MOBILITY Magazine - July 2010 by Worldwide ERC

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MOBILITY

Magazine of Worldwide ERC 速

July 2010

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Calendar

MOBILITY • Vol. 31 No. 7 • July 2010

EXECUTIVE COMMITTEE President

In Memoriam Meri Hill, owner and CEO of Pinnacle Group Associates, and later, Meri Hill Consulting, passed away on May 4, after complications from surgery. She was 77. She is survived by her beloved husband, James; a son, Craig of Cary, NC; daughters Connie Bullock of Manassas, VA, and Barbara Beles of Venice, FL; six grandchildren; and one great-granddaughter. She also is survived by two sisters, Elsie Jorgensen of Troy, MI, and Nellie Wardrop of Royal Oak, MI. Meri became the first woman to own a national home purchase company when she purchased Maenner Relocation (MRI) in 1989. She was one of the founders of the Detroit Regional Relocation Council, and actively involved with Worldwide ERC®, serving on the original committee that developed the CRP® designation, receiving the Meritorious and Distinguished Service Awards, and earning the Senior Certified Relocation Professional™ designation. She was also a frequent speaker and author. Many may recall her 2004 MOBILITY article, “Never Give up on the Pursuit of a Dream,” where she talked about her longtime love of stock car racing, and of fulfilling her dream as a “72-year-old grandmother driving the computer horsepower-enhanced Audi TT.” “Throughout life, I had learned that dreams are thoughts made up by dreamers, but the ultimate fulfillment of those dreams usually happens when the dreamer takes some action to make the dream become a reality. As I grew older and perhaps wiser, I knew that passing every car in front of me was not always possible, but it never stopped me from planning for the pass and fulfilling it when I could. I could hear my mentor Dad saying, ‘you need to be the lead car,’ and I vowed that I would always continue to strive for that goal. Sometimes, it seemed that whenever I had the opportunity to pass and I did get the lead, someone else would pull out at the next intersection and put me back in the line. Now I would have to remake the plan, work the plan, and strive to pass again. None of the expectations would ever be met without the dream in place, and the action plan to make the dream happen. As a former relocation company owner with responsibility for nearly 300 employees, I tried to follow that creed given to me early in life: take the responsibility to be the leader. Me? A business owner? Drive on a racetrack? ‘I don’t think so,’ quickly turned into, ‘why not? How do I get there?’” A memorial service was held May 10, in Venice, FL. Donations in Meri’s name may be made to the TideWell Hospice Philanthropy, 5955 Rand Blvd., Sarasota, FL 34238.

MICHAEL (MIKE) C. WASHBOURN, SCRP, GMS, Pfizer Inc., Peapack, NJ Vice President SUSAN SCHNEIDER, SCRP, GMS, Plus Relocation Services, Inc., Minneapolis, MN Secretary/Treasurer PAMELA (PAM) J. O’CONNOR, SCRP, Leading Real Estate Companies of the World®, Chicago, IL Chairman, Board of Directors AL BLUMENBERG, SCRP, NEI Global Relocation, Omaha, NE

BOARD OF DIRECTORS CORI L. BEAUDET, SCRP, SGMS, SC Johnson—A Family Company, Racine, WI LISA CARAVELLA, CRP, Bank of America, Plano, TX JAY K. DELICH, SCRP, SRA, IFA, Arizona Appraisal Team, LLC, Scottsdale, AZ MARIO FERRARO, International SOS Pte Ltd., SINGAPORE MARK GIORGINI, GMS, China Vanke Co. Ltd., Shenzhen, CHINA WILLIAM (BILL) GRAEBEL, SGMS, Graebel Relocation Services Worldwide, Aurora, CO JOHNNY H. HAINES, SCRP, SGMS, Deloitte, Hermitage, TN LARS LYKKE IVERSEN, Santa Fe Relocation Services, Hong Kong, CHINA CHRISTOPHER (CHRIS) JAMES, Bechtel Corporation, Phoenix, AZ JO LAY, SCRP, SGMS, Coldwell Banker Central Region Relocation, Chicago, IL EARL LEE, Prudential Real Estate and Relocation Services, Scottsdale, AZ STEPHEN C. MCGARRY, SCRP, WPP, New York, NY SANTRUPT MISRA, PH.D., Aditya Birla Management Corporation Ltd., Mumbai, INDIA JOY MORRISON, SCRP, SGMS, PepsiCo, Inc., Purchase, NY STEVEN A. NORD, UPS, Atlanta, GA JOHN PFEIFFER, GMS, Mustang Engineering, L.P., Houston, TX PANDRA RICHIE, SCRP, GMS, Long & Foster Corporate Real Estate Services Division, Chantilly, VA C. MATTHEW (MATT) SPINOLO, SCRP, SGMS, CARTUS, Memphis, TN

EX-OFFICIO Chairman, U.S. Advisory Council AL BLUMENBERG, SCRP, NEI Global Relocation, Omaha, NE Chairman, Foundation for Workforce Mobility KEVIN E. RUSSELL, SCRP, PHH Mortgage, Mt. Laurel, NJ Chairman, Global Advisory Council SANTRUPT MISRA, PH.D., Aditya Birla Management Corporation Ltd., Mumbai, INDIA Chairman, Government Relations Council C. MATTHEW (MATT) SPINOLO, SCRP, SGMS, CARTUS, Memphis, TN

MOBILITY (ISSN 0195-8194) is published monthly by Worldwide ERC®, 4401 Wilson Boulevard, Suite 510, Arlington, VA 22203, +1 703 842 3400. MOBILITY examines key issues affecting the global mobility workforce for the benefit of employers and firms or individuals providing specific services to relocated employees and their families. The opinions expressed in MOBILITY are those of the authors and do not necessarily reflect the opinions of Worldwide ERC®. MOBILITY is printed in the United States of America. Periodical postage paid at Arlington, VA, and additional mailing offices. Worldwide ERC® members receive one annual subscription with their membership dues. Subscriptions are available to both members and non-members at $48 each per year. Copyright © by Worldwide ERC®. All rights reserved. Neither all nor part of the contents published herein may be reproduced in any form without written permission of Worldwide ERC®. POSTMASTER: send address changes to M OBILITY , Worldwide ERC ®, 4401 Wilson Boulevard, Suite 510, Arlington, VA 22203

2 MOBILITY/JULY 2010

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Allied wins its 16th Quest for Quality award.

Orange-to-Orange Network

Quality moving and logistics services.

depend on Allied for extraordinary service, unrivaled dedication,

“Q4Q Recipients have consistently proven that they’re meeting ever increasing shipper demands in what is now a 24/7 global marketplace where actions and mistakes can be tracked down to the day, hour, minute, or even second.”

and innovative solutions for all your moving and shipping needs.

Logistics Management

Allied Van Lines wins another Quest for Quality award for Household Goods and High-Value Products. Allied received high

“...Walking away with a Quest for Quality award in 2009 is a true testament to a company’s ability to adapt and stay relevant in what may be the most difﬁcult operating environment since the Great Depression.”

marks in 5 key criteria: On-time Performance, Value, Information

Logistics Management

Around the world, one name is recognized as the leader in professional, quality moving services: Allied Van Lines. You can

Technology, Customer Service, Equipment, and Operations.

Perceptions

Midpoint Metrics t’s common practice to take stock of a mission at the midpoint, so I’m pausing for a moment during my year as

Worldwide ERC® president to renew my commitment to the initiatives I outlined early in 2010, and to share with

you my thoughts on our progress. It’s a great honor to be given a leadership responsibility for the association that

shapes our industry, and I have—more than once—been humbled by this significant responsibility and opportunity. What’s especially apparent is that true leadership must take full ownership of an issue in word and in deed. In our industry, as in many others, leadership also relies strongly on contingency planning. It is clear that planning and analysis can be far more effective when done proactively— before an issue surfaces—than when addressed reactively. When we’ve enjoyed stability for a period of time, it can give us a false sense of security and complacency. So it’s critical to ask ourselves some “midpoint metrics” questions from time to time, such as, “Do we really have appropriate plans for all possible scenarios?” and, “What if our business model changes?” Last year, we were faced with those very questions as we addressed several transitions in quick succession. We needed to take a good hard look at our association, at the changing economics and demographics, and at how you and our other members were socializing and connecting with each other. The recession brought us a lot of clarity concerning our businesscritical operations. Having been involved at the leadership level before moving into my presidency this year, forging the initiatives on which I would focus surfaced readily. First was to identify and bring aboard a new strategic long-term leader, which we have accomplished with the hiring of Peggy Smith, SCRP, SGMS, who has made communication with our members her number-one priority since joining us in early May. Smith’s carefully con4 MOBILITY/JULY 2010

sidered on-boarding plan is already in motion, and includes frequent touch points with members, supporters, and stakeholders; the launch of her wordsmithing blog in May and an Annual Member Survey in June; expansion of our social media outreach; commitments to speak to industry gatherings and hold focus groups to solicit feedback; and development of strategic alliances and a range of additional actions that will strengthen our organization and move it ahead. Global initiatives on my radar include leveraging opportunities in the APAC and EMEA regions; bringing our GMS™ program online in 2010—which is currently underway—and expanding the GMS™ program to a senior-level designation. I’m delighted to note that, in June, we announced the first class of 118 SGMS™ recipients and look forward to seeing that number increase every year. Another initiative to which I committed was to increase the value proposition for our members. We know that you have many options with which to share your time and resources. We want to ensure that you are confident that the investment you make in Worldwide ERC® is a sound one and brings you the value you expect from your professional community. This year, we introduced the new Worldwide ERC® Summary

Appraisal Report in response to cumulative changes in the economy and real estate markets, shifts in industry practices and policies, and recent changes to the Uniform Standards of Professional Appraisal Practice (USPAP), to ensure that the form continued to be a valuable tool under all market conditions. We also have made changes to our conference programming: enhancing peerto-peer connections with speed networking, text alerts and Twitter, and boosting your use and knowledge of tech tools with on-site technology support. And we have an active agenda in our tax and legal area that addresses issues from VAT and immigration to monitoring U.S. state issues and providing information on the FTC Red Flags Rule. Though I am offering this midyear report, I am very much a messenger of the work you are doing; the work of those on our committees and task forces; of those who communicate from offices and in the field; and of those who connect with each other from the smallest regions to the largest continents. You are the forward-thinking, forward-planning force that is Worldwide ERC®. Thank you for the great honor of serving you as we discover our next initiatives together. —Michael C. Washbourn, SCRP, GMS 2010 Worldwide ERC® President Pfizer Inc.

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MOBILITY Magazine of Worldwide ERC®

Features

Money Doesn’t Grow on Trees—or Does It? The ‘Greening’ of Relocation Management Companies By Betsy Welch, CRP, GMS, and Janet Olkowski, SCRP, SGMS

Survey Says... It’s Good to be Green By Stephen McGarry, SCRP

Real Estate Agents Have a Responsibility to ‘Go Green’ By Molly Phillips, ABR, SRS, EcoBroker®, GREEN

Top 10 List: How Worldwide® ERC Members Mean to be Green By Doug Weed, SCRP, SGMS

Brazil, the ‘B’ of the BRICs By Jorge Morazzani and Débora Bigio

Panama By Anne Dean, GMS, and Analisa Villalaz de Laffitte, GMS

Tangoing through the Argentine Immigration Process: Challenges and Tips for Success By Christi Dominguez

Adding a Company to the GSA Schedule of Work By Bill Mulholland, CRP, GMS

Putting Duty of Care on Your Organization’s Radar Screen

By Suzanne Garber

MOBILITY/JULY 2010 7

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MOBILITY Magazine of Worldwide ERC®

DEPARTMENTS

MOBILITY

2 CALENDAR

STAFF

4 PERCEPTIONS

Jerry Holloman

Vice President & Publisher jholloman@WorldwideERC.org

Midpoint Metrics By Michael C. Washbourn, SCRP, GMS

10 AROUND THE WORLDWIDE ERC

Managing Editor Frank Mauck

fmauck@WorldwideERC.org ®

EDITORIAL ADVISORY COMMITTEE

Chairman

12 EXECUTIVE SPOTLIGHT

Jo Lay, SCRP, SGMS, Coldwell Banker Central Region Relocation, Northbrook, IL

15 INDUSTRY SPOTLIGHT

Tamara Bianchi, CRP, Capital Relocation Services, Denver, CO

15 WORLDWIDE ERC® TRENDSPOTTING

Christopher R. Chalk, CRP, GMS, Graebel Relocation Services Worldwide, Alpharetta, GA

18 QUICK TAKES

Brenda Darrow-Fuhs, Bank of America, Longmont, CO

76 RAC REPORT

Tim Denney, Stirling Henry Global Migration, Sydney, AUSTRALIA

78 MARKETPLACE 79 GLOBILITY

80 LAST PAGE

Alex Alpert, Wheaton World Wide Moving, Tucson, AZ Robert F. Burch, SCRP, Alexander’s Mobility Services, Baltimore, MD Alex Chua, Newport Real Estate Limited, Shanghai, CHINA Terry Baxter Davis, SCRP, SGMS, Ernst & Young LLP, Cleveland, OH Marge A. Dillon, CRP, GMS, Xerox Corporation, Lewisville, TX Sean Dubberke, RW3 LLC, New York, NY Deborah A. Dull, CRP, GMS, Crown Relocations, Houston, TX Kari Hamilton, ABODA, Inc., Redmond, WA Nancy F. Harmann, CRP, GMS, Latter & Blum, Inc., Realtors, New Orleans, LA Gustavo Higuera, CRP, GMS, Prudential Real Estate and Relocation Services, Scottsdale, AZ Christine E. Holland, GMS, Massachusetts Institute of Technology, Cambridge, MA Ronald Huiskamp, GMS, Dwellworks, LLC, Kirkland, WA Rob Johnson, SCRP, SGMS, Altair Global Relocation, Plano, TX Tacha Kasper, CRP, Leading Real Estate Companies of the World®, Chicago, IL Tim McCarney, GMS, Weichert Relocation Resources Inc., Norwell, MA Elizabeth Perelstein, School Choice International, White Plains, NY Patricia Pollard, CRP, GMS, Coldwell Banker United Realtors, Houston, TX Michelle Sandlin, CRP, John Daugherty Realtors, Inc., Houston, TX Stefanie R. Schreck, CRP, GMS, American International Group, New York, NY Scott T. Sullivan, Brookfield Global Relocation Services, Woodridge, IL Mara Terrace, Siemens Corporation, Global Shared Services NA, Orlando, FL Sherrie Tessier, CVS, Woonsocket, RI Allie Williamson, CRP, OneWorld Relocation Services, Naples, FL GLOBAL EDITORIAL ADVISORY COMMITTEE

Chairman Joy Morrison, CRP, SGMS, PepsiCo, Inc., Purchase, NY Michele Bar-Pereg, Bar-Pereg Group, Amsterdam, THE NETHERLANDS

Design/Production: Ideas, Communicated, LLC, Vienna, VA, www.ideascommunicated.com Printing: CADMUS Specialty Publications, Richmond, VA Reprints: Katina Moaney, CADMUS Reprint Services, ercreprints@cadmus.com; +1 866 487 5625 ext. 3736 Advertising Sales: Glen Cox, National Sales Manager, The Townsend Group, +1 301 215 6710; ext. 109; gcox@townsend-group.com

Lorraine Bello, GMS, Ricklin-Echikson Associates, Inc. (REA), Millburn, NJ Lorelei Carobolante, SCRP, SGMS, GPHR, G2nd Systems, LLC, San Ramon, CA Scott Craighead, SCRP, GMS, Blue Sky Executive Search, New York, NY Anne Dean, GMS, Living Abroad, LLC, Norwalk, CT Jeff Knapton, SIRVA Relocation, Westmont, IL Derrick Kon, Mercer (Singapore), Pte. Ltd, SINGAPORE Anne-Claude Lambelet, SGMS, The International Relocation Associates (TIRA), Geneva, SWITZERLAND Tacita Lewars, GMS, Globaforce Incorporated, Calgery, Alberta, CANADA Cindy Madden, CRP, Cartus, Danbury, CT Andrea Massoud, GMS, Living in Brazil, International Relocation Services, Barueri-Sao Paulo,BRAZIL Nino Nelissen, SGMS, Executive Mobility Group, Schlipol Airport, THE NETHERLANDS Constance Pegushin, Berry Appleman & Leiden LLP, San Francisco, CA Maureen Bridget Rabotin, GMS, Effective Global Leadership, Paris, FRANCE René Rosemary Stegmann, GMS, Relocation Africa, Cape Town, SOUTH AFRICA Rita Wagner, GMS, Interdean International Relocation, London, UNITED KINGDOM Nick Woodhams, SGMS, Woodhams Relocation Centre, Sydney, AUSTRALIA

8 MOBILITY/JULY 2010

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Prudential Real Estate and Relocation Services

Rock Solid value every step of the way ®

When it comes to relocation, you have an important decision to make. So why not select a company that delivers satisfaction, savings and security throughout the process? With Prudential Real Estate and Relocation Services, it all leads to a better experience — for both you and your transferees. To learn more, call 1-877-418-0617. To download our complimentary relocation tools, visit www.prudential.com/relocation/value Minimize operational risk with our complete Relocation Management Services. Benefit from our global reach and Prudential’s more-than 130 years’ experience.

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Around the Worldwide ERC®

Announcing New GMS™ Criteria, SGMS™ Designation ince its inception in 2003, more than 2,500 individuals have earned the Worldwide ERC® Global Mobility Specialist (GMS™) designation. As a result of the continued evolution and successful progress of the GMS™ program, we are pleased to introduce new GMS™ recertification criteria and a Senior Global Mobility Specialist (SGMS™) designation.

New Recertification Requirements In addition to the online catalogue of global courses available for GMS™ recertification credit, designees may now earn credits from other types of global programming. These credits may be earned from specific Worldwide ERC® global events and from outside organizations provided the courses/sessions satisfy the criteria for CE credit approval. We encourage all of our GMS™ designees to review the new criteria posted in the

GMS™ pages of www.Worldwide ERC.org/Education/GMS/Pages/ gms.aspx.

An Exciting SGMS ™ Designation We are thrilled to announce that the new SGMS™ designation already has been awarded to 115 global mobility professionals. The SGMS™ is earned by • holding a valid GMS™ designation; • completing at least 10 global Continuing Education (CE) credits

Global Workforce Symposium Exhibit & Sponsorship Opportunities Now Available!

et ready for one of the global workforce mobility industry’s largest annual events! Exhibit and sponsorship opportunities are now available for the 2010 Global Workforce Symposium at the Seattle Convention Center in Seattle, WA, from October 27 to 29, 2010. Now more than ever, it is critical to take advantage of this opportunity to boost your company’s visibility, showcase your services, and connect with your clients and partners. You will experience exceptional networking opportunities, insightful educational sessions, and a dynamic relocation services marketplace at the Symposium. If you provide workforce mobility and relocation services, exhibiting at this event is a MUST for your company! Exhibit space and sponsorship opportunities for the Global Workforce Symposium is available on a first-come, first-serve basis, so sign up today! For more information and to sign up, visit the Global Workforce Symposium online at: www.WorldwideERC.org/ Events/Pages/gws10.aspx 10 MOBILITY/JULY 2010

from the Worldwide ERC® Online Learning Center; and • securing at least 10 Service Points through considerable contributions of time and expertise to the mobility industry through Worldwide ERC® activity. All GMS™ designees were contacted via e-mail and standard postal mail in June with regard to how the above changes personally affect them. If you hold the GMS™ designation and have not received information from us, please contact us at GMS@WorldwideERC.org or call +1 703 842 3430 ext 2. In addition, please contact us if you have any questions about the new requirements or the SGMS™ program. If you are interested in earning the GMS™ designation, please visit the GMS™ pages of www.Worldwide ERC.org for information on upcoming course offerings.

Upcoming Worldwide ERC® Events Worldwide ERC® Learning Zone Webinar An Update on the Mortgage Industry: New Legislation Tuesday, July 1, 2010 2:00 p.m. to 3:00 p.m. EST Worldwide ERC® Learning Zone Webinar The Worldwide ERC® Quarterly Tax and Legal Update Tuesday, July 13, 2010 2:00 p.m. to 3:00 p.m. EST GMS™ Training and Certification October 26-27 Seattle, WA Global Workforce Symposium October 27-29 Seattle, WA

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It’s not about getting bigger.

It’s about delivering more.

Primacy and Cartus have joined forces. More choices. More solutions. The two premier companies in the relocation industry have come together to accomplish what neither could do alone. Together, Primacy and Cartus offer a truly comprehensive range of relocation services wherever you need us to be, and we back it up with the most experienced team in the industry. We give you more choices, and more ﬂexibility to access services through local delivery or global engagement. We didn’t join forces just to serve more clients. We joined forces to serve our clients even better. Find out more at www.cartus.com.

Setting a new standard in relocation.

© 2010 Cartus Corporation • All rights reserved Cartus and the Cartus logo are pending or registered trademarks of Cartus Corporation. PRIMACY and the PRIMACY Logo are trademarks or registered trademarks of Primacy Relocation, LLC.

Executive Spotlight aragon Relocation, Rancho Santa Margarita, CA, has named Elaine Martin director and practice leader for the company’s newest subsidiary, Paragon GeoImmigration, and will be based in Paragon’s Irving, TX office. Frances Martinez Myers has been named president of Employee Transfer Corporation, Philadelphia, PA. TRC Global Solutions, Milwaukee, WI, has named Jerry Funaro vice president, global marketing. The FIDI Global Alliance, Brussels, Belgium, has named Orphee Moschopoulos-Beinoglou of Orphee Beinoglou International the 39th president of the organization. Lawrence-Arendall-Humphries Real Estate, Birmingham, AL, has named Bruce Gleissner sales agent in its Commercial Real Estate office.

Interstate Worldwide Relocation, Springfield, VA, has named Dan Seiler, CRP, director of business development for the corporate relocation group. Darla Furst, managing broker of the Palmer Ranch office of Michael Saunders & Company, Tallahassee, FL, has been appointed to the Florida Real Estate Commission. Chase’s, New York, NY, home lending business has named Lyn Hudson, CRP, GMS, vice president, national sales director, based in Chesterfield, MO. Jason Zimmerman has been named vice president of Edina Realty Relocation, Edina, MN, following the retirement of Marj Ford. UniGroup Worldwide UTS, St. Louis, MO, has named Rolf Munk manager of customs brokerage for the United States.

ReloTrans, Danvers, MA, has named Thomas Bailey business development manager. RELO Direct®, Inc., Chicago, IL, has named Judy Pogue, CRP, vice president of sales. Century 21 Real Estate LLC, Parsippany, NJ, has named Mark Foreman senior vice president of operations. Prudential Real Estate and Relocation Services, Inc., Irvine, CA, has named Stephen Van Anden chief marketing and innovation officer. Coldwell Banker United, Realtors®, Columbia, SC, has named Barbara Scott branch manager and broker-incharge of its Chapin office. Continuum International Logistics Inc., Brookfield, CT, has named Dawn Hasil, GMS, president of its Chicago, IL, office.

CATCH SUCCESS WITH WORLDWIDE ERC®! Capture the specialized knowledge and resources to successfully manage your company’s mobile workforce. Become a member of Worldwide ERC’®s powerful community of HR innovators and workforce mobility professionals today.

Join now!

Online: www.WorldwideERC.org E-mail: info@WorldwideERC.org Call: +1 703 842 3400

12 MOBILITY/JULY 2010

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Industry Spotlight

Webinar Poll Highlights Trends in Global Policies, Corporate Social Responsibility Crown Relocations, prior to its May 5, webinar, “Leaner, Meaner, & Greener: a New Landscape of Relocation Management,” conducted a poll querying more than 75 global mobility professionals about their policies, cost-saving strategies, and corporate social responsibility initiatives. According to the poll, as a result of the current economic climate, 14 percent of respondents said their company will relocate more employees than in 2009, and 46 percent indicated the number of employees would remain the same. Forty percent said that their companies expect to relocate fewer employees, down 20 percent from 2009. Further, 42 percent of respondents said that, as a result of the economy, their company amended its policy in 2010, compared to 19 percent in 2009. With regard to policy exceptions, 29 percent granted extensions of temporary housing, down from 37 percent in 2009; 20 percent granted loss-on-sale support, down 6 percent from 2009; and 12 percent extended the relocation benefits period, down from 16 percent in 2009. “As we define the new normal, Crown’s survey reveals policy amendments are on the rise as organizations shift mobility practice in more permanent ways to attract talent yet balance cost-containment initiatives,” said Tricia Stewart, CRP, GMS, director of consulting services for Crown Relocations, Brookfield, CT With regard to cost-saving strategies, 33 percent of respondents reported a reduction of relocation packages offered, 24 percent cited outsourcing or consolidating suppliers, and 20 percent said use of temporary assignments versus permanent moves. Sixteen percent reported implementing tiered policies, and 7

percent pointed to reduced or eliminated homesale support. According to Crown, organizations taking positive steps toward addressing environmental and social issues by engaging in activities related to corporate social responsibility (CSR) do so to reduce business risk and to focus on customer and employee preferences. The poll helped to reveal the disparity that exists between a perceived focus on CSR activities and actual practice. “While employee mobility involves environmental impacts, as well as the opportunity for community and social influences in transfer locations,

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66 percent of companies Crown surveyed have not integrated corporate social responsibility plans into mobility planning, policy, or practice,” said Stewart. “Poll results indicate 25 percent of companies Crown surveyed had reduced unnecessary travel through increased use of teleconferencing, virtual officing, and progressive corporate travel policies; yet only 9 percent of participants have incorporated more broad-based CSR initiatives. This is in contrast to the overall increase in CSR focus in company mission statements, employee messaging, and marketing.”

Prudential Real Estate and Relocation Services Rock Solid Relocation®

MOBILITY/JULY 2010 15

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Industry Spotlight

FYI Ace Midwest Moving and Storage, Little Canada, MN, has joined Atlas Van Lines, Evansville, IN. Employee Transfer Corporation ETCREO Management, Philadelphia, PA, has announced a joint marketing agreement with Halo Portfolio Advisers, LLC, Allen, TX. Corporate United, Cleveland, OH, has announced it has entered into a new commercial moves agreement with the United Van Lines, St. Louis, MO,/Mayflower Transit, St. Louis, Alliance. Continuum International Logistics Inc., Brookfield, IL, has announced the opening of an office in Chicago, IL. Leading Real Estate Companies of the World®, Chicago, IL, has announced the selection of Smarter Agent, Camden, NJ, to offer mobile services to the network’s more than 600 member firms. The company also announced an expanded partnership with Market Leader, Kirkland, WA, offering its members a trial version of RealtyGenerator. Prudential Real Estate and Relocation Services, Irvine, CA, announced the affiliation of Troth Realtors GMAC Real Estate, Lancaster, CA. The company will operate as Prudential Troth, REALTORS®. Meiers Moving and Storage, Salina, KS, has announced it has joined Atlas Van Lines, Evansville, IN, network of agents. Marriott ExecuStay, Bethesda, MD, has announced an enhanced online booking process. The Council of Residential Specialists, Chicago, IL, has announced the addition of two new e-learning courses, “Short Sales and Foreclosures: Protecting Your Clients’ Interests” and “Keep It Simple With Low-cost Online Marketing.” HCR Group, Basingstoke, United Kingdom, has been awarded a three-year employee relocation contract by the United Kingdom’s National Grid. SIRVA, Inc., Chicago, IL, has announced its Pre-Decision Services, designed to enable companies, transferees, and job candidates to determine how a potential relocation can affect their financial situations. Arpin International Group has announced the opening of an office in Shanghai, China, following the acquisition of Rhema China East Ltd. through the purchase of its holding company, Rhema Capital Investments. 16 MOBILITY/JULY 2010

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Quick Takes

Spend A Day With the ‘World’s Most Influential Business Thinker’ he Wall Street Journal recently ranked Gary Hamel as the world’s most influential business thinker, and Fortune magazine has called him “the world’s leading expert on business strategy.” Spend small group time with Hamel during the Worldwide ERC® Executive Education Program offered at the Global Workforce Symposium in Seattle, WA, on October 28, 2010. Hamel will provide you with a blueprint for building the essential capabilities that will distinguish tomorrow’s most successful organizations. Hamel’s goal: to help you become an inspired management innovator and your company to become a successful management maverick. This outstanding opportunity is offered exclusively to Symposium attendees as an optional add-on. An additional registration fee is required for this program. Attendance is limited. Register today via the Symposium registration form to ensure your place at this exciting program.

Communities

“W

e’re sharing real-time information in a way that gets us closer to each other,” wrote Worldwide ERC® CEO Peggy Smith, SCRP, SGMS, in her June 11 blog post. “We’re telling our story, and I’m delighted to watch it unfold.” Her blog, wordsmithing, lives among the interactive members’ Communities on the Worldwide ERC® website, www.WorldwideERC.org. Following are some of the conversations currently unfolding: U.S. Domestic Relocation Forum: “Do you know of any great ideas out there to assist relocating employees with down payments/loans/etc. for home purchase when they don’t have equity remaining after their homesale?” Global Workforce Mobility Forum: “Are you aware of any companies that mandate the business to do candidate assessments for assignments?” “Have you moved an employee within the same country in South America? My specific case is around a need to ‘relocate’ someone within Brazil from São Paulo to Minas Gerais. My only prior experience has been in Mexico, where almost every piece was negotiated and we ended up providing a hybrid between a ‘serviced relocation’ and cash allowance. Is there is a ‘typical’ package companies would look to provide or if it is more of a lump sum cash payment?” “Can you verify that it is not customary in the Netherlands to rent out one’s property when they go on assignment?” The Green Forum: “Do you have experience with wind power, and/or do you know anyone who has considered or installed a wind turbine in either their home or work?” The China Blog: Matthew Zeng Guoquan, a full-time student in the international MBA program at Lingnan (University) College, Sun Yat-sen University, Guangzhou, China, writes, “has my opinion about working for a foreign multinational or foreign-invested enterprise changed in the last several years? Yes. I worked for three foreign multinationals for five years before I joined the MBA program. However, I will very probably not choose foreign multinationals anymore after graduation.” Be part of the conversation—log in and add your comments and questions today. To get there, visit www.WorldwideERC.org/Pages/Web2.0.aspx or click on the white “Communities” text hyperlink at the top of every page of www.WorldwideERC.org. Come join your community! Note that access to the Forums is an exclusive benefit of Worldwide ERC® membership.

18 MOBILITY/JULY 2010

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new_olkowski - green_MOBILITY 6/16/10 2:25 PM Page 2

Money Doesn’t Grow onTrees—

or Does It?

The ‘Greening’ of Relocation Management Companies

B Y B E T S Y W E L C H , C R P, G M S , A N D J A N E T O L K O W S K I , S C R P, S G M S There are many creative and cost-effective ways for relocation management companies to implement green initiatives within their organizations. In light of the potential process efficiencies and competitive advantages realized through environmentally friendly initiatives, Welch and Olkowski evaluate whether companies can afford not to “go green.”

t should be apparent to most companies that aggressive social responsibility initiatives help foster increased sustainability. For the purposes of this article, the focus is on the environmental aspect of social responsibility; however, it is important to keep in mind that the “greening” of an organization is only one component of the broad picture and, to achieve long-term success, sustainability efforts must encompass not only environmental, but also social, economic, and cultural drivers. When the leaders of an organization think holistically about social responsibility, all four of these components are connected inextricably. From the perspective of a relocation management company (RMC), a discussion of green initiatives would be 22 MOBILITY/JULY 2010

remiss without mention of the financial implications, certainly in the current economic environment. Many companies have been reluctant to take on comprehensive green initiatives because of the apparent expenditure required. Making “nice to have” investments seems infeasible at a time when cost containment is at the forefront of decision-making processes. When evaluating the practical realities, the question remains for most firms: “Can we afford not to go green?” What about the process efficiencies gained and the longterm effects of green initiatives? How can carbon management efforts reduce risk, streamline processes, increase sales, or provide a competitive advantage—all of which ultimately improve the bottom line?

olkowski - green_MOBILITY 6/16/10 1:36 PM Page 3

MOBILITY/JULY 2010 23

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More Than Good PR Going green is much more than a public relations tactic. According to a February 2009 McKinsey Global Survey on valuing corporate social responsibility, CFOs, institutional investors, and investment and corporate social responsibility professionals say environmental programs will create more shareholder value during the next five years. Companies will create carbon management initiatives and build goodwill along with the other benefits, but their efforts will be driven by regulation. How does this affect RMCs? The requirement to support client green initiatives will be part of the sourcing process and require RMCs to focus on their processes, the green prac-

24 MOBILITY/JULY 2010

tices of their supplier partners, and minimization of litigation risk.

Clients Have Gone Green RMC clients already have led the way. Whether in manufacturing, pharmaceuticals, chemicals, food and beverages, or other industries, corporate clients have taken aggressive steps to protect the environment as well as their businesses—not only from a socially responsible and strategic positioning standpoint, but from a regulatory perspective. They will have to continue to follow regulatory guidelines to avoid financial penalties and obtain funding from financial institutions and investors. Companies will need vast amounts of capital as they are required to

switch to new, environmentally friendly ways of production. That capital will come from banks that are confident that their corporate customers will be around for the long haul. RMCs would be wise to do business with clients that are fueling the low-carbon economy, as they will reduce the business risk to RMCs— the loss that can result from clients that are not fiscally sound and able to weather the economic cycles of the future. To further elaborate on the “client” effect, companies are asking RMCs about their environmentally friendly practices during the request for information (RFI) or request for proposal (RFP) process. If the RMC is unable to provide a comprehensive

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INDICATE the level of importance of providing awareness and knowledge for your company of due diligence for identifying environmental pollution/ contamination risks associated with residential real estate that may affect the purchase or sale of an employee’s home.

Important

64 percent

Somewhat important

26 percent

Not important

10 percent

Source: August 2009 Worldwide ERC® Green Survey

response to the RFI questions on green initiatives, the opportunity to bid on the client’s business may be lost altogether. Often, the inquiries go beyond the RMC operations to supply chain practices.

Greening the Supply Chain RMCs must closely monitor their supply chain’s efforts concerning green initiatives. When an employer engages the services of the RMC, it is, by extension, employing the RMC’s service partners as well. RMCs have a responsibility to ensure that they and their suppliers are helping to present environmentally friendly global mobility solutions. The RMC also must stay current on environmental regulations and make any necessary adjustments for compliance and client reporting. Just as corporations are driving green initiatives through requirement of RMC eco-friendly practices, so, too, must the RMCs direct this effort when selecting supplier partners. RMCs should include specific questions on supplier applications pertaining to their green practices, as well as estab26 MOBILITY/JUNE 2010

lish metrics regarding minimum requirements. Examples might include the following types of items: All service partners. What initiatives has your organization taken to help protect the environment? How does your firm stay up to date on regulatory issues regarding environmentally friendly business practices? Real estate brokers. Do any of your agents have green certifications? How is your brokerage encouraging green practices in the real estate community? Inspectors. How do you stay up to date on the latest environmental issues? How do you communicate these issues to your clients? What solutions do you provide to help resolve environmental or hazardous issues? Appraisers. How does your firm stay up to date on placing a value on a green home? Household goods providers. How is your company working to reduce its carbon footprint? Does your fleet include any diesel-electric hybrid trucks? Do you use recyclable packing materials and moving boxes?

Minimizing Risk Within the public forum, there has long been a perception that RMCs represent “deep pockets” when it comes to U.S. real estate transactions. Historically, a buyer of a relocation inventory home will pursue legal action more readily with the RMC if issues arise with the property. Whether the RMC is at fault or not, the cases often are settled to avoid substantial legal fees required to fight the case. Examples include contaminated soil from leaking underground storage tanks, contaminated well water, or items disclosed that the buyer accepted but later found “unacceptable.” As a result, RMCs take careful measures to reduce the legal and financial risk in managing their clients’ homesale programs. They inspect, obtain disclosures, and scrutinize appraisals and broker market analyses—for their protection as well as their clients. One missed environmental hazard could cost the RMC and the client a considerable amount of money.

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In addition, the destination properties that transferring employees purchase could become an inventory property in the event of a future transfer. Ensuring that the employees’ new homes are environmentally safe is equally important. In addition to familiar environmental hazards such as radon gas, landfills, contaminated soil or water, there are more, less familiar hazards such as sites that have been contaminated by dry cleaning chemicals, unique local environmental factors, or homes that have been built with inferior or contaminated materials such as EIFS or Chinese drywall. RMCs and their inspection companies must stay well informed and proactively update their corporate clients about the risks of these environmental hazards. Staying ahead of the curve and taking steps to prevent and correct environmental issues will help minimize risk for the RMCs. Institutionalizing some of these items in clients’ mobility policies to prevent future effects must be driven by the RMCs as part of their ongoing consultative services to clients. According to Vanessa N. Pantano’s May 2009 MOBILITY article, “When Environmental Problems Reach Homes,” the health risks associated with exposure to hazardous substances varies according to the substance. No matter how small the health risk, the legal and financial risk for RMCs and, by extension their clients, is increased if they have been party to the sale and/or purchase of an affected property.

Gaining the Green Competitive Edge Companies that produce a product, such as organizations in manufacturing, pharmaceuticals, food and 28 MOBILITY/JULY 2010

ronmental activities make them feel loyal to their organization. To continue to recruit and retain talent— which will help sustain their businesses—RMCs must incorporate green initiatives into their organizations’ strategic goals. These personally and professionally important initiatives can tip the scale when a candidate is weighing the pros and cons of working for one company over another.

Creative Solutions

beverages, consumer goods, and the like, will gain a competitive advantage through their environmentally sound practices and products. In a service industry such as workforce mobility, the competitive edge is a finer distinction. The greatest asset to a company providing a service is its people. Providing electronic solutions, rather than compiling masses of documents, provides significant process efficiencies and substantially affects recycling and waste. In recruitment initiatives, RMCs (along with other organizations) need to attract eco-conscious candidates who will be fully engaged in the firm’s green initiatives.Cone, Inc.’s “2006 Millennial Cause Study” indicated that 69 percent of respondents said that their company’s social and/or environmental activities make them feel proud to work there, and 64 percent said that their company’s social and/or envi-

There is no doubt that times have been tough. However, years ahead will be even more challenging if RMCs are not engaged actively in their responsibilities to protect our environment. RMCs must continue to perform due diligence on client partners, supply chain partners, and the homes they are selling and purchasing. There also are many inexpensive steps that the RMCs can take to positively affect the environment. There are eco-passionate people within each RMC who can help drive green initiatives, and there are many creative and cost-effective methods of implementation. For those in an organization that has been reluctant to make the necessary investments, convince leadership that not making those expenditures may jeopardize the firm’s future and limit the client engagements that require the RMC to participate in green initiatives. Betsy Welch, CRP, GMS, is vice president, strategic services for Cornerstone Relocation Group, Basking Ridge, NJ. She can be reached at +1 908 484 1003 or e-mail bwelch@crgglobal.com. Janet Olkowski, SCRP, SGMS, is vice president, consulting services for Cornerstone Relocation Group, Basking Ridge, NJ, and a member of the Worldwide ERC® Green Initiatives Committee. She can be reached at +1 908 548 3115 or e-mail jolkowski@crgglobal.com.

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B Y S T E P H E N M C G A R R Y, S C R P

The Worldwide ERC® Green Initiatives Committee spent the last year examining the sustainability practices and eco-friendly programs of Worldwide ERC® members. McGarry takes a look at a sample of the findings and discusses their relevance as they relate to the current business world, where increased significance has been placed on organizations being environmentally and socially responsible.

orldwide ERC® is committed to building a greener world. When its headquarters office moved in November 2007, several factors were taken into consideration, including how the location could aid in Worldwide ERC® becoming more socially and environmentally responsible. Ultimately, the selected site, a Leadership in Energy and Environmental Design (LEED) silver-certified building, is on the cutting-edge of “green” commercial real estate. Its features include stormwater management, heat island reduction, optimized energy performance, and indoor pollutant source control, among countless other sustainable designs. “Green” can mean many things but, for Worldwide ERC® members, it is what can be done as individuals, companies, and an association to make our planet a place that can be inhabited by our children for generations to come. In 2009, a task force was organized to explore the impact of the sustainable, environmental business and living practices on our members, their companies’ operations, and our mobility industry. Lead by Kevin Rich, SCRP, of New World Van Lines, South Hamilton, MA, a surgical approach was taken to assess current sustain-

able business practices among our members and their desire to learn more in this area. A survey was designed and nearly 400 members responded, one of the highest survey response rates for Worldwide ERC®. The breakdown of the respondents was distributed very evenly, with about 20 percent for all the membership categories—corporate, relocation management companies, real estate brokers, appraisers, and workforce mobility/ relocation specialty service providers. For all of you who responded, we would like to thank you and, for those who did not, we will look for your participation next time.

What Are We Doing Right? The results of the survey revealed a membership with a high level of social and ecological responsibility with an eagerness to learn more about becoming good environmental citizens and better understand how sustainable business practice will shape mobility programs. Our members are passionate about the health of our planet and they show it in their everyday acts of goodness. Take the HCR Group in Basingstoke, United Kingdom. As a part of the organization’s ongoing commitment to reduce its carbon footprint, it plants a tree for every corporate relocation case undertaken. When agents at MOBILITY/JULY 2010 31

green_mcGarry_MOBILITY 6/17/10 4:10 PM Page 4

Your Advertising Dollars Save the Earth IN ADDITION to printing this issue on recycled paper, Worldwide ERC® used a portion of its July MOBILITY advertising revenue to plant 100 trees in the Atlantic Forest of Brazil (considered one of the world’s most endangered tropical rainforests; only 7 percent of its original area remains) through The Nature Conservancy’s Plant a Billion Trees program. The goal of this program is to restore 2.5 million acres of land and plant a billion trees during the next seven years. Learn more about The Nature Conservancy’s Plant a Billion Trees program at http://www.plantabillion.org/.

Coldwell Banker Prime Properties in Albany, NY, visit their listings, they leave large bags with the sellers to recycle remaining canned goods to donate to the local ministry.

ARE YOU seeing more transferees seeking homes with green features such as energy-saving appliances, water conservation systems, use of non-toxic paints, sustainable or recycled building materials, and the like?

Yes

35 percent

65 percent

In an independent survey of the top Greenest U.S. Companies conducted by Newsweek (http://greenrankings. newsweek.com) 80 percent of the top 100 companies are Worldwide ERC® members. This shows that our membership is made up of caring organizations and that we are socially and environmentally responsible. Kudos to all who made the list. According to the Worldwide ERC® Green Survey, 92 percent said they currently are recycling office products; 66 percent are using energyefficient lighting and equipment; 43 percent promote walking, biking, or taking mass transit to work; 41 percent have installed automatic shut off

Source: August 2009 Worldwide ERC® Green Survey

INDICATE the level of importance of providing awareness and knowledge for your company of trends in marketing and buying homes with green features such as: energy-saving appliances, water conservation/recycling features, geothermal heating and cooling, solar and wind power, healthy home interiors, and the like.

Important

50 percent

Somewhat important

39 percent

Not important

11 percent

Source: August 2009 Worldwide ERC® Green Survey 32 MOBILITY/JULY 2010

for equipment; and 31 percent participate in global events to improve the environment. It is important to remember the flip side of these statistics when searching for what more can be done to become a more environmentally conscious organization. Although 92 percent of the respondents currently are recycling office products, that means there still are 8 percent that are not. When it comes to “what can we do,” recycling not only is the easiest item on any list with regard to making the planet a better place, for the most part, it is law. Although 92 percent looks good, there is no reason this should not be 100 percent. Sixty-six percent of the respondents state that they are now using energyefficient lighting and equipment. This can be as simple as replacing regular fluorescent or incandescent bulbs with the more efficient CFL spiral bulbs. A quick aside—if every American home replaced just one light with a CFL spiral bulb, the country would save enough energy to light more than 3 million homes for a year, save about $700 million in annual energy costs,

green_mcGarry_MOBILITY 6/18/10 2:21 PM Page 5

and prevent nine billion pounds of greenhouse gas emissions per year, or the equivalent of the emissions of about 800,000 cars. The old saying of “a little goes a long way” is no truer than the statement above. Just think about what the savings in energy costs and greenhouse gases could be if we did this in all our offices, as well.

Support for Green Initiatives We asked why your company supports its green initiatives and to rank the items by importance to each company. When asked about environmental importance, 99 percent of the respondents said that the level for these considerations were “important” or “somewhat important,” and 97 percent said health and safety considerations were “important” or “somewhat important.” With regard to environmental and health concerns, we need to look at the issues that, during the years in our industry, have come to pose environmental and health hazards. These issues, which we can call the

“risk” items, are radon, asbestos, and UGOTs (underground oil/fuel tanks), to name just a few. There is no doubt that there is a great deal of concern over these issues. It is a matter of what we do about it. The answer is what we have been doing—identify, repair, replace, remediate, remove and, of course, educate. There were other reasons why you support green initiatives. Ninetyeight percent stated that ethics were “important” or “somewhat important,” and 95 percent cited the economics as “important” or “somewhat important.” When asked what Worldwide ERC® can do in providing awareness and knowledge to your company, the percentage of respondents who answered “important” or “somewhat important” on eco-friendly programs was 96 percent; tax and legislative incentives for building green was 91 percent; due diligence for identifying environmental pollution/contamination risks was 90 percent; trends in marketing and buying homes with

The 2010 Green Initiatives Committee Chairman Kevin E. Rich, SCRP New World Van Lines, Inc., South Hamilton, MA Rob Barber Environmental Data Resources, Inc., Milford, CT Cori L. Beaudet, SCRP, GMS SC Johnson—A Family Company, Racine, WI Renee Carnes-Rook, CRP Cartus, Danbury, CT William Graebel, SGMS Graebel Relocation Services Worldwide, Aurora, CO Stephen C. McGarry, SCRP WPP, New York, NY Ginger E. Merrick, CRP, SGMS Coca-Cola Enterprises Inc., Atlanta, GA Andy K. Neall, CRP The MIGroup, Irvine, CA Janet Olkowski, SCRP, SGMS Cornerstone Relocation Group, Basking Ridge, NJ Molly Phillips, ABR,SRS, EcoBroker®, GREEN RE/Max on Track, Germantown, TN Douglas H. Weed, SCRP, SGMS NSA Consultants, Wheaton, IL Staff Liaison Tina G. Lung Worldwide ERC®, Arlington, VA

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Join Us at the Green Forum REDUCE, REUSE, RECYCLE, is advice for those seeking to use resources responsibly. Another piece of advice is to communicate “paperlessly.” Our online discussion forums often are cited as one of the most important benefits of Worldwide ERC®, and provide an important platform for exchanging ideas and asking questions for members who share an interest in “going green.” If you have ideas about helping the workforce mobility industry “go green,” join members of the Green Initiatives Committee during the first week of July at the Green Forum on the Worldwide ERC® website, www.WorldwideERC.org. Just log in and click on “Communities” and choose the “Green Forum,” or visit your “My Account” page and scroll down to the “Forums” section. While there, sign up for alerts to the forums in which you are most interested by clicking the “Subscribe to this Forum” link. Visit the forums frequently to keep your “finger on the pulse” as to what your colleagues are doing to “go green.” You soon will see opportunities to share your expertise and build your personal brand as someone who is knowledgeable about this important topic. If you have any questions, please e-mail webmaster@WorldwideERC.org.

green features was 89 percent; future effect of green buildings for corporate home-purchase programs was 84 percent; and future effect of green minded consumers on valuation of green featured homes was 88 percent. Earlier in the article, we mentioned the need to educate and, well, that is why we are here. In terms of how you would like to learn more about these issues, 57 percent would like to see articles on these subjects in Worldwide ERC® publications, 32 percent would like webinars, and 10 percent asked for sessions at the Worldwide ERC® conferences. You have asked, and we have answered. There will be green-centric articles in MOBILITY, more items on the Worldwide ERC® website, as well as the online Green Forum. We encourage all of you to visit the Green Forum on the Worldwide ERC® website at www.Worldwide ERC.org/Forums/ Pages/The-GreenForum.aspx, to see, and read about,

what companies are doing to better our planet. It may just be interesting reading for you, or you may be able to take something away from the Forum that you will be able to put into practical use for you personally, or for your company. If you know of green initiatives that are not on the Forum already, we encourage you to post them yourselves, sharing your knowledge with the entire membership. The survey results, in their entirety, are not included in this article, or in this issue of MOBILITY, which we would like to note is printed entirely on recycled paper. If you would like to view the survey in its entirety, you can find it on the Worldwide ERC® website, www.WorldwideERC.org, in the Green Forum section. Stephen McGarry, SCRP, is director, global mobility for WPP, New York, NY, and a member of the Worldwide ERC Green Initiatives Committee. He can be reached at +1 212 632 2460 or e-mail smcgarry@wpp.com. ®

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Real Estate Agents Have a Responsibility to

G o Green ‘ ’ 36 MOBILITY/JULY 2010

phillips_MOBILITY 6/17/10 4:04 PM Page 3

B Y M O L LY P H I L L I P S , A B R , S R S , E C O B R O K E R ® , G R E E N It is a “green” real estate agent’s job to aid homebuyers in their search for eco-friendly housing, as well as illustrate how energy-efficient construction saves money in the long term. Phillips, a certified green real estate agent, offers a look at how the movement toward sustainability is affecting the real estate agents.

s a licensed real estate broker with 14 years experience, I know the importance of staying ahead of the curve in our market. Helping to save our planet is not just a trend; the green movement is altering the fabric of our social and economic environment. Becoming a green real estate agent starts with a sort of passion. I believe this is my way of helping to educate the public about the importance of green initiatives. In the residential real estate market, homebuilders increasingly are using sustainable products to improve the physical structure and to reduce energy costs in the long term. It is a green real estate agent’s job to aid buyers in their search for homes that use these products in their construction, as well as to educate purchasers of these homes on the ways in which these items will save money.

one project would require the real estate agent to put together a marketing campaign by teaming up with another green professional—for example, creating a mailing that would offer a free energy evaluation with a green-certified home inspector when you call an EcoBroker® to schedule a listing appointment. The classes themselves are lengthy, but are excellent training tools to help the EcoBroker® become more knowledgeable as a certified green professional. The National Association of REALTORS® (NAR) also has created a green designation for residential, commercial, and property management real estate professionals. This designation is still new and continuously adding new material, such as the EcoBroker® program. Unlike the EcoBroker® certification, however, NAR’s Green Designation is only offered to Realtors® and not other contractors in the profession.

EcoBrokers ® and Green Realtors ® There are several designations that real estate professionals can pursue to underline their commitment toward building a more energy-efficient and sustainable planet. EcoBroker®, founded in 2002, is the provider of green designation training for real estate professionals. Certified EcoBrokers® are real estate professionals who have received energy and environmental training, and pursue properties for their clients that provide a reduction in carbon footprint. In order for a real estate agent to earn the EcoBroker® designation, one must take all three required classes either in person or online. These educational classes are detail-oriented and keep the student constantly interacting with assignments. The assignments are geared toward making the EcoBroker® more familiar with other green professionals in the participant’s market. For example,

The Search for an Efficient Home Thanks to the Internet, buyers in the market today have access to a wide variety of information concerning green construction. They want low maintenance homes that use less energy. EcoBrokers® help homebuyers shop for energy-efficient homes and are trained to point out the features and benefits of natural building materials for the environmentally-conscious consumer. A certified Green Realtor® can show buyers how improved indoor air quality, along with adequate ventilation and ideal site selection, can add to a homeowner’s comfort of living. The purpose of building green homes is to reduce maintenance costs, provide a healthy and comfortable way of life, and benefit the environment. What does all this mean when shopping for the most efficient homes with clients? MOBILITY/JULY 2010 37

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INDICATE the level of importance of providing awareness and knowledge for your company of ecofriendly programs that generate operational cost savings; protect occupant health; improve employee productivity; use energy, water, and other resources efficiently; and contribute to a healthy environment. Important

68 percent

Somewhat important

28 percent

Not important

5 percent ®

Source: August 2009 Worldwide ERC Green Survey

For starters, looking for EnergyStar-rated appliances will help buyers save money through a reduction in water usage. An improvement in the quality of indoor air as a way of reducing harmful chemicals and pollutants can lead to a healthy and happy household. The Environmental Protection Agency reports that homes built with a geothermal heating and cooling system use fewer than half the fuel required of any other heating and cooling system. Geothermal systems run off the earth’s renewable energy that is absorbed from the sun. Did you know that, according to Enertech Manufacturing, LLC, using a geothermal system has the equivalent effect on the environment as planting an acre of trees? The ability to point out the importance of lot and site development with regard to where a house is situated can illustrate to buyers how well the house will be heated and cooled. The optimal position for a home is facing due south. Southern-facing homes realize the most solar gain in the winter and less of the hot afternoon western sun in the summer, 38 MOBILITY/JULY 2010

thereby helping with utility bills during both the colder and warmer months. Owners of green homes that are EnergyStar-certified can realistically expect to save up to 30 percent on utility bills.

Green-certified Real Estate Being on the cutting edge of education helps a real estate agent provide buyers and sellers with the best possible representation in today’s changing market. The National Association of Home Builders (NAHB) has instituted a National Green Building Program that provides buyers and homeowners with more efficient and more durable new and remodeled homes. Green Homebuilding Guidelines were introduced by the NAHB in 2005. The National Green Building Standard and rating system was adopted in 2008 and was approved by the American National Standards Institute (ANSI). Prior to this, the Leadership in Energy and Environmental Design (LEED) already had developed and instituted a green building rating system. The LEED rating system is dominant in the com-

mercial building sector but still is used to certify residential construction.

Marketing the Green Home Not everyone can guarantee energy savings when selling their home but, when a green professional markets an energy efficient home, they can do just that. Green marketing of homes will help buyers to better understand what is beyond the walls of a home and how those things can save them money. EcoBrokers® can use various means of marketing tools to spotlight energy-saving features in a particular home. A Green Realtor® will be “the source of the source” when it comes to informing buyers who are looking for homes that will be more energy efficient and save them money in the future. Marketing the green home is a more informative marketing plan. A Green Realtor® will offer more facts about the quality features rather than using catch phrases or visually descriptive words to describe a property. Therefore, one could say that there is more truth in marketing a green home. Homebuyers in search of a green home are seeking energy conserva-

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tion. As fuel and energy costs continue to increase, the finance-savvy buyers are looking for ways to cut costs. According to Lifestyles of Health and Sustainability (LOHAS), 30 percent of the population now is buying more organic foods, products, and hybrid vehicles. When energy conservation in homes is marketed as more of a consumer product than a technical product, the results should follow this same buying trend. Green marketing is practical yet strategic. This type of marketing will aid in consumers adopting more sustainable products. Green marketing sets homes apart from others in today’s market. Let us face it, this is a tough real estate market. Here is the good news: real estate agents, builders, and sellers can get ahead of the competition by marketing green, building green, and remodeling with green upgrades.

Readying a Green Home As a seller in today’s market, it is important to use money wisely to prepare a home to sell. EcoBrokers® and Green Realtors® can assist the seller in making the best decisions concerning home improvements. Replacing kitchen appliances with ones that use less water and electricity is a good investment that will help to sell a home. Adding insulation to a home is a good selling feature not only to keep a house warmer in the winter, but also to lower utility bills in the summer. Using natural materials to update a home will appear cosmetically appealing, as well as resourceful. For instance, replacing Formica countertops in a kitchen with granite uses the earth’s natural stone and creates a beautiful showplace that will reap a hefty return on one’s investment.

Green-trained real estate professionals can help sellers with small ideas on greening a home and suggest larger eco-friendly remodel projects that will help sell a home faster and for more money. EcoBrokers® and Green Realtors® use more channels to market a home with green features. There are additional websites and added features in Multiple Listing Services (MLS), print materials that really stand out to enhance the features, and other publications to advertise a green home as opposed to just a conventional house.

Making a Difference Going green is both an attitude and a lifestyle. The public can make small changes in their daily activities to help save the environment without interrupting their routines. Conscious effort, along with minor improvements such as changing light bulbs to the compact fluorescent bulbs and unplugging cell phone chargers when not in use will help to reduce each household’s carbon footprint. With the two designations that I currently hold, EcoBroker® and the National Association of REALTORS® GREEN, I am continuously researching ways to help educate homebuyers and sellers, and myself on ways to better our ecosystem. Along with other professionals in the industry who share a common interest, we are taking daily business practices and reforming them to better the environment. I am one person, but I feel that I am doing something to make a difference. Molly Phillips, ABR, SRS, EcoBroker®, GREEN, is a real estate broker with RE/MAX on Track, Germantown, TN, and a member of the Worldwide ERC® Green Initiatives Committee. She can be reached at +1 901 336 1406 or e-mail relocationontrack@yahoo.com.

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Top 10 List:

How® Worldwide ERC Members Mean to be Green B Y D O U G W E E D , S C R P, S G M S The Green Initiatives Committee survey revealed a great deal about the sustainability initiatives practiced by Worldwide ERC® members in their commitment toward going green. Weed offers the top 10 ideas individual members had for aiding in the reduction of our own carbon footprints.

e asked our membership to tell us what they are doing on a personal basis to “Go Green.” Following are the top 10 ideas they shared. 10. Plant a tree. Green plants use photosynthesis to grow. In this process, carbon dioxide (CO2) is converted to oxygen. In addition, trees help the evaporation of water into the atmosphere. This helps create clouds that can reflect harmful solar radiation. You can pay to have a tree planted for you. Click on www. carbonfund.org/trees and for $10 they will plant 10 trees. And, if you do so by July 22, they will plant your trees in Haiti, which will further help reduce floods and landslides while simultaneously reducing greenhouse gasses. 9. Composting. It is estimated that each person in the United States generates 1.3 pounds of food scraps daily. 40 MOBILITY/JULY 2010

That represents 13 percent of the total U.S. municipal solid waste. Normally, the scraps are put in a trash bag and left on the curb for collection, but this increases the volume of garbage in landfills, as well as increases their maintenance costs. Depending on the trash bag, it could take years to biodegrade and return to the environment. You could use a disposal, but that uses water and energy to run. It also adds to the cost of maintaining your community sewage treatment facility. Rather, collect food scraps and let them compost in your yard. Not only does that reduce the environmental effect of dealing with it in the traditional ways, you also can use it to fertilize your own garden where you can grow your own food and flowers. A double win! See www.earth911.com/news/ 2010/04/26/the-next-wave-in-composting for more information.

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Initiatives Taken in Support of Going Green Recycling of office products

92 percent

Using energy-efficient lighting and equipment

66 percent

Installing automatic shut off for equipment

41 percent

Minimizing water consumption by using water-conserving plumbing fixtures

36 percent

Promoting walking, biking, and taking public transit

43 percent

Partnering with environmentally friendly suppliers/companies

38 percent

Encouraging carpooling for employees

29 percent

Offering telecommuting to employees

38 percent

Selecting a location with public transit access

19 percent

Offering recycling programs for selected personal products, e.g., mobile phones

38 percent

Participating in global events to improve the environment (e.g., Earth Day, fundraisers for nature conservation)

31 percent

Alternative work schedules like four-day work weeks to reduce impact from commuting

19 percent

Use of alternative energy sources like solar, wind, or geothermal Other

7 percent 15 percent

速

Source: August 2009 Worldwide ERC Green Survey

8. Check the ingredients. How do we pick the products that serve the purpose while also being safe for us and the environment? Two ways: learn more about dangerous ingredients and read the label of your products. A resource to find ingredients to avoid and learn many ways to become more savvy is the Green Guide for everyday living: www.the greenguide.com. 7. Shop smart. We should consider environmental factors when we make our purchases. Things such as mileage ratings for automobiles, ENERGY STAR ratings for electrical appliances, and even the manufacturers themselves are trying to help us shop smart. Other manufacturers use recycled materials in their products. What per42 MOBILITY/JULY 2010

centage of your computer came from recycled materials? 6. Eat smart. Should we know what went into growing and producing the food we eat? Your best bet to date is to look for foods that are USDA-certified Organic. Not many products can make this claim because to do so they must be produced without antibiotics, hormones, genetic engineering, radiation, or synthetic pesticide or fertilizers. 5. Commute smarter. Getting to work can cost us not only dollars but, more important, in terms of our most limited resource of all, our time. So how do we save time, money, and scarce resources as we commute to work, school, or meetings?

Find a place to live that is convenient to work and other destinations of interest. There is a new website, www.walkscore.com, that can help. You can plug in any address and it will calculate walking distance to many of the most common amenities that we need on a daily basis. Check this site out before you buy or rent a new home. And, if you find a home that is in walking distance to most things but you still want a car to use on occasion, there is a smart way to do that, too. Check out Zipcar and Zimride; two of the fastest growing and ecologically friendly transportation services available. Not every location is in walking distance to work and shopping. But you also should know about public transportation options available to you. If you spend a little time doing research, you will find alternatives in almost every location. Although the trip may take a little longer, the time actually might be productive rather than a waste of time and resources. 4. Meet/learn smarter. There are a number of ways to do virtual meetings and virtual training. No matter which method you choose, ultimate-

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ly what used to require travel dollars, personnel time, and consumption of fossil fuels now means every mile saved helps boost productivity and conserve the environment. 3. Reduce waste. When people think of waste, they naturally think of a trash can or a Dumpster where unused items are deposited. But waste can be much more than that. What about when you brush your teeth in the morning? If you leave the water running for a minute or two while you brush, how much water have you wasted? How about all that junk mail you get? How much of that goes right from the mailbox to the wastebasket (or recycling bin)? There is a service available to reduce junk mail, www.41pounds.org. They say the average subscriber can save 41 pounds of wasted paper products per year through the use of their service. What about appliances that draw power even when the appliance is not being used? A great example of this is your mobile phone charger. Is it plugged in 24/7? It uses energy even

if your phone is not being charged. Are you leaving lights on in your home? If yes, why? I love to go down the row of treadmills at my health club and turn off the personal TVs that people leave on when they are finished with their workout. How much effort does it take to turn the TV off? There are a number of ways to automate the reduction of waste. Automatic shut offs for lights that are tied to motion detectors, smart power strips that sense current usage, more efficient light bulbs, more efficient appliances and furnaces, more/ better insulation, and just closing doors during heating and cooling seasons are all examples of ways to reduce waste. And, naturally, buying what you need and using what you buy is the best way to control waste and help the environment. 2. Proactively correct past mistakes. Do you have an underground oil tank? Do you know if it is leaking? How? Have you insulated your home the best you can? How energy efficient are your windows and doors? What about your furnace and hot

water heater? Are there dangerous materials in your home? Lead paint, asbestos, radon? Take care of these issues in an ecologically appropriate way. Do not wait for them to become a bigger problem and expense down the road. Chances are you are going to be hit with the bill anyway, so minimize the cost to you and to the environment. 1. Recycle. The smartest and best way to make for a greener planet is to re-use limited resources wherever possible. This includes recycling paper, plastics, glass, and metals. It means taking a little extra time and effort to dispose of unwanted items in a way that is ecologically responsible. Keep track of where to recycle batteries and electronics. Think about what happens to items you throw in the trash. Will they outlive you in some landfill or will they have a new life serving to conserve our natural resources? Doug Weed, SCRP, SGMS, is principal for NSA Consultants, Wheaton, IL, and a member of the Worldwide ERC速 Green Initiatives Committee. He can be reached at +1 630 533 3502 or e-mail doug@nsaconsultants.com.

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Brazil, the

‘B’ BRICs

of the BRICs

44 MOBILITY/JULY 2010

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BY JORGE MORAZZANI AND DÉBORA BIGIO Officially the Federative Republic of Brazil, Brazil is the largest country in South America and the eighth-largest economy in the world in nominal gross domestic product. Morazzani and Bigio offer an overview of the country for employee mobility professionals, including discussions concerning Brazil’s economic environment, immigration policies, taxation, labor law, and compensation benchmarks.

razil is one of the four “BRIC” countries, an acronym for the fast-growing economies of Brazil, Russia, India, and China. These four countries account for more than 20 percent of the world’s land area and more than 40 percent of the world’s population. They are developing rapidly, and many say that, during the next few decades, the combined economies of the BRICs could surpass the economies of today’s wealthiest countries. Recognizing that BRIC countries offer huge business opportunities, global companies are paying increased attention to these markets, and Brazil is no exception. Thus, the importance of international assignments to and from Brazil has become more relevant. Brazil is a democratic federal republic with a population of approximately 192 million (the fifth-most populated country in the world) over an area of approximately 8.5 million square kilometers. In size, it also is the fifth-largest country in the world and represents approximately 47 percent of the South American territory. Its geography has a varied landscape, diversity of wildlife, and abundance of natural resources. The best example of natural wealth is the Amazon Rainforest, which comprises 3.6 million square kilometers.

Economic Environment Brazil is the economic leader of Latin America and the only Portuguese-speaking country in the region. Its economy is the second largest in the Americas (after the United States) and one of the top 10 in the world. In fact, economic indicators suggest Brazil is the first Latin American country emerging from the recession, according to the MOBILITY/JULY 2010 45

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September 2009 issue of The Economist. Because of its distinctive position in South America, coupled with several government initiatives, Brazil has been a focal point for foreign investors. To improve its global economic status, Brazil has lowered interest rates, promoted partnerships between the public and private sectors (i.e., public-private partnerships), and participates in various multinational economic groups such as Mercosul, G-22, and Cairns Group (a group of agricultural exporting countries). As a result, Brazil has continued to progress in a number of industries, including nuclear and space programs, aircraft manufacturing, nanoscience and nanotechnology, and biotechnology. Agribusiness is responsible for 34 percent of Brazil’s gross domestic product, 37 percent of national jobs, and 43 percent of national exports. In addition, Brazil has the technological capacity for deep-sea oil exploration.

Ambassador for International Sports Brazil’s global visibility was further enhanced after being chosen as host for both the 2014 World Cup and 2016 Olympic Games. Both events are expected to give rise to substantial construction and infrastructure investments, particularly because the International Federation of Association Football and the International 46 MOBILITY/JULY 2010

Olympic Committee impose strict infrastructure requirements. This increased economic activity will require additional technological resources and specialized professionals, and it is projected to bolster international assignments to and from Brazil.

Planning International Assignments Companies looking at international assignments to Brazil should consider myriad local aspects. Foreigners hired as employees in Brazil are subject to the same rules as Brazilian employees, namely labor social security and Brazilian federal revenue laws. In addition, foreigners working as directors of Brazilian companies are subject to the laws of the National Social Security Institute and the Federal Revenue Department, as well as the Civil Code and the Stock Corporation Act. Individuals assigned outside of Brazil also face a number of unique issues related to international deployment, including work contract revisions or rescissions and guarantees of a job on repatriation. They also must consider whether to remain on the Brazilian payroll, including where and how wage payments would be made, applicable payroll taxes and taxes withheld, and related matters. Therefore, companies deploying personnel to or from Brazil should analyze all relevant aspects of these

assignments, particularly Brazil’s immigration requirements, labor laws, and tax system.

Immigration Brazilian companies hiring foreign individuals must comply with local visa and work permit requirements. Foreigners only are allowed to work in Brazil under one of the following types of visas: • Permanent visa. Generally applicable to investors, administrators, managers, directors, or executives with management powers, who will occupy a decision-making position at any Brazilian company; • Temporary visa, type V, with an employment contract. Granted to foreigners hired as regular employees by Brazilian companies; or • Temporary visa, type V, without an employment contract. Applicable to foreigners who render technical assistance services and technology transfer; requires a technical service agreement between a foreign and a national company, and does not allow for an employment contract with a Brazilian employer. To obtain these visas, specific documentation is required, including proving suitable qualifications to work in Brazil. To protect the local job market, work visas are issued only if the remuneration to be paid to a foreigner in Brazil is equal to or higher than the highest remuneration

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paid by the Brazilian employer to a Brazilian individual for the same position. Brazilian companies are allowed to pay compensation solely to those foreigners holding one of the first two types of visas previously mentioned. The third visa (temporary visa, type V, without an employment contract) does not allow the individual to have an employment contract with a Brazilian employer, so it does not allow the individual to receive remuneration in Brazil. According to a survey recently conducted by Brazil’s Labor Ministry (http://www.mte.bov.br/), 42,914 job authorizations were granted through December 2009. The countries that sent the most foreigners to work in Brazil were the United States, United Kingdom, Philippines, India, and France. Interestingly, during 2008, foreign private individuals invested close to $100 million in Brazil, and invested approximately $33 million up to June 2009. These figures show that foreign jobs in Brazil should not be narrowly perceived as competition with

the local workforce, but as an important source of foreign investments.

Labor Law Brazilian labor legislation is renowned for its protective nature. Brazil guarantees its foreign employees all rights granted to local Brazilian employees. In fact, labor rules generally are applicable within Brazil’s national territory irrespective of the nationality or domicile of the parties. In addition, labor rights cannot be waived by an employee or denied by the employer, so employees may not be harmed by an employment relationship. Therefore, when planning international assignments to Brazil, it is important to consider labor law ramifications, particularly those that may trigger potential incremental costs.

Typical Benefits All Brazilian workers have the right to a Severance and Indemnity Fund for Employees, and employers must contribute 8 percent of an employee’s salary to this fund. In case of dis-

missal without cause, an employee may withdraw the balance in this fund. The employer must pay the employee, as part of the termination payments, an amount equivalent to 40 percent of the balance distributed. In addition, the company must pay an additional fine to a government social fund equivalent to 10 percent of the balance distributed. Employees of Brazilian companies also are entitled to vacation. Employers must grant a mandatory 30day rest period to an employee after he or she has rendered services for 12 months. An employee on vacation is entitled to receive regular pay plus an additional so-called “vacation bonus” equal to one-third of the monthly remuneration. Total remuneration (i.e., base salary and any other additional compensatory items such as bonuses, fringe benefits, and the like), must be considered when quantifying vacation payments. Also, an employer is required to pay employees an annual so-called “13th salary” (i.e., a Christmas bonus) payable to employees regard-

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less of their remuneration. It is equivalent to one additional month of salary after taking into consideration annual or semiannual bonuses and fringe benefits. The employer must make half of the payment in November (or together with vacation if requested by the employee) and the other half in December. Because Brazil does not allow its employers and employees to negotiate legal rights, it is imperative to consider local law when formalizing the remuneration package of an individual being assigned there. For example, the employer may consider apportioning an employee’s annual base salary over 13.33 payments (i.e., 12 monthly regular payments, the 13th salary, plus the one-third vacation bonus) to minimize or avoid the incremental cost of the required 13th payment. Also, employers clearly should state whether certain income items should not be so-called “tax equalized” and, for example, consider as a matter of policy not tax equalizing severance benefits.

Recent Developments Brazilian labor law also protects its residents working outside the country. Brazil enacted legislation during 1982 in response to its companies with employees rendering services abroad—primarily in the area of construction in countries with different labor legislation—because of con48 MOBILITY/JULY 2010

cerns that such employees may not enjoy the same labor rights available under Brazil legislation. In July 2009, legislators amended the law to extend Brazilian benefits not only to employees of engineering companies working outside Brazil, but also to all foreign assignments regardless of the economic activity of their employers. This amendment extended Brazilian labor rights to employees working outside of Brazil in the event that they would not acquire equivalent rights in the host country. However, if the host country would grant benefits (e.g., vacation, Christmas bonus, and the like) equal or better than in Brazil, generally an employee would not be entitled to claim such benefits from Brazil.

Taxation Brazil has a sophisticated codified personal taxation system that taxes individuals up to a maximum of 27.5 percent on their income. Understanding such a system to ensure compliance and maximize tax-planning opportunities is critical for successful assignments to Brazil. Similar to most developed countries, tax residency and the source of their income primarily drive taxation of an individual assigned to Brazil. Tax residents are taxable on worldwide income (unless statutorily exempt), and nonresidents generally are taxable solely on Brazil source income.

Brazil considers foreign employees as tax residents as of the date of entrance, under either a permanent visa or a temporary visa type V with a local employment contract. The holders of temporary visa type V without a local employment contract would be considered tax residents of Brazil after 183 days of physical presence in the country, consecutive or not, during any given 12-month period. Similar to the United States, Brazil allows individuals to claim a foreign tax credit to offset Brazilian income tax imposed on foreign source income, provided there is either a tax treaty or reciprocal tax treatment between Brazil and the foreign country. Although there is no income tax treaty between the United States and Brazil, the Brazilian tax authorities officially have confirmed that U.S. federal (but not state) taxes paid to the United States may be claimed as foreign tax credit, subject to certain limitations. Solely foreign taxes actually paid (i.e., accrual method is not allowed) may be credited.

Income Sourcing Under the tax laws of most countries (including the United States), the source of compensation income for tax purposes typically would be determined based on where services are performed (i.e., the location of the employer, the payroll, and the payer is irrelevant). Brazil, however,

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determines the source of compensation income by the location of the payer, irrespective of where the work is performed. This relatively unique income sourcing legislation may offer tax-planning opportunities but also create pitfalls for the unwary. In the case of a U.S. citizen deployed and working full-time in Brazil, it typically would be advisable to keep the employee on the U.S. payroll subject to actual U.S. income tax withholding (instead of hypothetical tax withholding) to minimize the possibility of double taxation. Because in Brazil the compensation paid from the United States would be deemed U.S.-source income and subject to U.S. income tax, an individual would claim a foreign tax credit in Brazil for the U.S. tax withheld. This arrangement typically would reduce or eliminate the Brazilian income tax liability and generally ensure that the individual would claim a full foreign tax credit in the United States for any residual Brazilian tax. However, in the case of Brazilian

employees deployed to the United States, keeping employees on the Brazilian payroll could result in an onerous double-taxation situation. Such individuals would be deemed to earn their income from U.S. sources under U.S. tax law but from Brazilian sources for Brazilian tax purposes. This inconsistent sourcing of income between the United States and Brazil would result in taxing the income in both countries with basically no foreign tax credit relief. Thus, it generally would be advisable to transfer the individual to the U.S. payroll to be paid from the United States. This tax tips summary should be evaluated in conjunction with other corporate tax ramifications to ensure no adverse corporate tax consequences would come into play.

Tax Compliance Tax residents of Brazil are required to file an income tax return on a calendar-year basis (January 1 to December 31). Residents must file their return on or before the last

working day of April of the following year, and no extensions to file are allowed. The income tax return must reflect worldwide income net of expenses and deductions allowed, as well as income taxes paid and/or withheld at source during the year. Taxes usually are deducted directly from employees’ salaries, but tax payments on other income (e.g., income from outside of Brazil) must be made via a monthly filing (called carnêleão) with a commercial bank. Interestingly, the Brazilian income tax return also must include a list of assets and liabilities in the taxpayer’s name as of December 31 of the related calendar year (or departure date in the year of breaking residency). All global assets must be reported irrespective of where they are located, including: • real estate properties, vehicles, watercraft, and aircraft irrespective of the acquisition value; • other movable property valued at more than BRL 5,000 (approximately US $2,940);

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• bank accounts with a balance in excess of BRL 140 (approximately US $82); and • shares, gold, and financial assets of BRL 1,000 (approximately US $590) or more. Assets should be reported at cost instead of market value and may include assets of the spouse and dependents in certain circumstances. Furthermore, individuals are required to declare liabilities with banks, credit companies, indi-

viduals, loans abroad, and the like. The Brazilian government uses this comprehensive asset and liability disclosure to scrutinize whether annual variations in a taxpayer’s equity would be in sync with income declared. Also, by capturing information about income-producing assets outside Brazil, the tax authorities may identify income from foreign sources. This approach is considerably more comprehensive than the U.S. system, in

which assets typically are reported via income tax returns only to calculate depreciation/depletion or to reflect its cost in the year of sale or disposal. Probably the only U.S. requirement to disclose assets that is somewhat similar to Brazil is the annual foreign bank account form due on June 30, but that is limited to certain non-U.S. financial accounts. Brazilian residents who permanently leave the country should file an exit procedure that includes a Communication of Departure, an Exit Income Tax Return and requesting a Tax Clearance Certificate to declare themselves as nonresidents on the day of their departure. This releases them from fiscal obligations in Brazil. Should they not file this return, they would become nonresidents only after 12 months of physical absence. Thus, it is generally advisable to formally claim no residency on departure.

Conclusion Brazil is the only BRIC country in the Americas. Time will tell what international economic position Brazil will gain, but a country with so much potential and momentum would be expected to become a more prominent global player. Therefore, investors should take action now to position themselves to reap the longterm benefits that such an important market is projected to offer. Jorge Morazzani is a partner in PriceWaterhouseCoopers’ International Assignment Services Practice and supports both the Washington, DC, and San Juan, Puerto Rico, offices. He can be reached at +1 703 918 3684 or e-mail jorge.morazzani@us.pwc.com. Débora Bigio is a manager in PricewaterhouseCooper’s Brazil office, and also supports the International Assignment Services practice. She can be reached at +55 11 3674 3588 or e-mail debora.bigio@br.pwc.com. 50 MOBILITY/JULY 2010

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WR R I N E XT P R A CTI CE

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Panama

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BY ANNE DEAN, GMS, AND ANALISA VILLALAZ DE LAFFITTE, GMS Officially the Republic of Panama or, as Panamanians say, the“Center of the World, Heart of the Universe,” Panama is a small country geographically part of Central America and historically part of South America. Its strategic location and stable economy have been key elements in Panama becoming a great destination for multinational companies. Dean and Villalaz de Laffitte take a closer look at this small but influential country.

he international flavor of Panama is evident from the selection of products and services foreigners can expect to find, which are comparable to those in North America and Europe, albeit amid a more relaxed lifestyle. The expatriate will have plenty of company among people of other countries in Panama, for its citizens mix with general harmony while still maintaining their distinct cultures. The name of the country in Spanish is Panama, meaning “abundance of fish,” and it is pronounced with the stress on the last syllable: Pah-nah-MAH. Many also will refer to Panama City simply as “Panama.” Panama has one of the smallest populations in Central America, more than 3.4 million and growing 1.5 percent each year. Most of the urban population live in the country’s two largest cities, Panama City and Colón. Most of the rural population lives west of the canal. A large gap exists between rich and poor in Panama, with a sizable middle class and a large lower class. Panamanians are interested in, and well informed about, national and international affairs and consider their country to be in a strategic position, providing a service to all

nations. Some in Panama consider the relationship with the United States to be unequal, but others appreciate the benefits the country derives from this unique relationship.

Major Cities Colón was founded in 1852 and originally was called Aspinwall after one of the trans-Isthmian railway founders. Located at the Caribbean entrance to the canal and with a population of 231,000, it is Panama’s second-largest city and home of the Free Zone. Established in 1949, the Free Zone is an extensive compound of international stores and warehouses, surrounded by an imposing wall. The stores are well stocked with electronics and other goods. Dutyfree stores abound, especially along Front Street, but its slums are among the worst in Latin America and muggings are frequent. Crime is more of a problem in Colón than in Panama City, even in broad daylight. This is not a place for sightseeing or aimless wandering. If you must commute to Colón for business, it is recommended that you drive directly in and not linger in the city after business hours. Panama City is laid out in a semicircle hugging the Bay of Panama

with the district of Balboa—a part of the metropolitan region—to the west across the Pacific entrance to the canal. The modern commercial and banking centers spread out from the eastern shores of the bay. Panama City has a population estimated at 1.6 million, including the district of San Miguelito. It was relocated to its present site in 1673 after pirates sacked the old town, now known as Panama Viejo, about 6.5 kilometers/4 miles east on the beach side. Much of the Spanish loot from Peru was unloaded at the old city and transported by mule to the Atlantic side for shipment to Spain, perpetuating the region’s long tradition as a crossroads of the world. Most of the new Panama City is modern, with a touch of old Spain. The old quarter, known as El Casco Viejo, sits on a square-like peninsula jutting out from the western edge of the bay. It is a grid of narrow streets and balconies with iron grilles, reminiscent of other Spanish seaports in the Americas, that fans out from the Plaza Central, also known as Plaza de la Catedral. Panama City’s main street, the Avenida Central, runs northwest out of the old quarter, then veers north and northeast almost parallel to the MOBILITY/JULY 2010 53

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shoreline, changing its name to the Via España along the way. The Avenida Central portion of the street is a noisy and crowded commercial district. One section of Avenida Central was converted into a pedestrian area featuring trees, street vendors, and department stores. Many businesses and hotels are in Bella Vista and Marbella. The chief restaurant area is appropriately named El Cangrejo, or “the crab,” and there are great international restaurants within the city. The city’s modern center, with high rises and condominiums, is Punta Paitilla and Punta Pacifica, directly across the bay from the old quarter. The main banking district is inland from Punta Paitilla along Calle 50 and Vía España.

Ethnic Makeup A melting pot in every sense of the term, Panama’s population includes whites, blacks of African descent, mestizos, mulattos, and indigenous tribes in the rural areas. Well over two-thirds of Panamanians fall into the mestizo and mulatto categories: “mestizo” means that they are descended from mainland Spaniards and Indians; “mulatto” means that they are descendents of the black slaves imported during the colonial era and the whites from Spain. Blacks comprise the largest single minority, accounting for about 14 percent of the population, and are divided between those of slave descent and those of West Indian origin, commonly called “antillanos,” who came to Panama to work on the canal in the early 1900s. Blacks are integrated into Panamanian society more than in many

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developed countries, but there remains discrimination in some sectors. The white Creole sector accounts for about 10 percent of the population, but dominates the economic elite. The Indian population, divided among several small tribes, Kuna, Guaymí, Emberá, and Chocó, accounts for about 6 percent of the population. The remainder of the population is of mixed ancestry.

Cultural Traditions Panamanian culture is deeply rooted in the diverse traditions of the various peoples who have lived in and governed the country. Native Americans, Spaniards, Africans, and North Americans are among those whose legacies add flavor to Panama’s customs. The Kuna Indians, one of only three original tribes that still exist in Panama today, are known for their beautiful molas, which are complex, handcrafted, multi-layered appliqués in original designs. The Spanish-inspired pollera, Panama’s national dress, is a sweeping skirt of intricate embroidery and myriad gathers. Colorful pottery-making has reached great heights as an art form combining art and religious expression. Indeed, religion has played a part in forming Panama’s culture, as evidenced by many celebrations during the year in the city and in the towns of Panama. One of its best-attended festivals is the Carnival, which takes place during the four days before Ash Wednesday each year. Dances, street events, and music are among the hallmarks of these festivities.

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Folk music is cheerful, combining the rhythms of Africa with the tones and dance steps of Andalusia. The national dance is called the tamborito, a dance for couples during which only women sing the accompanying song. Popular stories told orally through generations enchant children and are considered important contributions to their Panamanian identity. Panama’s traditional cultures have been tempered by the presence of the U.S. military for the past century and by virtue of Panama’s role as an international center of business. However, the various heritages have managed to remain regionally separate and strong in their own right. Panama City being the exception, cultures there intermingle and you might hear symphony, jazz, heavy metal, salsa, meringue,

and even calypso music on the same night. Here you may experience Panama’s melting pot in the richest sense of the word. Approximately 85 percent of Panamanians are Roman Catholic, although many fundamentalist Christian denominations are growing in importance. About 12 percent of the population now call themselves “Evangelicos,” a catchall term for many non-Catholic Christian faiths. The language of business and everyday life is Spanish. English is the prevalent second language, and many Panamanians are bilingual, with approximately 14 percent of the population speaking English as a native language. English is used when conducting international business. Be prepared to communicate in Spanish,

either on your own or through an interpreter. It is a courtesy that will be greatly appreciated. Panama’s diversity is manifested in its variety of dialects, all of which are rapidly spoken and many not easily understood. People of various regions have modified the Spanish language over time so that certain areas speak a form of Spanish that is particular to the people living there.

Philosophy Diplomacy and patience are essential in the workplace. Confronting mistakes in the workplace with direct, open discussion will not work in Panama; much more effective is criticism in private. Panamanians believe in the intrinsic worth of the individual. Each person

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is treated with respect and dignity regardless of his or her social standing or financial success. The elderly are treated with special deference. Being in any way disrespectful—by pulling rank on a colleague or publicly criticizing someone—is considered rude and should be avoided at all costs. In general, a strong work ethic prevails, but this is a laid-back society that is not ruled by schedules. Panamanians tend to put family above everything else, but at the same time they are very ambitious. Panamanians are followers of strong leaders and hesitant to act on their own. Remember that corporate structure in Panama is concentrated at the top. Mid-level managers will rarely, if ever, make decisions on the part of the company. If you expect to

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get anything done, go straight to the boss. Traditionally, women in Panama have not enjoyed the same economic opportunities as men. Not until 1995 did the law recognize property in common, and divorced or deserted women often were left destitute. Panamanian women are moving into higher managerial positions, so foreign businesswomen should not encounter any major obstacles. However, a businesswoman always should stress that she is part of a team rather than a solo performer, and that her company is strongly committed to doing business in Panama. When entertaining a male Panamanian colleague, a businesswoman always should include the spouse in the invitation. Payment of the bill

should be arranged in advance, either by giving the waiter a credit card before the meal or arranging to have the bill charged to her room if the dinner is held at the woman’s hotel. Panama, the “Center of the World, Heart of the Universe,” with its strategic location and stable economy, will continue to attract multinational organizations. Awaiting expatriates is a large center of international business and the fastest growing economy in Central America. Anne Dean, GMS, is the director of editorial services for Living Abroad, LLC, Norwalk, CT, and a member of the MOBILITY Global Editorial Advisory Committee. She can be reached at +1 203 221 1997 or e-mail anne.dean@ livingabroad.com. Analisa Villalaz de Laffitte, GMS, is the founder and country director for LARM Panama, Panama City, Panama. She can be reached at +507 2710029. or e-mail panama@larmgroup.com.

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Tangoing through the Argentine Immigration Process: Challenges and Tips for Success

Officially the Argentine Republic, Argentina is the second-largest country in South America and is situated on the southern portion of the continent. Dominguez explores the background behind the Argentine government’s bureaucracy, examines processes that require extra attention to detail, and provides recommendations for managing a successful immigration process. 58 MOBILITY/JULY 2010

BY CHRISTI DOMINGUEZ

sk the average person about Argentina, and images of world-class beef and wine, the sensual tango, or the rugged gaucho of the pampas may come to mind. Ask an HR professional or company about their experience with the Argentine immigration process, and words such as “long,” “bureaucratic,” or “complicated” will be a part of their reply. Although Argentina’s economy is rebounding from the 2001 economic crisis, the country remains a frequent destination for international assignments. Argentina benefits from rich natural resources, a diverse and educated population, an export-oriented agricultural sector, and a diversified industrial base. The country is one of the G-20 major economies and has experienced consistent growth in foreign investment because of its great potential for price appreciation. Argentina’s gross domestic product grew steadily at 15.5 percent from 2000 to 2008, according to statistics from the World Bank, and its unemployment rate fell by 50 percent during that same period, according to ProsperAr, Argentina’s Investment Development agency. In addition, the currency exchange rate at press time was at 3.82 Argentine pesos (ARS) to

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Standard Immigration Process The standard Argentine immigration process consists of a pre-approval, consular visa application, and postarrival document procurement. Note: the process for citizens of MERCOSUR countries is post-arrival, but minimal documentation is required. Step 1: Entry Permit requested. Processing time: approximately four to six weeks. Step 2: Entry Permit sent to the Argentine consulate closest to the employee’s residence, where the employee and/or family members apply for Temporary Residence visas valid for one year. Processing time is approximately one week. Step 3: Employee arrives in Argentina, where the provisional CUIL (work identification number) is requested (in the case that the employee will be transferred to local payroll). Processing time is one to three business days. Step 4: Documento Nacional de Identidad (DNI) appointment is requested and usually granted for three to four months later. Processing time: one to three business days to secure the DNI appointment. Step 5: Approximately three months later, the employee attends the DNI appointment, and the DNI begins processing. The Registry quotes a processing time of 60 days to issue the DNI. However, a more realistic processing time is three to five months for the DNI to be issued. Step 6: DNI is issued at least six months after the process begins. Step 7: Definite CUIL is granted, and the immigration process concludes. The post-arrival process bypasses the pre-approval and consular portions, and all filings are made in country.

$1 USD and 4.69 ARS per euro, which allows for a substantially lower cost of living for expatriates relocating from the United States or Europe. In fact, Argentina ranked 27th on global management consulting firm A.T. Kearney’s 2009 Offshore Location Attractiveness Index, based on a combination of financial attractiveness, people skills and availability, and the business environment. Many companies treat an assignment to Argentina like any other international posting, but it is imperative to take into account the challenges inherent to the Argentine immigration process.

A Closer Look at Argentina The history of the Argentine Republic can best be described as complicated. Its recent decades are littered with coups, military dictatorships, and tragedies. Corruption within the government still runs rampant, and overbearing attitudes often 60 MOBILITY/JULY 2010

prevail in even the most basic government processes. Some authorities are notorious for only conducting business if some sort of “facilitation payment,” gift, or favor is offered. An elitist attitude is prevalent in the capital city of Buenos Aires, whose metropolitan area is home to approximately 13 million people and is sometimes called the “Paris of South America.” There often is a sense of entitlement that dominates in government transactions where the authorities request any and every document that may occur to them. These sentiments are echoed by Matías Celatti, a legal department account manager at AFN Visas.com International SRL in Buenos Aires. He explains, “the main challenge that an immigration firm faces is the lack of common sense found in government offices. Many times, government employees view any sort of discrepancy in documentation as a personal offense.”

Argentina is part of MERCOSUR (Mercado Común del Sur), a freetrade union that forms the world’s fourth-largest trading bloc. Argentina, Brazil, Paraguay, and Uruguay are member states; Bolivia, Chile, Colombia, Ecuador, Peru, and Venezuela are associate states. The advantage that Argentina’s membership in MERCOSUR offers is that citizens of any of the aforementioned countries can file for residence (obtaining a Temporary Residence permit) in Argentina by presenting minimal personal documentation and no corporate documents. This Temporary Residence permit is valid for two years, whereas the standard permit for non-MERCOSUR nationalities is valid for one year. The standard Argentine immigration process (for non-MERCOSUR nationalities) is described in the sidebar above. No process in Argentina has been affected more by recent changes than the DNI process (Step 4 in the side-

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bar). The DNI (Documento Nacional de Identidad) is the local ID used for day-to-day transactions, such as obtaining a driver’s license, opening a bank account, and buying or renting real estate. While the former DNI process for foreigners with Temporary Residence permits took between three and four months, the current process involves obtaining an appointment (usually issued for three to four months later) and awaiting the issuance of the DNI (no earlier than three months after the DNI appointment, although the Registry officially quotes the processing time at around two months). In total, this process now takes a minimum of six months in the Autonomous City of Buenos Aires, as well as in the remaining 23

provinces. The process has become so delayed that certain Argentine entities have had to adapt to the abundance of foreigners without DNIs. Examples of this include banks that have agreed to open an account with a letter from the foreigner’s employer; or the national airline, Aerolíneas Argentinas, ending its offers of lower prices on flights to DNI holders. Other entities have not acquiesced. With the exception of the Autonomous City of Buenos Aires, no other office of the Department of Transit (Dirección de Tránsito) will issue a driver’s license to a resident without a valid DNI. This is particularly problematic for assignees who recently have relocated to Argentina. They often must hire drivers or rely solely on public transportation to

navigate throughout the country until their DNI is issued well after their arrival in the country.

Responding to Delays The DNI process had become so delayed by 2009 that foreigners often would receive their DNIs 18 months after arriving in Argentina and beginning the DNI application. In response to these delays, President Cristina Fernández de Kirchner signed a decree that was published on October 22, 2009. This decree allows for a new digital component that so far has facilitated the application process and shortened the processing time (formerly a year and a half for foreigners) to around six months. It remains to be seen whether these changes will have a

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lasting effect, but the move appears to be a step in the right direction and has managed to shorten the overall processing time for DNI applications. Another noteworthy immigration procedure is the company registration with the Registro Nacional Único de Requirentes de Extranjeros, also referred to as the “RNURE.” The RNURE is a specialized department within the immigration office that registers companies hiring foreign employees. In 2006, the immigration authorities started requiring that all companies have a valid registration with the RNURE to sponsor a foreign employee’s Temporary Residence permit. Many companies still have not completed the RNURE registration and do not consider starting the pro-

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cess until a foreign employee is needed urgently in Argentina. Until the company has obtained its registration, it cannot file for any employees’ immigration processes. This can become particularly difficult for organizations that have never brought in foreign employees and, thus, are unaware of this registration requirement when the employee’s assignment begins. While the company registration is being processed, the employee and company often become frustrated because the employee’s immigration process hinges on this key component. In theory, the registration with the RNURE should take only about one month; however, it is not uncommon to have registration processes drag on for six or even nine months.

Dell recently underwent a sixmonth company registration process with the RNURE department. Magaly Regalado of Bogotá, Colombia, senior HR consultant for Dell’s South American region, describes the RNURE department registration experience this way: “there are specific guidelines to follow and documents to present. Most of the time, decision-making depends on a person within the RNURE office.… It turns into a subjective process when the decision depends on one person.” It is important to note that the RNURE registration process can be initiated and completed well before a company identifies or even decides to bring foreign employees to Argentina. Immigration law stipulates that

companies registered with the RNURE department must update their registration on at least an annual basis and also must notify the RNURE of any changes to the company’s information.

A Complicated Matter In addition to the aforementioned components of the immigration process, filing for an employee’s Temporary Residence permit often can be a complicated matter. Overbearing attitudes are prevalent in daily transactions at the immigration office. Unusual requests for documents to support a petition for Temporary Residence are so common that they are no longer considered unusual. In fact, the most perplexing part is that anyone who tries

to find portions of the law that justifies these document requests will come up empty-handed. Some illustrative examples follow. Case study A: A client’s birth certificate, as well as his four family members’ birth certificates, included both parents’ last names, as is the practice in Spanish-speaking countries. However, these particular birth certificates also included the Spanish

word for “and,” connecting both last names, i.e., “Rodríguez y Cervantes” (not their real name). The Argentine immigration authorities demanded that all five family members obtain a “Certificate of Unification of Names” from their home country’s embassy in Argentina to prove that the last names on their passports (“Rodríguez Cervantes”) and the last names on their birth certificates (“Rodríguez y Cervantes”) belonged to the same family. Case Study B: Police clearance certificates are required as supporting documents for the Temporary Residence application. This is not strange in itself, but another unwritten rule is that if the employee reenters the country that issued the certificate before he or she has filed

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for the Temporary Residence Permit—even for just one day—the certificate is deemed invalid and a new one must be secured. One client was being transferred by his company to Argentina. However, because the company was in the middle of completing its company registration with the RNURE, the client could not file for his or his wife’s Temporary Residence permit. In the meantime, he had to take several unforeseen trips to his country of origin and former country of residence. Every time he or his wife re-entered one of those countries, the Argentine authorities considered the previous police certificate invalid. This resulted in securing 14 separate police certificates from two different countries to apply for this client’s and his wife’s Temporary

Residence permits once the company’s registration was completed.

Final Recommendations The issues described can be avoided, or at least minimized, if you consider the following recommendations: 1. Company registration with the RNURE. Because of the often lengthy registration process with the

RNURE, it is recommended that all companies begin the registration at the earliest possible time, even if there are no current plans to bring foreign employees to Argentina. This will avoid delays in future immigration processes in which employees cannot begin the immigration process until the company registration is first completed. Regalado recommends that companies sending expatriates need to have “patience and constant communication” with the immigration provider and HR department in Argentina during the RNURE process. 2. Always opt for the standard consular immigration process (when possible). The consular visa process with pre-approval is the standard (and preferred) Argentine

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immigration process. However, many companies, when faced with time constraints regarding the employeeâ&#x20AC;&#x2122;s arrival, opt for the post-arrival process in which all filings are made in Argentina. This process is particularly problematic and often includes outlandish document requests from the immigration authorities. Therefore, it is recommended to allow an extra six weeks to follow the consular process and ensure the immigration process goes smoothlyâ&#x20AC;&#x201D; government processing time may be longer by six weeks, but the overall lead time will be significantly less because of reduced administrative time and expense spent preparing documents. 3. Examine documentation carefully and allow time for document gathering. The Argentine authorities are notoriously meticulous. Employees will need to provide birth certificates and police certificates from every country of legal residence from the past five years. The immigration authorities and Argentine consulates also request up to four

originals of every document, legalized and translated into Spanish, so it is prudent to plan accordingly. Most global immigration vendors can assist with birth certificate and police certificate requests. 4. Prepare clients for the long DNI process. It is crucial that both HR and the mobility services company effectively communicate the length of the DNI process and the local transactions that will be affected by the employee not having a DNI. Many employees will arrive in Argentina with their visas in hand and will think the immigration process is almost complete, but it is important to remind them how long they will be without a local ID. In some cases, HR contacts in Argentina may have to provide solutions to certain problems, such as writing a letter to a local bank to allow the assignee to open a bank account (a transaction that normally requires a DNI). Make sure they are aware of this and are willing to help. 5. Enlist support from HR. With the amount of documents required

for the Argentine immigration process, home and host HR support is crucial. Many times, an HR contact in Argentina may be outraged about an authorityâ&#x20AC;&#x2122;s seemingly unreasonable request for a document and may challenge this very request. This often is counterproductive and delays the employeeâ&#x20AC;&#x2122;s immigration process considerably. As Celatti points out, â&#x20AC;&#x153;within the HR department, it is ideal to have proactive employees who work with the immigration provider, and when we offer a solution, they need to support us.â&#x20AC;? Following the preceding guidelines related to the Argentine immigration process may seem a daunting task. Nonetheless, companies that take a proactive approach in addressing the aforementioned issues will have productive personnel and will find themselves fully equipped to take advantage of the business opportunities Argentina has to offer in 2010 and beyond. Christi Dominguez is an immigration consultant for Emigra USA, LLC, Houston, TX. She can be reached at +1 713 874 8521 or e-mail cpdominguez@emigra.com.

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D D I N G A C O M PA N Y

66 MOBILITY/JULY 2010

TO THE C H E D U L E

GSA O F

W O R K

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B Y B I L L M U L H O L L A N D , C R P, G M S Mulholland offers a first-hand look at getting a company on the GSA schedule of work for relocation services, including an overview of the GSA, and shares some insight gathered along the way. n May 2008, at the National Relocation Conference in San Antonio, TX, representatives from the General Services Administration (GSA) called for “new, creative, innovative” relocation companies to come forth with ideas and solutions. Unfortunately, the combination of current government pricing structure, relocation business models, and the real estate market made for a recipe that most service providers could not stomach. Hold the phone one second… did the government say it was looking for “creative,” “innovative” solutions? I attended the conference on behalf of my company, American Relocation Connections in Fairfax, VA., and came away both skeptical and intrigued by GSA’s pitch. Despite our initial reservations, on behalf of my company, I set out to submit a proposal to be added to the GSA schedule of work for relocation services. More specifically, a creative, innovative service that had never before been offered through schedule! It was a tall order, but the government asked for it… right? We later discovered during the months of working closely with the GSA and other government agencies that this is not your parent’s government—the GSA we dealt with could be lean, mean, and open to thinking outside the box.

offering private sector professional services, equipment, supplies, telecommunication, and information technology to government organizations and the military. Or, in layman’s terms, the GSA is the portal through which most government agencies go for solutions to their needs from corporate America. For its services, GSA pre-qualifies vendors and pricing and sets policies that promote management’s best practices and efficient government operations. Once a vendor is set up, the GSA generates revenue through fees collected from vendors. These fees are called industrial funding fees, or “IFFs,” and must be paid by vendors on every sale through schedule. The GSA offers a “schedule of services” and the schedule is organized into numerical sections. Relocation falls under Schedule 48, described on gsa.gov as, “Employee Relocation Services are available under Multiple Award Schedule 48 for employees and their families being transferred to new duty stations.” Services on schedule are categorized by “SINs.” SIN is just one of the hundreds of government acronyms one must add to their vocabulary when entering into the government world and stands for “Special Item Number.” The SIN for relocation is 653 and there currently are five main sections. The sections and a brief description are outlined in the sidebar on page 68.

The Proposal Process General Services Administration The General Services Administration (GSA) is the government agency tasked with the responsibility of

What does being added to the GSA Schedule entail? The “proposal” process to be added to the GSA Schedule of Work includes three main components: the MOBILITY/JULY 2010 67

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Five Sections for Relocation on GSA Schedule SIN 653-1: Relocation Services Package (includes services such as homesale services, homemarketing assistance, guaranteed buy out, and destination services). SIN 653-3: Relocation Software, Technology Tools, and Services. SIN 653-4: Additional Services; This includes cost-of-living analysis, closing assistance, expense management, rental management, entitlement counseling, group move assistance, and international move assistance (This SIN recently was modified to include property management and training.). SIN 653-5: Agency Customization Services. This includes special property (difficult to sell) services, homesale and marketing assistance, close only services, and buyer value option. SIN 653-7: Move Management Services (household goods shipments).

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technical proposal; the administrative proposal; and the price proposal. Once you apply to the GSA schedule, you are assigned a “contracting officer” and he or she becomes your main contact at GSA. Administrative proposal. This section of the proposal process requires the vendor to prove that it is a business that complies with applicable laws and regulations both in the United States and to its specific industry. The vendor must register with a number of government certifications and representations and must submit information about the company such as financial data, professional compensation plan, and uncompensated overtime policies and justify that employee wages meet the Service Contract Act. Technical proposal. The technical proposal is exactly as it sounds. It is the section of the proposal process in which the company is asked to provide technical information on the company and the services it is proposing to offer to prove that it can, in fact, perform the services that it is proposing. Technical proposals can vary slightly, but traditionally includes such items as company background, a summary of the services being offered, examples of similar projects the company has completed in the past, industry references, management capabilities and key personnel information, staffing practices, training, reporting, monitoring workload, time management, cost control, and past performance ratings. Price proposal. In the third and final section of the proposal process, the vendor must outline and justify its proposed pricing for the services it is offering, including support for the pricing it is offering to the govern-

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ment, commercial sales practices, supporting transactional information, pricing narrative, discount policies, and price catalogs. The price proposal includes acknowledgement and confirmation that the IFF will be paid on each sale through schedule.

Response Time From speaking with the GSA representatives, the average time for companies to be added is more in the 15- to 20-month range. In the corporate world, “difficult takes a day” and “impossible takes a week,” so a process that takes on average months and even years can seem like a lifelong obligation. Unlike the government, in the corporate world often we do not use acronyms, mostly because we have to make sure when doing business to business transactions nothing is lost in translation, but one acronym that every business knows is ROI (return on investment). So what is the ROI on getting on the GSA schedule? Consider a client that pays its bills, every time, guaranteed. Or how about a client with a large budget and a capacity for a deficit without ever going out of business? I cannot say the process was completely painless but, with some preconceptions about “dealing with the government,” I was surprised at how easy it was to work with GSA. Do not get me wrong, we definitely ran across a few snags but, when push came to shove, the GSA responded. On one occasion, we became frustrated about a delayed response time. Tim Burke, GSA’s director for the Office of Travel and Transportation Services, personally got involved to ensure that the GSA was being responsive.

He wanted to make sure that a service that the government both wanted and needed was getting the proper attention to ensure it was added to schedule in a timely matter. When Burke was copied on an email, the issues were resolved with corporate precision. I think that speaks volumes to the dedication of the agency and its services. GSA also was surprisingly accessible. As many people in business have experienced, e-mail is a wonderful thing; it connects us at lightning speed and provides us a record of correspondence. However, it does eliminate the human factor and sometimes nothing can replace a face-to-face meeting. On this occasion, there was confusion on both sides concerning questions regarding our “one time set up fee.” We requested to come into GSA headquarters in Arlington, VA, for a face-to-face meeting to ensure all questions were answered and we were all on the same page as to the information GSA needed. Within 48 hours, GSA rounded up representatives from several departments that played key roles in our proposal. That both surprised and impressed me. Of course, once a company is added to schedule, the next step is to establish contracts with individual agencies and that is another project in and of itself. Getting on schedule is really only half of the battle. Only time will tell what the future holds for government relocation. However, one thing is for certain: if schedule 48 is not a success, it will not be because of a lack of ideas and effort. Bill Mulholland, CRP, GMS, is director for American Relocation Connections, LLC (ARC), Fairfax, VA. He can be reached at +1 703 352 9701 or e-mail bill.mulholland@arconnections.com. MOBILITY/JULY 2010 69

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BY SUZANNE GAR BER

70 MOBILITY/JULY 2010

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By spearheading a duty of care integrated risk management process within an organization, Garber explains how global HR professionals can retain top talent, increase productivity levels, avoid lawsuits, and decrease workmen’s compensation claims.

oon after the 2004 tsunami hit, Ed Levy, then a security director at a large multinational pharmaceutical company, learned through International SOS, the company’s medical and security assistance provider, that one of its international assignees and his family had perished in the disaster while at a Thailand resort. Levy called on the vice president of global HR, who did not have a policy or procedure in place at that time, to help address this tragic situation. “We had many policies in place, but this specific incident brought to our attention that we left something out,” said Levy. “How were we supposed to inform next of kin and our employees about this sad situation, and what support were we going to provide to bring the family’s remains back to the States?” Levy immediately met with senior management and the vice president of global HR, who all agreed that the company would provide the funds to bring the remains back to the United States. They worked closely with International SOS to manage all the logistics and further communication

with the next of kin, as well as develop new policies that would help define guidelines and procedures for potential future situations. “Looking back, you could say that as an organization we met our duty of care obligations” he said. “Realistically, we supported this effort as it was just the right thing to do.” Some would say that is how duty of care is defined: it is simply doing the right thing. However, there also are components of duty of care that require advance planning and cautious foresight. To that effect, two recent trends are bringing duty of care to the forefront of many HR, security, travel and medical departments.

Recent Trends First, many organizations are going to more far-flung corners of the world to expand business opportunities and conquer market share. This inevitably brings more risk exposure to an organization, as employees move across borders either as international assignees or frequent business travelers. A recent International SOS analysis of travel data collected from more than 300 global companies during 12 months

indicated that the companies’ travelers took more than 3.5 million international trips, and approximately a quarter of those were to high- or extreme-risk destinations where not only individual countries are included, but entire regions. Second, legislation regarding duty of care is increasing. Several countries in Europe, North America, and Australia have developed employer duty of care legislation. However, emerging markets such as China, India, and Brazil are unlikely at this time to seriously address this issue. In most cases, they have not articulated or enforced this type of legislation. This means that employers and employees alike should be concerned. Expatriates or business travelers to and from these countries are likely to redress for harm under the Western laws wherein the organizations operate, even if host nations have not created duty of care legislation. This is especially true in thirdworld countries to which travel is increasing at a rate higher than any other region, according to the Official Airline Guide (OAG) in February 2010. Global HR professionals either can embrace these changes and take the MOBILITY/JULY 2010 71

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lead in ensuring their organizations meet duty of care obligations, or turn a blind eye and cross their fingers in hopes that these issues will not hit them. For those who smartly prefer the “embrace” model, here are three ways HR professionals can take the lead: • understand the definition of duty of care; • assume a lead role; and • adopt an integrated risk management process.

Understand the Definition of Duty of Care From a broader HR perspective, employers have a variety of duty of care responsibilities toward their employees. Employers are expected to take reasonably practical steps to safeguard their employees against any reasonably foreseeable dangers in the workplace. The duty of care obligations of employers encompass a large number of activities considered within the realm of employee well-being that extends beyond the typical workplace and may extend to contractors and subcontractors. A list of employmentrelated duty of care responsibilities is detailed at the top of the next page. When employees work across borders, the employer’s duty of care involves risk management extending beyond the usual health, safety, and security requirements imposed by the familiar environs of the employee’s home country. The circumstances in which both international business travelers and expatriates are operating are likely to be very different and unfamiliar, putting them at greater risk than if they worked in their home country. Host country circumstances may differ by the types of threats—including terrorism, lawlessness, crime, political instability, 72 MOBILITY/JULY 2010

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Range of Employment-related Duty of Care Obligations by the Employer • Physical and mental health • Work injuries and accidents • Consequences of job workload and stress • Repetitive strain injuries • Spread of communicable diseases • Safety (tools, equipment, workplace) • Security • Workplace bullying, harassment, and discrimination • Corporate fleet management • Travel for work purposes • Car rental, employees’ use of personal vehicles, travel to and from work, traffic accidents, driver fatigue, and the like

natural disasters, infectious diseases, travel-related sickness, travel accidents, and common travel problems. International assignees, whether on short-term business or serving as long-term expatriates, also are likely to be unfamiliar with the host country or countries in which they temporarily work and/or reside. This unfamiliarity can lead to a multitude of questions. For instance, should an American employee traveling to visit clients in Mexico rent a car at the airport and try to navigate his or her own way to the client location, take a taxi, or be picked up by local employees? Or, if an expatriate employee experiences severe abdominal pain and is unable to make it in to the office, should he or she visit the nearest local hospital and take local medi-

• Accommodations for employees while traveling for work • Corporate events away from the workplace (travel, drinking, accidents, and the like) • Pre-employment selection (fitness for work) • Negligent hiring (sex offenders, violent personalities) • Accuracy of job references for former employees • Security and confidentiality of employee personal data • Fiduciary duties of board members/directors • Selection of insurance providers • Management of employee benefits • Due diligence in acquisitions

cations, simply wait out the pain, or call her HR team to seek advice? Unfamiliarity makes it more difficult for employees to respond appropriately to the threats presented and further increases their exposure to potential harm. Caring for the core of your company is a key component to duty of care and takes the guesswork out of the hows, wheres, and whys of a global assignment or travel itinerary.

Assuming the Lead Role Global HR plays a unique role in ensuring that the organization is meeting its duty of care responsibilities to employees. Global HR has a unique, enterprise-wide perspective, and it has a better sense of how risks may vary among locations and how local laws and culture may both con-

tribute to the creation of risk and influence the management of risk, according to the 2009 Society of Human Resource Management (SHRM) Global Learning System. In addition, the responsibility of communicating with traveling employees and their families during a crisis often falls to HR professionals, according to J.T. Arnold’s article, “Tracking Business Traveler’s,” in the November 2008 issue of HR Magazine. HR also plays a vital role in successfully forecasting and implementing emergency planning management and must anticipate and respond to the emotional toll on the workforce that often results from a crisis. HR’s crisis management role also includes taking proactive steps to respond quickly to developing situa-

FIGURE 1

Employer Duty of Care Integrated Risk Management Process

Assess Risks

Plan

Develop Policies & Procedures

Manage Mobility

Communicate Educate Train

Track Monitor Inform

Control Analyze

Advise Assist Evacuate

Source: International SOS MOBILITY/JULY 2010 73

tions, such as providing employee counseling services and managing leave and privacy issues to minimize interruptions to business operations, according to Kevin Lindsey’s article, “Legal Trends: Crisis Alert,” from the August 2006 issue of HR Magazine. Finally, line managers who deal directly with international business travelers and expatriates play an important role in managing work responsibilities and ensuring compliance with company policies. They are among the first people who employees seek when they have questions about which local hospitals speak English, what sick leave benefits are offered by the company, or what to do in case of a security evacuation. It is critical that HR professionals work

with these line managers and equip them with correct information and the tools to properly communicate it.

Solving the Puzzle As companies deal with increasingly global and mobile workforces, duty of care can seem like a daunting task, but it does not have to be. It is best for organizations to distance themselves from the negativity and

SPRINTW AHEAD W ITH

ORLDWIDE

fear around the responsibility and focus on innovative and collaborative solutions that not only fulfill responsibilities but also improve employee retention rates and productivity levels, increase business growth, and decrease lawsuits and workman compensation costs. Global HR professionals can help their organizations develop a solution by contributing to an integrated risk management strategy that involves and includes the HR, medical, security, risk management, legal, travel, and communication departments. By forming a committee or team, these professionals can identify gaps and build an effective plan. Figure 1 on page 73 shows an integrated risk management process and demonstrates how an effective

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74 MOBILITY/JULY 2010

strategy helps an organization by: • Showing the steps taken to educate employees about risks so that they are prepared to handle them. • Monitoring the environment for potential hazards and updating international assignees on any developments that could become critical incidents. • Supporting and assisting their employees in the event of a crisis or emergency. Global HR professionals may find during this process that their organization has existing resources available to help meet their risk management goals. For example, a security department may offer safety training to international business travelers headed to high-risk areas. With some policy and training adjustments, this type

of solution may be expanded to include expatriates and families. Organizations can save time, budget and, potentially, employee lives by using the systems and policies already in place. As with any strategic initiative, it is critical to have senior management support. With recent earthquakes in Haiti and Chile, along with other world events, this may be a logical time to begin exploring a duty of care initiative for your organization. In addition, with the ongoing interest in social responsibility within the business community, this topic is extremely timely. Having an integrated risk management strategy in place demonstrates your organization’s commitment to the community within: its employees.

Ultimately, the responsibility for developing an integrated risk management strategy that is embedded in the corporate culture cannot be delegated or outsourced. It is the legal, fiduciary and social responsibility of an organization, and the result of concerted and cooperative efforts of an integrated internal team, to prevent and manage the risks of their expatriates and international business travelers. Global HR professionals are well positioned to lead the way in helping an organization fulfill its duty of care—an effort that when all is said and done, is simply about doing the right thing. Suzanne Garber is chief operating officer, Americas region, for International SOS, Philadelphia, PA. She can be reached at +1 215 942 8000 or e-mail suzanne.garber@internationalsos.com.

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MOBILITY/JULY 2010 75

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RAC Report

Regional Market Summary: Greater Milwaukee, WI, Area

he past couple of years have been challenging to say the least. The metro area is defined as Milwaukee, Waukesha, Washington, Ozaukee, and Racine Counties. Real estate markets have been in decline and continue to decline despite an increase in overall activity. This increase in overall activity can be attributed to the stimulus incentive for first-time homebuyers, as well as increased foreclosure and short sale homesales that tend to be in the lower price segments. The local economic news has not been great. Unemployment rates, while improved from last year, are still at 8.5 percent for Waukesha and Milwaukee Counties. Racine County is worse, with a 9.9 percent unemployment rate compared to 10.5 percent last year. While there has been some improvement in the rates the overall job market is flat at best, with no real indications of improvement in the near future. Inventory levels have been significantly higher than normal levels. The upper-price segments typically are worse, as the stimulus incentive has lowered the entry level price segmentâ&#x20AC;&#x2122;s inventory levels during the past year. Now that the stimulus incentive has expired, it is unclear whether the improvements in the lower price segments will be sustainable without real job growth. It appears as if the market deterioration has slowed, however, the expiration of the stimulus incentive likely will cause the marketplace to lose buyers and put increasing pressure on inventory levels. I expect inventory levels to begin to increase again when employment prospects exhibit meaningful improvement. Interest rates still are historically attractive and will need to remain low to have a 76 MOBILITY/JULY 2010

STATISTICAL SNAPSHOT

Unemployment Monthsâ&#x20AC;&#x2122; Supply Annualized Sales Volume Annualized Avg. Sale Price Average DOM

TODAY

ONE YEAR AGO

CHANGE

8.5 9.28 13,220 $186,786 76

8.7 10.68 11,351 $208,433 135

-2.30% -13.10% 16.47% -10.39% -43.70%

MARKET AT A GLANCE

Economic Climate New Construction REO Activity Supply Demand Market Direction Market Mood

Poor Low High High Low Down Poor

MEDIAN SALES PRICE 2005-2010

250000 200000 150000

Year

100000

Median Sales Price

50000 0 2005 2006 2007 2008 2009 2010 chance of the market stabilizing. If inflation begins to increase, rates will need to be raised, which would further deteriorate the marketplace. New construction activity has been light and will continue to be weak as long as values are in decline. The remainder of 2010 likely will produce lackluster results. Jeff Barta, SCRP, is with Jeff Barta Valuations, Inc., Waukesha, WI. He can be reached at +1 262 510 2482 or e-mail jeff@jeffbarta.com.

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Vienna Retains Best Quality of Life Crown: Mercer Survey Economic Times of India (05/26/10) A new global survey of cities by management consultancy Mercer finds that Vienna was ranked as offering the best quality of life in the world, followed by Zurich and Geneva. Most of the top cities were European—16 of the top 25—and the study concludes that “the overall standard of living in Western Europe remains far above the world’s average.” Despite the global economic downturn, many factors in Western Europe improved, including schools, housing, recreation, and public services. The highest-ranked U.S. city was Honolulu at number 31, with the survey citing the financial crisis as the cause of the decline in rank of U.S. cities. No cities in Central and South America made the top 50, with the highestranked city being Point-a-Pitre in Guadeloupe. Africa and the Middle East also did not fare well, with the highest-ranked cities being Dubai at 75 and Port Louis in Mauritius at 82. Singapore was the top-ranked Asian city at number 28, followed by Tokyo at 40, Kobe and Yokohama tied at 41,Osaka at 51 and Nagoya at 57. (http://economictimes.indiatimes.com/Viennaretains-best-quality-of-life-crown-Mercer-survey/ articleshow/5977230.cms) Foreign Workers Prove Themselves in Tough Times Swissinfo (05/27/10) Government policies that allow foreign workers to move freely between Switzerland and the European Union have helped the country deal with the economic downturn, according to a new report from the State Secretariat for Economic Affairs. Allowing skilled foreign workers to fill vacancies left by the relatively small workforce in Switzerland helped produce “exceptionally strong” economic growth without taking any jobs away from Swiss citizens, the report says. The number of foreigners coming to Switzerland declined along with the economy but was still relatively high, with 68,000 arriving in 2009. Unemployment has been rising in the country and foreign workers were hit hardest, but experts say unemployment is not expected to stay high in the long term. (http://www.swissinfo.ch/eng/ politics/Foreign_workers_prove_themselves_in_ tough_times.html?cid=8958242)

Hard Times in Greece Prompt Albanians to Return Home Reuters (06/01/10) Koleka, Benet Albanian immigrants in Greece make up the largest portion of foreign workers in the country and are hardest-hit by its current financial crisis, leading many to consider going home for good. Remittances from Albanians around the globe fell to a five-year low last year, to 780 million euros from 951 million in 2007. There are between 650,000 and 800,000 Albanians in Greece, and some are struggling so badly that their relatives back home were sending them tobacco, beans, and potatoes to help them get by. Iron worker Gerald Hoxha has decided to leave permanently after seeing his income fall from 70 euros a day to 30 euros, with only about 20 days of work a month, and he has a wife and two children to support. There is no official data on how many Albanians are leaving Greece, but duty officers at the border crossing say the number has risen. “They are coming back with everything they own,” said officer Landi Ipo. (http://www.reuters. com/ article/idUSTRE6503WB20100601) New Points System Lets in More Foreign Workers Not Fewer Telegraph.co.uk (06/03/10) Whitehead, Tom The British government imposed a points system two years ago intended to reduce the soaring flow of immigrants into the country, but a study reveals that the number of immigrant families allowed into the country actually rose by 20 percent while foreign students increased by 30 percent. The study was performed by think tank Migrationwatch, and found that the number of non-EU migrants rose from 159,535 in 2007 to 190,640 in 2009 despite a recession and high unemployment. Government officials had expected the points system to cut immigration by 12 percent, and this week Labour declined to answer parliamentary written questions about the issue and was accused of hiding a “guilty secret.” Immigration Minister Damian Green said the government plans to introduce an annual limit on work permits. (http://www.telegraph.co.uk/news/uknews/ law-and-order/7797786/New-points-systemlet-in-more-foreign-workers-not-fewer.html)

June 9, 2010 This issue is sponsored by:

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MOBILITY/JULY 2010 79

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Last Page

Seven Tips for Selecting Temporary Housing in Panama City, Panama f you have had the opportunity to stay in a corporate housing apartment in the United States, Europe, or Asia, you know the benefits this service can provide. These apartments can be ideal for relocating personnel, executives, and corporate teams. Temporary corporate housing often is a cost-effective solution for any business traveler. Here are some useful guidelines that you should consider before you sign an agreement with a temporary housing provider in Panama City.

Size Matters Short-term housing typically offers significant space for business travelers. A hotel room might offer 30 to 40 square meters (323 to 430 square feet) of space. A corporate housing provider often offers 1-, 2-, and 3-bedroom apartments and can have up to four times the space of a hotel.

Location, Location, Location Location is important when choosing temporary corporate housing. You need to search for a safe temporary apartment that will be close to your place of business. Because traffic is a major factor, it is not advisable to stay in an apartment that is far away from your destinations in Panama City.

Getting Around If your company does not provide transportation, be sure to ask your corporate housing provider for recommendations. It is advisable to use a trusted and known person for your transportation needs. Some providers also can arrange airport transportation. The closest airport to Panama City is Tocumen International Airport (PTY). It is a 30-minute drive from the airport into Panama City. Rush hour traffic greatly can increase your transit time.

Safety First Security is an important issue. It is advisable to stay in an apartment tower that has verified 24/7 security personnel. Be aware that not all security companies are the same in Panama. Make sure to use a housing provider who has extensive experience in Panama City to ensure your safety.

Keeping in Touch It is best to get a temporary furnished apartment that has Wi-Fi coverage. A professionally managed corporate housing apartment should include all costs related to electric, water, gas, cable TV, Internet, and landline phones. Some providers will include a prepaid cell phone 80 MOBILITY/JULY 2010

for you to use. It is not advisable to rent a furnished apartment without these public services included, as it is a time-consuming, costly, and complicated process to have public services connected.

All the Extras Amenities should be considered when you look for furnished apartments in Panama City. Make sure that your temporary corporate housing apartment has furnishings, air conditioning, linens, and housekeeping services to make your stay more comfortable. A fully-equipped kitchen and washer and dryer in the apartment are important. Kitchens should be stocked with all of the cooking implements you need. You will have to bring your own food, but everything else should be ready to go. Your corporate housing provider also will be able to reconfigure the apartment, adding twin beds, cribs, desks, and the like, to make your temporary corporate housing apartment work for you and your family.

Making a Choice Choosing a provider is key to a good experience. There are property management companies and individuals that offer furnished apartments. These should not be mistaken for corporate housing providers. Foreign companies should strive to work with a corporate housing provider that is a member of the Corporate Housing Providers Association (CHPA) and Worldwide ERCÂŽ. Issues concerning safety, payment method, maintenance , and client service should be considered when choosing a temporary corporate housing provider in Panama City. We live in a fast-paced business world; we all strive to balance work and home. Temporary corporate housing provides the environment to maintain and balance oneâ&#x20AC;&#x2122;s work and home life while relocating or on temporary assignment. David Lorber is president of Panama Corporate Living, Panama City, Republic of Panama. He can be reached at +1 866 440 5421 or e-mail dslorber@panamacorpliving.com.

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