sue Shortland reports on recent location trends and the implications for international-assignment policies.
T
he top destinations for expatriates are the USA and China, according to Brookfield Global Relocaton Services’ 2012 Global Relocation Trends Survey report. A fifth of the survey respondents cited the USA, while 14 per cent listed China, keeping these two countries at the head of the expatriate destination list for another year. Santa Fe’s 2012 Global Mobility Survey also ranked these two destinations as the top host countries, although these results record China ahead of the USA, 21 per cent of organisations citing China as the most common assignment destination. While Table 1 (drawn from Brookfield’s survey) suggests, at first glance, that only the USA, China and the UK are significant in the volume of expatriates that they host, it is important to remember that these three destinations now make up less than half (just 44 per cent) of the top receiving countries. There is also evidence that these destinations are in decline in relation to the number of organisations placing them in the top spot (the USA being down from 23 per cent in 2011, and China down from 16 per cent). It is also interesting to see new countries being highlighted as ‘top’ international assignment destinations. These include Malaysia, Spain, Indonesia, Argentina, Kazakhstan, and Colombia.
Hotspots While the BRIC countries (Brazil, Russia, India and China) feature as some of the most frequently-mentioned emerging new locations for international assignments, a wide range of others are cited. Table 2 (again drawn from Brookfield’s 2012 survey) highlights the wide range of new locations cited by survey respondents, indicating a mix of developed and
Table 1:
Table 2:
Locations most frequently selected for international assignments
Emerging new locations for international assignments
Location
Location
% of organisations
% of organisations
USA
20
China
5
China
14
Brazil
5
UK
10
Australia
5
Singapore
5
India
4
Germany
5
Russia
3
Australia
4
South Africa
3
Switzerland
4
Singapore
3
Canada
3
USA
2
UAE
3
UK
2
Netherlands
2
UAE
2
Hong Kong
2
Poland
2
India
2
Belgium
2
Belgium
2
Malaysia
2
Brazil
1
South Korea
2
Japan
1
Serbia & Montenegro
2
Russia
1
Czech Republic
2
Italy
1
Angola
2
Saudi Arabia
1
Indonesia
2
France
1
Turkey
2
Spain
1
Vietnam
2
Indonesia
1
Thailand
1
Kazakhstan
1
Canada
1
Colombia
1
Netherlands
1
Malaysia
1
Austria
1
Argentina
1
Iraq
1
-
Afghanistan
1
-
Nigeria
1
Brookfield GRS Global Relocation Trends Survey 2012
AUTUMN 2012
USA
INTERNATIONAL MOBILITY :
developing locations. Colombia, Angola, the Czech Republic, Indonesia, South Korea, Malaysia, Montenegro, Turkey, and Vietnam are all additions to the list since 2011.
Challenging locations
The BRIC countries are highlighted in both the Brookfield and Santa Fe surveys as presenting some of the greatest challenges to assignees and their organisations. China leads the pack, with 17 per cent of the organisations participating in Santa Fe’s survey, and 16 per cent of those taking part in Brookfield’s, rating it as the destination that presents the greatest assignment difficulties. India is rated as most challenging by 12 per cent and 8 per cent respectively, Brazil as most challenging by 7 per cent and 9 per cent respectively, and Russia by 7 per cent and 6 per cent respectively. While it is generally acknowledged that these locations are difficult, owing to their developing nature and cultural differences, it is notable that Western developed locations also present challenges to assignees. For example, the Brookfield research indicates that 4 per cent of respondents report the USA as presenting the greatest assignment difficulties, while 3 per cent cite the UK, and a further 3 per cent cite Australia. Table 3 (drawing upon Brookfield’s research) outlines the nature of the challenges experienced. Besides the rising trend in diversity of host locations, there is also evidence of a shift away from the headquarters being the primary source/recipient of international
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assignees. While Brookfield reports that 54 per cent of assignments involved the headquarters country as either the sending or receiving location, 46 per cent of assignees in the 2012 survey were relocated to, or from, nonheadquarters countries.
Policy implications
China
As can be seen from Table 3 (see p14), a wide range of problem issues will affect international relocation policy design. However, there are a number of common themes. Both developed and developing countries can be seen to present immigration and tax challenges. The complexity and ever-changing nature of immigration, and the slow speed of visa processing and associated delays to work authorisation, indicate the importance of effective planning of assignments. Awareness of regulations relating to work visas for spouses/partners, and provision for assistance with this, should also be viewed as a policy consideration. Having familiarity with visa and tax regimes across a spectrum of countries is, no doubt, difficult. Specialist advice is likely to be required, and should be addressed in policy design. Again, timely action in respect of tax planning is advised. Cultural understanding, and the need to familiarise assignees and their families with cultural issues and potential culture shock, are evident. Policy content should address cultural training, which should be tailored to address the requirements of different nationalities, not just headquarters nationals.
UK
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14
: INTERNATIONAL MOBILITY
Security, safety and health are paramount; these issues may relate to crime, corruption, remote locations, or natural disasters. Once again, relocation policy must incorporate provision to ensure assignees’ welfare, and that of their families. Language issues should also be addressed. Housing (availability and cost), and regulations affecting shipments and associated customs requirements, also must be addressed. Lack of infrastructure affects service provision and housing availability; some destinations may not have housing of a suitable standard to attract expatriates or destination service providers to locate suitable accommodation. Given the volatility of some currencies, how payments are calculated, reviewed and delivered, plus updates to the cost of living, must also be considered. For many organisations, entering a new country is a worrying affair, as relocation professionals may have little or no experience of how mobility issues are managed. Rather than view this with trepidation, it is comforting to remember that someone, somewhere, will have done this before; building networks of contacts with mobility experience can help to provide ideas, insight and solutions. Those who have entered
AUTUMN 2012
new markets are usually keen to share their experiences. While relocation policies may be kept confidential, and policy design cannot realistically be copied from others (as it is unlikely to reflect organisational strategy or culture), tips on what to do, and what not to do, in particular destinations can aid the tailoring of policy design to meet individual organisational needs. There are also a number of specialist organisations with insight and information on specific aspects of the relocation process. For example, Permits Foundation can provide information on work-permit arrangements/visas for accompanying spouses and partners, helping to smooth employee transfers. Overall, the expansion of international mobility into new countries presents an exciting future for relocation professionals, broadening their capabilities and horizons with every new mobility challenge. See our USA (p16) and Australia (p36) features, and the International Destinations section of www.relocatemagazine.com
Table 3: Locations that present the greatest assignment difficulties for international assignees Location
% of organisations
Nature of challenges
China
16
Tax and currency issues; culture; immigration/visas/work-permit process; customs issues regarding removals; housing quality; remote locations/lack of infrastructure; health; statutory regulations
Brazil
9
Security/safety; work visas/lead times; language; tax issues; culture; lack of infrastructure; bureaucracy
India
8
Quality of life; housing quality; culture; frequent legislation changes; immigration regulations; lack of infrastructure; statutory regulations
Russia
6
Immigration/lead times and delays; labour laws; regulatory barriers; culture; remoteness; security; government requirements
USA
4
Tax; immigration; regulatory difficulties/barriers
UK
3
Cost; tax; immigration
Angola
3
Housing; hardship; immigration
Japan
3
Health; language; cost; distance; natural disasters; visas
Australia
3
Tax; visas; high cost of living; natural disasters; culture
Colombia
2
No service providers; strong local unions; low productivity; government policy
Mexico
2
Safety; security; limited infrastructure; economic volatility; living standards
Nigeria
2
Security; hardship
Germany
2
Culture; relocation expenses caps
Saudi Arabia
2
Culture
UAE
2
Immigration; housing; culture
Libya
2
Security; political and cultural instability; civil war
Singapore
2
Costs; housing costs; cost-of-living index
Kazakhstan
2
Remote; harsh conditions, especially for families; hardship; immigration lead times
Italy
1
Immigration; cultural integration
Venezuela
1
Crime; corruption; availability of goods; currency fluctuations; immigration processes; government controls
Argentina
1
Work visas; services; transferring money
Belgium
1
Tax; work authorisation
Netherlands
1
Immigration; tax
Indonesia
1
Remote location; crime; safety
Brookfield GRS Global Relocation Trends Survey 2012
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: USA FOCUS
AUTUMN 2012
Back in the USA Surveys continue to highlight the USA’s special appeal as a relocation destination. Following on from the coverage in our Autumn 2011 issue, we explore how current economic challenges and uncertainties over the results of the forthcoming presidential elections are affecting relocations to, and within, one of the original superpowers.
A
s Mitt Romney and Barack Obama slug it out in the political arena, the world awaits the outcome of this keenly-fought US presidential contest, and we in the relocation sector wait to see what the implications will be for companies moving to the US, or sending employees on assignment there. The election, which looks set to be one of the closest ever, takes place amid unemployment, ballooning budget deficits, and the Obamacare controversy. As the incumbent, President Obama is likely to be judged on the state of the US economy, which is not in rude health; government figures show that GDP growth has slowed to 1.5 per cent from 3 per cent at the end of 2011. The Guardian’s Jonathan Freedland has highlighted the even more worrying figure of 8.3 per cent unemployment. Mr Romney can point to a record of effective management of tough economic situations, as both Governor of Massachusetts and saviour of the Winter Olympics in Salt Lake City. Convincing the centre and reaching out to nonwhites still remains a challenge for his party, however. There can be no disputing the fact that the US economy is flagging under President Obama, but he has proved financially shrewd at times – as witness his decision to bail
out the banks – and he inherited an ailing economy from the Bush administration. While Mr Romney promises tax breaks, some of his previous actions may cause companies to pause for thought. In a piece for the New York Times in 2008, for instance, he argued that Detroit – now one of the Obama bailout success stories – should be allowed to go bankrupt.
Key sectors The US is the world’s largest manufacturer, producing approximately 21 per cent of manufacturing output. Key industries include petroleum, steel, automobiles, construction machinery, aerospace, agricultural machinery, chemicals and electronics, many of which have seen substantial job losses in recent years. Retailing plays a major part in the economy, despite rising costs on imported goods exerting pressure on retailers to raise their prices. Overall, the services sector accounts for 68 per cent of GDP. In the formerly buoyant, but now struggling, state of California, the projected budget deficit is likely to be almost $7 billion greater than the January projection of $9.2 billion, according to Governor Jerry Brown. Most worryingly, Governor Brown notes, the current fiscal year is likely to see a
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: USA FOCUS
$3.5 billion tax shortfall. The stuttering economy has already affected corporate relocation to the state. Organisations considering relocating to California should not ignore these developments, which, in particular, may result in higher taxes. Governor Brown hopes that the public ballot in November will back his plans to increase the sales tax a quarter-cent for four years and raise taxes on incomes of $250,000 or more by from one to three percentage points for seven years. One California success story is the transformation of Venice’s ‘Silicon Beach’ into a hub of technology companies. Admittedly, technology startups appear less dynamic than in the past. Investment advice provider Dealogic has shown that, after Facebook’s springtime Initial Public Offering (IPO) flop, no tech companies went public even as late as June, compared with the 19 IPOs posted in the same period the year before. Despite these setbacks, technology companies have resolved to move within, and not out of, California. Google has relocated its technical and sales teams to the area, and Venice residents wax lyrical about Silicon Beach’s future. As Michael Weir, chief marketing officer of cloud technology company Sparqlight, told CNBC, “This is a place where people have come for years to make dreams happen, so why shouldn’t they come here to make their technology dreams happen?”
Top relocation destination Surveys continue to highlight the US’s appeal as a relocation destination. In both the Cartus and the Brookfield 2012 global relocation trends reports, the US featured as top destination. In addition to being the most frequent destination, it is the one to which companies have experienced the greatest increase in
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permanent transfers over the past two years. Perhaps unexpectedly, the US also figures in both surveys as the country which respondents expect to present the greatest new challenge for assignees arriving from overseas, for reasons that include cultural transition, immigration delays, and the high cost of living. The US’s business culture is certainly very different from the UK’s, as Nick Rines demonstrates on p24. Pass on his useful tips to your relocating assignees. Brookfield’s survey also ranked the US sixth on the list of locations that presented the greatest assignment challenges for programme managers. Reasons cited included: • Immigration • Economic crisis/unemployment • Payroll and tax • Compliance (tax and immigration) • Regulatory barriers/difficulties • HR’s lack of understanding of global policy • Market development We cover several of these challenges later in this article.
Optimism in corporate relocations Despite the economic situation, refinements to relocation policies to address critical skills gaps and fast-moving business strategy, combined with the gradually-improving economy, are leading to optimism in US corporate relocations, according to Weichert Relocation Resources. Its Employee Mobility Survey 2012 indicates that 40 per cent of organisations expect their relocation activity to increase over the coming year, while 54
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per cent expect it to remain at similar volumes – a marked change from the previous few years. Nevertheless, the report finds, the market is still difficult. Relocations are taking longer, and, despite a recent upturn in the housing market, this still continues to impact on employee mobility. As 92 per cent of organisations in Weichert’s survey reported that workforce mobility was either critical or important to talent-management strategies, relocation policy and practice have had to adapt to ensure mobility is facilitated. For example, 96 per cent of companies now offer some form of home-sale assistance, and the use of pre-decision programmes is increasing. Today, 67 per cent of organisations report their use on either a formal or a case-by-case basis (up from 53 per cent last year). For more on the current US property picture, see p26. Summing up current US mobility trends, Joseph Morabito, president and CEO of Paragon Global Resources, says, “Domestic relocation volume in the US has been falling for a number of years, as companies have downsized or moved jobs overseas as a result of the US tax code and other regulations impacting business. International activity is increasing as more American companies focus on global business.”
The HR agenda September’s HR Excellence Summit in Washington DC explored the current key themes for HR in the Americas. The top six themes were:
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strategies in emerging markets are symptoms of the economic downturn. There is a need for HR to step up to the challenge of hiring, developing, and retaining the talent necessary to endure these changes. 2. Enterprise profitability – In the current economic climate, companies cannot afford inefficiencies that compromise profitability. HR must align with overall business goals so that all processes and initiatives are executed with the intention of improving productivity, and, in turn, profitability. The role of chief HR officer/HR director is becoming more one of executive leadership, and thus demands a focus on business objectives that will optimise profitability. 3. Attracting, developing, and retaining critical talent – Despite unemployment, there is a serious deficit in the skilled workforce, especially in North America. Technical capacity developed internally cannot afford to be lost, and thus retention of critical talent is a key priority. 4. Technology as a tool in HR transformation – Metrics and human-capital management play a growing part as business analysis takes a more important role in HR decisions. Complex global networks are also now demanding technology as a tool to manage the end-to-end talent continued on p.22
Healthcare: an alien landscape
1. Constant change: managing change through business agility – Mass corporate restructuring, significant layoffs, process redesign in Lean Six Sigma, and global growth
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o those coming from the UK, with its National Health Service, or other countries with state healthcare provision, the US system, in which hospitals and clinics are generally owned and operated by private companies, and most employees have healthcare insurance supplied by their employers, whether on a noncontributory or, increasingly, a contributory basis, can seem very alien. Healix International provides medical, security and travel-assistance services. Says Gregory Cain, VP of business development for the Americas, “Healthcare delivery in the US varies considerably by the PMI [private medical insurance] scheme the employer makes available to the assignee, particularly in those cases where the assignee is being placed into the same scheme as domestic employees. “The way in which the assignee can access specialists can range from being able to make immediate and direct contact to having to obtain a referral from their primarycare physician. Employer plans will also usually only allow use of a limited number of medical resources in a geography via commercial provider networks, so knowing who these providers are is critical. “Finally, assignees to the US may be surprised at the limited availability of diagnostic tests and x-rays in the physician’s office compared with back home. Insurers long ago directed more cost-effective utilisation of diagnostics with independent labs.” Such tests, are, of course, expensive – a fact that underlines the importance of comprehensive medical cover for those relocating to the USA.
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Tax planning for temporary assignments to the US Stephen Maltby, partner, Gibney, Anthony & Flaherty Many foreign nationals are unaware that ‘residency’ for US income tax purposes can have little to do with their immigration status. This concept is an important one because, with Federal tax rates as high as 35 per cent, a failure to plan properly can be costly. Non-residents are subject to taxes on their US source income only, whereas residents are taxed on their worldwide income, including salary or bonuses earned from work performed abroad, gains on the sale of foreign real estate, and dividends from a foreign corporation. Foreign nationals will be deemed residents of the US once they obtain a green card or meet the ‘substantial presence test’. This test is satisfied by the non-immigrant’s being present in the US for more than 183 days (based on a weighted average of days present over three years). Depending on the time of year they enter, nonimmigrants may be able to avoid being treated as a US resident for the first calendar year they are present in the US. Even when the non-immigrant has met the substantial presence test, he or she is generally only treated as a resident beginning on the first day of the calendar year in which
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he or she is physically present in the US (with a de minimus exception for up to 10 days prior). It is, therefore, important to time the sale of property abroad, and foreign-earned bonuses, before arrival in the US. US residency also carries certain obligations, including filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBARs), for each foreign account owned, or one that a resident has signature authority over. This obligation arises once the aggregate value in foreign accounts exceeds $10,000 in a year. Severe penalties are imposed on residents for failure to file FBARs. The timing of residency termination is also important for many reasons, including avoiding the exit tax and utilisation of the exemption for gain on the sale of a personal residence. The exit tax, a mark-to-market capital gains tax on all assets owned at the time of expatriation, applies to long-term green-card holders meeting certain income and net asset thresholds. A green-card holder is treated as a long-term resident once he or she remains in the US for more than eight of the last 15 years. It is important to seek legal advice in connection with transfers to and from the US. In addition to timing concerns discussed above, foreign nationals should seek advice on a number of issues, including whether any treaties apply to their situation, the taxation of their US and foreign retirement plans, planning for US and foreign social security, state and local tax issues, and estate planning for US assets and non-resident spouses.
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US employment-based immigration basics Elaine Martin, MD, Paragon GeoImmigration. The US’s immigration regime is considered to be the most complicated in the world – with good reason. Almost every letter of the alphabet has a corresponding immigration category, and some have multiple sub-categories (H-1, H-1B, H-1B1, H-2, H-3, H-4, for example). However, companies that hire foreign nationals in the US – or transfer them from company offices overseas – generally need to understand just a few of these categories. The most common categories for foreign national employees are: 1. B-1 Business Visitor (or Visa Waiver for eligible countries) – Proceed with caution! This status does not allow the visitor to perform any services for the US company, no matter how short the stay is. Activities that are allowed include: • Attending conferences, seminars, business meetings • Receiving training • Conducting sales/marketing activities for products or services originating outside the host country. For example, a French person could market Dom Perignon champagne in the US as a business visitor • Engaging in a fact-finding mission • Performing after-sale service/installation of equipment imported into the home country if the service was provided for in the purchase contract 2. L-1A/L-1B Intra-Company Transferee – The assignee must have worked for the company outside the US for at least 12 months preceding the transfer. The company must show that the assignee has specialised knowledge (L-1B) or will act in a managerial or executive capacity (L-1A) in the US. The US immigration service examines these applications very closely, and it has become extremely difficult to prove the specialised knowledge required to get an L-1B petition approved. The advantages are that the dependent spouse can work, and the process can be fast if the company has an L-1 Blanket in place. The disadvantage is that the process can be slow, and government filing fees are high.
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continued from p.19 network. Later in this article, PwC’s Alex Rubin develops this theme further. 5. Global talent management – Emerging-market talent development is key for multinational companies. Should they develop local talent, or import from head office? 6. Critical talent development/leadership development – Ageing baby boomers at senior management level have raised a serious concern in succession planning. Challenges arise not just in identifying key potential leaders, but also in developing them in core leadership competencies. In fact, as Worldwide ERC’s Peggy Smith points out, the concerns of HR and mobility professionals in the US closely mirror those of their global counterparts. Says Ms Smith, “As the war for talent keeps escalating, most countries are looking for talent, both domestically and across borders. That makes workforce mobility more complex on many levels, but particularly with regard to the tax and legal landscape – in fact, compliance is one of the watchwords for this global economy. “As mobility professionals, we must be so attuned to the needs of companies and assignees that we can customise assistance to serve the employee, even as we ensure that it is also kind to the bottom line. The mobility industry in the US is more mature than in other countries, but we also are newcomers to some parts of the world; that means that we are sometimes the educator, sometimes the student. “But in the final analysis, we are all global leaders learning together how best to deploy and retain a workforce that keeps business moving forward.” FOX-ADVERTS-FINAL_Layout 1 06/09/2010 11:55 Page 1
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3. H-1B Specialty Occupation – To be eligible for this category, the position must require a degree in a specialised field, and the foreign national must have that degree (or the equivalent in education and/or experience). The disadvantages are that the dependent spouse cannot work, there is an annual cap of 65,000 new H-1Bs every year (usually reached before the end of the year), the process can be slow, and government filing fees are high. 4. TN – Trade NAFTA – Available to citizens of Canada or Mexico entering the US to perform activities on the specific TN list of occupations.
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The US approach to global mobility
Business culture in the US Nick Rines, Institute of Diplomacy & Business Though the US shares a language with the UK, doing business there is very different. It is much more to the point. Nevertheless, politeness is important, particularly when first meeting someone. Business meetings must be taken seriously. On occasion, you may be tempted to skip preparation for meetings in the UK, believing you can ‘wing it’, but this does not apply in the US. It is important to arrive at meetings with the required information, on time, and properly dressed. On the East Coast, and in big cities around the Great Lakes, business suits are essential for most business occasions. Even on dress-down Fridays, or in sectors that encourage less-formal attire, the casual Ralph Lauren look has got to be right. Shoes must be polished, and trainers are a no-no. When doing business across the Atlantic, you need to be far more prepared with figures and analysis than you may be used to. It is also useful to have alternative plans and contingency arrangements. Once you have reached agreement, it is important always to meet the deadlines agreed. • Be prepared for what, in Britain, would be considered aggressive behaviour during negotiation, or if there is perceived to be a problem. You may have attended a social event with someone the night before, but that will not stop them asking pointed questions • Do not be surprised by this form of direct talking, and do not try to respond in kind. Be firm if the situation requires it, and make points as succinctly as possible, but stick to what you know • Strategic planning is the norm in the US, while the British are more spontaneous, and tend to believe in creative thinking and muddling through • Both cultures believe in doing deals by creating good relationships, and the golf course can be a venue for business. It is not unusual to be invited to the family home for dinner or a barbeque. If American clients or associates are visiting the UK, the invitation should be reciprocated • Be wary of relaxing too much at social events, however. The best way to approach them is to see yourself as your company’s ambassador. Take a gift for the host and or hostess, but nothing too expensive • When doing business in the US, you will not find any of the embarrassment that the British can experience when asking for what they want – including money. Americans are not being rude: they are simply being businesslike about business. It can make life a lot easier
With the concerns of HR and mobility professionals in the US now more closely aligned with those of their global counterparts, it is interesting to consider how approaches to global mobility differ. Recent research undertaken by Worldwide ERC and professional services company Towers Watson focused on the differences between the approach to global mobility in the US, Europe and Asia, looking at how organisations approach talent mobility as part of their talent-management strategies, the difference between existing policies in the US, Europe and Asia, and how effective the current mobility structure is in attracting and retaining key talent. The study, Global Talent Mobility Survey: Regional Differences in Policy and Practice, found that 53 per cent of USheadquartered companies had an organisational-development/ talent-management group with primary responsibility for talent management, compared with 67 per cent of Europe-headquartered companies and 21 per cent of Asiaheadquartered companies. Of the survey respondents, 50 per cent indicated that decisions about international assignments were made as part of an integrated talent-management process. Of those, 100 per cent of US-headquartered companies involved the HR department in these decisions, as against 91 per cent of Asiaheadquartered companies and only 86 per cent of Europeheadquartered companies. Mobility programme outsourcing was more prevalent among US and European companies.
Remuneration challenges Pay and tax can be difficult areas for companies moving employees to the US, as Scott Niven, head of relationship management and strategy at global-mobility specialist IPM, points out. “Companies using a balance-sheet or build-up method to set their international assignment remuneration on a uniform, and equitable, basis globally may occasionally come under pressure when moving employees to the US, if the result of such a calculation is perceived to give less ‘pay’ than a US national doing the equivalent job would earn. “However, companies should avoid a knee-jerk reaction to such situations by focusing on salary only. The entire offer needs to be looked at, as the international assignee is likely to have benefits, such as fully- or partially-subsidised accommodation, on top, which the US national would need to fund from their after-tax pay. “Furthermore, as the US offers very little preferential tax treatment to international assignees, and as most international assignees will be tax equalised to their home base, with the company picking up the US tax liability, provision of such benefits has an additional tax delivery cost.” For information on tax planning for temporary assignments to the US, see p20.
Technology aiding compliance As Peggy Smith mentions, compliance issues dominate the agendas of US companies and those doing business in the country, and the complexities are increasing, particularly as regards immigration, where there have been a number of new announcements, and tax. Alex Rubin, international assignment services technology director at PwC, is enthusiastic about the ability of technology to aid compliance. “Today, organisations in
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the USA and other countries face many challenges in the compliance domain. Technology can be a powerful instrument in answering key questions. Are employees meeting their tax obligations in all countries in which they are working? Are employee movements triggering any corporate responsibility for income-tax reporting and withholding? How do you know when you are at risk of creating a permanent establishment? “Thanks to constant, fast-paced evolution, new technology tools are being utilised in organisations to address business needs beyond traditional expatriate tax matters. Globalmobility technology has advanced at a tremendous speed – from handling security and streamlining processes to centralising vendors, such as travel managers, and matching travel-expenses claims with where employees are working, organisations in the USA are now using technology tools in areas that did not exist just a few years ago. “PwC envisions that technology will provide even more value in predicting a company’s mobility trends and deliver early warnings on potential tax-compliance issues in the near future. “While cost-containment remains the focus for most companies, leading-edge companies are now seeking out technology innovations to help them make strategic decisions in this complex area, and to support their organisations’ strategic business and data goals.” In 2013, will the USA be overtaken as the most frequent relocation destination? Re:locate will keep you informed, via both the magazine and the website. 0303 HF Relocate_Advert_print.pdf
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Our focus on the USA continues on www.relocatemagazine.com this autumn, via our new Spotlight editorial feature, which will include a wealth of articles, news, and practical advice on topics ranging from relocation challenges for employers to family support.
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US property: stability returning? The struggles of the US property market, where the global economic downturn started, have been well documented. However, there are signs that a degree of stability may be returning, as Louise Whitson reports.
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n Re:locate’s Autumn 2011 issue, we reported on the difficult conditions faced by the US property market. A year on, with November’s presidential election looming, I asked Pam Milani, VP of corporate real estate at SIRVA Relocation, if she thought the situation was improving. Her response was encouraging. “Many US real-estate markets are showing definitive signs of stabilisation and improvement. Published interest rates for a 30-year fixed mortgage are currently under 4 per cent, another record low, with a hopeful expectation that lenders will eventually relax overlyrestrictive lending guidelines.” However, says Ms Milani, even in areas that are experiencing significant increases in home-sale activity and modest appreciation in property values, prices have not returned to their 2007 peak. And Joseph Morabito, president and CEO of Paragon Global Resources, warns that the US will not see prices at pre-2008 levels for quite some time. Says Pam Milani, “The growth of the labour market is tepid, but jobless claims are holding steady. While these factors are key to a sustained, and prolonged, housing recovery, the problem of ‘shadow inventory’ – homes in various states of foreclosure that have yet to hit the market – will continue to impact the market over the next five-year period.
“The problem of negative equity will continue to weigh heavily on the housing market and the economic recovery.” Joseph Morabito believes that the result of the presidential election may also have an effect. “The US has the highest foreclosure rate in American history, which ties directly to the high unemployment rate. There are also many uncertainties related to extension of the Bush Tax Cuts that will expire on 31 December. As such, the presidential election has a direct impact on economic growth and job creation in America, which are critical to the real-estate market.” Is the current situation affecting mobility? Says Mr Morabito, “When negative equity occurs, while some companies offer loss-on-sale relocation benefits, which are taxable, the typical cap may not be enough. If the homeowner simply walks away from the mortgage, which often happens, credit is ruined for as many as seven years if a foreclosure takes place, making home purchase in the new location, if a mortgage is required, impossible.”
Location, location, location Cartus Corporation reports that, according to the USA’s National Association of Realtors, average house prices, notably in the lower ranges, are rising in more metropolitan
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areas, owing to lack of supply. Members of Cartus’s Broker Network are seeing varying market conditions, based on location. In some areas, such as Southern California’s Silicon Valley, supply shortages are resulting in multiple offers. In others, sales are brisker, but prices are still under considerable downward pressure, thanks to a high incidence of short sales and foreclosures. A Cartus spokesman advises, “Transferees making a move should be prepared in advance for market conditions. They need to ask questions, listen carefully, and leverage their agent’s expertise in formulating a strategy that reflects the current state of the market.” Companies, says Cartus, are adopting a number of practices that can prove effective in helping employees to sell their homes. Among these are: focusing on prompt repair and improvements, to ensure that properties are at their best when
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first put on the market; the use of incentives to encourage buyer activity; and the use of marketing parameters such as required listing times and price points for employees.
Rentals market thriving Many relocatees, of course, will seek to rent, rather than buy. Joseph Morabito explains that the rentals market is strong in most major US cities, as many people who do not qualify for a mortgage are having to become tenants instead. This, says Cartus, is leading to falling availability and rising prices in hotspots such as Southern California and Metro Washington DC. Its spokesman advises, “Remember: assignees coming into the US will have to compete with domestic US transferees for these limited accommodations. All renters must be prepared to make decisions on the spot. Those who hesitate may lose out.”
Education in the USA – the global classroom The US offers relocating families a range of schooling options, in both the state and the private sector. Rebecca Marriage explores the options, with advice from experts.
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hile the public education system in the US is undergoing a period of transformation as it moves to an ambitious Common Core Curriculum, independent and international schools in the US are taking an increasingly global view of education. A growing number of independent schools in the US are offering students the opportunity to take internationallyrecognised programmes of learning, and expanding
international school groups allow students to engage with partner schools around the world, in what is being dubbed by commentators the new ‘global classroom’.
US education system Families relocating to the US looking for public-school places for their children will first be struck by how education systems and end-of-school measurements of success for students vary
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significantly from state to state. Even school start age may vary between regions. Schooling usually begins in grades K (Kindergarten) at age five or six, followed by middle/junior high school (US grades 6 to 8), and finishing with high school (US grades 9 to 12). As most policies are set at the state and local levels, the school curriculum can vary from state to state, and even between school districts within a state. These inconsistencies have been blamed, in part, for the US’s fall in the international league tables; in the Programme for International Student Assessment (PISA) rankings, the US recently came 25th out of 34 developing countries in maths, falling behind countries such as Japan, Germany and France. “One reason in particular,” says Jonathan Wray, instructional facilitator for maths in the Howard County (Maryland) Public School System, “is that we have hundreds – if not thousands – of different ways of teaching our students, and different ideas of what they ought to be taught.” In 2009, the National Governors [sic] Association launched the Common Core State Standards, in an effort to replace the current confusion of public education policies. So far, 47 states have signed up. “The Common Core State Standards initiative is designed to eliminate inconsistencies among states, districts and schools,” says Mr Wray. “The aim of this state-led programme is to develop practices and criteria the entire nation can rally behind, so students can prepare for success in a global society.”
Global vision Relocating families are often well-versed in the benefits of maintaining an international focus on the education of their children and the opportunities for future global mobility – something that has not gone unnoticed by some international school groups that are continuing to expand in the US. The World Class Learning Group (WCL) has British Schools with an international curriculum in Washington DC, Boston, Charlotte, Chicago, Houston, and New York. The Dwight Group and GEMS Education Group offer schools across the globe an international outlook and curriculum. Elizabeth Sawyer, president of Bennett Schoolplacement Worldwide, has noticed the increasing focus on a global vision for education in US private independent schools. “Different schools are doing it in different ways,” says Ms Sawyer, “ranging from offering languages that they might not have offered five years ago, online courses that can be ‘shared’ by students around the globe by way of creating ‘global classrooms’, exchange programmes, and partnerships with non-US schools.” Barbara Saran-Brunner, admissions and financial aid director of the International School of Boston, takes the view that relocating families would be advised to consider the international school option. “For continuity of curriculum and school spirit, schools that are part of an international network should be considered first,” she explains. “These schools are more likely to be able to integrate students mid-year and from different parts of the world, and are more likely to have the structures in place to help students with language and study habits.”
An international curriculum An internationally-recognised and transferable curriculum, such as the International Baccalaureate (IB), is often top of the list when choosing a programme of learning for students
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relocating to the US, and specifically in independent feepaying schools. However, interestingly, the IB is growing most rapidly in the US in the public sector. “We’re seeing growth in the popularity of the International Baccalaureate programme,” says Dianne Drew, head of Dwight School, New York City, “especially as IB Diploma graduates are gaining ever-wider recognition as students who take on, and meet, rigorous academic challenges. Currently, there are more than 900,000 IB students in over 140 countries, and these figures are growing each year.”
An eye on the future – higher-education choices The International School of Boston is also seeing a growth in the popularity of the IB, especially among those who are planning to enter higher education. “Families should have a good idea for their older children where they would like to study for university, as higher-education applications are done differently in the US than anywhere else in the world,” explains Barbara Saran-Brunner. “This year, half of our students in 11th and 12th grade are studying for the IB Diploma; the other half prepares the French Baccalaureate. Both diplomas are highly regarded by any university around the globe.” Dianne Drew supports this view, and urges parents to think carefully about their children’s future higher-education choices, suggesting that the IB provides students with a clear advantage. “Internationalism is a driving force in higher education in today’s global arena,” says Ms Drew. “The International Baccalaureate Organisation documents that acceptance and retention rates of IB graduates at US Ivy League colleges outstrip those of their peers.”
New schools In response to the increasing globalisation of education and the demands of higher-education institutions across the globe, an ambitious new school project, launching this year, will aim to establish a global network of schools serving students in pre-school, elementary and secondary grades. Avenues: The World School opens the doors to its flagship campus in New York City in September 2012. The 15-grade institution is the first of a worldwide system of 20 or more independent schools to open over the next decade in major cities around the globe, such as Shanghai, London, Mumbai, São Paulo, Johannesburg, Abu Dhabi, and Sydney. Connected by a common vision and shared curriculum, Avenues will offer a worldwide network of campuses. “Avenues will aggregate the academic expertise and best practices from the finest preparatory schools and universities in the country into a worldwide system of schools,” said Benno Schmidt, chairman of Avenues. “As the first truly global network of pre-K-12 schools, Avenues is uniquely equipped to prepare students to excel in the highlycompetitive and networked 21st-century world.” “As the world evolves, so must our educational systems,” said Avenues’ CEO, Chris Whittle. “We live in a much smaller, more connected world, one that demands education to be less parochial in its view and more urgent in preparing students who can lead in this new global society. Students who graduate with a global perspective and cultural fluency, who have experienced studying and collaborating around the world as a reality, and not a dream, will have an extraordinary advantage.” However, existing international schools in the US are keen
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to remind families that this has been a long-held philosophy of the major international school groups. “Long ahead of the curve, Dwight was the first independent school in the US to create a campus abroad in 1972, when we opened our London School,” says Dianne Drew. “Since then, Dwight has established additional campuses and programmes on Vancouver Island, Canada, in Beijing, China, and in Seoul, South Korea. Our global vision, which dates back 40 years, is to develop world citizens who possess the wisdom and flexibility needed to thrive anywhere in the world.” “Schools like Avenues, newly entering the educational arena, aim to provide the global experience today’s students certainly require,” says Ms Drew. “However, the school is not there yet. It takes considerable time, knowledge, and curriculum expertise to offer an appropriate programme for international students.” GEMS Education, a long-established global network of schools, is set to open a new school in Chicago. The GEMS World Academy will be the first outpost in the US for the group, which has branches around the world in Dubai, Kenya, England, and India, among other places. “The sheer diversity of nationalities in GEMS International schools provides students with a unique international understanding through interaction and by studying and experiencing other cultures and belief systems,” said a GEMS spokesperson. “This global cross-cultural experience is extended further through a special initiative where GEMS students are linked, via video-conferences, to students in non-GEMS schools around the globe.”
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Advice for parents Relocating professionals with families are usually highly aspirational and career-minded, so an international network of schools can provide parents with the opportunity to transfer their children from one school to another, as their circumstances change, without too much disruption. However, this does not mean that public schools in the US should be discounted, and, with the introduction of the Common Core Curriculum and the growth in popularity of the IB in public schools, education provision from state to state is likely to become less confusing, and more coherent, for families entering the system. Elizabeth Sawyer firmly believes that families should simply be made aware of the considerations when choosing a public school in the US. “A surprising number of families arrive here without understanding the US education system very well,” says Ms Sawyer, “and how enrolling their children in a given school or district will affect their repatriation or next assignment in two or three years.” “Among the most important considerations for professionals,” concludes Dianne Drew, “is to provide families with the proper information and a range of educational options, so that parents can make the best decision for their family and feel comfortable knowing that their child can move overseas with the least amount of disruption.”
For useful information on relocating to the USA, see the International Destinations section of www.relocatemagazine. com. Refer your relocatees to www.smartmoverelocate.com
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: CULTURE
AUTUMN 2012
“It’s a small world after all”
The new demand for cultural competence As opportunities to work overseas increase, cultural competence has become an essential job skill for the 21st century. Mary Beauregard, of Global LT, which provides cultural and language support around the world, discusses some critical aspects of cultural competence, and explains why cultural competence matters.
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oday, our chances of travelling to another country for business have more than tripled from just 20 years ago. There is no doubt about it; cultural competence has become a new and vital job skill for the 21st century. What abilities and attitudes embody this unexplored but critical competence? Is it sufficient that we practise offering our business card with both hands in Asia, or not show the soles of our feet in the Middle East, or avoid hand gestures that might be interpreted as crude and insulting to our global counterparts? Non-verbal nuggets like these are interesting, and based in fact, but they are just the tip of the proverbial iceberg when it comes to being culturally competent. As we continue to improve the way we view and respond to our expat populations, we can’t ignore another significant segment of our global constituency: the local employees who interact daily in the multicultural workplace. It is often at home, where colleagues, counterparts and customers hail from ‘foreign’ lands, and deliver the global experience to our own backyards. Cultural competence is needed everywhere! In the global workplace, communication style, thought process, adherence to schedules, and management preferences shift and diverge. Accents and second-language use often
complicate and impede successful verbal exchange. Unfamiliar approaches to leadership, motivation, delegation, and accomplishing tasks can engender apprehension, frustration, and mistrust. Even friendships and social expectations may differ. Yes, better assignment preparation, utilisation of cross-border skills, and cross-cultural training are essential to improving performance among expats and their families, but they must also be considered for bringing our ‘domestic internationals’ into the global context. When selecting individuals to represent companies abroad, there are several instruments available for gauging a candidate’s cultural competence, or cultural intelligence (CQ). Obviously, there is no one-size-fits-all measure, as global workers and expat candidates come from, and travel to, various parts of the world with various cultural tendencies. These profiles serve to raise the subjects’ awareness of individual strengths and weaknesses. Coupled with a customised, culture-specific training programme, participants, usually an expat couple, focus on realistic expectations of what their lives will be like in the new environment, and how they plan to meet new challenges. This very personal, higher level of preparation includes all aspects of expat life, without disregarding daily necessities like the availability of a favourite breakfast food or condiment. Two well-respected instruments for candidate assessment are the CCAI (Cross Cultural Adaptability Inventory: Kelley and Myers) and the OAI (Overseas Adaptability Inventory: Tucker International LLC), which both measure international assignees on several different attitudes and characteristics. These, like most of the assessment tools, do not predict candidate success or failure, but rather focus on individuals’ ‘assets and liabilities’ (CCAI), which might, on the one hand, help overcome obstacles, or, on the other hand, complicate and add stress to cultural encounters. These very qualities could be examined by anyone involved in cross-cultural endeavours. Here are some of the qualities that are often measured in the aforementioned profiles: • Respect for other beliefs • Flexibility and openness • Patience and tolerance • Perceptual acuity • Sense of humour • Personal autonomy
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Respect for other beliefs/ flexibility and openness It’s obvious that respect for others is key to ‘getting along’, but, because every culture is ethnocentric (‘our way is the best and only way’), this is often a difficult, yet crucial, skill. We must first examine the role of our own culture in our personal and professional lives, and realise the impact ‘our way’ has on our ability to understand and appreciate ‘the other’. Accepting business differences in management styles and delegating, or in planning, timing, and executing a project, can be fraught with tension and ethnocentrism, and requires great flexibility, as well as acknowledgement of different beliefs and practices. After all, one of the non-economic, bottom-line benefits of global business is learning new methods and best practices, and integration of ideas, instead of division! Yes, it’s easier said than done. Families, when entering a new culture, find it challenging to accept unfamiliar religious beliefs and practices, or no beliefs at all. Acknowledging disparate gender roles or uncomfortable social hierarchy takes practice, too.
Patience and tolerance Global LT (GLT), a leading provider of language and cultural training, translation and expatriate destination services in the US, has been assisting international employees for almost three decades. Our long-term service and interaction with individuals and families from all over the world has afforded us many ‘lessons learned’. GLT staff practise what they preach, and have conducted cultural-awareness training for their entire employee population, from top management down to the newest hire. These global associates may never set foot in another country, but learning how their counterparts in Hong Kong, London, Brazil, or Massachusetts process a request, respond to a client, or read a directive in an email has opened their eyes to new perspectives and attitudes. It’s not easy for this global staff of 100 employees, representing 16 countries, speaking 22 different languages. But these programmes have promoted cultural competence through education and exchange, and have increased patience and tolerance by actively demonstrating one of GLT’s corporate core values: “Our diversity is the key to understanding our customers.”
Perceptual acuity As an intercultural trainer and consultant for GLT, I feel that one of the most essential characteristics, especially for people from the West, has to do with being able to observe behaviour before acting, interpreting non-verbal language, and accurately assessing unspoken cues. These valuable intercultural skills take a good deal of practice, since most US Americans, as well as people from the UK, Germany and France, are not always as well equipped to ‘read between the lines’ as people from Asia, Latin America, or the Middle East. With this skill, one becomes more intuitive and empathetic, understanding that ‘the other’ has perceptions and varying expectations, too, heightening communication skills and promoting active listening.
Sense of humour Intercultural consultants and seasoned expats alike feel that a sense of humour, especially in the acquisition of a foreign language, is a valuable, but often overlooked, skill. Using
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humour in regard to one’s own insufficiencies, and therefore not being afraid to make mistakes, allows the learner freedom to try and ultimately succeed in speaking a new language. This sense of humour (never projected towards the foreign national), and being able to bounce back from disappointment or cultural faux pas, sometimes called ‘emotional resilience’, can greatly contribute to success in a global situation. Maintaining a respectful yet lighthearted attitude has great benefits in coping with other stressful situations, too.
Speaking the same language? One expat from India to the United States tells of his first weeks at a midwestern university, as he sought advice from a counsellor about a difficult upcoming project. The obliging counsellor told the Indian student, “If I were you, I would go to the library and get all of the materials I could find on topic X. I would read them through, I would take notes, and then I would make an outline.” The student thanked the counsellor, and returned two weeks later to collect the outline that he expected the generous counsellor to provide. Of course, there was no completed outline, and the student, disappointed, yet able to see the humour in the situation, reflected, “I thought that when he said ‘I would do, such and such’, it meant that the counsellor was going to do the research for me!” This illustrates that, even when we speak the same language, clear communication isn’t guaranteed.
Personal autonomy When it comes to expatriate preparation and cultural competence for families, we look to the parents. How will their personal characteristics influence the transition? What is their unified goal for the expat experience? Often, the numberone goal is a wish for strong family cohesion. Expat training programmes must emphasise not just the host-country dos and don’ts, but also the importance of establishing an openminded family identity and non-judgmental values. Formulating these ideals in a Family Mission Statement is often recommended in GLT’s trainings. Helping foster cultural competence at an early age, and equipping children for the transition, provides a grounding force for internationallymobile youngsters. Through personal autonomy, all global nomads and domestic internationals come to realise that the differences they encounter may require adaptation, but they must always be true to their own core values and beliefs. Knowing who they are, and what they stand for, in the light of these competencies fosters appreciation and curiosity regarding differences, and increases the opportunity for personal growth and transformation. Call it a small world, a flat world, or a global village: cultural connectivity is here to stay. So slurp your noodles in Japan, don’t sit in the back seat of a taxi in Australia, always show deference to the oldest person in Thailand … but refine the soft skills that will help increase your cultural competence. For further information, contact Global LT’s regional offices: USA 1-888-645-5881, UK 44 (0) 750 793 8880, Hong Kong 852 2354 4616. www.Global-LT.com/relocate
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: RESEARCH
AUTUMN 2012
Spotting talent in the 21st century The international talent pool is widening, and companies need to know where they should be fishing. Wendy Wilson, of the newly-launched UK affiliate of US organisation Families in Global Transition, considers exciting new research that could be of great significance to employers in a globalising world.
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s Mo Farah bowed his head to receive his gold medal at a significant part of his or her formative developmental years the London 2012 Olympic Games, there were many in (between the ages of 11 and 18) living outside their parents’ Britain who were ready to acknowledge the diverse ethnic mix culture(s), usually because of the parents’ work. The TCK within Team GB. frequently builds relationships to all of the cultures that the According to recently-published research conducted family has been immersed in, while not having full ownership by British Future, Team GB’s diversity paid dividends. An of any. analysis of the podium places shows that immigration appears The traditional third-culture model to be a winning factor. More than a third of Britain’s London FIGT has mainly focused its research into the TCK profile 2012 Olympic medal winners were either born abroad or had a across five traditional third-culture expatriate foreign parent or grandparent. Over a third (10 communities (corporate, military, foreign gold, three silver, and 10 bronze) of the 65 service, NGO and missionary, and medals taken by Team GB were won educators), to identify the specifics by athletes whose immediate family of each sector, and to find the came to Britain from overseas. Traditional commonalities of all those who Team GB is modern Britain. have lived and grown up in each More importantly, team GB is Third Culture Corporate Educators of these subgroups. successful modern Britain. Communities The research has produced Latest figures show some interesting results, that 11 per cent of the including a comprehensive UK population were born list of qualities more often outside the UK, and 29 than not found in adult Third per cent have parents or Culture Kids (ATCKs). Foreign grandparents who were Service Typical TCK characteristics immigrants. include flexibility, tolerance, Team GB is our reminder and openness to difference. TCKs of the irreversible blurring of the Fig 1: The Third Culture Model tend to be excellent at bridging conflict traditional concepts of nationality. But © 2012 Ruth E Van Reken and leading teams, and are natural diplomats. beyond nationality lies a more interesting They’re great communicators, but also keen observers issue. What if the immigration process itself is the and problem solvers, as they’re able to stand back and approach key to excellence? What if Mo Farah’s unique abilities are problems and situations from different perspectives. actually the result of his exotic back-story? It might just be They possess a heightened awareness of cultural context, that the journey itself creates the brilliance. and are highly adaptable. In particular, they’re adept at navigating rapid change in complex environments, because The Third Culture Kid profile they are so open to integrating new experiences. The question of cross-cultural heritage has preoccupied US-based not-for-profit organisation Families in Global Talent spotting Transition (FIGT) for a decade. FIGT has been studying a Many of these are skills that set TCKs apart from their particular demographic often referred to by sociologists as domestically-raised peers. They are unique personal Third Culture Kids (TCKs), or Global Nomads, in order to characteristics that have been developed as a result of understand how prolonged cross-cultural immersion, and the extensive global mobility and cross-cultural immersion. necessary adaptation, may impact an individual’s psychological They are also exactly the sort of instinctive skills that and developmental profile. are prized by multinational companies looking to staff Founded in the USA by Ruth Van Reken, FIGT has grown intercultural assignments. into an internationally-recognised think tank for families Often, these ‘diamonds in the rough’ are overlooked in transitioning globally and the organisations that seek to the hiring process, owing to a lack of understanding of the support them. TCK profile and a failure to appreciate the potential value A Third Culture Kid is defined as a person who has spent
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: RESEARCH
Cross Cultural Kids: the ‘new normal’ Both in modern Britain and beyond, we are now seeing a new 21st-century evolution of the TCK profile into what Ruth Van Reken refers to as Cross Cultural Kids (CCKs). She defines a CCK as “a person who is living in, or meaningfully interacting with, two or more cultural environments for a significant period of time during the developmental years of childhood”. An adult Cross Cultural Kid (ACCK) is someone who grew up as a CCK. As the CCK diagram shows, within the new CCK model TCKs become just one sector of a far wider spectrum. The new model includes other categories of children who grow up cross-culturally for any reason, such as bi-cultural kids, bi-racial kids, children of immigrants, children of refugees, and international adoptees. This looks beyond the TCK experience, which was, in general, related to parents’ professions rather than social circumstances. However, given the extent of research so far, the TCK model is an acceptable reference point from which to study common themes as well as differences in, and among, these other important groups.
Broadening the research agenda I agree with Ruth Van Reken that it’s time to widen this research agenda. The wealth of all the TCK research to date should now be part of a much larger discussion and research focus that look at the impact of increased migration and increasingly-common cross-cultural lifestyles on people from many different backgrounds. Looking into the psychological profiles of TCKs, we already know that their cross-cultural lifestyles can lead to complex issues of identity and belonging at different times during their lives, so it’s now very important to map this cultural-marginality issue across other CCK groups, to look for similarities and differences. My own research to date has been on the qualities inherent in global mindset, using a grounded theory methodology to identify the presence, or lack, of that mindset within the coaching profession. Our newly-launched FIGT UK affiliate in Oxford will enable us to push forward this important research agenda in the UK. FIGT UK’s main objective is to build a local UK network across all sectors, to provide a forum of exchange
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s TCK
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to an employer of this kind of personal history. It’s worth mentioning also that TCKs are not instinctive joiners, and the path often chosen in adult life is one of the outsider, reluctant to settle within one permanent structure. Recognition and careful management of this are necessary in order to select, nurture and retain this unique ‘top talent’ potential in a corporate setting. The pitfalls of choosing the wrong employee for a job are a matter of record. Any HR executive knows that a work narrative for an executive at home can abruptly change if that executive is posted abroad, often with calamitous and costly consequences. All too often during the selection process, promotion boards examine the past achievements of an employee, rather than the inherent potential. But what works in Southampton may not work in Beijing. To complicate matters, the traditional demographic of the TCK is now evolving, as the global economy grows more complex.
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CrossCultural Kids
Educational CCKs
Discriminated
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of en es r ild ge Ch efu R
Fig 2: The Case for Research: The CCK Model © 2012 Ruth E Van Reken
for globally-mobile professionals, families and students, and the organisations that support them. It also aims to empower organisations, individuals, and families by sharing research and best practice before, during, and after international transitions. Our research agenda at FIGT UK is to link existing data on the TCK profile with researchers and practitioners across different disciplines, to create new research streams relevant to 21st-century global relocation and migration issues. So far, the study of Third Culture Kids has made it clear that a critical experience of cross-cultural immersion and adaptation in one’s formative years can produce talented individuals of extraordinary capabilities in certain fields. People like Mo Farah fit the new CCK profile exactly, so the study now should be on the likes of Mo Farah and whether or not his affability, his extraordinary aptitude for excellence, and his supreme confidence in his field are not also the result of the challenges of his youth. If they are, then there are thousands of Mo Farahs out there. Globalisation is breeding a multinational tribe of CCKs. These cross-cultural kids might be children of refugees and immigrants, or they may hail from bi-cultural and bi-racial families, or they may be international adoptees or TCKs. Their personal journeys will all be very different, but the world of global business, commerce and diplomacy would be advised to take note. As these CCKs enter the workplace, they may well grow into exactly what the 21st century needs to drive a truly multinational world forward. The talent pool is getting deeper, and the companies of tomorrow need to know where they should be fishing. For information on FIGT UK, visit www.figt.org/uk_affiliates
See our feature on developing a global mindset (p8) and the International Assignments section of www.relocatemagazine.com
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AUTUMN 2012
Australia adapts to succeed Compared with much of the rest of the world, Australia’s economy is booming. Louise Whitson investigates the challenges facing employers in Australia and those managing international assignments to the region, with contributions from those on the ground.
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he relocation scene ‘down under’ is thriving. Respondents to Cartus’s 2012 Trends in Global Relocation survey ranked Australia at number six in the top 10 global destinations, and the country also took sixth place in the list of the top 10 new destinations to which oganisations had been sending assignees since 2010. Intra-country moves are also on the increase; Australia was at number four on the list of countries to which respondents’ organisations had experienced the greatest growth in intra-country moves over the past two years. For 4 per cent of respondents to Brookfield’ Global Relocation Services’ 2012 Global Relocation Trends Survey report, Australia was the top destination, possibly because of its relative insulation from the types of economic troubles experienced in the US and Europe, as well as its mining resources. Australia also figured on the list of primary emerging destinations, with China, Brazil and India. The reason for all this activity may well be that, in comparison with much of the rest of the world, Australia is booming. Its economy, which some commentators had predicted might be affected by global economic woes and reduced demand for commodities, grew by 1.3 per cent in the first three months of 2012 – considerably more than the 0.5 per cent that had been predicted. However, on the ground in Australia, business people see the economy as stable, rather than booming. There is still plenty of talk about how things could get worse and not being over the worst yet, while appreciating that things are really quite good compared with the UK.
Key industries: balance shifting Historically, mining has always been a major contributor to Australia’s economy. Many different minerals and ores are mined throughout the country. With its vast recoverable mineral and energy resources, including coal, copper, zinc, gold, silver, lead, nickel, tin, bauxite, uranium, industrial minerals, oil and gas, Queensland is an global hub for mining, engineering and manufacturing, and one of the world’s key locations for mining supply chains and head offices. During recent years, the mining sector has been the main contributor to Australia’s economic success, while other parts of the economy have performed far less strongly. However, the latest GDP statistics suggest that this may be changing. Sectors like professional, scientific and technical services, finance and insurance, it seems, now contribute as much as mining to total economic growth – encouraging news for the country in general, and particularly for those who feared that economic success which relied so heavily on a single sector might not be sustainable. The Australian government believes that attracting new investment in mining may become more challenging, owing to falling prices for coal, iron ore, and other commodities. Increased capacity and new technology will be needed to retain the revenue stream. BHP Billiton recently scaled back its plans for expansion of the Olympic Dam copper and uranium mine and said it would not approve any new projects until mid-2013 at the earliest. Analysts are warning of continued threats to Australia’s economy from global economic uncertainties. Areas of
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concern include the slowdown of growth in China, one of Australia’s largest export markets. Current problems in Europe are another source of unease. The Reserve Bank of Australia, fearing the risk posed to growth by the Eurozone‘s worsening sovereign-debt crisis, recently cut interest rates for the second time in two months.
Impact of carbon pricing The recent introduction of new carbon-pricing measures has had a mixed reception, not least because of the impact some believe it will have on prices and employment in some sectors, including mining. The Clean Energy Bill, which took effect in July, targets Australia’s top 500 emitters of carbon (25,000 tonnes or more) – which, it is argued, can afford to make the investment necessary to reduce carbon creation. Opposition climate action spokesperson Greg Hunt says that, while action on greenhouse gases is needed, the carbon tax will “hurt” families and small businesses by generating price rises, and make Australia less competitive in the global market. Jobs and investment, he believes, will simply move overseas, for no environmental gain. Aware of possible negative impacts, the Australian government has increased the income-tax threshold for individuals, to compensate for price increases. It is also taking steps to support jobs and ensure continued global competitiveness during the country’s transition to using clean energy, through the new Jobs and Competitiveness Program, which will support local jobs and production, and encourage industry to invest in cleaner technologies.
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Expats returning The latest figures from the Australian Bureau of Statistics (ABS) show that Australia’s seasonally-adjusted unemployment rate was just 5.2 per cent in July. The number of people employed increased by 14,000 to 11,512,600 over the month. Those unemployed decreased by 2,500, to 635,100. In the Economist Intelligence Unit’s latest liveability rankings, which score 140 cities from 0 to 100 on 30 factors spread across five areas – stability, healthcare, culture and environment, education, and infrastructure – Australia turned in a strong performance. Melbourne took the top spot for the second year in a row. Three other Australian cities were in the top 10. Adelaide rose from ninth to equal fifth place, Sydney was at number seven, and Perth at number nine. With its combination of employment opportunities and lifestyle, it’s not surprising that Australia is the country that currently hosts the highest number of British expats, according to the latest NatWest International Personal Banking Quality of Life Index. Over the past five years, Australia has also emerged as the top destination for British expats to move to, with 188,000 Brits emigrating there. Track Me Back is an online jobs resource that links expat workers in the UK with firms in Australia and New Zealand. Its recent survey found that many expats were returning home for better job opportunities, and because they were disenchanted with current economic conditions in the UK. The top sectors for returning expats, it seems, are mining, resources, engineering, energy, digital media, healthcare, pharmaceuticals, trades, construction, and insurance.
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“When it comes to job opportunities, companies still need to get the right fit. However, clients are moving slowly when there is a vacancy, sometimes procrastinating and making more calculations before hiring,” says Rick Cross, of Jones TalentID, a Melbourne-based boutique recruitment agency working in the professional practice and accountancy sphere. “Accountants and professional services are still in demand. Employers also have to take into account superannuation, which is compulsory. Employers must pay 9 per cent of annual salary into superannuation, even for temporary workers.” Mr Cross adds that it is fairly easy to get settled in Australia at the moment, thanks to plentiful rented accommodation and low house prices.
The HR perspective Deborah de Cerff, managing director of Melbourne-based global-mobility and HR consultancy DBS International, and founder of a knowledge-sharing community of Australian global-mobility pactitioners called The Relocation Network (www.relocationnetwork.com.au), explains that HR professionals are finding creative new ways of managing, and administering, global mobility. “Unstable economic climates, stricter government and immigration regulations, increased competition for key talent, and expansion into new and emerging markets are just some of the mobility challenges facing Australia’s HR community today,” she explains. “Combining these challenges with a greater focus on cost control has meant that companies have needed to find innovative ways to manage and administer their global-
Challenges for managers and relocatees When it came to locations presenting the greatest assignment difficulties for programme managers, Australia was named by 2 per cent of of respondents to the Brookfield survey. It was also identified by 3 per cent of respondents as the location that presented the greatest assignment difficulties for international assignees – a change from 2011, when it did not appear at all. Some of the challenges noted were the visa process, taxes and benefits, cultural differences, and the cost of living. When planning a relocation to Australia, advises Fragomen’s Karen Daly, managers should take into account that, in certain circumstances, assignees and their families
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mobility programmes. The result is that those responsible for managing their organisations’ mobile workforce are striving to implement a more strategic approach to global mobility, and to develop strategic business partnerships that can help them achieve their short- and long-term goals. The past 18 months, says Ms de Cerff, have seen a gradual increase in the number of global-mobility specialists recruited. Historically, these roles have either been performed as a subset of the broader HR function or a compensation and benefits job role, or delegated to trainees or administrators supported by outsourced vendors. As in other parts of the world, outsourced specialist support is becoming more common, as an increased number of niche organisations enter the market, offering high-touch, specialist services focused on specific industry disciplines. There is a growing shift to appoint multiple mobility vendors to support an organisation’s mobile workforce.
L E T U S T U R N YO U R N E X T D E S T I N AT I O N I N TO A H O M E :
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may be required to undertake health examinations by a government-approved radiologist or physician. Says Ms Daly, “It is important to discuss this requirement early in the process, as assignees may have to travel some distance to complete the examinations, and clinics are often booked out several weeks in advance. In addition, holders of the 457 visa [the temporary business category] must hold health insurance throughout their stay in Australia, unless an exemption applies.� See p41 for further advice on immigration issues. Kathy Nunn, of destination services provider Elite Executive Services, is a firm believer in the value of giving new assignees an orientation tour. “More companies sending assignees to Australia are looking at the value of preassignment orientation. Sending someone from Europe, with the length of the journey and the cost of the flights, can be daunting, but a familiarisation trip or orientation can nip issues in the bud, setting the relocation on a firm footing from the outset.� Ms Nunn points out that a good relocation consultant will use the orientation time to guide an assignee through the minefield of education systems and the plethora of school options, so that education opportunities are not lost by waiting until the family arrives. School places are not always easy to find, and seeking them out is one of the major distractions for any new assignee arriving with children. Orientation, says Ms Nunn, provides a first-hand insight into culture, suburbs, schools, and homes, with invaluable advice and local knowledge, providing a forum for any final issues to be resolved and anxieties minimised. The rental market in Australia can be tough, and homes explored on the
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internet can be deceiving; it is much better to have a clear idea of rental budget prior to arrival, so that certain suburbs can be targeted, and others avoided. The orientation also gives the opportunity to speak with bank managers, tax advisers, recruitment consultants, and the many other professionals who can answer important questions, saving time and confusion at the start of the assignment.
Counting the cost of mobility According to Tim Cradock, general manager of international, migrant and multicultural banking at the Commonwealth Bank of Australia, whose global-mobility team assists UK-based staff moving to Australia, there are a number of financial aspects for both employer and employee to consider when a relocation is planned. “Ensure the business provides a reasonable settling-in allowance for the individual, says Mr Cradock. “This is to cover incidentals, as well as closing off plans in the UK, such as their phone contract, and setting up in Australia. “Ensure pay is fair by benchmarking it to the Australian market, and see that the employee receives a home and host tax briefing with the company’s tax provider. This is to assess the employee’s tax position and whether any tax-filing obligations in the home location are still required.� See also our update on changes to the Living Away From Home Allowance (p42). For relocating employees and their families, Mr Cradock emphasises the importance of being au fait with the cost of living in Australia. He advises that they research the rental market in their new location, to see if they are able to afford to live there. Renting in Sydney, he says, is expensive in comparison with most countries.
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AUTUMN 2012
AUSTRALIA :
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Australia: key immigration issues for businesses and employees Martin Maddocks, global-mobility specialist, Newland Chase
When planning a relocation to Australia, one of the most important factors is the feasibility of obtaining work permits for your expat staff. Australian immigration requirements are rather strict, and, in addition, your branch in Australia must first hold a sponsor licence with the Australian Department of Immigration and Citizenship. Nevertheless, obtaining work permits can still be relatively straightforward, providing employers are aware of the requirements from the outset. The key is to plan ahead, and the following few pointers should be helpful for any employers or employees looking to relocate to Australia.
Obtaining and maintaining a sponsor licence In applying for a sponsor licence, one of the main requirements is that the Australian business can demonstrate a commitment to both employ and contribute to the training of local Australian workers. Throughout the duration of the sponsor licence, businesses need to meet a prescribed ‘training benchmark’, where the sponsor has to commit the equivalent of a small percentage of their payroll to the provision of training to their local employees. The benchmark can be met, for example, by employing recent Australian graduates, or paying for external training courses. As part of their sponsor obligations, businesses should evaluate their local recruitment plans and training schemes in ensuring the above requirements are
met. Therefore, in part, the ability to employ expat staff is directly related to employing and training local staff. With net migration in Australia predicted to rise by around 5 per cent over the next four years, this policy could be viewed as a subtle attempt to encourage employers to recruit locally in the first instance. Nevertheless, providing the above requirements are met, employers should feel free to bring in specialist staff from abroad as required.
Relocating your office to Australia If setting up an office in Australia from the outset, applying for the initial sponsor licence can be slightly more complex. Since the company will not be able to rely on a record of established business operations in Australia, you would have to demonstrate a record of successful operations overseas, and also that you have adequate funds available, and a viable business plan for Australia. As above, the business plan should also include provisions for employing and training local staff. Following on from this, the first expat staff member would then be able to apply for the initial work permit required to relocate to Australia. Also, the department would grant this on the basis that the individual has had the prior skills and experience required to set up the new operation in Australia. Although the department’s documentary requirements are rather robust, the sponsor licence for the start-up operation should be approved
without any unnecessary delay, providing the application is submitted with the required level of detail.
Applying for permission to work in Australia Once the sponsor licence is set up, the business can apply for work permits as required. However, a key factor would be whether or not the proposed role is deemed to be suitable by the department. Before submitting an application, employers must be certain that the proposed role will fit into one of the roles on the Skilled Occupation List, that the employee holds relevant qualifications and has had suitable work experience abroad, and that the salary is at least at the ‘market rate’ set by the department. Skilled occupations can include roles in engineering, finance, law, and medicine, and certain skilled trade roles. However, if it is deemed by the department that the skills required for the role are not in shortage in Australia, certain specialist roles may not be on the approved list. Although this policy is designed to encourage employers to hire locally in the first instance, in most cases there still are ample provisions in the current policy to allow employers to recruit for specialist staff overseas. Regardless, it is always essential that businesses consult with the department before proceeding with an application, to ensure that the proposed job role will be approved.
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Mr Cradock goes on, “If you intend to purchase a home in Australia, most residents recommend renting first. This allows you to become familiar with the often-diverse individual communities in and around a city, and to make a more educated decision about long-term housing. Sydney, for example, is divided into hundreds of suburbs. “Schooling in Australia is divided into private and public. Private schooling can be quite expensive, and is also religion-affiliated. Eating out, grocery shopping, and clothing (including children’s) can also be expensive, so it is important to be clear about the cost of living.” Relocation costs, Mr Cradock says, can be high – running into the tens of thousands when moving from the UK to Australia, especially if there is no assistance provided by the employer. For advice on tax issues, see box. As we went to press, news broke that Australia’s rate of economic growth slowed in the second quarter of 2012, thanks to a combination of falling global demand for its resources and cautious domestic consumption – the result of subdued consumer confidence. We wait to see what the future holds in store. Don’t miss the new Australia content in the International Destinations section of www.relocatemagazine.com
Tax: changes to the Living Away From Home Allowance Scott Niven, head of relationship management and strategy, IPM Under the present rules, a Living Away From Home Allowance (LAFHA) may be granted to any employee who is required to live away from his or her usual place of residence. This has included in its interpretation foreign nationals working in Australia for a secondment period, and, therefore, employers have been able to make significant cost savings by utilising the concession to exempt the cost of accommodation, as neither taxable in the hands of the employee for income tax nor subject to Fringe Benefit Tax (FBT) in the hands of the employer. Additionally, the legislation has also classified annually an allowance relative to family size that can be paid tax free to recognise subsistence expenses, and this has allowed employers constructing expatriate packages to exempt part of the taxable income. From1 October 2012, the legislation will be limited to employees who personally maintain vacant a home for their own use in Australia, which they are temporarily living away from, and up to 12 months at one work location. This effectively excludes access to foreign nationals on secondment, and there are to be no transitional measures. Accommodation will now become subject to FBT, and this will, therefore increase the cost to employers of secondments to Australia. The only relief will potentially be for commuter-like fly in/fly out arrangements, where the normal place of residence does not need to be in Australia. The relief on the subsistence allowance will also no longer be available. Some changes to the original legislation have been made over recent months, but it is unlikely that the position as regards foreign nationals will change.
See Education in Australia on p64
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: INTERNATIONAL POLICY
AUTUMN 2012
Trends in international relocation policies Given the economic climate and the pressures on competitiveness, the spotlight is on how to make international relocation policies more efficient and effective. Sue Shortland reports on recent trends in compensation, compliance and cost control, and their talent and demographic implications.
T
he home-country approach to international policy design remains the most common method of remunerating international assignees. Brookfield’s 2012 Global Relocation Trends Survey finds that 67 per cent of organisations use this compensation method for long-term assignments. It notes that 10 per cent use a host-based approach, 5 per cent use a headquarters approach, 4 per cent use an international-cadre approach, 4 per cent use net-to-net comparisons, and 10 per cent cite other approaches. The findings are interesting in that the headquarters, international-cadre, and net-to-net approaches have not been previously reported in the survey, even though such methods are not new in terms of policy design. A headquarters approach suggests a practical and straightforward method of measuring and administering expatriate compensation and a means of creating equity with the headquarters. The international-cadre approach suggests the need to reflect a growing internationally-mobile population with no true permanent home base, while the net-to-net approach suggests a means of introducing a ‘reality check’ on the feasibility of using host-based pay. Tax equalisation was adopted by 85 per cent, with 6 per cent using tax protection and 9 per cent a hands-off approach to determine host-country income-tax liability. With regard to homecountry income-tax liability, the respective figures were 84 per cent, 4 per cent, and 12 per cent. The home-country approach to remuneration was used by 89 per cent of organisations for short-term assignments. Of these, 67 per cent used home-country remuneration plus incentives/allowances, and 22 per cent used the balance sheet.
Compliance issues International mobility is an extremely complex undertaking. It requires not only keeping abreast of policy developments through benchmarking, but also staying up to date and ensuring diligence in compliance. Santa Fe’s latest Global Mobility Survey draws attention to this, noting the significant risk that compliance issues present to organisations and the requirement
for mobility professionals to make this a core priority. The survey highlights that international and domestic laws must be taken into account as well as organisations’ internal policies. The key issues are identifying where responsibility lies and ensuring accountability – otherwise, if everyone is responsible, the chances are that no one is held accountable, and compliance risk fails to be managed. That said, 93 per cent of the organisations surveyed believed that they managed compliance ‘quite well’ or ‘very well’. Santa Fe reports that international-mobility compliance is most usually the responsibility of the HR department (53 per cent) or the organisation’s dedicated mobility team (27 per cent). External legislation is considered most important, the top three compliance priorities being tax (73 per cent), immigration 69 per cent), and employment law (67 per cent).
Cost issues Cost control remains a high priority in international relocation; indeed, it appears that organisations are increasing their emphasis on cost management. Santa Fe reports that 58 per cent of organisations regard cost control as a high priority (up from 53 per cent in 2011), and 70 per cent expect a focus on reducing mobility costs in the year ahead. Brookfield reports that 51 per cent of organisations require a cost-benefit analysis to justify an assignment (10 per cent up on 2011), and that 43 per cent compare estimated with actual costs (18 per cent up on 2011). Yet, despite this, Santa Fe notes that relatively few (18 per cent) said that they could measure mobility costs accurately, and only 22 per cent reported specific cost-reduction targets. This suggests that cost control is far from precise. Indeed, while Brookfield notes that the pressure to reduce costs has increased (61 per cent of organisations reported this), the percentage that reduced international assignment expenses last year in response to economic conditions dropped to 57 per cent (from 75 per cent last year). This suggests that there is a gap between intention and action with respect to cost containment. Nonetheless, organisations continue with their ongoing struggle to justify costs and quantify return on investment (ROI). Brookfield notes that no organisation at all could state
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INTERNATIONAL POLICY :
Policy components/amounts offered to assignees More care in candidate selection Vendor fees Increased reliance on local hires Increased reliance on short-term assignments Increased reliance on assignee localisation Reduction in bonuses/incentives Cost-of-living allowance Increased use of assignees from lower-cost economies Closer scrutiny of policy exceptions Closer scrutiny of tax ramifications Other
Gaining high return on investment is, however, not just a matter of cost control of policy elements/expenses and vendor management. The quality of the individuals selected and their contribution to meeting assignment objectives and organisational goals is critical. Finding the right person is identified as the most common assignment challenge in Brookfield’s report. Despite the economic recession and rising unemployment, organisations cite lack of technical and managerial skills in host countries as drivers of expatriate use. Assignees with previous international-mobility experience are particularly valued in the current climate, as this is likely to speed up settling-in and integration, and aid productivity, thus improving ROI. It is notable that organisations appear to be favouring the selection of assignees with previous international relocation experience. In the 2012 report, 21 per cent of assignees had previously undertaken expatriation (up from 12 per cent in 2011). It is also notable that the proportion of young (aged 20 to 29), high-potential employees being sent on assignment is increasing. This might suggest an emphasis on using expatriation to develop future talent but equally a cost-control measure, as the employee profile is more likely to point to single-status assignments. Emphasis on previous assignment experience would suggest knock-on effects on assignee demographics in respect of gender, age, and marital status. Women have less international-mobility experience than men, and thus the proportion of female assignees might be expected to decline. However, in 2012 women’s participation has risen to 20 per cent (up 2 per cent on 2011).
% of organisations 26 19 16 10 9 4 4 3 3 3 2 1
EMPLOYEES BEING ASSIGNED ABROAD? LAND AT IPM BEFORE THEY TAKE OFF. GLOBAL MOBILITY STRATEGIC PLANNING AND DEVELOPMENT TAXATION AND COST REDUCTION GLOBAL REMUNERATION AND BENEFITS
GLOBAL MOBILITY SPECIALISTS
PAYROLL AND EFFICIENCY IMMIGRATION AND LEGAL COMPLIANCE RELOCATION AND SUPPORT
0845 458 5643 E: info@ipmglobalmobility.com W: www.ipmglobalmobility.com T:
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Talent and demographic issues
that its ROI on international assignments was ‘excellent’, and just 22 per cent rated it as ‘very good’, with a further 22 per cent regarding it as ‘good’. Indeed, 45 per cent said ROI was ‘fair’, and 11 per cent said it was ‘poor’. Brookfield comments that these are the lowest ROI ratings in the 17-year history of its survey reports. In terms of compensation elements subject to cost reduction, Brookfield reports as follows:
Policy area subject to cost reduction
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: INTERNATIONAL POLICY
It would also be predicted that the assignee age profile would be older; again, this appears not to be the case. Brookfield reports a 3 per cent decline in the 40 to 49 age group (the most typical expatriate profile) and a 1 per cent decline in the 30 to 39 age group. These now comprise 34 per cent and 31 per cent of the expatriate populations respectively. The 50+ age group remains steady, at 22 per cent of the population. A further contradiction is evident in that an increasing proportion of young assignees should indicate a decline in the proportion of married assignees, and, consequently, a rise in single-status assignments. While the Brookfield results do show fewer married assignees than in the past (8 per cent down on 2011, at 60 per cent), the percentage of single-status assignments remains steady. The percentage of assignees with accompanying children has declined once again (as might be expected from this age profile), and now stands at just 43 per cent, the lowest figure in the history of the survey. The art of making sense of these findings and contradictions may lie in understanding the use of alternative assignments. Two-income families may turn down long-term accompanied assignments because of economic considerations, perhaps opting instead to undertake single-status mobility or short-term, commuter, or some other flexpatriate alternatives. Interestingly though, Brookfield’s survey suggests that only 14 per cent of assignments are declined because of inadequate compensation. Family concerns provide the main reason for assignment refusal (34 per cent), followed by dual careers (17 per cent). Career aspirations are an important driver of assignment acceptance; indeed, 14 per cent of assignments are reported as being refused because they fail to provide sufficient career incentive, while 6 per cent are
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declined owing to lack of job security. Location issues are also important drivers of assignment refusal (quality of life, 8 per cent; personal security, 4 per cent; and inadequate practical support, 2 per cent). Despite the cost and complexity of international mobility, and the current economic recession, the trend in the deployment of international assignees continues upwards, and organisations expect this to continue. International assignees are required, in particular, in emerging and developing markets, as organisations strive to expand their global reach. This expansion into new and challenging destinations provides an exciting future for relocation professionals. We will report on location trends and their implications for international mobility and policy in our Winter 2012 issue.
Rilvan Moving and Relocations Topraisar Street No. 29 District 1, Bucharest, Romania Contact: Simona Paduret T: +4 02122 19547 E: office@rilvan.eu; simona.paduret@rilvan.eu W: www.rilvan.eu Rilvan Moving and Relocations is a division of the Rilvan Group with an abundance of experience in successfully providing services to major companies since 1992. We offer services in Romania,
Republic of Moldavia, Bulgaria or Ukraine, in the fields of Immigration, Destination and Moving. Our firm offers a broad expertise in the field, ensuring an easy and exciting new beginning.
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Issued by Lloyds TSB Offshore Limited. Registered Office and principal place of business: PO Box 160, 25 New Street, St. Helier, Jersey JE4 8RG. Registered in Jersey, number 4029. Regulated by the Jersey Financial Services Commission. We abide by the Jersey Code of Practice for Consumer Lending. The paid up capital and reserves of Lloyds TSB Offshore Limited was £709m as at 31st December 2010. Copies of our terms and conditions and latest report and accounts are available upon request from the above registered office. The Isle of Man branch of Lloyds TSB Offshore Limited is licensed by the Isle of Man Financial Supervision Commission and registered with the Insurance and Pensions Authority in respect of General Business. Business Address: PO Box 111, Peveril Buildings, Peveril Square, Douglas, Isle of Man IM99 1JJ. Lloyds TSB Offshore Limited is a participant in the Isle of Man Depositors’ Compensation Scheme as set out in the Depositors’ Compensation Scheme Regulations 2010. Complaints involving the Isle of Man branch of Lloyds TSB Offshore Limited that it cannot settle should be referred to the Financial Services Ombudsman Scheme for the Isle of Man. Lloyds TSB Offshore Limited is not and is not required to be, authorised under the Financial Services and Markets Act 2000 of the United Kingdom and therefore is not subject to the rules and regulations of the Financial Services Compensation Scheme made under that Act for the protection of depositors. Legislation or regulations in your home jurisdiction may prohibit you from entering into transactions with us. We reserve the right to make final determination on whether you are eligible for any products or services. Telephone calls may be recorded and monitored.
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AUTUMN 2012
The Statutory Residence Test explained From 6 April 2013, the UK will introduce a comprehensive statutory test of tax residence, and will, in addition, reform the law on ‘ordinary residence’ for tax purposes. Caspar Housden, tax adviser at Ernst & Young, explains how the new rules will affect international assignees.
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he new tax laws will replace the existing rules, which are largely based on guidance from the UK tax office, and derived from past case law. An individual’s tax residence is critical to how they are taxed, and there are two areas of the proposed new law that are of particular importance to international assignees: • In what circumstances an employee relocating out of the UK will cease to be a UK tax resident • Whether an employee relocating to the UK will benefit from a key tax relief for expatriates on income relating to non-UK work duties This article primarily focuses on the new rules in these areas, which are quite significant.
Why does residence matter? Residence is key in determining how an individual is taxed in the UK. At the moment, there are three possible residence statuses: • Non-resident in the UK (NR) • Resident but not ordinarily resident (RNOR) • Resident and ordinarily resident (ROR) Individuals who are NR are subject to UK income tax only on UK source income, and are not subject to UK capital gains tax on asset disposals (unless they are deemed to be only ‘temporarily’ non-resident). Individuals who are RNOR are subject to UK income tax on their UK source income. By claiming what is known as the ‘remittance basis’, they may
avoid any UK tax liability on certain types of non-UK source income (including remuneration from non-UK workdays) until the money is brought (or ‘remitted’) to the UK. Individuals who are ROR are generally subject to UK income tax on their worldwide employment income. However, individuals not domiciled within the UK may claim the remittance basis to avoid liability on non-UK investment income. It is vital that individuals are able to determine their residence status in order to understand how the UK tax law applies to them.
Why reform the law? The underlying case law for both areas is so complex that tax-office guidance has taken an increasingly important role in helping international assignees to understand their UK tax position. This guidance was designed to provide a simple, more objective means of assessing tax residence than the underlying law supported, but this gap between the guidance and the underlying law has led to growing uncertainty as to the legal basis for any position taken on tax residence. The Government recognises that this uncertainty was unhelpful, and has proposed reforms that will allow taxpayers to assess their residence status in a transparent, objective and straightforward way, without affecting the outcome for the majority of people. Currently, the proposed law is going through a second round of consultation, as there are still a number of critical areas to iron out before these objectives are achieved. However, the main thrust of the law is probably now settled.
AUTUMN 2012
Why is this important for mobile employees and their employers? It is critical for employees relocating abroad to understand when they will cease to be liable to UK tax as a resident, and so no longer liable to tax on all of their employment income. This is particularly important if they are going to a country with no tax, or tax lower than the UK’s. For employees seconded to work in the UK, the current rules allow those who are ‘not ordinarily resident’ to exclude from UK taxation remuneration for work performed overseas. This can reduce the tax payable by an inbound assignee quite significantly, and so reduce assignment costs if that employee is tax equalised.
The Statutory Residence Test and abolition of ordinary residence The basic framework of the Statutory Residence Test (SRT) comprised three parts: • Part A provided a clear set of factors where an individual would be non-resident if any of them were met • Part B provided a clear set of potential residence factors for any individual who did not meet the non-residence tests in Part A. If any of these were met, the individual would be deemed resident in the UK • Part C provided a list of connection factors and a day-count table for those who did not met the criteria in Part A or Part B. Under Part C, broadly, the more connection factors an individual has, the fewer the number of days he can spend in the UK before he is deemed to be resident in the UK While the basic framework original seemed fair, the devil has proved to be in the detail, and a second round of consultation has proved necessary. We also believe there is much work to do to define better key concepts applying to all parts of the test. Finally, the Government has also proposed that ordinary residence, as a concept, be abolished. Instead, it proposes that a form of tax relief be retained for duties performed outside the UK for shorter-term assignments.
Impact of the changes on those relocating abroad While the requirements to break UK residence are, theoretically, clearer than at present, overall the test is likely to make it more difficult for individuals to cease to be UK resident, unless they are leaving the UK permanently and have no intention of returning, especially in the first three years abroad. These people can only meet the Part A tests if they: 1. Spend no more than 15 days in the UK during a UK tax year, or 2. Are in ‘full-time work abroad’ for a complete UK tax year, with no more than 90 days back in the UK each year There is a formal definition for ‘full-time work abroad’, including a limit on the amount of work that can be performed in the UK. What this limit should be remains subject to consultation, with a choice between:
TAX :
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1. No more than 20 days of work in the UK per year, where a UK workday is defined as one on which five hours of work are performed in the UK, or 2. As point 1, but 25 days of work of more than three hours in the UK ‘Work in the UK’ includes all work-related activities, including training and business travel. The inclusion of business travel is unfortunate, and could possibly mean that an employee who works full time, and performs no work in the UK (as defined by ‘the man in the street’), would not be classified as being in ‘full-time work abroad’. Anyone who does not meet these restrictive tests would need to become non-resident under Part C, which will be more difficult if he has family, friends, or accommodation available to him in the UK, and wishes to return here. Such people may find their days in the UK limited to as few as 15, and they would not be able to cease residence from the date they left the UK, but only from the next 6 April.
Impact of the SRT on those coming to the UK Many aspects of the SRT impact employees relocating to the UK. However, it is the proposal to abolish ordinary residence that is the most important issue for these people. As a concept, it looks initially like a major simplification of the existing system, reducing the number of residence statuses from three to two. In practice, however, this is not the case, because relief for overseas working is retained, but still only where the remuneration for non-UK workdays is paid and retained outside the UK. This requires a detailed understanding of the complex law relating to the remittance basis. In addition, a key element of the current law limits this relief for those who intend to be in the UK for less than three years, which is a difficult status to prove. The proposed new law retains this element of subjectivity, as well as reducing the relief available to employees who leave the UK between 6 April and their third anniversary in the country. The other key difficulty for inbound employees is that, once resident under the SRT, it is likely to be far harder to become non-resident at the end of their assignment, unless, on departure, they have no ongoing UK duties, or no ongoing UK ties.
Conclusion The overall theme of the reforms is to make it harder to cease UK tax residence when relocating abroad, and to retain the complexity associated with a key tax relief for employees assigned to the UK for short periods. This is a pity, and, while there is still much detail to understand during the final stages of the consultation document, employers of mobile employees moving into, and out of, the UK should ensure that they, and their employees, take suitable tax advice, to prevent nasty surprises with their tax obligations from April 2013. See www.relocatemagazine.com for the latest property news and articles.
Re:locate Awards 2012/13
Celebrating success in relocation Looking for ways of raising your organisation’s profile, impressing potential customers and investors, improving business planning, and recruiting and retaining top talent? Then you need to enter relocation’s premier awards!
P
articularly in these challenging times, entering is also a great way of motivating your team and boosting morale – not to mention increasing your own success by showing your management what you and your team can do. These awards really are the ones to win! Introduced to celebrate the contribution of relocation to business, and to reward good practice, they have grown consistently, and are now of global stature, attracting more entries every year, from both UK and international organisations.
Get involved! With a choice of 10 categories – some for HR, some for service providers, and some for both – there’s sure to be one that’s perfect for you. As well as honouring those in HR roles, the awards pay tribute to the expertise of the wealth of service providers who make up our diverse industry. These awards are for everyone: organisations, teams and individuals. Previous winners have represented organisations large and small. So join them, and get involved!
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Sponsors and supporters signing up Last year’s awards generated real excitement, with more entries than ever before, and a packed Gala Awards Dinner. Our sponsors are key to the success of the awards, helping to spread the word and generate enthusiasm. Companies from across the relocation spectrum have been eager to be associated with this year’s awards, with the result that eight of our 10 categories are already sponsored. Cartus has been a Re:locate Awards sponsor for the past five years. Says Jane Bergman, “To be recognised by Re:locate
How to enter Entry is easy, and free. Visit www.relocatemagazine.com for full details, and to download an entry form. You can also sign up for awards webinars, and subscribe to our special awards newsletter.
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AWARDS :
magazine at these prestigious awards provides each winner with a platform to showcase their industryleading achievements.” NatWest Global Employee banking is sponsoring Best International Destination Services Provider for the third year running. Comments Neil Barsby, “Sponsoring this award is a great opportunity for us to reflect the hard work, dedication, and expertise of international destination services providers – those professionals who make such an important contribution to successful relocations and the lives of individuals.” Another long-term supporter, SIRVA Relocation, is sponsoring Rising Star in Relocation. “We are proud to be sponsoring this award, recognising those professionals that significantly contribute to their business today, and will continue to make a positive impact on the mobility industry in the future,” says Steve Marshall. For the second year running, Pro-Link Global is sponsoring the Green Achievement category. “As a core service provider for relocation professionals, we are proud to help recognise excellence in the industry,” explains Glenn Faulk. Another second-timer is Weichert Relocation Resources, which is sponsoring Excellence in Employee and Family Support. Global professional services firm PwC has come on board to sponsor Technological Innovation in Relocation. Says Alex Rubin, “We look forward to supporting innovative approaches in solving today’s relocation and mobility issues.” The Relocation Personality of the Year award celebrates relocation’s pace-setters. This year, it is being sponsored by Paragon Relocation. Miki Reeder, of Halo Financial, another first-time sponsor, says, “We are delighted to sponsor the Best Property Provider or Solution Category at the Re:locate Awards, rewarding excellence and best practice in the industry.”
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Award categories 1. Technological Innovation in Relocation Sponsored by PwC
2. Inspirational HR Team of the Year Sponsored by Cartus
3. Best HR and Supplier Strategy or Team 4. Relocation Service Provider or Team of the Year 5. Best Property Provider or Solution Sponsored by Halo Financial
6. Rising Star in Relocation Sponsored by SIRVA
7. Green Achievement Sponsored by Pro-Link GLOBAL
8. Excellence in Employee & Family Support Sponsored by Weichert Relocation Resources
9. Best International Destination Services Provider Sponsored by NatWest Global Employee Banking
Celebrity host Our celebrity host and guest speaker for this year’s Gala Awards Dinner will be highprofile international broadcaster and foreign-affairs authority Stephen Cole. Stephen is one of the most recognisable faces of international television., having worked at Sky News, CNN International, and the BBC. He currently anchors Al Jazeera English, both in London and at its base in Doha. Further details on www.relocatemagazine.com
Supporters:
10. Relocation Personality of the Year Sponsored by Paragon Relocation
Key dates Awards webinars: November 2012 onwards Entry deadline: Friday 15 February 2013 Gala Awards Dinner: Thursday 9 May 2013
Professional endorsements: THE RELOCATION USERS GROUP
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: SOCIAL MEDIA
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Making social media work for you Social media has many applications that HR can explore, and those managing relocation and international assignments can borrow. Fiona Murchie has some tips on developing your company’s social media presence, to the benefit of your business.
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ocial media’s use is now indispensable to recruitment and executive search agencies. General awareness of employers utilising social media to vet prospective employees, and their own staff, has led to an ‘integrity debate’, and possibly to more circumspect behaviour by Generation Y, regarding their Facebook antics in particular. However, there are many more applications of social media that HR can explore, and those managing relocation and international assignments can borrow, applying a few ideas to make the management of international assignments a smoother process. At the end of last year, research showed that fewer than one in 10 UK businesses had a socialmedia policy. This may mean that companies are adopting a relaxed approach, or simply that they haven’t grasped the nettle surrounding the use of social media by employees. There is still anxiety, but even those preferring a light touch will benefit from outlining their position in a transparent policy document – at the very least to avert that potential PR disaster waiting to happen. There is a business case for most companies in applying social media to their sales, marketing, growth, talent, and recruitment strategies. The benefits will obviously vary from sector to sector, but until you explore the options and opportunities, you simply won’t know what the advantages may be. The wave of enthusiasm for social media is not going to go away, but will undoubtedly transform itself with the next nuance of the digital age. Who would have thought that Twitter would grow from celebrity tittle-tattle to an effective form of communication in regions of political crisis or natural disaster? The Chartered Institute of Personnel and Development has, for some time, led the way on using social media to execute HR and business strategy. It offers plenty of useful information on its website, as well as the opportunity for knowledge sharing via its extensive conference programme.
Equally, every profession and industry sector has its own raft of expertise in social media, and there are countless courses and events to attend, where you can get sufficiently up to speed to start setting your own social-media agenda. Defining a social-media calendar is quick and easy to do; it can be upgraded as you become more confident in your purpose and resources. The top tip is to start small, but try to be regular in your activities.
Getting going • Start by defining the business case for making your company, or department, more open to social-media channels and activities • For most organisations, there are benefits around effective recruitment and widening, supporting and developing the talent pool • For those involved in global management and managing international assignments, sharing knowledge via social media for crossteam, virtual, global, and project-team working is well worth exploring • Look at how to maximise engagement and participation internally and externally, and see the results in terms of speedier communication and trust • Stay in control: nurture your organisation’s social-media culture, and promoting responsible and productive use
2020 workplace One of the sessions at the HR Excellence Summit in Washington this autumn focuses on The 2020 Workplace and explains how innovative companies are attracting and developing talent. The 2020 workplace will be global, age diverse and hyper connected. Presenter and author Jeanne Meister explains how leading edge companies are already taking advantage of social media tools to build their own internal networks to collaborate with peers around the world and engage with staff across the generations. Different generations have totally different working styles. Reverse mentoring is just one of the ways that the power of social media can be harnessed in organisations. Find out more in our Winter issue.
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SOCIAL MEDIA :
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Relocation industry The Association of Relocation Professionals’ conference, held this summer, saw the grass roots of the relocation industry getting to grips with social media as a professional tool. Technological advances over the years have seen the advent of successive generations of relocation-management software across the relocation and removals industry, and a growing number of destination services providers (DSPs) now have their own case-tracking systems. In a step further, the Re:locate Awards 2011/12 honoured Cartus for its new mobile app, which allows clients, employees, and their partners to keep fully up to date with a move. In a world where employees and expats use social media to stay in touch and share information about locations and moving, it is only logical that social media should be fully utilised in the professional relocation context. Social media is great for supporting customer engagement, and innovative destination services providers can build up their presence on the main social-media platforms, particularly LinkedIn and Facebook. Interacting with their professional clients via LinkedIn reinforces their knowledge and expertise. With a little imagination, Facebook can be used to keep the relocating employees they are supporting in the loop, or topped up with added-value local information. YouTube and blogs can also be utilised for this purpose. One of the conference speakers, Nick Draycott, of Midas Relocation, who has been in the industry for many years, made the following useful analogy to help get the social applications in the right context: “LinkedIn is a business conversation and like having a conversation at a trade show, Facebook is like a cocktail party, while Twitter is a chat down the pub.” Mr Draycott urged the audience to think laterally about social media, to embrace it rather that see it as a burden, not to underestimate the impact of smartphones, and to ensure that websites and other forms of digital information were phone-friendly. Anyone involved in the relocation industry can help raise the profile of the sector by talking to the community via Twitter. Hashtag topics, or commenting on industry conferences and events, will help you have your say and promote the importance of mobility on the business agenda – not to mention raising awareness of the services and support on offer. Speaking about the launch of new company R3Location, Marco Previero emphasised the need to include social media to compliment traditional marketing strands, and the importance of providing good, engaging content. A case study of the social-media activities undertaken by The Jubilee Hour illustrated how all the components had worked together to achieve nearly 2 million promised hours’ service for charity. If you want to dip your toe in the water, follow Re:locate’s social-media activities via LinkedIn, Twitter, and Facebook. Our education editor, Rebecca Marriage, keeps schooling and education issues high on the agenda, both in the UK and internationally, and is raising the profile of family issues across the corporate agenda. Via the new Smart Move website, www.smartmoverelocate. com, your relocating employees can take advantage of an extensive range of knowledge to support their move, from the trusted Re:locate resource. They can also share tips and experiences, and establish new networks, via the inbuilt community.
Partner support is one of the key concerns for relocating employees. Do you know where to get flexible, professional and affordable career and job search advice?
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Scotland on the up? Fiona Murchie examines two of Scotland’s major relocation hotspots, and asks what the consequences of an independent Scotland might be for relocation and inward investment.
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berdeen – probably the UK’s first relocation hotspot – continues to be a major relocation hub. Economic trends are still tied to the oil industry, although the economy is now more diverse, with spin-off businesses serving a wide spectrum of industry sectors, two universities, and a major teaching hospital. The influence of fishing, farming, and the food industry should not be forgotten. Having previously lived in Aberdeen for 10 years, I know just how cosmopolitan a city it is, with oil executives, engineers and riggers from around the world – not only the Americans, Canadians, and Scandinavians you would expect, but also Koreans, Russians, and South Americans. There is still that expat community feel and can-do attitude, and the quality of life is high. The cost of rented housing fluctuates – a barometer of the oil price – and there is the usual debate about modern rented properties, which abound on purpose-built estates in areas such as Kingswells, Westhill, Cults and Bieldside, and the large granite properties to be found in the popular West End of the city. Even with an international airport and the largest helicopter port in the UK, Aberdeen is still over two hours from Edinburgh or Glasgow by road and train, and 537 miles from London by road, or a flight of one hour 50 minutes. And, with airport security as it currently stands, it is not the quick commute it used to be. The coast and countryside are fabulous, the people are friendly, the weather is colder but not as wet as that of Scotland’s west coast, and the long summer nights add extra time for golf, tennis, and many other outdoor leisure pursuits, such as watersports and climbing. Skiing is a winter bonus. Shopping has taken a new lease of life with the development of the Union Square centre around the station. Marks & Spencer and John Lewis reassure those relocating from south of the border. Schools are good. One of the UK’s first American schools was established here, although it now offers an international curriculum and has a smart new campus. Aberdeen is home not only to global oil companies but also to a host of suppliers and second- and third-tier support companies. Robert Gordon Institute of Technology and Aberdeen University offer support, training, and research and development for the industry.
Energy-sector success Aberdeen has been in the news recently, on the back of the Edinburgh Festival, Olympics coverage and Scotland’s excellent medal tally. It is not surprising, therefore, that the BBC, describing Aberdeen as “the powerhouse of the Scottish economy”, homed in on trade body Oil & Gas UK’s press
release and BP’s announcement of $2 billion (£1.27 billion) of capital to be invested in the North Sea in 2013, with an estimated further $10 billion over the next five years. The BBC reported that there were currently more than 400 companies working in Aberdeen’s energy sector, over half of which took on extra staff in 2011. Oil & Gas UK’s chief executive, Malcolm Webb, described offshore energy as “Britain’s best industrial success story of modern times.” The Instrumentation Scotland & Offshore Systems conference and exhibition, held in Aberdeen in early September, illustrates the diversity of the oil and gas industry, and its importance. Cairn Energy recently announced plans to drill up to 15 wells in the North Sea by the end of this year. Another success story is Wood Group, which represents the success of Aberdeen’s oil-industry support services, and now has a turnover of £3.27 billion. Current chief executive Allister Langlands will take on the role of chairman when founder Sir Ian Wood retires in November. Energy is significant throughout Scotland. Glasgowheadquartered Scottish Power, which has a long-standing record of relocation, is responding to a shortage of engineers by targeting young talent.
The independence debate Oil ownership is a question has been debated since the 1970s, when the Scottish Nationalist Party (SNP) led the cry for independence and laid claim to ‘Scotland’s oil’. Now, Alex Salmond, Scotland’s first minister, has forced the debate into the open with the promise of a referendum. The Economist caught the headlines back in April with its cover story on the economics of Scottish home rule. Although Scotland is not, in fact, heavily subsidised by Westminster, it does receive larger grants per head of the population than Wales. These would be lost under independence. The Economist pointed out that, where oil and gas have made Scotland rich, things have moved on since the 1970s. An independent Scotland would rely heavily on oil and gas, which accounted for 18 per cent of GDP in 2010/11. North Sea oil is running out, with many fields stopping production as early as the 2020s. Oil markets are volatile, and tax revenue is currently high because of high prices, but this could change. Equally, extraction rates could make things uneconomic. Lurking in the background is the cost of decommissioning oilrig installations, which are largely in Scottish waters. Oil & Gas UK predicts that the cost of decommissioning could be over £30 billion by 2040, and a more than 50 per cent taxrelief bill would fall to Holyrood, rather than Westminster. Renewable energy as a replacement for oil is currently a long
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way off, though high on the agenda. The financial sector dominates in Edinburgh. It has already suffered from the fallout from the Government’s bailout of the Royal Bank of Scotland and Lloyds TSB’s acquisition of HBOS. An independent Scotland might mean a break-up, which would hit Edinburgh hard. Edinburgh is also a fund management centre, the bestknown companies here being Scottish Widows and Standard Life. However, it is already slipping, and is now 37th in the Z/ Yen rankings, behind Guernsey, Stockholm, and Wellington, as the Economist report points out. The choice of currency for an independent Scotland would also be an issue, particularly with the lessons learned from the Euro crisis by countries such as Greece, Ireland, Italy, and Portugal. There would also be debts to take on board, such as a per capita share of the national debt, and the cost of pensions. Already, spending in Scotland, which includes such items as free university tuition, is 13 per cent higher than in England, according to the Economist. Welfare spending is 11 per cent higher. The SNP also supports free childcare and more generous state pensions, claiming that low corporation tax would tempt the investment necessary to pay for them. Gordon Kerr, group director of Edinburgh-based Team Relocations, is a Scot himself. The company has a strong historic link with the Scottish relocation market. Says Mr Kerr, “In Edinburgh, we have seen changing patterns of relocation activity. Traditionally, the banks supported large volumes of domestic and international relocation into the city. Today, financial-sector volumes are lower, and generally their relocation packages have become less generous. “However, overall relocation activity has held up well, with
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other sectors, such as IT, education and research, transport, and light manufacturing, bringing more employees to the city. Government and other public-sector relocation is important in Edinburgh, but is not noticeably expanding, and is subject to tighter financial controls than ever before. “Elsewhere in Scotland, it is more difficult to identify clear patterns of relocation activity. Hotspots are associated mainly with head-office locations, such as East Kilbride and Perth, while activity into Glasgow remains steady. Without doubt, Aberdeen is the relocation capital of Scotland, coming second only to London in Team’s destination league table for inbound international relocations to the UK. “As for the current debate on Scottish independence, while irritation has been expressed by some business figures as to the protracted timetable for a referendum, there are few signs that the possibility of an independent Scotland is affecting business activity. While companies generally dislike uncertainty, it seems that the independence debate is likely to have very limited impact, provided that the major political parties in Scotland continue to be committed to EU membership, sterling and pro-business policies, including current (or lower) corporate tax rates.” It is clear from the press that even the experts don’t know what their views are on independence and its implications for Scottish business. The debate has hardly started.
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Oxford: open for business Long established as a UK centre of excellence, Oxford now attracts global companies seeking a European base. Louise Whitson investigates the appeal of this 21st-century relocation hotspot.
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t the recent launch of think tank Families in Global Transition’s UK affiliate, Oxfordshire was highlighted as an international centre of excellence, and a magnet for relocation. It’s not hard to see why. The city of Oxford boasts one of the world’s most prestigious universities, and is rapidly expanding as a centre of medical and bioscience excellence. It has a thriving technology sector with an increasing number of IT, software and creative media businesses, and a growing reputation as a cultural hub. A skilled workforce and a comprehensive business support network are further attractions to businesses of all sizes, and in all sectors. Another advantage is Oxford’s location in the heart of England, just 50 minutes from central London by train, and with first-rate rail and motorway links. The Oxford– Cambridge Arc connects the area with fast-developing Milton Keynes and another great university city, Cambridge. Oxford’s strength in research and development continues to attract interest from US and Far Eastern companies seeking a European base. A majority of the major employers are based in the city centre, on industrial estates, or on one of Oxford’s two most prestigious business parks, the
Oxford Business Park and the Oxford Science Park. Another major player, BMW, has made a significant investment in modernising its Cowley plant for production of the new Mini. Living in such a sought-after location can be expensive. Partly as a result of demand from London buyers seeking more for their money, prices of prime property in Oxford rose by 2.5 per cent in the second quarter of 2012, bucking the national downward trend, according to estate agent Knight Frank. International purchasers bought 40 per cent of Knight Frank’s prime housing stock in the city during 2011. In the last two years, the company has seen sales to international applicants rise by 50 per cent – further evidence of Oxford’s status as a global hotspot. Oxford is rich in the excellent schools that are so important to relocating families. A spokesman for Headington School, a day and boarding school for girls, explains that medical professionals are attracted to the area to work at hospitals such as the John Radcliffe, Churchill, Horton General, and Nuffield Orthopaedic Centre. Scientists relocate to work at the Rutherford Appleton Laboratory, with its global reputation, and Culham Centre for Fusion Energy.
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Attracting international business Beyond the city, South Oxfordshire is home to one of the most significant clusters of life sciences, scientific research and development, energy, and advanced engineering businesses in Europe. Naturally, this influences the residential property market. Local lettings agencies report that, as a result of the area’s popularity, May and June were peak months for renting unfurnished houses to families moving to South Oxfordshire, particularly Abingdon, in time for the new school year. Half of the county’s largest businesses (those employing more than 1,000 employees) are found here. Some of the biggest names are the Caterham and Williams Formula 1 teams, Sophos (IT solutions), Oxford Instruments (high-tech tools and systems for industry research), Miele (domestic and commercial appliances), Infineum (petroleum additives), Johnson Matthey (chemicals), HR Wallingford (civil engineering and environmental hydraulics consultancy), Invesco (investment advice), and the Centre for Hydrology and Ecology. At the centre of the science and technology cluster, Science Vale UK is a nationally-recognised area of economic growth, and a global centre for enterprise and innovation. Granted Enterprise Zone status, it is home to 13 per cent of the South East’s research and development activity, and is gaining an international reputation as a business location for high-tech and scientific companies. South Oxfordshire’s Harwell Oxford science and innovation campus has been selected to host the new Satellite Applications Catapult, one of seven new UK technology and innovation centres. The centre is expected to be operational
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later this year, and will play a key part in increasing the UK space industry’s share of the global market from 6 per cent to 10 per cent. Explains Paul Febvre, project director of the delivery team, “The Catapult will be a world-class centre for the development and commercial exploitation of satellite products, services and applications. It will be the place where the best researchers, SMEs, and large companies come together and innovate.” Harwell Oxford has also been chosen by Element Six, the world leader in synthetic diamond supermaterials, as the site of its new global innovation centre. Scheduled to open in spring 2013, the centre will develop a pipeline of products for customers in industries from oil and gas drilling to machining and electronics. More than 100 engineers, scientists and technicians will be employed there. Steve Coe, Element Six’s group innovation director, says that Harwell Oxford was chosen because of its global reputation, high-tech talent pool, and global connectivity. A further boost to the area has been provided by £3 million of funding from the Government’s Growing Places Fund, which was recently awarded to Oxfordshire Local Enterprise Partnership, the body responsible for championing and developing the county’s economy. The money is to be invested in capital projects that range from transport improvements to addressing skills gaps across the county.
For more on relocation hotspots, don’t miss the expanded UK Destinations section of www.relocatemagazine.com
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Education reform: keeping abreast of change What with Free Schools, Academy Schools, exam reforms, and the range of qualifications on offer, the state education system in England and Scotland can be hard for relocating parents to navigate. Rebecca Marriage sheds some welcome light.
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n the last 12 months, the pace of change in education policy in England’s schools has been nothing short of lightning. There are now almost 2,000 Academy Schools in England, Free Schools are opening across the country, and school inspectors are getting tougher. Proposals for school examination reform are taking shape, and the English Baccalaureate, a measure of performance that aims to bring England’s schools in line with those of other top-performing countries, seems to be having an impact on exam performance in this year’s A-levels and GCSEs. But alongside all this noise, international alternatives to traditional GCSEs and A-levels are quietly growing in popularity, and are crossing over into both state and independent schools in England. While all this amounts to more choice for families on the move, navigating the system, and understanding the new education landscape in England, is getting harder by the day
Free Schools and Academies Families looking for a school in their new relocation destination might well be faced with a completely new breed of school from this September. Last year, 24 Free Schools opened in England, a further 50 will open in September 2012, and 102 have recently been approved by the Department for Education (DfE) to open from September 2013. Free Schools are set up by teachers, parents, local interest groups, charities and businesses, largely responding to need in areas with a shortage of good school provision. They are funded directly by the Government, but are outside the control of local authorities. The schools were a flagship policy for the Conservative party in the run-up to the last general election, with the central aim of driving up standards by encouraging competition. Currently, they are largely based in London and the South East, but plans are being drawn up for schools covering the rest of the country. Academy Schools are run in a similar way to Free Schools. They are free from the control of local authorities, and form part of the same drive to raise education standards. There are now almost 2,000 schools in England that have Academy status. While some education commentators are apprehensive about the freedoms that these schools are afforded and the resulting potential for inconsistent standards, the Government is fully behind the new schools, and believes that they are
working. The DfE has published research which, it claims, shows that, between 2010 and 2011, results for pupils in Academies improved at a faster rate than those in other statefunded schools.
School inspections get tougher Time will tell if this new wave of schools will make actually make a difference in helping to drive up standards and increase real choice for parents. In the meantime, there are also plans to change significantly the way schools in England are inspected from September 2012, as the Office for Standards in Education (Ofsted) has announced that it is about to get tougher on schools.
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When did a school make you feel this good? Families just know when a relocation works. Whether you are a mom or dad, toddler or teenager, HR or relocation professional, from Texas or Tokyo, when all the pieces come together, it can deliver one of life’s most rewarding experiences. ACS understands the complex needs of globally mobile families. We have partnered the relocation industry since 1967 to meet the many challenges that face international families. Our campus-specific Admissions, Housing and Transport experts work closely with parent-assisted Welcome Teams, International Groups, Parent/Teacher Organisations and Buddy programmes to create a smooth, seamless and happy transition. That is why each year literally hundreds of families from more than 50 countries make ACS 'the' regional solution to their educational and lifestyle needs.
To find out more about us, and our world renowned programmes, please visit www.acs-schools.com Alternatively call either ACS Cobham +44 (0)1932 869744, ACS Egham +44 (0)1784 430611 or ACS Hillingdon +44 (0)1895 818402 ACS Schools are non-sectarian and co-educational (day and boarding) for students 2 to 18 years of age.
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Many families relocating to, and within, England rely on these external assessments when searching for good schools. Alongside performance tables, inspection reports help to make up for word of mouth about schools and their local reputation, on which families new to an area are likely to miss out. Ofsted has confirmed that it will no longer describe schools as ‘satisfactory’ where they are not providing a good level of education. From September 2012, the ‘satisfactory’ grade will be replaced with ‘requires improvement’. Only schools with outstanding teaching will be awarded Ofsted’s ‘outstanding’ grade. The International School of London (ISL), Surrey, was awarded ‘outstanding’ status during its recent inspection. The school was ranked ‘outstanding’ in 10 of the 11 education categories, including every category concerned with quality of education, teaching, curriculum, and pupils’ spiritual, moral, social, and cultural development. The school now ranks among the most outstanding in the UK. Families relocating to the UK from overseas will be interested to hear that the school’s mother-tongue programme was selected for special mention by inspectors. Their report said, “The mother-tongue programme is offered from the nursery onwards, and is tailor-made to suit the needs of each pupil and facilitate return to the home country.”
The English Baccalaureate Introduced by the Government last year, the English Baccalaureate (EBacc), a performance measure for schools, is also expected to help raise standards. The E Bacc recognises where pupils have achieved good grades across core academic subjects. One of its key aims is to bring England’s educational
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standards into line with the standards of other highperforming countries. The Government hopes that the EBacc’s introduction will help to increase enrolment in language and STEM (Science, Technology, Engineering and Mathematics) courses, which have shown a steady decline in recent years. This year’s GCSE and A-level results have indeed seen a slowing of this decline in entries for modern foreign languages, and, according to the Joint Council for Qualifications, there has been a dramatic increase in entries for GCSE Science, with entries up 36 per cent.
Exam reform In 1988, when GCSEs replaced O-levels and CSEs, 42.5 per cent of entries received top grades. This year, 69.4 per cent received the A*–C grades; while this represents a tiny percentage drop in the top grades, the steady increase has prompted accusations of ‘grade inflation’. Earlier in the year, the DfE announced that it would be taking measures to reform exams in England for 14- to 16-year-olds, and, following a leaked government document, sparked a debate in the media about the return of O-levelstyle exams. In any case, the Government is committed to increasing the ‘rigour’ of GSCE exams by awarding marks for spelling and grammar, and requiring all exams to be taken at the end of the two-year courses, rather than in modules along the way. Pupils will be unable to resit individual unit exams, as they have been allowed to do until now. “We would like to see every student in this country able to take world-class qualifications,” said Michael Gove, Education
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Secretary, “such as the rigorous and respected exams taken by Singapore’s students.”
The international alternative However, international qualifications – popular with globallymobile families – are quietly taking hold in many of England’s state and independent schools. For example, the uptake of the alternative to traditional GCSEs, the international GCSE (iGCSE) has continued to rise significantly in schools in England. The iGCSE, which celebrated its 25th anniversary in 2010, has already become well established on the international education scene, and is an internationally-recognised qualification taught in over 2,600 schools worldwide. Cambridge International Education, one of the two boards in the UK offering the iGCSE, has reported that schools in the UK made over 50,000 entries for Cambridge iGCSE this year, a rise of 100 per cent since 2011. Entries for Cambridge iGCSE subjects that count towards the EBacc tripled over the same period. The International Baccalaureate (IB) Diploma, often a favoured curriculum choice for the relocating student owing its international transferability, has also been hitting the headlines amid the current debate on exam reform. Some commentators believe that the IB offers a serious alternative to the traditional English examination system and addresses the criticisms thrown at GCSE and A-level that they lack rigour and breadth of study. Tony Evans, chairman of Sevenoaks School, in Kent, said, “The IB Diploma encourages an international perspective, flexibility of mind, and confidence in areas of learning which are essential for life beyond school and university. It is by far
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the most balanced and enlightened education one can offer a young person.” According to annual research commissioned by ACS International Schools among university admissions officers in the UK, half of admissions officers have noticed an increase in the number of IB applicants this year. More than 200 schools in the UK now enter students for the IB ahead of A-levels, and, interestingly, 122 are state schools.
Choice for families Headington School, Oxford, an independent school for girls, offers sixth formers a choice between A-levels and the IB Diploma. Headmistress Caroline Jordan believes that the element of choice is important. “The IB is an excellent preparation for further education and the world of work, as it encourages students to be independent learners and develop their research and critical-thinking skills – highly-attractive qualities for universities and employers.” However, A-levels are also due to undergo a series of reforms, which, according to Andrew Gillespie, of d’Overbroeck’s College, Oxford, could restore some of the confidence about the exam that may have been lost in recent years. As with GCSEs, there have been criticisms of grade inflation for the once ‘gold standard’ exam taken by pupils in England, Wales, and Northern Ireland. The proposals call for one set of exams each year, in the summer term at the end of the two years of study, reducing the opportunities for pupils to keep retaking exam components to push up their grades. “The problem is that grade inflation is making it difficult for universities and employers to differentiate between good
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and excellent,� said Andrew Gillespie, “but A-levels continue to provide a valuable depth of study before a degree. They enable students to focus on subjects they enjoy, and that fit their strengths and university aspirations, providing more flexibility than the IB, and, therefore, have real merit.� While it is clear that no qualification or school choice is a one-size-fits-all, the increasing options, and, hopefully, the rising standards, of educational establishments and exams available in England offer a wealth of choice for families on the move seeking the best education for their children.
Changing times for Scottish schools This year has seen the best-ever pass rates for Scotland’s internationallyregarded secondary-school exams, the Highers. However, after a period of unrest in Scottish schools following sweeping curriculum reform and proposed exam changes, the good news arrives at a time of great uncertainty for pupils and parents, amid reports of independent schools boycotting the new exams and state schools expressing concerns that they are unprepared. This year’s Highers success rate of 76.9 per cent was up from 75.3 per cent last year, and the Advanced Higher pass rate was 80.1 per cent, up fractionally on last year’s 79.3 per
AUTUMN 2012
cent. But, while this year also sees the highest-ever pass rates for Standard Grades, the existing exam for 15-year-olds, it could be one of the last years it is taken in Scotland. New exams are being introduced as part of the ‘Curriculum for Excellence’, a revised curriculum for Scottish state schools that has been implemented over the last few years. The new qualifications and examinations, called National 4 and National 5, are due to replace Standard Grade from August 2013 onwards. They will be followed by updated Higher qualifications in 2014/15, and new Advanced Higher qualifications in 2015/16. While state schools in Scotland will be obliged to undergo the exam reform attached to the curriculum, with the exception of one of the most educationally-successful Scottish local authorities, East Renfrewshire, which will delay the implementation of the exams by a year, independent schools are free to make their own decisions. Considerable uncertainty surrounds the new exam regime. For a discussion of the issues, see the full version of this article on www. relocatemagazine.com. For the latest education news, articles and blogs, visit www.relocatemagazine.com, and refer your relocating employees to www.smartmoverelocate.com
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I love the fact that BSB has given me the opportunity to take part in a range of activities outside the academic programme, such as debating at the Model United Nations, speaking in the national finals of the Telenet BBC Public Speaking Awards and playing in the school orchestra.� Sam (School President, BSB)
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AUTUMN 2012
EDUCATION :
Applying for a school place
As the season for school applications begins, Rebecca Marriage explains what relocating parents need to know about the admissions process for state, independent, and international schools.
State schools The key criterion for admission to state schools is simple: does the family live within the school’s catchment area? Parents should contact the local authority, or the school itself, to determine the precise boundaries of the catchment area. Schools are permitted to take pupils from outside the catchment area, but only if they are not fully subscribed with local pupils. The exception to this rule is grammar schools. These are selective, state-funded facilities available in some, but not all, areas of the country. They select their pupils on the basis of performance in the 11-plus exam. Faith schools are allowed to use faith-based criteria in order to give higher priority to children who are members of, or who practise, their faith or denomination. This only applies if a school is oversubscribed. When applying for state schools for the first time, the deadline is usually during the autumn term before the September in which the child is due to start school. However, an application can be made for a place at any point in the school year, and it must be considered immediately.
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Independent schools The admissions criteria for independent schools are as varied as the number of such schools in the UK (currently over 2,500), so it’s important to check individual requirements. Some schools will require pupils to take an entrance exam, or invite the family for interview, while others operate a firstcome, first-served system, and may have long waiting lists. Some independent schools will ask parents to register their child before an application is made. This does not secure a place, but indicates that parents wish their child to be considered. There is usually a non-refundable fee, which can range from under £100 to several hundred pounds, to cover administration costs.
International schools Most international schools do not select by ability, basing their decisions on previous school records and teachers’ recommendations. Some schools require a certain level of ability in the English language, but extra tuition is often available. It is important for parents to determine the level of English that the school expects, and what additional support is on offer. International schools will ask for prospective pupils to be registered in advance of application. This does not guarantee a place, but a non-refundable fee is paid, to indicate that parents wish their child to be considered. It is wise for families to contact the school of their choice as soon as they know they will be relocating.
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Education in Australia: a world apart Australia offers a wide variety of schooling choices for relocating families, in both the state and the private sector. Rebecca Marriage explains the options, with comment from leading Australian education professionals.
NAPLAN tests, or the National Assessment Program in Literacy and Numeracy, assess students’ reading, writing, language, and numeracy skills, and are administered by the Australian Curriculum, Assessment and Reporting Authority. Before NAPLAN and MySchool, there was no nationallycomparable data or single source of data on all schools. Australian School Education Minister Peter Garrett has said of the website resource, “We know parents use and appreciate MySchool. On launch day, the site had around 30 million page views, and, since then, 4.5 million people have logged on to get information about their local school.” Schooling in Australia starts with a kindergarten or preparatory year at around age five to six, varying from state to state, followed by 12 years of primary and secondary school. In the final year of secondary education, Year 12, pupils can study for a government-endorsed certificate, which, again, varies between states, but is recognised by all Australian universities and many international highereducation institutions. The school year is divided into three or four terms, and runs from late January/early February until December. There is a short holiday between terms, and a long summer holiday in December and January. Students attend school from Monday to Friday each week. School hours vary, but are generally from 9.00 am to 3.30 pm each school day.
Choice of schools
T
he Australian school system offers a wide range of choices for relocating parents looking for a school for their child. The country’s education system has a good international reputation, scoring well above average in international education league tables. According to the Organisation for Economic Cooperation and Development, for example, Australian students consistently perform at a level significantly higher than the international average. While end-of-school qualifications, curriculum, and school starting age vary slightly from state and state, the government is in the process of rolling out an Australian national curriculum, to continue to raise standards in education, and to end the inconsistencies.
Australian education system In parallel with the introduction of the new national curriculum, a new online resource for parents was introduced in 2010; the MySchool website was developed to offer transparent information on all schools in Australia, and to show the results of the standard tests in literacy and numeracy that were developed around the same time. The
Australia has more than 7,000 government schools and almost 2,000 independent schools, including a selection of singlesex and co-educational schools and faith schools. However, globally-mobile families might be surprised at the lack of international schools in Australia. International schools, which teach in English, are hugely important for expats living in non-English-speaking countries, but they are not so prevalent in English-speaking countries like Australia. British international schools are also in short supply in Australia, as there is little demand for institutions offering an English national curriculum.
An international education However, Australia does have independent fee-charging schools with an international focus, a mix of nationalities, and a focus on pastoral care for students in global transition. For example, at Redlands, a co-educational independent school in Sydney, 17 per cent of students are from expat families. Redlands finds that this mix of nationalities encourages many expat enrolments from families from the UK, Europe, USA, and from other international schools throughout Asia.
AUTUMN 2012
“We find that most expat families choose an independent school education due to the fact it more closely resembles what they are used to,” explains Dianne Hansen, director of marketing and communications at Redlands. “The strong pastoral-care programmes ensure students are cared for and settle well into their new environment. Because relocation means taking students out of their comfort zone, away from what they are used to, these factors are extremely important to provide the optimal ability for students to transition and succeed.” Independent schools are also more likely to offer an internationally-recognised and transferable qualification, such as the International Baccalaureate (IB). “The IB is very popular among relocating families,” says Kim Delaney, director of marketing and development at Mercedes College, a Catholic co-educational school in Adelaide. “It is the only qualification recognised worldwide, which is very important for people relocating every two to four years.” Dianne Hansen supports this view. “At Redlands, we offer the IB Diploma Programme in Years 11 and 12,” she says, “and our middle-year and primary-year programmes are based on many of the IB fundamentals, so students of expat families generally find an easier transition than to other schools.” Ms Hansen also offers a word of caution when using the MySchool website to make judgements about schools offering the IB. “All Australian schools sit the NAPLAN test,” she says. “However, they provide a very limited snapshot of a school. Government league tables that currently exist provide a limited academic picture of a school, and they do not include IB results.” For relocating families with older children, final school exams will be a big consideration, and particularly their recognition for entry into international higher education institutions. End-of-school exams differ from state to state in Australia; for example, the Higher School Certificate (HSC) is the final examination for students in Year 12 in New South Wales schools. Kim Williams, of Pymble Ladies’ College, in Sydney, says, “There are government moves towards all states working on the same education system to alleviate this problem, but the HSC is an internationally-recognised qualification.” Parents would be well advised to check that, if their child enters for an Australian state final year of secondary school certificate, it is recognised by their future choice of highereducation institution.
A smooth transition Few state schools offer the whole school age range, from preschool to Year 12. Often, the age bands are split between three schools. Many independent schools offer a complete education for three-year-olds through to 18-year-olds, and can, therefore, generally accommodate all students from one family. “Many families like the prospect of being part of one community, and easy transition across different levels of schools,” says Kim Delaney. In fact, with such a big variation in the school year between northern-hemisphere education systems and the Australian education system, some pupils arriving from the USA and Europe will repeat a year, to ensure they fall in line with the correct year group. This is a particular issue for children at the beginning of school, as Kim Williams explains. “Children commencing at Pymble Ladies’ College need to have turned five years of age by 31 March to commence in
EDUCATION :
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Pymble Ladies’ College
Kindergarten,” she says. “However, students enrolling from overseas are usually enrolled in their age-appropriate year group, with an interview and testing to determine individual student needs.” Most schools are likely to work very closely with relocating families to ensure a smooth transition, as Dianne Hansen explains. “For expat students, we work with each family to define the appropriate year group for each individual student. We take into consideration a number of factors, including what time of the year they will arrive, their academic ability, their emotional maturity, and what year group they will go back into when they leave Australia.” “The ideal time for families to arrive in Australia is in time to commence school at the start of the academic year at the end of January,” says Ms Hansen. “However, at Redlands, we can cope with entry at any time during the year.” See the Australia and Education sections of www.relocatemagazine.com, and refer your relocating employees to www.smartmoverelocate.com
Foster a love of learning for your daughter at Pymble Pymble offers a world class learning environment that provides opportunities for excellence in academic studies, sport and the arts, a comprehensive curriculum with outstanding facilities and a nurturing pastoral care program that recognises each girlÕ s unique strengths and qualities. The College is set on 20 hectares of park like grounds on SydneyÕ s upper North Shore. For more information please visit
www.pymblelc.nsw.edu.au
Scan for a College Tour
Pymble Ladies’ College is a school of the Uniting Church in Australia for girls from Kindergarten to Year 12 with boarding from Year 7.
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: DIRECTORY
AUTUMN 2012
Re:directory ESSENTIAL CONTACTS... AREA GUIDES Profile Locations Contact: Fiona Murchie Tel: +44 (0)1892 891334 Email: orders@profilelocations.co.uk Website: www.profilelocations.co.uk
Pro-Link GLOBAL
The Relocation Network
Contact: Andrea Elliott
Contact: Deborah de Cerff
Tel: +44 (0)20 3004 9276
Tel: +61 (0)4225 7724
Email: info@pro-linkglobal.com Website: www.pro-linkglobal.com Area: Global
Area: National
Email: deborah@relocationnetwork.com.au Website: www.relocationnetwork.com.au Area: Australasia
RECRUITMENT
BANKING
INTERNATIONAL ASSIGNMENT MANAGEMENT
Lloyds TSB International
IPM (Global Mobility Specialists)
Tel: +44 (0)1621 840600
Contact: Kevin Ballard
Contact: Alan Bentley
Email: caroline.frostick@redrecruit.com
Tel: +44 (0)1624 638065
Tel: +44 (0)845 458 5643
Website: www.redrecruit.com
Email: kevin.ballard@lloydstsb-offshore.com
Email: info@ipmglobalmobility.com
Area: Worldwide
Website: www.lloydstsb-offshore.com/ employeebanking Area: Worldwide
NatWest Global Employee Banking Contact: Neil Barsby Tel: +44 (0)1245 355628
Website: www.ipmglobalmobility.com
RELOCATION MANAGEMENT COMPANIES
Total Reward Solutions
360 Relocations
Contact: Simon Richardson
Contact: Tony Squire
Tel: +44 (0)1732 783817 Email: simon.richardson@totalrewardsolutions.com
Website: www.natwestglobal.com
Website: www.totalrewardsolutions.com
Area: Worldwide
Area: National & International
DESTINATION SERVICES PROVIDERS
PROFESSIONAL ORGANISATIONS
Profile Locations
Association of Relocation
Contact: Vanessa McConnell
Professionals (ARP)
Tel: +44 (0)1892 891334
Contact: Tad Zurlinden
Website: www.profilelocations.co.uk Area: London, South East, Aberdeen
Quintessential Relocation Consultants Contact: Jo Stoddart Tel: +44 (0)1481 257200
Tel: +44 (0)8700 737 475 Email: enquiries@arp-relocation.com
Email: sales@360relo.com Website: www.360relo.com Area: Worldwide
Brookfield Global Relocation Services Contact: Duncan Boyd Tel: +44 (0)20 8996 1200 Email: duncan.boyd@brookfieldgrs.com Website: www.brookfieldgrs.com Area: Worldwide
Cartus Contact: Nigel Passingham Tel: +44 (0)1793 756000
Area: National
Email: trustedguidance@cartus.com Website: www.cartus.com
Chartered Institute of Personnel and Development (CIPD)
Website: www.quintessential-relocation.com
Tel: +44 (0)20 8612 6200
Area: Channel Islands (Guernsey, Jersey, Alderney)
Website: www.cipd.co.uk Area: National
HR CONSULTANTS Contact: Carlos Mestre
Tel: +44 (0)1923 235360
Website: www.arp-relocation.com
Email: jo@quintessential-relocation.com
Mercer
Contact: Caroline Seear
Area: National & International
Email: neil.barsby@natwestglobal.com
Email: relocation@profilelocations.co.uk
Red Recruit
Area: National & International
Connells Relocation Services Contact: Simon Robins Tel: +44 (0)1635 271271 Email: simon.robins@connells.co.uk Website: www.connellsrelocation.co.uk
European Association of
Area: National & International
Relocation Professionals (EuRA)
Tel: +41 (0)22 869 3090
Contact: Tad Zurlinden
HCR Group
Email: carlos.mestre@mercer.com
Tel: +44 (0)8700 726 727
Contact: Simon Hood
Website: www.mercer.com
Email: enquiries@eura-relocation.com
Tel: +44 (0)1256 313741
Area: Global
Website: www.eura-relocation.com
Email: shood@hcr.co.uk
Area: International
IMMIGRATION SERVICES Paragon GeoImmigration Contact: Elaine Martin
FOCUS Contact: Alessandra Gnudi
Website: www.hcr.co.uk Area: UK, Worldwide
Interdean International Relocation Contact: Rob Lucas
Tel: +353 (0)1811 6630
Tel: +44 (0)20 7937 7799
Email: emartin@paragongri.com
Email: agnudi@focus-info.org
Email: rob.lucas@interdean.com
Web: www.paragongeoimmigration.com
Website: www.focus-info.org
Website: www.interdean.com
Area: Worldwide
Area: London, South East
Area: Worldwide
Tel: +44 (0)20 8961 4141
Industry jobs at: http://jobs.relocatemagazine.com
AUTUMN 2012
Paragon Relocation Contact: Liam Brennan Tel: +44 (0)20 7559 3412 Email: lbrennan@paragonrelocation.com Website: www.paragonrelocation.com Area: Worldwide
SIRVA Relocation Contact: Erika Toomer Tel: +44 (0)1793 606538 Email: erika.toomer@sirva.com Website: www.sirva.com Area: National & International
DIRECTORY :
SCHOOLS ACS International Schools Contact: Fergus Rose
TASIS The American School in England Contact: Karen House Tel: +44 (0)1932 582316
Tel: +44 (0)1932 867251
Email: ukadmissions@tasisengland.org
Email: frose@acs-england.co.uk
Website: www.tasisengland.org
Website: www.acs-england.co.uk
Area: West London, Berkshire, Surrey
Area: London, South East
SERVICED APARTMENTS Dwight School London Contact: Alison Miley Tel: +44 (0)20 8920 0634 Email: amiley@nlis.org Website: www.dwightlondon.org Area: North London
Team Relocations Contact: Colin Atkins
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The Apartment Service Contact: Melanie Degand Tel: +44 (0)870 080 2303 Email: melanied@apartment.co.uk Website: www.apartmentservice.com Area: UK & Worldwide
International Community School
Frasers Hospitality UK
Contact: Matthew Cook
Contact: Sin-Han Thiede
Tel: +44 (0)20 7402 0416
Website: www.teamrelocations.com
Tel: +44 (0)20 7341 5586
Email: matthew.cook@ics.uk.net
Area: Worldwide
Email: sinhan.thiede@frasershospitality.com
Website: www.icschool.co.uk
Website: www.frasershospitality.com
Area: Central London
Area: Europe, Middle East, Asia Pacific
International School of London (ISL) Group of Schools
Hyde Park Residence
Tel: +44 (0)1293 813838 Email: avonstrachwitz@wrri.com
Contact: Heather Mulkey
Tel: +44 (0)20 7409 9000
Website: www.wrri.com
Tel: +44 (0)1483 750 409
Email: jacqui.parker@hpr.co.uk
Area: Worldwide
Email: admissions@islondon.com
Tel: +44 (0)20 8955 1312 Email: colin.atkins@teamrelocations.com
Weichert Relocation Resources Contact: Andreas von Strachwitz
Website: www.islschools.org
REMOVALS AND STORAGE Bishop’s Move Contact: Richard Hohler Tel: +44 (0)800 616 425 Email: corporate@bishopsmove.com Website: www.bishopsmove.com Area: Global
Clockwork Removals Contact: Peter Young Tel: +44 (0)800 328 4166 Email: peter.young@clockworkremovals.co.uk Website: www.clockworkremovals.co.uk Area: UK, Worldwide
Contact: Jacqui Parker
Website: www.hpr.co.uk Area: London
Area: London, Surrey, Qatar
Pravonix Serviced Apartments International School of Macaé Contact: Leslie Anne da Mota Tel: +55 (22) 2765 5199 Email: admissions@ismacae.com Website: www.ismacae.com Area: Macaé, Rio de Janeiro, Brazil
Kent College Canterbury Contact: The Registrar, Mrs Jayne Simpson
Contact: Pragna Hay Tel: +44 (0)844 8550 094 Email: pragna@pravonix.co.uk Website: www.pravonixservicedapartments.co.uk Area: Newbury, Berkshire, UK
SACO The Serviced Apartment Company Contact: Clare Carpenter Tel: +44 (0)117 974 5934 Email: ccarpenter@sacoapartments.com
Tel: +44 (0)1227 813 831
Website: www.sacoapartments.com
Email: registrar@kentcollege.co.uk
Area: National & Worldwide
Website: www.kentcollege.com Area: South East
Select Apartments Contact: Giles Walker
DT Moving
Kent College Pembury
Tel: +44 (0)203 142746
Contact: Tim Daniells
Contact: Debbie Sainsbury
Email: gileswalker@selectapartments.co.uk
Tel: +44 (0)20 7622 4393
Tel: +44 (0)1892 822006
Website: www.selectapartments.co.uk
Email: london@dtmoving.com
Email: admissions@kentcollege.kent.sch.uk
Area: London, UK
Website: www.dtmoving.com
Website: www.kent-college.co.uk
Area: Worldwide
Area: South East
SPOUSAL ASSISTANCE/ CAREERS
White & Co
SABIS International School UK
Contact: Louis Spies
Profile Locations
Contact: Deborah McAllister
Contact: Fiona Murchie
Tel: +44 (0)1489 774907
Tel: + 44 (0)1225 891841
Tel: +44 (0)1892 891334
Email: l.spies@whiteandcompany.co.uk
Email: admissions@sisuk-sabis.net
Email: careers@profilelocations.co.uk
Website: www.whiteandcompany.co.uk
Website: www.sisuk-sabis.net
Website: www.profilelocations.co.uk
Area: UK
Area: Bath, UK
Area: National & International
To advertise here please call: 01892 891334
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