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  • GLOBAL MOBILITY SERVICES

    6-8 October 2015

    Rome, Italy

    2015 Global Mobility Forum

  • Understanding the "Plus" in Local Plus Policies

    Bill Barron Partner

    Kathy Soderman Managing Director

  • 3© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    Agenda

    Compensation Philosophies

    Case Studies

    Your Experience

    Q&A

  • Compensation Philosophies

  • 5© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    The Policy-Building Challenge

    Competitive/ Attractive

    Hand-holding

    Cost-Effective

    Empowerment

    Flexibility

    Home Equity

    Host Equity

    Control/ Compliance

  • 6© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    Policy Development Considerations

    Reflect corporate philosophy, culture and structure

    Align HR strategy with company’s business strategy

    Benchmark/reflect best practices

    Minimize costs/maximize return on investment

    Address both personal and professional needs of assignees

    Minimize special deals and exceptions

    Plan for future

  • 7© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    Compensation Philosophies

    Compensation philosophies will differ from policy to policy within an organization…Prevailing are:

    1. Home-based

    2. Host-based

    4. Headquarters

    5. Better of Home or Host

    3. Blended Home or Host

  • 8© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    KPMG Survey 2015: Assignment Compensation

    Which of the following statements best reflects the intention of your assignment policy’s compensation approach?

  • 9© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    KPMG Survey 2015: Taxes

    Which statement best describes your approach when addressing the assignment tax costs in relation to the assignee’s earnings?

  • 10© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    Local Definition

    A Local Plus package is an approach where the company pays their employees transferring internationally based on the local pay structure which will typically include: ■ Local Salary

    ■ Local Incentive Compensation

    ■ Local Benefits

    ■ Local Payroll

    This approach will apply to: ■ One way international transfers

    ■ Localized expatriates

    ■ International direct hires

    ■ Locally Qhired non-native individuals

  • 11© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    Local Plus Selection Drivers

    There is parity between home

    and host.

    Host country has higher pay scale

    that home country.

    Difficulty accessing local housing market.

    Developmental moves for more

    junior employees with fewer at home

    obligations.

  • 12© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    Local Plus Elements

    Housing

    Dependent Education

    Relocation Assistance

    Immigration Assistance

    Tax orientation

    Tax preparation

    Home Leave

  • 13© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    Advantages & Disadvantages

    Advantages

    Pay and allowances may be delivered easily May promote more consistent administration Could promote perceived equity amongst assignees at the host location Compliance and managing data may be easier May lower overall assignment costs

    Disadvantages

    x Impedes continued participation in home country programs (company-related, pension, social, etc)

    xAny need for home country currency will require supplemental assistance xMay complicate moving assignees to new assignments xMay complicate repatriation

  • 14© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    Pitfalls

    Employer Costs

    Benefit Issues

    Employee Experience

    Forgetting to Phase Out

    FX rates

  • Case Studies

  • 16© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    2. Project lead1. Analyst 3. CEO 4. Director

    Policy Selection

    How would you structure a policy to meet the needs of both assignee and the business? Let’s explore a few scenarios.

    Purpose Finance analyst sent abroad for global experience. Subsequent assignment likely

    Specialized expertise needed to roll out new initiative

    CEO for foreign subsidiary, return home at end of assignment

    Operations director permanent transfer to head department

    Home Host Duration

    Singapore United Kingdom 24 months

    Poland India 6 months

    US Hong Kong 36 months

    Au

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