January 2004

Editorial

Against all odds!

Alain Verstandig, Managing Director, Net Expat  I'm going to surprise you. In these early days of 2004, I'm able to pass a relatively positive verdict on the year just gone. You think I'm crazy? That's not my style. The fact is that 2003 was an excellent year for Net Expat. So I would like to thank all those men and women who, from their positions of responsibility as Human Resources executives, kept a cool head in tough times. My thanks go to all those who - as HR directors, Expat Managers, Compensation & Benefits Managers, Business Unit Managers and the like - gave us the opportunity to develop further and, despite difficult economic conditions, now deem it a matter of course and therefore essential to provide support to Expat Partners. These men and women are helping shape the economic evolution of our planet and unquestionably preparing the future of their companies. After all, our prosperity depends ultimately on the humane management of our Human Resources. Thanks to you - and there are more and more of you - we have now opened NET EXPAT offices in Milan and Vienna and are working on plans for Prague, Budapest and Warsaw to help you manage your future mobility needs.

Expert Opinion

The vision of Sony Europe

Mr. Jos Windelinckx, HR & GA General Manager, Sony Brussels Operations  Sony Europe - Brussels Operations employs 520 people in a new building in the Corporate Village in Zaventem, near the airport as of September 2003. Flexibility and a world-wide visibility are some of the values that Sony supports. This can be easily illustrated within Sony - Brussels Operations as 50 % of the employees are representing 35 different nationalities. All of them are working in different areas such as marketing, engineering, customer services, finance, … A real combination of different cultures and at the same time keeping in mind that we are one team with one vision. Sony Brussels Operations welcomes many employees from abroad, from European territory and outside, from call center agents to European Executives. An important part of our recruitment strategy is to include a relocation package. This package includes for example help in finding apartments, legal advise on rental contracts, related administrative issues, applying for work permits, advise on visa applications, registration in Belgium, exchange of foreign driving license, introduction to international school. Most of these services are outsourced, but a very close coordination and information exchange with the agencies and control from HR department is important. The HR department defines the limits of their respective interventions and keeps the supervision of the service quality provided by the third parties. Sony Brussels Operation continues to develop and to improve the relocation and remuneration package. Since 2000, we have offered an extended medical insurance and services, all provided in Dutch, French or English language. In addition, we widened our service by developing an international workforce such as the set-up of a framework for corporate issues, of partnership with banks, of social security institutions, tax consultants, insurance companies, … and even better, we have recently implemented a partner program via NET EXPAT for management through our HR Department. Our challenge is to create a relocation program for all expatriates, including the development of a specific program to help them to work within a multi-cultural workforce. We have to enhance the mobility in Brussels platform as well as between various countries. Together with the cooperation and support of HR Europe, we are able to prepare this kind of international transfers easier between the different Sony operations within Europe.

Humor

How to mess up your expat management plans

Let Wall Street determine your expatriation policy  Make as many exceptions as possible to the forms of support you offer  Give responsibility for your expats to people who have never been expatriated  Offer money rather than support services to your expats: they will know how to spend it without realizing…  Make the logic of your allowances so complicated that even a full expatriation will not be enough time to understand it  Avoid talking more than necessary to your expats' partners as they could spoil everything before leaving  Survey your expats as little as possible: you can't imagine the sorts of things they could come up with  Don't identify your potential expats until the last possible moment, that way they will be 'fresher'  Outsource all your expat management… and look for another job!

Testimonial

The Win - Win - Win BMS approach!

Alex & Louise Sheppard. Alex is accompanying Louise in her expat assignment as BMS employee  Alex, we're delighted to see you happy and relaxed today, but it would be fair to say that the past few months have not been easy ones for you and your family. That's true! I'm now working for a company in a job I really enjoy, but it wasn't easy getting here. I already had more than 10 years professional experience in IT, all of it in the UK. When my wife, Louise, was offered an expatriate assignment, I thought I wouldn't have much difficulty finding a job in our new host country. So we left the U.K. without too many qualms, to some extent encouraged by the optimism that seemed justified at the time. Unfortunately the job market changed dramatically, as everyone now knows. The IT world in particular went through a major crisis: most IT employers revised their recruitment strategies with many hiring only young applicants with little experience and costing less. So I found myself offering my services to a job market that wasn't really looking for someone like me… So you decided with your coach to add another string to your bow. Exactly. While keeping a close eye on the job market I also looked at the possibilities of complementary training to support my application. Through valuable contacts in the IT field my coach confirmed that my choice of an Oracle Professional certification would enhance my appeal in a difficult market. This certification helped me at three levels. Firstly, it allowed me to reposition myself with an additional quality endorsement: as a result it directly contributed to my finding my present job, and I'm also sure it has added to my long-term 'employability'. Secondly, the course helped me get through some difficult times, it kept me occupied and helped me to adjust to my new situation. The intensive studying required kept me going through the moments of isolation which I think many partners of expatriates feel. Last of all, once the training was over and I found myself talking to my potential employers, I was able to talk confidently and with a certain pride of the way I had put the time since my last job to good use. I hadn't simply bided my time until the IT job market picked up. I had updated my skills, invested in my future and, by implication, in that of my next employer! People see such proactivity as a valuable asset in potential employees. One thing has that was very important to me throughout this period was the contact with my coach. As my wife Louise was working full time in her new job and as my Oracle certification was done at home on the PC, I appreciated the regular, personal contact with my coach. Whenever I felt prey to self-doubt in my approach to finding a job or my value in the market when the prospect of a job looked distant, the optimism and realism of my coach helped keep me going. His morale and practical support meant a lot to me. Of course, all NET EXPAT's services were paid for by BMS, Louise's employer and I am very grateful to them. It says a lot for BMS that they have the vision and commitment to provide these services to help their employees and partners. I believe that this can only benefit the company in the long term. Louise, it was your opportunity that started the whole process. How do you feel about the decision to expatriate now? I have to admit that, when I left the U.K. with my family in tow, I didn't have a completely easy conscience. Although the whole process was very much a joint decision I felt some responsibility for Alex giving up his job and for pitching him into an extremely difficult IT job market. Knowing that his coach was there to help him and that he had the support of HR professionals to help him continue his career was extremely reassuring for me. It went a long way towards easing my conscience. As time went by and the new job looked as far away as ever, NET EXPAT reaffirmed our decision to move here was a sound one. Alex's coach consistently provided us with the confidence that eventually the right job would turn up. Without this support we would have been questioning our decision amongst ourselves and worrying unnecessarily. Today, we are a happy and more united family integrating ourselves into a truly European life. For us, expatriation has been great!

Corporate Vision

A holistic point of view

Mr. Steven Baert, Manager Human Resources, BMS  Mr. Baert, how important are family concerns to BMS? For a very long time now, we have tried to look at the aspects of expatriation from a holistic point of view. This means that we not only take into consideration the direct issues facing our expatriates, but also those affecting their partners. For our employees, expatriation represents a change within the context of continuity: as BMS employees in one country, they become BMS employees in another. For their partners, on the other hand, expatriation represents a complete change of lifestyle, both socially and professionally. In their case, the impact is much more dramatic. The fact of helping partners to pursue their careers or simply find a worthwhile activity is seen by BMS as a perfect example of a win-win situation for both BMS and its employees. We are convinced that a successful expatriation is conditional on a happy family, where everyone gets satisfaction. How, practically, are you helping your expatriates' partners? Our objective, by working with NET EXPAT, is to give the partners the opportunity to integrate well in the host country by helping them to either find a new job or activity that helps them to assimilate into the new culture and environment. The services of NET EXPAT allow the expatriate's partners to feel supported and feel "at home" in a new country!

European Union

Tax and social security in the enlarged EU

Joël Lebersorg, Director, Deloitte International Assignment Services The European Union is preparing for its biggest enlargement ever in terms of scope and diversity. Ten new members - Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia - are set to join in 2004. While the income tax matters will remain a national prerogative as is currently the case in the Union, major changes will occur in the area of social security for all migrating persons in the enlarged EU. The tax rules In absence of harmonization on individual tax rules within the EU, domestic tax law will continue to govern the individual tax treatment of the salary received by the migrating employee in an enlarged EU. As a general rule, the worker will be taxable on all remuneration in the country where he or she works. Bilateral tax treaties have been signed between the current EU member states and most of the ten candidate states. Where these bilateral tax treaties exist, a set of rules will decide which country has the final right to tax the income. These treaties have been signed to avoid situations of double taxation on the same income, in particular when an employee is working simultaneously in two or more countries. The social security coverage The EU rules on social security coverage have essentially been designed to avoid as much as possible contributing to several different social systems during a career and hence have a fractioned entitlement to pension and other social benefits from each country where contributions were paid. These EU rules will be extended to all ten new member states and will allow for migrating workers in the enlarged EU territory to remain covered by their home social security system. This possibility will be a major breakthrough for all companies conducting business in the new member states. However, the social security contribution rates are still under control of each country and can vary greatly. As shown below, the employer's contribution due on a salary of EUR 60,000 can vary from as much as EUR 25,800 to as little as EUR 3,477 in 2003. What about the benefits? Just as the social security contribution rates vary, the old-age pensions, healthcare, disability and unemployment benefits also differ very much from each other. When comparing for example the annual state pension in the ten candidate states with a few EU countries, very large differences in benefits immediately appear: Moreover, as the pension build-up occurs over the entire working career, the individual's contribution history will have to be taken into account. The EU regulations on social security coverage will here also provide for new rules in the candidate states. For more information, you can contact Joël Lebersorg, Director, Deloitte International Assignment Services at +322 600-68-42.