Whitepapers

Prioritizing Wellness

German philosopher Arthur Schopenhauer aptly stated,

“Health’s not everything, but everything’s nothing without health!”

Globally relocating employees—especially those who accept a first-time assignment—often “don’t know what they don’t know.” Even before the COVID-19 pandemic, pre-assignment medical considerations and screenings were not usually top of mind for employees going to a new country, although they remain an important detail in preparing for any global assignment.

For successful global mobility management programs, proactive service and strict attention to detail are critical and result in a positive return on investment for companies and employees alike. Therefore, it is important to convey well before departure what the employee and family can expect in the host country.

Especially so, if they have any health issues, they should understand what medical options are available to ensure employees going abroad are empowered, are knowledgeable about the process, and understand unique country requirements.

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Proactive Medical Screenings

For those offered an international assignment opportunity, medical screenings may seem unnecessary or low on their to-do list with everything else on their plate. However, the effort can be well worth it to reduce the risk of avoidable health issues on assignment. After all, one of the most effective tools for a successful, stress-free international assignment or permanent move is proactive planning.

Medical screenings can supply proof of a company’s legal standing concerning duty of care, which presumes employers have moral and legal responsibility for the health, safety, and security of their employees— especially those traveling on behalf of their employer.

Proactive pre-assignment medical screenings that include interviews of the employee and family members help ensure information and action plans can support the success of the assignment or move and lower stress levels.

Such screenings—required by some employers and only strongly encouraged by others—can also result in proactive doctor recommendations that support a healthy employee and family while abroad. A well-designed plan will also clearly address and alleviate any data privacy concerns employees and their family members may have about their medical information.

Being more prepared for and in tune with managing the potential for health concerns is not only good business practice, but it helps assignees feel relieved when they know their employers are providing help and looking out for their family’s welfare while abroad. According to Mercer, medical conditions identified at a screening may not stop an assignment from happening, but rather, they can help the employee and family prepare.

In such a scenario, all international assignment candidates at a manufacturing client are required to undergo “pre-assignment medical screening checkups.” One employee’s screening resulted in the discovery of a serious undiagnosed condition. The doctor highly recommended that the employee and company delay the assignment to address and remedy the health situation at home. After six months, the candidate was cleared for assignment to the host country.

Efforts to discover medical issues and understand how they can influence an assignment’s success or failure should not focus only on employees. Health issues for spouses, partners, and / or accompanying dependents should be discussed upfront with each family considering an assignment.

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‍Productive Planning

An assignee about to fly from Turkey to the U.S. learned at nearly the last minute that his wife’s recently diagnosed health condition required her medicines to be refrigerated continuously. Special batteries for the ice packs needed to be used in flight and during their long airport layover. The batteries also required constant recharging during all periods of transportation. The family’s 20-hour journey was only two days away. When the assignee called his NEI Account Executive, it was clear by his voice that he was nervous.

The global relocation management company account executive helped arrange a successful journey from Turkey to the U.S. together, the account executive and the assignee worked with the airline to arrange refrigeration of all medicines during the flights. They located and purchased in advance additional freezer packs at the layover airport. These steps ensured that they could keep the medicines cool until they reached the destination hotel. Additionally, they took steps to ensure that the family would be able to obtain more medicine in the assignment location.

Before employees and families travel abroad, they should understand what medical services their health insurance will cover outside of their own country.

They should also:

• Schedule a discussion of any specific health concerns— illness, allergies, medications, etc.—with their medical provider eight to ten weeks before the anticipated start of travel and receive immunizations well in advance of travel to achieve optimal protection.
• Arrange eye exams for family members, and obtain duplicate prescriptions for glasses and contact lenses, or extra pairs of glasses or lenses in case these are not easily available on location.
• Request copies of medical records, X-rays, and prescriptions to take abroad.
• Schedule family medical checkups in advance for when they are on home leave.
• It is critical that employees going abroad understand how the company’s health insurance works in the destination location. Specifically, does the employer’s health insurance company in the host country cover the same prescriptions as under the home country’s health insurance coverage? Will prescription expenses far exceed the home-country cost of the same medicine? If so, will the company reimburse the employee for what is not covered, since he or she is taking an assignment at the company’s request?

Finally, employees should know the importance of carrying proof of health insurance and how to process claim forms, contact their health insurance provider, and make payments for medical coverage while on assignment.

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Prescription Restrictions May Surprise You‍

Employees should not rely on being able to access the same medicines in the destination country as they can in their home country. The medications may not be available or—depending on location—may not meet standards for approval.

Employees and their families need to be aware that the rules about moving medicine and prescriptions through customs or having them shipped to the assignment location vary significantly from country to country. As some travelers have found out, ignorance of local laws is no excuse to authorities. There can be consequences if such laws are violated while entering the host country.

Though each country’s rules change regularly and sometimes with little warning, consider that:

• Singapore requires a license to legally bring in Ambien.
• In Saudi Arabia and Japan, attention deficit disorder drugs such as Adderall and Ritalin are not allowed, even with a doctor’s prescription, as methamphetamines and amphetamines are active ingredients.
• Those entering Dubai must complete an online form detailing medication they carry, because many medications are banned, such as narcotic-based, psychotropic, and controlled substances. The banned list also contains medicines that are not registered in the UAE, herbal medicines that might contain some banned substances, medical devices that might contain banned medication, and pharmaceuticals that have been discontinued in the UAE.
• Going to Japan requires leaving over-the-counter cold treatments such as Sudafed or some Vicks products behind, as they contain the ingredient pseudoephedrine, which is banned there. Japan also limits common Benadryl to 10-milligram capsules.
• Some over-the-counter medicines commonly used in the U.S. and other countries are illegal to bring into Mexico, including inhalers and some allergy and sinus medications.
• In Greece and the UAE, diazepam, tramadol, codeine, and many other commonly prescribed medicines are considered “controlled drugs”—always check what the requirements are for taking them into a country.
•  Visitors are strongly encouraged to carry a doctor’s note with them for any personal medicine when visiting China.
• Those headed to the U.S. should be aware that personal medication may be subject to U.S. drug importation laws and regulations. In general, personal importation of a 90-day supply of medication is allowed, but only if the drug is not available in the U.S.

If there is no way to legally enter a country with one’s needed medication, some tough choices must be made. Employees can check with their prescribing doctors to see whether there is a legal alternative in the new location. If the destination’s government has a limit on the specific amounts of a medication that can be brought into the country at one time, an option is to use one’s home-leave trip benefit to acquire an additional supply.

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Vaccination Variances‍

Restrictions can also apply to vaccinations. One U.S. family in China that had a newborn in-country learned that a vaccination required for young children in the home country was not allowed in China. The company approved reimbursement for round-trip tickets for the mother and newborn to visit South Korea for the vaccination rather than wait until their next home-leave trip to the U.S. for the vaccination.

It may be possible to obtain the medication once the employee arrives in the host country, but consideration should be given to where it is purchased. Tullia Marcolongo, executive director of the International Association for Medical Assistance to Travelers, reminds readers that, “Fake medicines are common worldwide and can cause serious illness or even death. Always get your medication from a reputable, licensed pharmacist.” Additionally, employees should be cautious when sending medication through the mail. Says Marcolongo, “Extreme heat and cold during transit can alter the effectiveness of your medication. It is also possible that the package could be confiscated at the border.”

Finally, the U.S. Centers for Disease Control and Prevention recommends that when traveling, it is important to pack approved medicines in carry-on luggage so that if a suitcase is missing, the medications are not lost and out of reach when needed.

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Improving The Odds for Success

Failed assignments, according to one study, have an estimated cost of two to three times an employee’s annual salary. This doesn’t include the company’s lost business opportunities and the costs to recruit, interview, and establish a new replacement employee.

Improving the odds of assignment success and a global company’s return on investment can be accomplished by supporting employees through a proactive, consistent [and private] pre-assignment medical briefing program. Mobility managers should consider:

• Adding pre-assignment medical screenings to the employee’s checklist of things to do before departing.
• Establishing a checklist regarding pre-assignment health issues.
• Reviewing company policy to see if any reference to health screenings needs to be added.
• Understanding exactly what the policy covers and who, internally, can explain the importance of proactive, pre-assignment health planning to potential assignees.

When sending employees to other countries for work, it is prudent in the spirit of duty of care to reduce all risks for employees and families before they even accept the assignment. Health and safety should be at the top of the list for both parties—employee and employer.

Such proactive steps can not only result in healthy, productive employees and families while on assignment abroad, but also positively impact the company’s bottom line.

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_{The above information is for general information only and is not presented as legal advice. Please consult with your legal advisors and internal stakeholders before making decisions and taking any action.}

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A Comprehensive Examination

Offering partial lump sums in lieu of reimbursement for certain policy benefits is well-proven in U.S. Domestic mobility policies and the strategy has become popular for its flexibility and ease of administration. Providing a partial lump sum for specific policy benefits can also allow relocating employees to spend how they feel best in their situation.

But do partial lump sums have a place in international mobility policies?

Let’s investigate!

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What’s Your Comfort Level?

It may sound tempting to the employee and company to use partial lump sums in an international policy, however, it varies on each company’s comfort level surrounding how a partial lump sum would be used, particularly for:

• Specific benefits (e.g., temporary living, meal per diems, to/from airfares and baggage fees, spouse/partner counseling), and
• Specific employee levels (entry level, management, executives)

After all, since companies relocating employees “intra-country” – such as from Los Angeles to Las Vegas – use partial lump sums for certain benefits, why couldn’t employees relocating on assignment from Los Angeles to London, for example, do the same where appropriate?

The answer is…it depends.

It is no secret international moves have unique “grey” areas and nuances to address that are different from domestic policies. Successful, trouble-free international moves take considerable coordination involving timelines, logistics, and attention to detail for Global Mobility or Talent Management administrators. To help bring more clarity to potential concerns, consider the following:

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Upsides for Using Partial Lump Sums for Certain Benefits

Companies operate with an eye towards overall efficiency and employee self-service where possible.

Those in favor of partial lump sums often cite the following:

• From a generational standpoint, Millennials taking international assignments may embrace using a partial lump sum compared to Gen-X or Baby- Boomer generations.
• Employees may feel more empowered to make relocation/assignment choices that work for their preferences and are incented to spend as little as possible to keep what remains.
• Partial lump sums make corporate budgeting for certain benefits more predictable and streamline the management process.
• Companies find issuing partial lump sums for certain relocation benefits more efficient than collecting receipts from the employee then reviewing and auditing expense reports so employees can be reimbursed.
• Anticipated savings may reach up to ten percent when using a partial lump sum allowance for certain benefits compared to a direct reimbursement approach.

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Potential Downsides of Using Partial Lump Sums

Most companies prefer managed control of an international relocating employee’s approved benefits, logistics, and costs. Using a partial lump sum for certain benefits, while attractive on paper, can have its risks if the wrong benefits are included.

For example, it is strongly recommended to avoid including visa and immigration benefits, as well as overall taxation support, in partial lumpsums.

Consider the following:

• A partial lump sum may not be appropriate for executive or senior-level assignments. If the sum is deemed too low, getting an exception approved to increase the benefit for their perceived need can become an annoyance that negatively affects satisfaction.
• Client administrators will need to invest time to determine partial lump sum amounts that are fair and effective by location, decide which benefits should be included, and apply them across multiple policies. And all this work must be repeated as market changes occur.
• Currency fluctuations or high inflation can leave employees feeling short-changed or requesting exceptions due to a “special situation.” This can add to administrator workloads which could impact savings and potentially create tension for companies and employees alike.
• Relocating employees may spend significant time researching how far their funds might realistically stretch in their international destination, which could impede their productivity and responsibilities at work.
• Relocating employees may opt for less expensive options to retain more cash, instead of, for example, selecting safe and reliable temporary living apartments in the host country. There is also a risk of jumping into something that looks like a great deal only to realize it is a scam.
• Relocating employees who have previously been on a company international assignment with eligible costs reimbursed may not see the overall value in a partial lump sum.
• With partial lump sums often taxed as ordinary income, companies may be able to avoid taxation outside of a partial lump sum in certain countries. It is important to check with your tax firm before implementing any changes.
• If the relocating employee is responsible for taxes with the partial lump sum, they may be unaware of home and/or host country regulations that could result in penalties and / or negative company compliance issues.

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Striking a Comfortable, Equitable Balance

Keeping the above considerations in mind, determining if using a partial lump sum in lieu of reimbursement for certain benefits boils down to what is the right fit for that company. To help assess the fit look at:

• Company culture and annual move volume,
• Employee “noise” levels about policy benefits,
• Employee demographics and job levels, and
• Company program flexibility and expense tracking goals. A partial lump sum allowance for international assignments may seem appealing but may also burden employees/ families with unexpected extra time for planning and research to effectively budget for their needs, all while needing to focus on the international transition, core job responsibilities, and / or family concerns.

“Beauty is in the eye of the beholder” and each company needs to strike a comfortable, equitable balance between employee workload, cost savings, risk, compliance, and flexibility.

If you would like to discuss international partial lump sum options or other topics, please contact your NEI representative at any time.

_{The above information is for general information only and is not presented as tax or legal advice. Please consult with your tax or legal advisors and internal stakeholders before making decisions and taking any action.}

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The Next Big Business Trend for Global Mobility

For decades, many Western manufacturers shifted production to Asia and China for countless items – including consumer products, textiles, cell phones, computers, microchips and much more. The intent was to lower labor costs and raise profits.

As global supply chains continue to feel great pressure, offshoring production to far off locations may be reversed.

How might this trend impact global mobility?

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Global Instability Impacts Globalization Efforts

Concerned with global stability and COVID-19 lockdowns, CEOs have started researching plans to relocate production closer to home – more than even during the first six months of the pandemic, according to Bloomberg.

U.S. Treasury Secretary Janet Yellen has called for more “friend-shoring” – also called “near-shoring”, “re-shoring” or “on-shoring” –in a push for U.S. companies to become less reliant on geopolitical rivals. Larry Fink, CEO of Blackrock, said the war in Ukraine has "put an end to globalization” and “companies and governments will also be looking more broadly at their dependencies on other nations."

A December study by Goldman Sachs found 75 percent of respondents plan to diversify their supply chains.

Such strategies are designed to:

• ‍Reduce risk: Numerous industries fell victim to offshored product availability that stalled their business.‍
• Avoid geo-political concerns: This can include trade wars and actual wars – as seen when hundreds of western companies exited Russia after its invasion of Ukraine. With China-Taiwan tensions escalating, U.S. companies in Taiwan are taking proactive measures to insulate themselves from potential business risks.‍
• Decrease supply chain delays: In-country or regionally produced products have a more streamlined distribution process and don’t usually require expensive overseas shipping.‍
• Greater quality control: Re-shoring closer to home provides greater control over the production process and quality standards to ensure consumers receive the highest quality of products in a timely manner.‍
• Reduce time zone differences: Re-shoring allows companies to proactively avoid issues before they disrupt their manufacturing process as collaboration between individuals in closer time zones reduces communication challenges.‍
• Sustainability Efforts: Re-shoring/near-shoring also adds sustainability and ESG (Environmental, Social, and Governance) benefits. Shorter, “greener” supply chains mean lower carbon emissions and reduced Scope 3 emissions (emissions generated indirectly by a company’s activities).

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Supply Chain Stability vs. Expense Savings

Some U.S. business sectors – automotive, aerospace, textiles, microchips, etc. – have started re-shoring faster than others, but re-shoring or near-shoring of manufacturing and supply chains is no small task. It is also not without risk and still influenced by the global locations where necessary manufacturing supplies and raw materials are sourced.

Consider the situation of an Italian maker of hydraulic equipment. They had re-shored their steel and wire supply chain from China to a European regionalized approach. One of the new regional suppliers where they sourced iron was located in Mariupol, Ukraine – a city that became completely devastated when Russia invaded. The company had to scramble to get this supply component all the way from India.

Despite much political pressure for companies to come back home, it is a huge investment and can often take years to accomplish. The biggest challenges may be in the U.S. and Europe:

• ‍First: energy and construction costs in the U.S. and Europe are higher than many offshored locations. If certain raw materials for production are sourced locally at much higher prices, companies may need to push that cost onto consumers who may not be willing to buy;‍
• Second: inflation in the U.S. and Europe have pushed employees to demand higher compensation and benefits, and construction and energy costs have grown even higher;‍
• Third: U.S. manufacturing employment is still below its pre-pandemic level and only two-thirds of what it was just two decades ago; and‍
• Fourth: not all employees of various countries are equally qualified. Depending on the product being manufactured, companies feel significant skills gaps exist in countries where companies can near-shore for precision, high-tech manufacturing skills and operations. Certain components of equipment also can’t be made in all locations and must be brought from countries with higher skilled employees.

Though nations like China have huge manufacturing advantages, more companies in western Europe have begun near-shoring factories to Eastern Europe and more U.S. companies are near-shoring manufacturing to Mexico and Central America due to lower capital and labor costs.

Consider that 172 of 260 company executives with manufacturing  plants  in China acknowledged their interest in near-shoring to Mexico to supply the U.S. market, as reported by Border Now magazine.

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What This All Means to Global Mobility

With all the talk of relocating manufacturing and supply chains, many experts believe companies will respond by both 1) diversifying suppliers and 2) relocating to near-shore, low-wage countries.

Global Mobility Managers would be wise to think about how best to plan and prepare for regional / global group moves and entries of new employees/families into previously untapped locations. For instance, regarding Taiwan, this may be a “slow drip” over time transition that might not be highly noticeable, unless there is a blockade or hostilities.

NEI encourages client global mobility stakeholders and management to collaborate and work closely before a decision to re-shore or near-shore is made so:

• key talent can be identified as potential relocation candidates,
• visa and immigration needs can be researched to establish necessary timelines, and
• realistic costs projections can be made.

As some countries fight “brain drain” – the loss of educated, skilled talent leaving for countries with more opportunity – they will take aggressive measures to keep that talent from leaving.

Yet the “brain drain” will continue.

In March 2022 alone, a Russian technology industry trade group estimated between 50,000 and 70,000 tech workers had left the country and an additional 70,000 to 100,000 would soon follow. In China, since the nation’s aggressive COVID lockdowns, middle-class and wealthy citizens’ inquiries to immigration consultants have surged.

History shows people will sacrifice and find a way to leave situations they do not see as sustainable. Western countries and companies may continue to benefit in the future and should be prepared.

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Pre-Planning is Everything

Consider the projection by the McKinsey Global Institute that re-shoring and near-shoring production will relocate between 16 and 26 percent of the value of world trade in the next five years – that’s up to one in four facilities!

Imagine having a crystal ball and being able to plan for the unimaginable disruptions like COVID-19 well in advance. This might be one’s chance to prepare for a potentially huge trend looming on our horizon.

If you would like to discuss how best to support your company’s initiatives with re-shoring, near-shoring or global group moves – as well as relocation, retention and immigration needs for key local national or international employees – please contact your NEI representative.

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_{In addition to normal global mobility services, NEI is also able to provide clients with worldwide assistance in identifying commercial locations in which to relocate.}

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Global Expense Management & Compensation Delivery Overview

In the area of global expense management and compensation, many companies often rely on historical practices, but as rapidly as the world is changing these key areas of relocation management should be reviewed frequently to ensure compliance. Now more than ever, for those companies with a wide-ranging breadth of assignment locations and projected assignment durations, attention to the details is critical to compliance.

Running a compliant global compensation and expense management program can lower stress and realize considerable time and cost savings for HR and Payroll professionals. It is important to understand the various approaches to Program Management; Payment; and Payroll Delivery options to maximize company accountability and accuracy when collecting, tracking, and reporting expense and compensation information for employees relocating internationally.

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Program Management - Outsourced or In-house?

When selecting a global compensation delivery model - whether managed in-house or outsourced – many considerations need to be evaluated. These items can include tax considerations based on the type of visa each employee is moving under; tax treaties and pay elements, as well as the associated global tax considerations of them.

‍Outsourcing to an RMC partner:

‍The client chooses a proven relocation management partner to assume responsibility for administration of the program with client global payroll internal stakeholders and a client-preferred tax partner.‍‍

‍Managing it In-house:

The client runs the process within the company for their employees relocating globally. In-house contributors can include HR, Payroll, Global Mobility in conjunction with outside tax partners to deliver services.

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Payment - Host, Home or Global?

As every company’s goals, culture and mission is different, each one also has a different rationale for determining how to conduct payroll options for employees working across borders. While each approach has its advantages and disadvantages, it is important to note that most multinational NEI clients use either home country or split payrolls for their expat employees. Let’s examine the primary options:

Host Based Approach:

Known for its cost- effectiveness to “localize” the employee, the host- based approach uses the market rate of the host country to determine the assignee’s salary. In other words, the assignee transfers to the host country payroll and receives both base and incentive pay based on local compensation norms and regulations. The assignee pays the tax and social security (or social insurance) contributions required in the host country.

• A host-based approach may support moves into countries with higher salaries, compared to their home country, as employees will often see the positive in taking a rise in pay versus a decrease in pay.

Home Based Approach:

This approach, known also in the industry as a “balance sheet” method, is to maintain assignees’ home country purchasing power, so they are no better or worse off while on assignment in the host country, than if they had stayed at home.

• It is also the most widely used approach by U.S. multinational companies as the aim is to help maintain home country purchasing power. However, for relocations from low-to-high salary countries, the new, ensuing salary level may be too low to provide an appropriate standard of living or too low for the countries’ immigration requirements.
• Many feel that the home-based approach is also more appropriate for assignments where an employee will return home after the assignment, compared to an employee who may go on to live in multiple countries and not return home.

Global Approach:

Though the “global” approach to payment has more equality and inclusivity among similar jobs within global organizations, it is also the least utilized approach due the complexity of global delivery.

Differences in each country’s laws, as well as vast differences in local taxes and living costs must be considered in establishing equitable expatriate compensation. Additionally, not all companies will have the corporate interest - or internal bandwidth – to establish a strategic global compensation system. This is a reason why host- and home-based approaches continue to be the most used approach.

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Payroll Delivery – Split or Shadow Payroll?

Global compensation rules are already complex and confusing and even seasoned relocation professionals sometimes need a refresher of the payroll delivery concepts and the particular importance it plays in today’s changing world of global mobility. Let’s examine the options:

Shadow Payroll Approach:

Some employers may have dual payroll withholding responsibilities in both their home country and a foreign jurisdiction. If so, they will often run what is known as a “shadow payroll” in respect to an employee’s taxable income. The payroll in the host country will “shadow” what is being reported in the home country for the purposes of being able to meet various withholding requirements.

Split Payroll Approach:

Some employers allow employees to receive a portion of their salary in both the home and host country payroll to receive a portion of their pay in the local currency. It is also common for assignment allowances to be paid in the host country if using a split payroll approach.

Split payrolls may also be required due to some countries’ regulations for compliance of local pay delivery.

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NEI’s Consultative Approach Benefits All Clients

NEI has extensive experience providing international payroll delivery support, including the compensation gathering from multiple payrolls. This expertise translates into less work for a client’s payroll department, freeing up important time for other core responsibilities.

We recommend performing up front analysis and planning in conjunction with any client tax firm to cover important items:

• Determine which payroll processing method– home or host country, split payroll, shadow payroll –works best for you and your company’s compliance and administrative processes.
• Obtain accurate information about tax requirements, labor laws and regulatory mandates.
• Comply with local customs, cultural issues of each country.
• Work with payroll firms to address technology needs surrounding global payroll plans.
• Assess language barriers and time zone differentials, which can affect payroll processing.
• Revisit payroll systems and processes regularly.

NEI takes ownership and accountability with our partners to ensure the domestic and international assignment process is not only seamless but stays as stress-free as possible and on track from the beginning by setting expectations upfront for each benefit.

Overseen by a staff of CPAs, NEI provides global expense management and global compensation accumulation and reporting. This service is performed in-house and coordinates with each client's payroll and tax partner to ensure the details are captured for reporting.

This means less work for client payroll and mobility / human resources departments, freeing up time for other core responsibilities. Potentially, this can also lead to lower costs with the tax partner as they are provided accurate details captured by NEI for easier filings without spending billable time gathering information or seeking data clarifications.

Our internal control process is SOC 2 Type II certified and supports accuracy through a series of audits and controls. Working closely with the NEI Account Executive,

the Expense Administrator and Auditor become experts in administering client expenses according to unique policies and procedures.

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Consultative Support

There is no single “best way” to implement Global Expense Management, Compensation and Payroll. NEI’s many years’ experience helping global clients navigate these matters provides consultative support, education or training as needed to ensure your global compensation program -- and compliance needs -- are or email away. Please contact your NEI representative; Mary Petersen, CPA, Controller; or Michelle Moore, NEI’s Chief Global Mobility Officer, at any time to discuss further.

_{The above information is for general information only and is not presented as tax or legal advice. Please consult with your tax or legal advisors and internal stakeholders before making decisions and taking any action.}

Thriving During Mergers and Acquisitions

 Day-to-day business can be challenging on its own, but when Mergers and Acquisitions (M&A) are in the works, things can become especially interesting.

M&A activity is on track for another strong year, so questions Global Mobility, Relocation and Human Resource departments should be asking right now are:

“Are we ready for a fluid and potentially aggressive M&A environment?” and“ Where do we start when we learn about a merger or acquisition that impacts our business?”

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Awareness and Preparation Are Key

Benjamin Franklin wisely said,

‍“By failing to prepare, you are preparing to fail.”

Based on NEI Global Relocation’s (NEI) experience with M&A transitions, five key Action Steps that impact the successful integration of companies have been identified:

1. Ensuring Key Stakeholders are at the Planning Table
2. Addressing Cultural Differences
3. Assessing Global Mobility Needs and Implementing New Strategies
4. Managing Expectations and Working through Differences
5. Effecting a Calm Transition

These elements may feel as though they are occurring simultaneously, but NEI’s expertise with M&A can guide you through each Action Step to skillfully embrace the

vital components necessary for you to thrive, rather than just survive.

Given the potential for increased M&A activity, awareness of these steps can help Global Mobility, Relocation and HR professionals play a more strategic role should your

company head in that direction.

After all – when the M&A ink is dry and the lawyers and investment bankers leave the scene, confusion often reigns for those who are not primed for the challenge. Even

normal daily decisions of the past can prove problematic in the new and merging environment.

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Ensuring Key Stakeholders Are at the Planning Table

Action Step One

Morgan Stanley’s ”M&A Trends Outlook” report confirms that deal-making is likely to accelerate going forward and factors cited as most likely to drive future activity include:

1. Well-capitalized companies making acquisitions in their core businesses.
2. Financial sponsors, which are holding record amounts of capital, deploying it in acquisitions.
3. Uneven performance among companies stoking shareholder activism.
4. Cross-border M&A making a comeback.

One of the most important factors in achieving a successful M&A transaction is effective integration. Who better to contribute to a successful integration than the company’s “people” people?

Six of eight key internal factors that can lead to a failed M&A touch on areas related to HR including:

• Execution/Integration Gaps
• Talent Issues at the Target Company
• Not a Well-defined M&A Strategy
• Not Achieving Expected Cost Synergies
• Inadequate/Faulty Due Diligence
• Not Achieving Cultural Alignment

This illustrates how important it is to invite Global Mobility, Relocation and Human Resources to the planning table to participate in the extensive pre-planning

discussions that need to occur before the announcement goes public.

While executives leading a merger or takeover may act more optimistically, impacted groups might be insecure about the potential for dramatic change. Forming strong

relationships and cross-departmental teams improves M&A dynamics.

Internally, companies must identify key players from the merging entities to create an M&A project team. Because combining the assets of two or more companies

involves employees, Global Mobility, Relocation and Human Resources comprise an important segment of an M&A implementation strategy and play critical roles on the

transition team, as do Payroll and Accounting.

The first order of business for the M&A project team related to employees includes:

• Establishing Timelines for what can be shared and when.
• Sharing Known Dynamics, such as the number of anticipated relocations, locations affected, the new global footprint, potential group moves.
• Determining Budgets to contain costs of known dynamics.
• Identifying required Outside Resources, such as the relocation management company.
• Generating New Policies to retain critical talent.

Once the basics have been established and a general statement of work has been considered, it is time to arrange a confidential meeting with the relocation

management company. Because every M&A has its own unique signature, what you did in the past may not fit the current situation.

Relocation management companies like NEI have vast experiences in helping numerous companies navigate the complexities of M&A integrations related to global

mobility and can be a time and cost saving advocate for planning a successful M&A.

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Addressing Cultural Differences

Action Step Two

According to Aon Hewitt, 58 percent of companies reported they did not have a specific approach to assessing and integrating company culture in a deal.

A Willis Towers study of 190 CEOs, CFOs and top executives on global acquisitions found that cultural incompatibility is rated consistently as the greatest barrier to a

successful integration. Unfortunately, it also found that due diligence on corporate cultures was negligible.

An assessment between key groups is often used to appreciate the differences. Understanding work style, protocol, etiquette, decision-making, and more is critically

important in developing the organization’s new culture in a manner that helps everyone feel like a valued participant.

With the forecasted uptick in cross-border M&A activity and since cultural alignment is a major factor in a successful M&A, consider investing in cultural training for all

stakeholders, including the HR and Global Mobility/ Relocation teams that may work together.

“Truly global companies around the world are securing supply chains and acquiring companies internationally to do so. We should expect even more cross-border volumes across borders and regions for the foreseeable future.”

Mollie Ivancic, VP of International Services, NEI Global Relocation

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Merging Cultures

NEI Thriving Example #1

When a North American firm was acquired by an overseas conglomerate, both relocation departments entered the process knowing there needed to be much planning,

collaboration, and integration of teams to maintain a return on investment and a seamless transition.

NEI recommended intercultural and communications training for all groups working on or affected by the transition and provided additional area orientation support and

integration planning for those who would relocate. This was a crucial step for members of the acquiring company’s overseas management team who were coming to live

and work in North America where they would present a different culture and management style to the new workforce.

The company also used the resources of the foreign country’s local embassy and engaged their ambassador to speak about cultural customs and business protocols of

the acquiring company’s country to key operational staff in the United States who would be working with new, high-level managers.

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Assessing Global Mobility Needs and Implementing New Strategies

Action Step Three

“A partner like NEI – experienced to recognize the opportunities – is crucial to the successful integration of talent agility, relocation and global mobility within the newly- formed company.”

Michelle Moore CPA, MPA, CGMA, Chief Global Mobility Officer , NEI Global Relocation

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Each M&A integration approach is different and tailored to the situation or even an outcome desired by senior management.

For instance, during clear “buyout” situations, leaders from both companies may publicly rename the takeover as a “merger” or a “synergy” to diminish the potential of

employee anxiety and improve cross-organization collaboration. It is often assumed that the acquiring company’s policies will supersede the program of the

company being acquired, but no hard and fast rules exist.

Group Moves within a new company are a common biproduct of M&A activity. Experiencing and managing a group move is one of the more challenging tasks a relocation

manager and company can face. It typically involves targeted new policies, a very customized local approach, communication strategies, multiple meetings, support

functions and ongoing collaboration.

Throughout our history, NEI has managed many group moves for our clients ranging from groups of five to 800 transferring employees/families across numerous

industries and global locations. Through our experience, we know how to identify success elements to retain key employees, present the big picture, guide affected

employees and manage the entire process proactively. We have found that a strategy does not have to be expensive or elaborate to succeed.

Many Global Mobility, Relocation and Human Resource departments that have experienced M&A events discover that it is also an opportune time to not only customize

group move benefits, but also make desired changes to the overall relocation program. The timing of the M&A provides the additional leverage needed to obtain senior

management agreement and support.

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Trust is Earned, Not Given

NEI Thriving Example #2

In the merger of two mega-conglomerate companies, NEI took the lead in successfully analyzing and integrating the two companies’ relocation benefits and policies into

a comprehensive new program. The client specifically sought NEI’s expertise in offering creative solutions, presenting the agreed upon approach to impacted employees,

and helping to relocate the combined company’s new headquarters to a new site.

Newly combined companies often consult with NEI to conduct an objective, detailed analysis and compare both companies’ policies against current best practices and

the client’s industry peers. After the policy comparison, merging companies often choose to move forward with NEI’s policy suggestions because of the focus on cost

effectiveness and NEI’s record of delivering high employee satisfaction.

Once finalized, NEI presents its findings at a kick-off implementation meeting involving all key stakeholders. This is an excellent time to cover new program improvements

and procedures while ensuring everyone involved is on the same page going forward on both tactical and strategic levels.

When the plan is put into action, desired results are monitored, measured, and reported regularly so the program can be adjusted, as necessary.

Not long after the positive conclusion of this large project, the client merged, yet again, with another rival. NEI helped manage the resulting union of the relocation

programs and all transferee/assignee activity continued as a seamless execution of the ongoing program. Communication, collaboration, and a consultative approach

helped make both mergers a great success.‍

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Managing Expectations and Working Through Differences‍

Action Step Four:

Working through differences is not limited to companies combining work groups from different countries or regions of the world –internal company cultures can often be

diametrically different.

NEI has helped the M&A of many companies with polarly opposite and well-entrenched, corporate cultures offering vastly different relocation benefits.

One company may provide very generous benefits, while the other very lean. If not carefully managed, a situation like this can lead to dissatisfaction and

bitterness, depending on new corporate objectives.

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“Understanding” Helps Us Accept Change

NEI Thriving Example #3

Quickly integrating the relocation programs of two merging companies was complicated enough, but members of a small division of the purchased company were

disappointed about adhering to a new policy, much different than the more generous, exception-friendly benefits to which they had been accustomed.

NEI effectively helped the two sides by using a collaborative and consultative approach to compare relocation programs against company announced objectives. An

enhanced benefits policy grid for the merged companies helped NEI present the findings and discuss why the proposed solution was important to meet company

objectives.

Once each division understood the reasoning behind the proposed changes, they moved forward as one, overcoming a potential “relocation roadblock” for

the new corporate culture.

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Effecting a Calm Transition

Action Step Five

Employees in the process of moving are already stressed about relocating and new responsibilities. It is natural to become even more anxious when caught in the middle

of a merger or acquisition announcement. Equally concerning are evolving internal processes and ensuring that everyone is on the same page.

Consistency is critical for benefits and processes to be carefully analyzed and clearly documented so details can be communicated to all without a need for later

changes. This includes documenting processes for financial capture, tracking and reporting accuracy.

Taking the time to do it right the first time and preparing consistent documentation ensures that relocating employees and stakeholders will understand and correctly

follow any new processes.

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"Consistency is critical for communications and documentation uniformity."

Looking at the big picture and analyzing the impact of a M&A on various work groups is also important to foster a calm transition. In the following example NEI uncovered

a source of great internal anxiety related to new processes and increased workload.

By understanding the situation and listening to concerns, NEI was able to create an innovative solution that saved an enormous

amount of time and removed a great deal of anxiety.

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Work Smarter, Not Harder

NEI Thriving Example #4

For an NEI client, one of the company’s relocation groups experienced a stressful period each year as they had to work extensive hours for a week over the holidays to

complete the year-end “true-up” process. They had major concerns about how this would be accomplished with the combined entity and double the employees.

Concerns about the level of staffing, which was not increasing, were also raised – not to mention recognizing that this entire group of employees would be forced to

work through the holidays while the rest of the company’s employees would be enjoying their time off.

NEI’s Chief Financial Officer met with all stake holders involved and proposed a new accounting process to run tax gross-up calculations more often and interface them

electronically, since NEI was also managing Expense Tracking. This eliminated the need for the time-intensive true-up process at year-end because NEI would be

reconciling for the company through out the year. The new process handled the task with ease, requiring less time and labor to accomplish a greatly increased workload.

As a result, the client’s team did not need to work that busy holiday week ever again – even with their company size doubling – which was much appreciated by everyone

at the company!

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Finding Catalysts for Bold New Strategies

COVID-19 forced many organizations to step out of their comfort zones and make changes they would have previously resisted without the situation’s dire urgency, such

as Work from Home, virtual meetings, working while social distancing, and more.

M&A announcements produce their own daunting challenges, but just as COVID-19 forced companies to act, a M&A event can also serve as a catalyst to implement bold

strategies tailored to a new and greater company mission and vision including:

• eliminating process bottlenecks
• improving customer service
• addressing policy/benefit shortcomings
• demonstrating the HR/Global Mobility/Relocation group’s value as proactive consultants and
• leaders creating a more competitive company to increase profitability and grow market share.

NEI has found M&A situations excellent opportunities to help introduce progressive changes or savings measures for which a client had expressed interest or intended to

make, but may not have had the internal support to implement previously.

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What’s Next?

The business world is operating in a swiftly evolving and very fluid environment; one in which certain trends are starting to appear, including a strong forecast for

corporate amalgamations. M&A continue to bean important growth driver and a coordinated approach to integration is critical.

Simply put, taking early and deliberate steps can help foster a smooth transition.

NEI has mastered the key elements of successful M&A integration for relocation and has a passion for working with client leaders to solve business challenges that

benefits everyone.

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_{Please contact NEI to learn more about how we can help your company, whether an M&A is in your future or not. Our global expertise and consulting services are available to help your company thrive in today’s challenging world of workforce mobility.}

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A Region of Extremes

The “ME” in “EMEA”, the Middle East, is the common name for transcontinental areas of West Asia and Egypt originating from the British worldview in late 1800’s. It is a region often in the news concerning oil prices, conflict, refugees, and political instability. It is also an area that can pose significant relocation/assignment-related challenges.

The 17 countries of the region have over 400 million people today and cultures with extremely diverse religious, political, and economic backgrounds. The region is young – over 40% of people are under age 25!‍

The extremes of wealth are also clear there. Some Middle East countries are fabulously wealthy while others are quite poor with high unemployment rates. Most nations in the region rely predominantly on export of oil and oil- related products for their GDP, but others – Turkey, United Arab Emirates, and Israel – have increasingly diverse economies. Exposed to global trade/financial conditions and any increase in regional tensions, the Middle East’s economic outlook remains “subdued”, says The International Monetary Fund (IMF).‍

However, the IMF also states that “attracting skilled expatriate workers to the region will remain key to maintaining competitiveness” as supported by the region being an increasingly popular destination for corporate investment. The World Bank reported growth has picked up across the region and The Harvard Business Review reported the region remains attractive, is rich in opportunities and is an exciting expansion opportunity for multinationals across industries.

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Varying Customs, Laws, Challenges

To mitigate risk and help relocation/assignment success, it is critical to ensure candidates going to the region are open minded, flexible, and open to cultural differences. Previous experience dealing with challenging situations and other international assignments are also a plus.

According to NEI Service partner Aperian Global, ways in which business is conducted differently in Middle Eastern countries include:

It is also important for candidates and accompanying family to be educated about not only the Middle East overall, but that of each nation’s customs and how each might impact their specific move or assignment or how they conduct business. One should not assume what is acceptable in Dubai will be suitable in Riyadh for example.‍

• Those in the region tend to value indirectness and aim to avoid offending others. They may talk around an issue or make promises that are not delivered upon if there is a reason that would potentially offend you.
• The word "no" is often avoided, with a polite but vague response offered instead. Watch for nonverbal cues, such as tone of voice, hesitation, or body language, to discern true feelings.
• Eloquence and expressiveness are considered positive traits; not showing emotion may seem insincere. Try to match your local counterparts' level of effusiveness to demonstrate sincerity.
• Be aware that words are powerful; many in the region believe that they may influence circumstances or create negative consequences. Pay careful attention to your choice of words when communicating with Arab counterparts.
• Personal space between people conversing is generally smaller than in some other cultures, and touching, hugs, and handholding are common among those of the same gender, so do not back away from these approaches.
• Avoid public displays of affection between men and women; it is illegal in many places.

Another area to note for the region is on personal rights: lesbian, gay, bisexual, and transgender citizens generally have limited or highly restrictive rights in some parts of the Middle East and face open hostility in others.‍

Attitudes towards women, compared with the Western world, can also be quite different. Saudi Arabia has considerable restrictions of women, who need to dress conservatively and generally be escorted by a male family member when out. Only recently was there a royal decree announcing the end of a decades-long unofficial ban on women driving. Other recent social reforms include the opening of movie theaters, music concerts and allowing women into sports stadiums for the first time. Such reforms are aimed at improving Saudi Arabia’s image abroad, increasing women’s participation in the workforce and boosting local household spending.

Yet, while discrimination against women remains prevalent in some areas, again, not all countries have the same laws or beliefs. Turkey, Kuwait, and the UAE are mostly modern, and many female expats have less difficulties adjusting to life there.‍

In the Middle East, expat women also may be more closely observed than expat men. To successfully integrate, it is important to be mindful of the local customs, traditions and show respect towards the dress codes, religions, and beliefs. 

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NEI Driving Solutions for Middle East Challenges

Frustrations with processes in the Middle East can be as common as other regions in the world, such as securing drivers’ licenses. Many expatriates who have moved to Dubai feel simple tasks, such as obtaining a driving license, prove difficult. According to Aperian Global, familiar challenges for outsiders to the region can include:‍

• Managing the pace to get things done
• Navigating hierarchy and the implicit rules
• Having misconceptions of Islam and the Arab region
• Being too task-focused (“Foreigners come and go…” as the local saying goes)‍

Assignee/family Middle East region assimilation can have unique challenges. Consider this case study:‍

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South Korea to Israel Assimilation Challenge

An assignee with highly specialized technology skills, along with his spouse and two children, accepted a long- term assignment to Israel from South Korea. Though strongly encouraged, the employee and spouse declined to participate in a cultural awareness training program offered by the client. They did not speak Hebrew and local Korean language translation services were scarce.‍

The family was extremely selective about housing they would accept and, after some delay, finally settled on a leased home of their choosing. During Israel’s monsoon season, heavy rain resulted in regular power outages and roof leaks, leading to the spouse slipping on a wet floor and visiting the hospital. Rain also damaged the home’s refrigerator and electric gate, denying them access to their property. The home was then robbed, requiring a security system to be installed. Pulled between job demands, travel and his family, the assignee was stressed.

Solutions: NEI advised our client of these unique challenges as they occurred and, together, strategized effective solutions. Due to our clear communication lines and recommendations, the following was proposed for the assignee to avoid a failed assignment:

Ongoing support was provided through NEI’s local expert DSP who spoke both English and Hebrew. He communicated to the assignee who spoke both English and Korean. This allowed the DSP to translate for the landlord and maintenance firm. All necessary home repairs were resolved.‍

Intercultural training that the couple had turned down originally was re-proposed and gratefully accepted. This was especially effective for the family as the selected consultant spoke their native Korean fluently and traveled to Israel for in-person training.

After completing the program, the family ventured out more and the spouse enrolled in local activities to meet people and network.‍

Result: The family began adjusting immediately – even extending their Israel assignment an extra year!‍

Sizing up Middle East Opportunities‍

More than ever before, today’s expats are expanding their horizons, taking on new challenges and pursuing new opportunities with their companies. Many global companies find the Middle East emerging market a great place to do business with a welcoming quality of life. HSBC’s Expat Explorer Survey examines countries around the world where expats have the best job security, safety, social life and how much it costs to live there. 

Several Middle Eastern countries consistently make the survey’s top twenty rankings including:

• Qatar
• United Arab Emirates
• Bahrain
• Saudi Arabia

Whether a seasoned expat or a first-time assignee, it is important for all to research and become familiar with their Middle Eastern destination location through formal intercultural programs and online sites – such as:‍

• NEI Cities – a web-based tool that provides links to destination information, so employees can become acquainted with the new location before the move, and
• GlobeSmart® – a web-based tool offered by Aperian Global, provides business personnel with access to extensive knowledge on conducting business effectively with people from countries around the world. With planning and preparation, relocations or assignments to the Middle East can be rewarding career and life experiences for employees and their families.

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Yes, We’ve Done That!

With over 30 years’ international expertise, NEI’s experience can quickly assess and navigate the sometimes unique or new opportunities that the Middle East might have for both relocation candidate and employer.

NEI has a long history of helping to manage clients’ Middle East relocations. We believe partnering with local, expert and strongly vetted Destination Service Providers is critical for success. All our DSPs must be well-versed in the customs and protocol of the country. Other partners include moving companies and forwarders, temporary living providers, tax reporting and consulting services, language and intercultural training specialists, and visa/immigration administrators.

 Local DSP representatives are pre-qualified by NEI and possess the expertise, credentials and experience needed to help the assignee fully acclimate to the new area. Consequently, assignees’ benefits are two-fold:‍‍‍

1. They have on-the-ground expert DSPs who helps immerse them in the local culture; and
2. They have a dedicated NEI Account Executive, available 24/7, to help counsel them through their life-changing event.

NEI provides custom solutions for any situation around the globe with our Americas, EMEA and APAC regional offices and network of global service partners. Our geographic reach extends worldwide to assist each of our global clients – whether in the Middle East or elsewhere. If you have any questions or would like further information, please reach out to your NEI representative or Mollie Ivancic, NEI VP, International Services.‍

The above information is for general information only and is not presented as tax or legal advice. Please consult with your tax or legal advisors and internal stakeholders before making decisions and taking any action.

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_{The above information is for general information only and is not presented as tax or legal advice. Please consult with your tax or legal advisors and internal stakeholders before making decisions and taking any action.}

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Choosing the Right Temporary Living Accommodations

Temporary living is a common benefit offered by corporate clients to their relocating employees and is, in many ways, the most personal service line in all of relocation. Temporary living requires travelers to find a transitory home: a place to sleep, eat, shower, work … a place to live. 

As such, overall satisfaction often hinges on the days/weeks/months spent in temporary housing. When evaluating various accommodation options to support a temporary living relocation benefit, it is crucial to fully consider the benefits and drawbacks of both apartments and hotels.

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Consideration: Cost

Corporate apartments in primary markets, such as New York City, Chicago, Los Angeles, and Seattle are10 to 20 percent less expensive on aggregate, than hotels when comparing the total cost for a one-month rental. That discount range jumps as the length of stay extends, approaching 30 percent when comparing the total cost for a three-month rental.

Hotel reservations longer than one week are primarily subjected to variable pricing (i.e., nightly rates fluctuate from one night to the next and are always reflective of a corporate pricing model). Hotels also look to capitalize on vacation weekends, sporting events, etc., and will not deepen price discounts as the length of stay increases. Corporate apartments, however, trade margin for occupancy, creating an inverse correlation between price levels and length of stay.

Further, hotel reservations often carry significant tax burdens. It is important for savvy decision-makers to consider all-inclusive nightly rates when making cost comparisons across accommodations. Published and marketed baseline hotel rates can be deceptive as taxes are typically not displayed until the final stages of the booking process.

“Higher occupancy drives higher rates as supply is more limited,” notes Henry Gager, VP of Global Operations at CorporateLiving. “Correspondingly, lower occupancy drives lower rates as supply is more abundant. Steeply discounted hotels were commonplace during the first 15months of the pandemic as hotels struggled to stay afloat, but the market place has recalibrated, buoyed by greenlit corporate travel.”

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Consideration: Do It Yourself

NEI’s temporary living partners act as travelers’ behind-the-scenes fiduciaries, working on behalf of relocating employees to facilitate, verify, and deliver on the fine details: dates, furnishings, internet, cleanliness … the list goes on! Securing a corporate apartment -- as an individual -- can be a daunting task and, in most rights, it should be. As the saying goes, “The devil is in the details” and without a refined, structured approach, individuals/HR teams may find themselves overwhelmed - not to mention, in for an unpleasant, unbudgeted surprise when they see the final bill.

From security deposits and application fees to credit checks and occupancy forms to connecting utilities and securing renters insurance, the rental process gets complicated quickly. Utilizing the services of a seasoned, vetted housing vendor simplifies and streamlines the temporary living process and allows individual travelers to have access to furnished accommodation options that they would not have otherwise.

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Consideration: Qualities

Corporate apartments provide travelers with a myriad of qualitative advantages when compared to hotels, square footage being chief among them. Standard hotel rooms, particularly in high traffic markets, such as San Francisco, Philadelphia, and Boston, are tight and rarely include any sort of living area or true desk setup. In fact, many hotels do not have any room layouts other than studios on-site. Corporate travelers will often find themselves strapped for space in hotel rooms, especially when staying in-house for upwards of one month.

Corporate apartments, in addition to offering more space, generally have true kitchens: a full-sized refrigerator and oven range, a comprehensive kitchenware set, and ample counterspace. Storage space is generally abundant, with dressers, side tables, and large closets coming standard.

Background checks are also required in most residential communities, adding a baseline level of security amongst all on-site occupants.

Finally, corporate apartments provide a stable, community-type atmosphere as levels of transiency are far below those experienced at a hotel, meaning your neighbors aren’t constantly new and changing and leaving each morning at 11 AM.

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Consideration: Using Vendors for Hotels

There are numerous benefits from utilizing NEI and its temporary living partners to secure and manage hotel bookings.

• No upfront payment is required by the traveler
• No upfront payment is required by the corporation
• Preferred pricing
• Flat, as opposed to variable, rates
• Preferred approvals (pet fees waived, multiple animals allowed, restricted breeds approved, free breakfast add-on, no-show fees waived, early check-in approval, late check-out approval, etc.)
• Check-in confirmation (no unapproved overages)
• Check-out confirmation (no unapproved overages)
• Preferred availability
• 24/7/365 support

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Consideration: A Note on Airbnb Options

Airbnb accommodations may occasionally seem attractive. Property profiles often tout professional photos, positive ratings tend to attract the eye, and baseline prices can seem tantalizing low.

Though NEI and its housing partners are capable of booking via Airbnb(if client policy permits), relocating employee/family and corporate risks ultimately outweigh potential benefits:

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Marketing versus Reality

Photos and descriptions cannot be validated prior to transferee arrival by NEI and its housing partners as Airbnb rentals are often provided by individual hosts who are actively renting to a myriad of travelers. The inability to verify the quality of Airbnb accommodations creates massive uncertainty for travelers and their families.

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Hidden Fees

Transparency is important, and Airbnb’s pricing presentation is anything but. Beware of hidden fees associated with cleanings, date changes, and add-ons like parking.

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Extension Issues

Airbnb locks travelers into specific terms and actively markets booked accommodations for dates following a traveler’s scheduled departure date. Extensions can prove to be unavailable when they are needed, forcing an unintended transfer fortraveling employees.

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Shared versus Private

It’s not always clear if accommodation is shared or private and renting a room within an owner’s residence all but guarantees limited privacy.

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Host Communication

Hosts can be unresponsive or unavailable, or simply unable to address potential in-house issues, leaving travelers without a strong point of contact on-site.

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Duty of Care

Hidden cameras, broken locks, robberies … the horror stories are sadly real. Airbnb leaves travelers vulnerable to potentially unwelcome and/or dramatic occurrences.

Though Airbnb is a legitimate and savvy tool for casual or vacation travelers, the product offering lacks the duty of care element, professional structure, and management oversight that a corporate housing accommodation provides.

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The NEI Difference for Corporate Housing

NEI’s temporary living service provision is structured and calculated, working to meet the nuanced constraints of individual travelers and their families. Services are coordinated in concert with all other policy benefits by a relocating employee’s NEI Account Executive who acts as travelers’ primary point of coordination.

Following a comprehensive family needs assessment, during which any requirements for a temporary living are identified, NEI’s Account Executives manage the entire housing process according to each employee’s specific policy criteria.

They use an interactive, proprietary temporary living directory to search and compare NEI’s current service partners. The directory details specific service partner information such as geographic expertise, property offerings, pricing, and quality ratings. This custom tool not only saves valuable time for Account Executives, but also expands the utilization of NEI’s service partner network and captures cost savings for clients.

NEI’s temporary living service partners are carefully vetted prior to network inclusion and are consistently evaluated before and after each use, regardless of how much time has elapsed since their last provision of housing. Continuous assessment promotes strict adherence to the stringent quality and service requirements of NEI and its clients.

Acting independently, NEI is not tied to any temporary housing brand through formal affiliation, ownership, or franchise agreement. This independence allows for ultimate flexibility in partnering with temporary housing providers based on service, cost, and various other criteria. 

For more information or if you would like us to assess your current temporary living process, policy components, or service partner, please contact your NEI representative at any time.

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_{The above information is for general information only and is not presented as tax or legal advice. Please consult with your tax or legal advisors and internal stakeholders before making decisions and taking any action.}

Diverse Cultures, Challenges, Opportunities

Latin America (LATAM) generally refers to territories in the Americas where the Spanish or Portuguese languages prevail: Mexico, most of Central and South America, and in the Caribbean, Cuba, the Dominican Republic, and Puerto Rico. It covers approximately 13 percent of the earth's surface, and its population is about 600 million people. It's a region known for its diverse and rich culture, natural resources, and developing markets.

Despite economic challenges, the region continues to attract both in-region cross-border and global company relocations. The flow of expatriates into the region has increased significantly during the past ten years as political institutions increasingly become more open, democratic, and stable.

Economic activity in LATAM remains on track as the global economy gathers steam. The long-term growth outlook has LATAM's focus on priorities such as:

• Closing infrastructure gaps.
• Investing in human capital.
• Encouraging female labor force participation.
• Reducing labor market informality.
• Enhancing governance and curbing corruption.
• Furthering trade and financial integration.

As LATAM markets continue to grow, relocation activity should also keep pace with economic activity.

Yes, NEI Has Handled That!

Experienced mobility professionals usually agree that managing successful relocations in LATAM can prove more challenging than in other parts of the world. The need for patience and flexibility is paramount here.

NEI has three decades of experience consulting and servicing clients who deploy employees into, from, and within LATAM. Our own Account Executives – the single point of coordination for client global assignees –have personal experience abroad, language skills, and knowledge of cultural differences. We also partner closely with experienced on-the-ground service partners with expertise, skills, and knowledge of what's required to successfully support client relocations in each unique LATAM country.

Our LATAM experience goes far beyond common LATAM relocation "hot spots." Urban, rural, and in between, NEI has managed all such locations for our diverse client base across Mexico, Central and South America.

Consider an example of two dozen employees from the U.S. and Mexico heading to a remote, coastal area of Brazil. In addition to facing culture shock, the local market had limited housing availability, schooling challenges, and complex visa, payroll, and immigration requirements. Many in the group faced a different lifestyle than accustomed to at home and, with limited options, many also found themselves moving from large homes to very small apartments.

Because face-to-face meetings in LATAM are so critical to establishing trust, several members of NEI's global leadership team personally traveled with the client contact to Brazil to meet with local client HR stakeholders, immigration, tax and payroll partners, client expats currently on assignment, and DSPs to gain firsthand understanding of challenges and housing/living conditions near the work site.

NEI's team collaborated with client team members to streamline information, gather feedback, and find practical, on-the-ground solutions. NEI also coordinated two days of local cultural training and on-site language training at the work site. Furthermore, NEI addressed all employee relocation concerns directly and acquired answers to all employee questions from involved parties where needed.

By NEI leadership traveling directly to the site and investing ourselves in the outcome directly, strong, face-to-face relationships were built, a clear understanding of both business and cultural practices at the work site were gained, and our full commitment to the client's project success was clearly demonstrated.

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Setting Expectations, Being Proactive

NEI Account Executives manage relocating employee expectations right from the start of each move. Doing so for LATAM relocations is especially important. Delays are commonly at the top of the employee/family's list of concerns and need to be considered appropriately.

The reason that household goods shipment coordination in LATAM can be challenging is that there are no "open borders" between the countries, such as in the European Union. What seems to be a simple land shipment from one country/state to another can take longer than expected, and many LATAM countries have strict but fluid rules around when a person is eligible to bring a shipment into or out of the country.

For instance, a client assignee relocated from Ecuador to Argentina, but he was unexpectedly repatriated two years later. Because of his business travels and the time he spent out-of-country, Argentina restricted him from relocating his goods back to Ecuador. NEI worked with the client to provide a creative solution to allow the employee to bring back some of his goods and compensate for the goods that were left behind.

NEI also proactively prepares our clients' mobility teams for the unique nuances of each LATAM country and even individual cities within countries. When all involved parties are aware of these challenges, participants' expectations can be established early on.

Consider this intra-LATAM example when flexibility was key: An assignee and his wife, who was five months pregnant, accepted a permanent move from Argentina to Sao Paulo, Brazil. The area of the city they needed to be in had limited temporary living options and numerous severe cases of a mosquito-borne virus that was a serious concern for the expecting couple.

NEI's Account Executive was highly empathetic to the couple's requirement that any temporary living unit shown to them have mosquito netting across all windows – regardless if units had air conditioning.

Initially, this request proved difficult as 1) appropriate property inventory was scarce; 2) apartments were being booked extremely fast; and 3) it was a challenge to source netting appropriate for keeping out mosquitoes. The couple sought creative options.

Our Account Executive worked with our temporary housing service partner, who was resourceful and understood the family's concerns. Once the couple selected a property, NEI and the temporary housing partner helped them immediately identify a local, trusted mosquito abatement company. NEI quickly coordinated reimbursement, approved by the client contact, and the appreciative couple settled into Sao Paulo eagerly expecting their newborn with much less apprehension.

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Potential Corruption Concerns

One of the biggest challenges of doing business in LATAM has been the perception of fraud and corruption. According to the World Economic Forum's Global Risk Report, fraud remains a serious issue, though considerable efforts have been made to lessen it due to efforts of companies, governments, and the wider international community. Anti-fraud legislation, such as the US Foreign Corrupt Practices Act and the UK Bribery Act, have helped to increase awareness of the potential for corruption and fraud in LATAM.

Assignees need to be briefed on potential risks both prior to any LATAM trip and, once in the country, with their DSP. By being mindful of this, they can be prepared to understand potential in-country situations they might face and how to avoid them.

Consider the example of an assignee and her family who were relocated to a city well north of Santiago, Chile. NEI's Account Executive collaborated with the client, the immigration service partner, and the local DSP to avoid two corruption situations that were well known locally:

• Because it can take up to three months for a work permit in Chile and up to four months for a residence visa, the assignee entered under a Special Tourist Visa for Work Purposes. This allowed her to work until the work permit was received, but the immigration firm and DSP recommended to NEI that the family travel south to Santiago because of known corruption issues at the local consulate. NEI secured approval from the client for this plan to cover the family's round-trip flights to Santiago and avoid the local consulate.
• As there was also known corruption in the local driver license agency, where both the assignee and husband would have to take a lengthy driver's test offered only in Spanish, NEI and our on-the-ground DSP worked with the client so the couple could take the test in Santiago when acquiring their visas. There, the requirements were a certificate of one's latest education, a valid license, and proof of residency – and no reputation for corruption.

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Key Cultural Considerations

LATAM is one of the most beautiful, dynamic, and welcoming places in the world. Its diverse cultures, growing markets, and resources make it a superb area for global companies to explore and conduct business. With this diversity, it is important for companies conducting business there to remember – just as in EMEA or APAC – that all Central and South American cultures are not the same, and local modifications need to be made accordingly.

We encourage assignees to fully appreciate cultural differences with pre-move training on items such as how citizens in LATAM countries view time. In today's world, understanding time orientation in the destination country is critical to business situations.

It is recommended in LATAM to arrive on time for meetings, but also be prepared for schedules to dissolve and agendas to go out the window. If a dinner is arranged at a restaurant for a specific time, often after nine or even 10:00 pm, expect that the meal often will not start until an hour later after drinks and appetizers.

Likewise, LATAM communications can be much more "indirect" than some are used to, and there are plenty of non-verbal signs one should be mindful of.

Business casual wear is generally not appropriate in LATAM. Rather, business meeting attire is considered a cultural indicator signaling that "if you look powerful, you will be treated as powerful." Women typically dress in fashionable business suits, men in suits and ties.

As in EMEA or APAC, more young professionals in the region have English competency, but English language competency should not be assumed. NEI strongly encourages pre-departure language training be maximized as it can result in faster integration on LATAM assignments and maximize each assignment with a return on investment.

Finally, NEI also advises clients and assignees that, inmost LATAM cultures, family is one of the most important considerations. On our calls with assignees, NEI Account Executives adjust the communication style on the call to ensure they are connecting with the employee and asking the right questions which may lead to addressing any unspoken issues about the family's expectations. This connection fosters an open discussion to ensure their needs are completely met.

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Security Spotlight

Safety is also a frequent concern and pre-move discussion topic for moves into or within LATAM. NEI takes security extremely seriously, but despite the best security briefings and precautions, unfortunate events can happen anywhere.

Like other regions of the world, assignees/families living or traveling abroad need cultural awareness, risk planning, security awareness, and heightened situational awareness.

For instance, some LATAM countries are going through challenging political situations. This is especially prevalent in Venezuela where ground travel outside of Caracas should only take place during daylight hours. This needs to be taken into consideration for those who transit to work outside of the capital city. Additionally, shipping trucks do not travel at night, increasing transit times.

NEI fully appreciates that assignees can have emergencies at any time of the week – not just Monday through Friday. Consider the situation of an assignee in Brazil driving home from work on a Friday night. Stopped at a traffic light, he was held up by a gun-wielding assailant demanding his wallet. The employee was fortunate to drive away unhurt and keep his cell phone, but his cash, credit cards, and license were gone. Unable to connect with colleagues at his local office, he called his NEI Account Executive at her home in the U.S.

NEI immediately connected the assignee with International SOS that evening for assistance speaking with his local bank, as he was not fluent in Portuguese. He was offered temporary housing at a nearby hotel and provided emergency cash. While he turned down the hotel offer, he greatly appreciated the after-hours care and concern NEI showed for his situation.

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Helping You Achieve Your LATAM Goals

NEI provides expert consultation on LATAM mobility practices, including billing and currency restrictions that vary between countries.

Our goal for each assignment is Service Exceeding Expectations and to reduce employee frustration, anxiety, and the number of surprises or delays a family might face. Helping employees focus on their new job responsibilities, assimilate seamlessly, remain productive, and contain costs are our top priorities.

NEI can help overcome unique legal, logistical, and compliance challenges and has the right balance of experience, language skills, cultural understanding, and local service partners and experts at local regulations to successfully do business in this exciting region, to make moves less complex, more cost-effective, and more rewarding for all involved.

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Should you have any questions on how we can help your relocation activity in LATAM, please contact your NEI representative or Mollie Ivancic, VP, International Services.

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