How do you manage employee mobility? This presentation looks at the considerations for employers and employees including risk management, quality and effectiveness, compliance, coordination and communication. It considers relocation, HR aspects, tax, labor law, social security and immigration.

1. 2012 Human Capital conference
23-26 October
A beginner’s guide to global
bilit
mobility

2. Disclaimer
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Gl b l Limited, h f hi h is t legal entity.
l tit
Ernst & Young LLP is a client-serving member firm of Ernst & Young
Global Limited located in the US.
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Thi presentation i © 2012 E t & Y
t ti is Ernst Young LLP All rights reserved. N
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► The views expressed by panelists in this session are not necessarily
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Page 2 A beginner’s guide to global mobility

3. Presenters
► Pieter Cross ► Thomas Efkemann
► Bayer AG ► Ernst & Young GmbH
► pieter.cross@bayer.com ► thomas.efkemann@de.ey.com
Page 3 A beginner’s guide to global mobility

4. At the beginning of an assignment you may
think about these questions.
questions
Is my employee allowed How do I consider my
y
to work abroad? employee for merit
increases, bonuses?
What happens if my Can I make the decisions
employee gets sick about the benefits? Who can?
during the
assignment?
i t?
How to track all payments?
p y
Can my
employee work
abroad 40 Which service providers exist to
hours? support the move?
Page 4 A beginner’s guide to global mobility

5. Your employees may think about these
questions
What happens with
What kind of job
my investment funds
Do l
D I lose my will I d after th
ill do ft the
at home?
pension assignment?
entitlements? What happens if I lose my
job?
What happens if my family Are my goods insured
gets sick while being during shipment?
g p
abroad?
Do I have to take all my
furniture and goods with Will the school certificate of
me? my children be accredited in
my home country?
Can we take our What happens with our
pets with us? second income? Can my
partner work abroad?
Page 5 A beginner’s guide to global mobility

6. The answers to the questions are in the
pieces of the puzzle
Relocation HR aspects Tax
Labor Social Immigration
Law security
Page 6 A beginner’s guide to global mobility

7. How do you manage mobility?
► There are lots of options and the key is finding a model
p y g
that works for your organization
► The focus should always be on compliance:
y p
► Tax (primarily corporate tax then personal tax and social security)
► Immigration
► Corporate compliance (across numerous issues):
► Various policies need to be considered
► Vendor selections
► Appropriate sign-offs
► Security matters
► Legal matters
L l tt
► Then service delivery
Page 7 A beginner’s guide to global mobility

8. Managing expats
One size fits … none
► Need to reflect on:
► Number of expats
► Company structure
► Primary objective of the assignments
► Skill sets available to manage expats/ full time employees
available
► Resources available
► Payroll capabilities
► Previous/existing expat populations
► Future corporate development
► Management expectations
M t t ti
► Many other issues
► All this before you even think of what type of policy
Page 8 A beginner’s guide to global mobility

9. Policy or policies
► You need to choose the right solution for y
g your
organization:
► Does your organization define all HR activities in policies and
frameworks?
► If you have an occasional expat you may not need a policy
► Regular transfers will need at least a framework
► As mobility becomes part and parcel of the business, mobility
policies become essential
► An organization with strong talent management should have a
policy as an integral piece in the talent management tool box
► Do you need a single policy or multiple policies?
► How long is a piece of string?
Page 9 A beginner’s guide to global mobility

10. Amount of policies drive by multiple factors
► Regional or g
g global p
policies
► Long-term and short-term policies
► Project assignments
► Developmental assignments
► Junior staff or senior executives
► R&R policy
► Tax policy
► Localization policy
► Local-to-local policy
► At the end of the day it has to be your policy or policies
Page 10 A beginner’s guide to global mobility

11. What approach should you take?
Two major schools of thought
j g
► Home-based approach with tax equalization:
► Most common approach by far
► Endeavors to keep an expat “whole” by keeping the home annual
base salary with a set of deductions and additions to ensure a
similar standard of living in any host country
► Company assumes responsibility for all tax compliance
► Host-based approach:
► Still popular and even making a come back perhaps
► Looks t h t th host
L k at what the h t would pay f a l
ld for local, th compares thi t
l then this to
the home country net income and endeavors to match/better the
net through a collection of incentives to the inbound
► The expat is responsible for all tax liabilities
► Best of both is a model that is out there, but it is complex
Page 11 A beginner’s guide to global mobility

12. How do you administer your mobility
program?
► In HR or not
► Under talent management or compensation and benefits
► Centrally or regionally
► In-house or outsource — all or some of the activities
► Use shared services or not
► Excel, Human Resources Information System (HRIS) or
technology solution
gy
► What kind of staff do you need?
► Whoever you can find
► Tax people
► Experienced expats or their spouses
Page 12 A beginner’s guide to global mobility

13. How does Bayer do it?
► Clearly defined p
y philosophy behind mobility
p y y
► Textbook Dave Ulrich model:
► Human Resource Business Partners (HRBPs)
( )
► Experts
► Shared services
► Leverage HRIS to support the model and the service
delivery (quality data is key)
► Strong support from the top:
St tf th t
► CEO values mobility
► Head of HR is passionate about mobility
► Established policies and infrastructure all in place
Page 13 A beginner’s guide to global mobility

14. The Philosophy provides the direction –
Rationale of international assignments
As an attractive employer Bayer offers opportunities for international careers.
employer, careers
• Development: Through international assignments it enables employees to gain experience and
develop their potential to prepare them for possible career advancement in the future – often pre-
requisite when developing towards Senior Management positions.
• Project: Bayer transfers employees between countries to provide locally needed specialist
knowledge/ expertise (e.g. in project management, global/ regional functions)
• Job: Bayer makes use of international assignments to fill governance positions (e.g. SBR, F&A
Heads, Regional CDH functions).
To achieve these goals it is important
g p
 To define the criteria and select the right employees for such
assignments
 tot take care of sufficient tracking and future career development
 to provide attractive conditions and professional support and
 to further develop employees after such assignments in their Home
countries
Page 14

15. Bayer Expat Community
North America Europe Europe / MiddleEast
258 Inbounds,
Germany Main countries:
186 Inbounds, Switzerland, France
Main countries:
USA, China Eastern
Europe
Asia Pacific
APAC
365 Inbounds,
Americas / Africa
Main countries:
334 Inbounds
Inbounds,
China, Singapore
Main countries: USA,
Mexico
Latin America,
L ti A i Africa, Middl E t
Af i Middle East
Page 15

16. Expat Overview – Country View
Inbound View Outbound View Expat Population
China 215 Germany 705 Overall Result 1.183
Germany 186 USA 84
USA 186 France 45
Switzerland 65 China 38
Singapore 60 Brazil 29
France 48 Spain 23
Mexico 40 India 19
Brazil 34 Argentina 17
Belgium 28 Great Britain
G t B it i 17
Japan 19 Switzerland 17
Hong Kong 15 Belgium 16
Australia 14 Japan 14
Russia 14 Colombia 12
India 14 Australia 12
Page 16

17. The International Mobility Organization
HR//direct Home
Center of International Manager
Expertise
E ti Mobility Team
HR Business
Global Relo Partners
Vendor Global Local Host
Regional Mobility
Country
C t Experts Manager
Expatriate
Page 17

18. Center of Expertise (CoE)
• Global Process Owner of Mobility
• Global Policy Development / Maintenance
Center of
Expertise
E i • Benchmarks, Trends
• Escalation contact for HR//direct in exception
management
• Implements Executive Board Initiatives
relating to Expatriates
g p
• Supports country organizations in their responsibilities in development /
maintenance of Country Profiles
• Maintains strong mobility Network and Community with regular meetings and
communications
• Monitors liaisons with Third Party Vendors
Page 18

19. HR//direct Mobility Team
Single point of contact with regard to
• Initiation process (global basis)
HR//direct
• Salary calculation (approval) process for Initiation Mobility Team
and on assignment
• Global Relo Vendor (Initiation and exception
mgmt)
• HR//direct Mobility acts as a coordinator between the
sending country and the receiving country
Coordinates process
between countries
• Mobility calculates compensation packages
involved
Calculates • HR//direct Mobility coordinates approvals for the
compensation compensation details with involved management in
packages home and host country
Global Relo Vendor • Mobility acts as a single point of contact for
exception mgmt the initiation of G
f Global Relo Vendor and requests f
for
exceptions
Page 19

20. HR Business Partners & Home Manager /
Host Manager
• Selection of suitable employees
• professional competence, previous achievements, potential engagement and
aspiration, readiness to adapt to different living conditions
• Tracking and future career development.
g p
• pro-active career planning process prior to the assignment, specific personal
development objectives agreed between Home / Host Manager & employee, support
regular meetings (minimum annually) to take place with the Home / Host Manager
Important to guide Expat th
I t tt id E t throughout duration of assignment
h t d ti f i t
Home Manager & Home HR  Career aspects of employee
• Maintenance of ExecuTrack and Potential Lists
• Create visibility within POCs HR B i
Business Home
• Promotion
• Merit Review Partners Manager
• Merit communication
• Definition and Planning upon repatriation
Host Manager & Host HR  Assignment aspects of employee Global Local
Host
• Local HR processes (payroll, vacation, one-time payments) Regional Mobility
• PMP Country Contacts Manager
• STI communication
Page 20

21. Global Relo Vendor
Gl b l R l V d
Global Relo Vendor coordinates all
relocation activities executed by
Global Relo various service provider being
Vendor Single Point of Contact (SPoC) for
the Expatriate
• Transfer organization
• Housing, registration, schooling, temporary housing GRV
• Visa, work permit (application, extension)
• Household goods move, storage
• Transfer related trainings (language cultural)
(language,
• Payment of related allowances according to Global Directive
• Expense reimbursement according to Global Directive
• Exception h dli i relocation matters
E ti handling in l ti tt
Page 21

22. Questions
Page 22 A beginner’s guide to global mobility