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Deploying Talent on Short Term Assignments
Desiree Fulton Global Mobility, Tax & Immigration Policy
Scotiabank
Jennifer Connell, SGMS, CRP Manager, Consulting Services
Weichert Relocation Resources Inc.
Agenda
Short Term Assignments
Drivers of Short Term Assignments and Alternative Programs
Example of Short Term Assignment: Scotiabank
Alternative Assignments
CERC Conference 2012
CERC Conference 2012
Significantly Increase
Increase
Remain Unchanged
Decrease
Significantly Decrease
6%
40%
43%
0%
9%
5%
27%
54%
7%
10%
2010
2012
Volume Expectations for Short Term Assignments
CERC Survey, Trends and Volumes for 2012
Why Short-Term and Alternative Assignments?
Greater pressure to respond to business unit needs.
The speed of business is accelerating the
increase in alternative assignments
more than cost savings.
– 57% of employers worldwide feel the
talent shortage is preventing them from
growing.
“The Human Age” – A new era where
people are recognized to an unprecedented
level as the key to companies’ success and
economic prosperity. (ManpowerGroup)
Short-term assignments are increasing at a faster rate than traditional
“long-term” assignments, a trend confirmed by numerous surveys.
Expected to increase somewhat or significantly by 14% (CERC)
Expectations for long-term assignments and permanent transfers in 2012 are
consistent with those reported in 2010
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Changing employee
demographics
Skills gaps and “critical” labor
shortage
Evolving corporate needs (e.g. growth into new markets)
Cost containment and transparency
Alignment with Talent
Management
Strategic Role of Mobility
CERC Conference 2012
CERC Conference 2012
Short Term Assignment Challenges
• STAs aren’t as easy to manage as anticipated
• Companies may relocate more employees more frequently
on STAs, thus boosting overall program costs
• Unexpected tax consequences if assignments aren’t
executed properly
• If the assignment transitions into long-term, it may change
the assignee’s tax status
• Short-term assignments don’t always result in full cultural
assimilation, which is key to developing global leaders and a
big part of ROI for any international move
Scotiabank
Desiree Fulton Global Mobility, Tax & Immigration Policy
Global Mobility Policy – Short-Term Assignments
CERC Conference 2012
Scotiabank Profile
1
77,000 employees, 55 countries, 19 million customers
3 Core business lines, Canadian Banking, International Banking, Global
Banking Markets
2011 Annual Report:
– 5.3 billion profit 2011, up from 4.3 billion 2010
Scotiabank Global Mobility Statistics
Total Global Mobility assignments: 239
Total Long-Term Assignments 208
Total Short-Term Assignments 31 (13% of total)
STA structure supports development, projects, training
Typically, Director level or less
Typically, younger demographic, single or married, no children
4 CERC Conference 2012
Scotiabank Configuration
Global Mobility Policy & Administration is centralized
Business line HR assists business line management in selecting candidate
Global Mobility Admin prepares all assignment letter & compensation packages globally
Outsourced: Relocation vendor; Tax & Immigration; Cultural Orientation; Language
Global Mobility is only “approver” of exceptions; exceptions are minimal; tracked by relocation vendor & reported monthly
STA costs usually shared by home & host locations
5 CERC Conference 2012
Scotiabank – STA “Package”
6
Applied to assignments > 6 months < 24 months
Monthly Cost of Living Allowance (COLA) based on host city
Country Allowance, if applicable (% of base)
One bedroom furnished accommodation
Excess baggage to ship personal goods
Family remains in home location principle residence
Frequent home visits
< 10 hrs flight time = every 8 weeks
> 10 hrs flight time = every 12 weeks
Tax equalization – employment income
Tax consulting; annual tax filing preparation home & host
Immigration consulting; work permit issuance / tracking
Global Mobility is only “approver” of exceptions; exceptions are minimal; tracked by relocation vendor & reported monthly
STA costs usually shared by home & host locations
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Scotiabank - GM Policy Review
More guidance / definition to assist business line in determining “type” of assignment structure appropriate
Greater involvement with Talent Management group to identify top talent developlment / strategic leadership positions & paths
STA perceived as “cheaper” than long-term assignment package, but often equal to, or greater cost
Exception requests for flexibility on STA home visits
Exception requests for flexibility on STA family accompanying assignee
7 CERC Conference 2012
Draft Model for Differentiating Assignee/Assignment Types
Talent based framework to determine assignment type and drive the mobility package provided to the employee
Two dimensions:
1. Development value and
2. business value/need
Development
Value
Higher
Lower
Lower Higher Business Value/Need
Target Employees: Source Pool (Emerging Leader)
Learning Experience
Target Employees: Top Talent Key Person
Strategic Leadership Opportunity - Key Job at Division
Target Employees: Employee initiated moves
Commodity Job – Non Strategic Roles GM Approach: Expectation of 3-5 yrs. Career management process to obtain next role.
Target Employees: Critical Resource**
Skilled Position (management or technical)
GM Approach: Bank has no plans /expectations for employee to return to existing location
GM Financial Approach: Minimal assistance or support provided by the Bank.
GM Approach: Expectation that employee will be on assignment (2 years or less). Career management process to obtain next role.
GM Financial Approach: Participant will bear some of the costs.
GM Financial Approach: Full assistance no Mobility incentive req’d Accommodation of some exceptions
GM Approach: Expectation of 3-5 yrs. Career management process to obtain next role.
GM Financial Approach: Full assistance Mobility incentive appropriate Accommodation of reasonable exceptions to facilitate
8
Facts - Employees on Assignment Globally
Duration of Current Assignments: 28% Less than 1 year 55% 1 – 5 years 14% 5 – 10 years 3% More than 10 years
Business Line Breakdown: 77% International Banking 10% Global Wealth Management Including GTB 8% Global Banking & Markets (excluding local plus)
5% Corporate Functions
Number of Years of Service: 13% Less than 5 years 33% 5 – 15 years 26% 15 – 25 years 15% 25 - 35 years 13% Over 35 years
Level Breakdown: 5% SVP 26% VP 43% Director
14% level 8 12% level 7
The ratio of men to women on assignment is 3:1
9 CERC Conference 2012
Commuter Assignments
COMMUTER
ASSIGNMENTS
Yes Formal Policy
61%
58%
Assignment involving travel between home and destination
countries for a specified number of days per month, with a
set maximum of return trips home. The employee typically
stays on home country payroll but expected to work in the
host country on a frequent/defined basis.
Benefits provided:
97% Immigration
94% Tax Consultation/Return Preparation
92% Home/Host Travel
75% Tax Equalization
61% Host Transportation Allowance
61% Temporary Living
50% Extra Baggage
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Extended Business Travel
EXTENDED
BUSINESS
TRAVEL
72%
32%
Yes Formal Policy
Employee travels regularly to an international location for an
extended period of time (typically up to 1-2 weeks) to work
on key business projects.
Benefits most frequently provided:
•97% Immigration
•69% Home/Host Travel
•66% Temporary Living
•51% Tax Consultation/Return Preparation
•49% Host Transportation Allowance
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Rotational Assignments
ROTATIONAL
ASSIGNMENTS
42%
71%
Yes Formal Policy
A series of two or more assignments, typically short in
duration (e.g. 1-3 months) with the employee returning to the
home location for a set period of time, or to a different
location.
Benefits most frequently provided:
•Immigration
•Tax Consultation/Return Preparation
•Host Transportation Allowance
•Home/Host Travel
•Tax Equalization
•Temporary Living (host)
•Extra Baggage
•Housing Allowance
•Hardship/Location Premium
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Core-Flex
CORE-FLEX
20%
91%
Yes Formal Policy
A program in which a basic set of fixed (“Core”) and
optional (“Flex”) benefits are provided, resulting in an
assignment/transfer package that is customized to the
employee’s circumstances and needs or the budget/cost
constraints of the business unit.
Benefits most frequently provided:
Core Flex
Immigration Language Training
Tax Consultation/Return
Preparation
Cross-Cultural Training
Medical Exam/Vaccinations Pre-transfer Trip
Miscellaneous Allowance Housing Allowance
Household Goods Settling-in Services
CERC Conference 2012