In our continuing series of highlights from Worldwide ERC® President and CEO Peggy Smith’s Leadership Unplugged interviews at the 2018 Global Workforce Symposium, we listen in on some innovators’ perspectives.
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Innovation. It’s one of the hallmarks of disruption done right. When Worldwide ERC® CEO Peggy Smith asked several thought leaders to talk about what’s emerging in today’s mix of advanced technology, mobile people, and creative business approaches, she was the recipient of some remarkable perspectives.

Smith chatted with Tom Dempsey, Vice President, Business Development, Quicken Loans about the proliferation of great ideas, some of which had been incubating for years before they appeared as startup or popup companies. Dempsey spoke about the opportunity that comes from being able to look at one’s business model to find new, better ways to serve customers and add efficiencies - and assume no rules! He pointed out the results that come when innovators can “get outside of the box and really get to what people want.” One example? “Pushing a button and getting a mortgage! The idea that you can harness data and make decisions quickly…it’s exciting to see where technology will go.”  

Liam Brennan certainly saw where technology was going when he launched GT Global Tracker. “You came in and did a little bit of a disruption!” Smith said to Brennan, CEO of the company, which helps employers track their business travelers for compliance with taxation and immigration issues. “What did you see that made you think, ‘I can do better?’” Brennan recalled the period when he and his team were studying business travel issues and could see some concerns that were going to be bigger problems over time: “We started to build a product to try and get ahead of the curve.” Brennan noted that their goal was to preserve the current ecosystem so that their customers wouldn’t need to change business processes that involved IT or HR systems, or their relocation management company. By creating a solution that could “just plug into” the enterprises already connected to the business traveler, it was possible to provide analysis of data that’s already there. Smith then asked Brennan what he saw in the area of “bleisure” (business + leisure trip combinations). He noted that’s another area where close tracking of data helps, as “the combination of work and leisure is leading to situations where the time in country might trigger thresholds for compliance issues.”

Smith invited Heather James, executive vice president, Nomad Temporary Housing to share her viewpoint on innovation in the housing industry. James, who sees her company as the “first true, unbiased aggregator,” noted that the business model is to leverage existing temporary housing inventory in the marketplace with bookings that go out to 950 partners worldwide. She noted that technology is an enabler, but even amid all the new platforms coming out, “The pendulum can’t swing all the way one way or all the way the other. It can’t be totally high-tech, it can’t be, ‘oh we’re going to hold your hand the whole way’…there’s got to be this meeting in the middle so that someone gets the benefit of all.”  

Speaking with Ben Cross, CRP, vice president, business development for University Moving and Storage, Smith noted that the moving industry—one of the oldest in the mobility space—is often a frontrunner in innovation, and embracing new technologies. Cross agreed, noting such enhancements as accelerating and automating documents, and the use of video surveys. He pointed out that video has other possibilities, too, of a more ‘human’ nature: “There’s a real opportunity to incorporate video into the service delivery model,” Cross said. “So you could send the transferee a video, they can self-serve, but they still get that personal feel of having spoken with someone.”  

On 14 November, Worldwide ERC®, the American Moving and Storage Association (AMSA), International Association of Movers (IAM) and eight other organizations sent a letter to Senate leaders urging them to pass the Moving Americans Privacy Protection Act (H.R. 4403, S. 998) by the end of the year.

The U.S. Customs and Border Protection (CBP) presently sells the manifest data on vessel shipments to companies that post the information online to paid subscribers. The relocation overseas of a transferee can often require the shipping by vessel of personal goods. Making public the personally identifiable information of the transferee including military personnel exposes them to identity theft, fraud and unwanted solicitations. H.R. 4403 and S. 998 would correct the problem.

In addition to Worldwide ERC®, AMSA, and IAM, the Air Force Sergeants Association, American Foreign Service Association, Association of the United States Army, Association of the United States Navy, Fleet Reserve Association, National Active and Retired Federal Employees Association, National Association of Federally-Insured Credit Union and National Association of Realtors signed the letter to Senate Majority Leader Mitch McConnell and Senate Minority Leader Charles Schumer (D-NY). While not a signatory, the Leading Real Estate Companies of the World also expressed its support for the effort.

Congressmen Jeff Denham (R-CA) and Bill Pascrell (D-NJ) introduced the Moving Americans Privacy Protection Act (H.R. 4403) which the U.S. House of Representatives passed by voice vote on 17 May of this year.  H.R. 4403 is a companion bill to S. 998 introduced on 1 May 2017 by Senators Steve Daines (R-MT) and Gary Peters (D-MI).

Related: Worldwide ERC® Engages U.S. Congress on Transferee Data Privacy Bill

What do you get when you combine a massive middle-class consumption-oriented population, with businesses looking for diversification opportunities, and a supportive community of innovators, mentors, accelerators and investors? In Latin America, the answer is Brazil, a country of more than 210 million which has quickly built a reputation as an ideal start-up ecosystem.

Start-Ups in São Paulo and Beyond

“Brazilian cities consistently make top 10 lists for digital entrepreneurs,” says Ping Jiang, an investor specializing in emerging markets and undervalued investment vehicles. “No list of emerging startup cities would be complete without a mention of Brazil’s São Paulo, which is a fantastic startup environment.” In fact, the city is home to 2,700 active tech startups.

But it’s not just in São Paulo. Across Brazil, states are vying to attract entrepreneurs with incentives and incubation programs. One such program is Seed, developed in the state of Minas Gerais in 2013. This six-month program is “equal parts accelerator, startup ecosystem, coworking space, and angel investor,” says Jiang. Similar programs can be found around the country in cities large and small.

Start-ups selected for São Paulo’s “SP Stars” incubator program benefit from mentoring and advice from international tech leaders like LinkedIn and Cabify.  

Another is Germinadora, which start-up blogger Matt Wright encountered on a recent trip to Brazil. It is an “innovative startup hub trying to change the concept of acceleration and incubation” in which mentors offer their time and talent to support local entrepreneurs. Tech networking events draw people from biggies like Google and IBM, as well as accelerators and incubators and even government representatives, all eager to mentor and support innovation.

Updated 29 November 2018.

Dear colleagues:  

The movement of government offers clues to the way business will unfold, as new lawmakers enter and others depart. With the recent elections in the United States, we want to provide you with an understanding of the impact such changes could have on mobility.  

On November 6, midterm elections (which occur halfway between presidential elections for open Congressional seats) were held, resulting in Democrats taking control of the U.S. House of Representatives and Republicans expanding their majority in the United States Senate to 53-47. Democrats gained a net of 40 seats in the House.

Democrats taking control of the House significantly shifts the political dynamic in Washington, D.C. for the next two years. Beginning in January, we will see proposals with the progressive tilt of the new House Democratic majority. This will also change the negotiations with the Senate as the more centrist chamber: from one where the Senate would take a more moderate stance than the House to one ensuring conservative principles are included.

By Greg Bonnette, Vice President, Strategy & Innovation – Ironside

Predictive analytics may seem like a recent innovation, but the basic concept has been used in various ways for hundreds of years.
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For example, the 16th century Italian polymath Gerolamo Cardano (1501-1576) is considered one of the founding fathers of probability. In addition to his interests in mathematics, physics, biology, chemistry, astrology, astronomy, philosophy, and mechanics, he was also an accomplished (some might say incurable) gambler. Not only was gambling an important source of income to Cardano, it also served as the impetus for his Liber de ludo aleae ("Book on Games of Chance") in which he used dice to demonstrate the basic concepts of mathematical probability.

One key difference between Cardano’s mathematical probabilities and predictive analytics today are the number of variables in question. Whether calculating probable outcomes from multiple throws of several six-sided dice or estimating the likelihood of drawing certain cards in a 52-card deck, Cardano only had to contend with a limited data set. Five hundred years later, the sheer quantity of data available and the technology required to process it is changing the way numerous industries—including, now, relocation—conduct business.

Big Data is Small Potatoes for a French Fry Machine

Over the past 30 years alone, Cartus Corporation—Ironside’s partner in pioneering predictive analytics in the relocation industry—has managed more than 2.3 million relocations for employees and their families. Each one of those moves was associated with dozens of interconnected data points related to costs, timings, locations, and more, resulting in a nearly infinite combination of attributes and thus potential causal relationships (i.e., which variable was most responsible for which result).

Contrast that to someone calculating gambling outcomes based on a fixed set of variables, or even an early life insurance company like Scottish Widows (established 1815) using local church data to create the first actuarial tables of human mortality, and it’s easy to see why the amount of data powering the predictive formulas of old would be considered trivial by today’s computational practitioners.

On 15 November 2018, the U.S. Internal Revenue Service (IRS) released detailed guidance on the more than 60 tax provisions that are adjusted for inflation each year.
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The adjustments for 2019 will generally be used on tax returns due in 2020.

The changes are more extensive than usual due to numerous changes made by the Tax Cuts and Jobs Act (TCJA). For example, the deduction for personal exemptions is suspended through 2025, so there is no inflation adjustment; the deduction is zero. In addition, TCJA-imposed “chained CPI” is used for inflation adjustments. This measure of inflation assumes that as prices rise, consumers either forgo certain expenditures or switch to less expensive alternative. It generally results in a lower adjustment than the CPI, which was used previously.

Related: Repayments Under Payback Agreements No Longer Deductible

The standard deduction was roughly doubled by the TCJA. For married couples it rises from $24,000 to $24,400, and for singles from $12,000 to $12,200 for singles. The foreign earned income exclusion rises from $103,900 to $105,900. The Alternative Minimum Tax exemption amount goes from $70,300 to $71,700 ($111,700 for married couples) and begins to phase out at $510,300 ($1,020,600 for married couples). There is no longer any limitation on itemized deductions, so there is no longer an inflation adjustment for that item.

Other adjustments affect the thresholds for the various income tax rates and the amount of income that will trigger the top 37% rate.  

This article originally appeared in the November 2018 edition of Mobility Magazine.

Companies need to consider a range of factors when deciding to enter a foreign market.
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Growing companies may at some point face the prospect of global expansion, as demand increases for products or services in international markets, or to meet other business needs. This is a natural evolution and offers significant opportunities if approached in the right way at the right time.

While going global can make sense, the decision should factor in the overall cost-benefit analysis for a company as well as preparation for a new level of human resources support and administration for staff on assignment. As with any shift in business direction and scope, there are both pros and cons to consider when expanding internationally.

What Are the Factors Affecting International Expansion?

The reasons to expand globally are manifold and will vary depending on the business type and overall market strategies. Companies will be forced to consider a range of factors when deciding to enter a foreign market. These include:

When looking at these factors, a multinational entity will need to decide whether to use a DIY approach to enter the new market or to outsource essential functions to a third party. When the realities of expansion are looked at closely, many of the inherent challenges can be met more easily by using local partners to administer staff assignments, payroll, and immigration compliance.

Negotiators for the European Union (EU) and United Kingdom (UK) have reached an agreement on a Brexit plan.  
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On Wednesday, 14 November 2018, Prime Minister Theresa May published the 585-page draft plan outlining the UK’s exit from the EU. Despite the cabinet signing off on the deal Wednesday night, Thursday morning, the plan and PM May began facing some severe backlash. EU negotiators have already agreed to this draft plan and are making it clear that they don’t intend to re-open negotiations.

Though negotiators have reached an agreement, Prime Minister May faces an uphill climb getting the deal approved by parliament. At this point, it seems as if the plan proposed this week is the last chance to strike a deal before the looming deadline. The alternative to a deal is a hard exit in which the UK simply withdrawals from the EU. Both sides are looking to avoid such a scenario.

Related: Mobilizing Your Brexit Strategy

As part of the plan, the UK would end the free movement of people but would create a mobility framework for EU and UK citizens move between the two jurisdictions for travel, studies and work. This would have a direct impact on the ability to transfer employees between the UK and much of the rest of Europe. There are also broader implications regarding Brexit which could result in businesses relocating offices and employees between the UK and EU.

Thursday morning, two prominent cabinet ministers resigned, including Dominic Raab, the Prime Minister’s primary Brexit negotiator. Raab becomes the second person in this position to resign this year. Esther McVey, the cabinet minister who oversees work and pensions also announced her resignation shortly after Raab.

Cases are beginning to be filed challenging U.S. IRS certifications of delinquent tax debt to the U.S. State Department that could lead to passport revocation or denial.

According to the IRS, some 20 cases are now before the U.S. Tax Court, and one in a U.S. District Court, raising a variety of issues.

These reflect increased IRS activity under the passport revocation law. According the agency, as of 14 September 2018, over 280,000 cases had been certified to the State Department.
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Included in the 2015 highway bill, signed into law by the President on 4 December 2015, is a revenue-raising provision that requires the IRS to work with the State Department to revoke or deny the passport of any taxpayer with “seriously delinquent tax debt.”

A seriously delinquent tax debt is defined as a tax liability that has been assessed (as opposed to merely asserted) of an amount greater than $50,000, and for which the taxpayer has exhausted all administrative appeal rights. That amount includes penalties and interest in addition to the taxes. The statutory $50,000 amount is adjusted annually for inflation, and is $51,000 in 2018.  

IRS and the State Department began implementing the law 1 January 2018. Notice 2018-1 provides detailed information about the provision and its implementation. Under the law, when the IRS certifies that there is a seriously delinquent tax debt exceeding $51,000, the Treasury Department will transmit that certification to the State Department. The taxpayer will also be notified. Generally, when notified of a qualifying delinquent debt the State Department will give the taxpayer 90 days to resolve the issue, generally by arranging for payment of the debt.  

Brazil is rapidly gaining a reputation as a global business center. With a population exceeding 211 million, it now boasts the sixth largest economy in the world.  

But don’t assume sending mobile assignees to Brazil is the same as in other Latin American locales. Understanding the nuances of the Brazilian business culture is critical to successfully establishing business roots here. As global business consultant Keith Warburton notes, “If you speak to business people who have worked in Brazil they will all tell you the same thing – that the key doing successful business in Brazil is to develop a deep understanding of Brazilian commercial culture.”

If you are sending assignees to Brazil, here are a few cultural nuances to help speed their transition.

Informalities

Brazilians generally are considered an informal, fun-loving people who value their relationships. While an initial business meeting may be somewhat formal, you can expect subsequent meetings to be less so as colleagues become better acquainted.

Mobility professionals or assignees should take time to enjoy small talk before getting down to business, and don’t appear frustrated or inpatient by it, Warburton advises. Those personal relationships are key to getting business done. Stay around after your meeting adjourns to visit in relaxed conversation. And don’t expect a meeting to follow an agenda, assuming it even has one.

What’s the best way to take the pulse of an industry? Talk to some of its thought leaders and tap into their industry expertise, insight and experience! Worldwide ERC® President and CEO Peggy Smith did just that in her Leadership Unplugged series at the 2018 Global Workforce Symposium.

Disruption is in the eye of the beholder: What will it mean for you?
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Like every other industry, the global mobility and talent mobility ecosystem is subject to disruption. It can come at any time and from any entity. But disruption doesn’t have to be a scary thing.

As Joleen Lauffer, Executive Vice President of Aires, shared during an interview for the Worldwide ERC® Leadership Unplugged series, “…disruption really leads to a lot of innovation and it makes us all raise our game a heck of a lot faster.”

Is disruption a threat that causes companies to falter, or an opportunity that drives businesses forward? It can be both! There are a few lenses in the mobility industry through which we see disruption emerging:

Your organization may fall into one these three scenarios. No matter what, as Worldwide ERC® President & CEO Peggy Smith noted in her conversation with Lauffer, businesses must be prepared to “disrupt or be disrupted.”

Far-right Congressman, Jair Bolsonaro is the new President-elect of Brazil after defeating Fernando Haddad of the Worker’s Party 55.1% - 44.9% in last week’s Presidential run-off.
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Bolsonaro’s victory concludes months of a turbulent and often times violent campaign. Bolsonaro had to take a few weeks off from the campaign trail after being stabbed in the stomach in September.

Bolsonaro’s election comes amid a tumultuous time in Brazil. Government corruption is a major problem with President, Dilma Rousseff getting impeached in 2016 and former president Luiz Inácio Lula da Silva in prison for corruption. Da Silva was the front runner in this year’s election before being sent to jail. Brazil is also facing a slumping economy and rising crime rates, which all likely had an impact on the election results as voters pushed back against the “establishment”.

Related: What to Know About Placing Assignees in Brazil

Many are comparing Bolsonaro’s rise to that of President Donald Trump’s as both were able to position themselves as strong outsiders rallying against the media and establishment politics. Bolsonaro however, has been making waves with his extreme rhetoric, at times voicing admiration for past and current dictators, advocating for state violence, and comparing homosexuality to pedophilia.

Just days after winning the election, Bolsonaro has already named the judge who jailed da Silva as his Justice Minister. Bolsonaro has also announced that he intends to move Brazil’s embassy in Israel from Tel Aviv to Jerusalem. While a lot remains to be seen as to how Bolsonaro governs, it is clear that he is not afraid to make waves and plans to take a hardline stance on issues such as crime.

What does the future of global mobility hold?

Last month, Worldwide ERC® President and CEO Peggy Smith had a chance to sit down with Tom Dempsey of Quicken Loans at the 2018 Global Workforce Symposium. Front and center: the future of the global mobility industry.

What are some of the influences the future holds for global mobility professionals? According to Smith, redefining employment will come first.

“I think the real question to ask ourselves is, ‘what are the workforce models of the future?’” said Smith. “Some of us may want to become [gig-employed] or some of us may want to work with an agency.”

Rising numbers in gig or project-based employment show the growing momentum. And not just in the United States, but worldwide. A recent Mobility Magazine article quoted Alain Roumilhac, president of ManpowerGroup France:

So how can organizations tap into a workforce that seeks more control over their employment and location. And adding in the continued digitalization of the workplace, what can companies do to make their opportunities more appealing?

This article originally appeared in the November 2018 edition of Mobility Magazine.

Could rotational assignments get us safely to the other side?
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In any storm there is an eye, the moment when sirens blare and your favorite weather forecaster warns to take cover. Yet the multigenerational workforce waters have been swirling since 2011, when an average of 10,000 baby boomers began turning 65 each day, and some 75 million baby boomers set their sights on hard-earned retirement.

Currently in the eye are 53 million Gen Xers left to “batten down the hatches” with predictions of a “silver tsunami” for any organization that has not significantly increased its younger labor pool. This labor gap of 22 million is real, resembling the calm before the storm that may end with a destructive aftermath for companies that are not proactively accelerating the development and growth of their millennials to not only take, but succeed in the big jobs that baby boomers are vacating without enough Gen Xers to fill.

Today’s workforce spans four generations (ages 18 to 80); 35 percent of those are millennials, making them the largest generation in the U.S. labor force according to Pew Research Center analysis of U.S. Census Bureau data. Juggling the exodus of key business acumen, knowledge, and company experience from baby boomers with millennial expectations is either an HR/recruiter nightmare or the rainbow at the end of the storm.

Related: The Perfect Storm: Talent Mobility Professionals Decode the Future

On 4 November, HBO aired an interview from 29 October with U.S. President Donald Trump conducted by the media company Axios. In response to a question, the President cited his ability to issue an executive order to end the automatic citizenship for certain individuals born in the U.S.

Based on the video and written excerpts of the interview released by Axios, President Trump stated White House counsel believes he has the authority to end the citizenship right for newborns of non-citizens and unauthorized immigrants through executive order.
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In the interview, the President also stated that just such an executive order is in process. Axios had released clips of the interview on 30 October and shortly afterward the President signaled his intent to push the issue.

The current long-standing precedent on citizenship differs from the position conveyed by the President. A difference in interpretation of the birthright citizenship section of the 14th Amendment could impact the decision of transferees to relocate to the U.S. Worldwide ERC® is monitoring for the release of the indicated executive order and other immigration initiatives coming from the Administration that would impact the mobility community.

The consensus amongst constitutional scholars is the 14th Amendment of the U.S. Constitution applies citizenship to all individuals born in the U.S. regardless of the legal status of their parents. Section 1 of the 14th Amendment states: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside.” Some experts argue “and subject to the jurisdiction thereof” could be interpreted to mean just citizens and other legal permanent residents of the U.S.

Should President Trump issue an executive order it will most likely apply to undocumented immigrants and potentially documented individuals in the U.S. on a temporary basis. An executive order making any changes to current precedent will most certainly face a lawsuit with the order likely to be blocked from being implemented and ultimately not survive the legal challenge.

German Chancellor, Angela Merkel, has announced that she will not be running for re-election in 2021.
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In her announcement, Merkel also stated that she will not run again for re-election as leader of her Christian Democrat Union (CDU) Party this December. Merkel has been chairwoman of the CDU since 2000 and Chancellor since 2005.

Merkel’s announcement comes as the CDU party continues to suffer election losses, making it harder to hold together a coalition government. Notice of Merkel’s departure has already kicked off the race as to who will be her successor. Current CDU party secretary, Annegret Kramp-Karrenbauer is seen as a favorite to replace Merkel by many in the party but Jens Spahn, current Health Secretary and Friedrich Merz a former member of parliament have also thrown their hats into the ring. Other candidates are likely to enter the race as well.

Related: Innovation Takes Off at Munich Airport

Merkel’s departure will have an enormous impact on the EU which has a few looming issues to tackle such as BREXIT. It remains to be seen if Merkel’s successor will be pro-integration with Europe or will work to reassert more national sovereignty. In recent years, Germany has also seen a sharp rise in support for the far-right Alternative for Germany (AfD) party. Merkel has been a check to the AfD’s staunchly anti-immigrant policies and it is unclear if those views will gain ground once Merkel departs.

It remains to be seen if Merkel will serve out the remainder of her current term or if elections will be called sometime before her announced departure in 2021. Regardless of who replaces Merkel, the EU is losing an influential and experienced leader who has helped guide the EU through numerous crises over the years. As a leading economy in the EU, any changes to immigration policies under a new leader would have a huge impact on the mobility industry and it will be important to monitor this situation closely.