A robust and responsive global mobility program can make your organization stand out among your competitors and help you attract and retain the top talent in your industry. Find out how:
A robust and responsive global mobility program can make your organization stand out among your competitors and help you attract and retain the top talent in your industry. Find out how:
A comprehensive talent mobility program is essential to recruit and retain top executive talent. Offering a competitive mobility package is one way to attract and keep the best talent on your executive team.
Addressing concerns about selling a current home and purchasing a new home in your mobility program may play a large part in an executive’s decision to accept a relocation offer. Consider the following for your executive mobility program:
A Guaranteed Buyout (GBO) program involves providing a buyout offer after a home has been on the market for a certain length of time. This gives your employees the assurance that they can confidently purchase a new home without the constant worry of whether their old home will sell.
A Buyer Value Option (BVO) program offers similar advantages to a GBO once an outside buyer has been identified. This option often focuses on providing employees with sufficient marketing support to sell their homes.
A home sale bonus incentive involves providing an additional bonus for employees who sell their homes within a certain period of time. These bonuses – also known as quick sale bonuses – provide employees with motivation to sell their homes more quickly and relocate without having their attention, focus and efforts diverted by their former properties.
A loss on sale provision involves reimbursing employees for a loss incurred due to the sale price of their home. This helps assuage employees’ fear about losing money on a home sale.
Provide access to a third party company to stage your employees’ homes for sale to improve the chances for them to sell quickly.
Conduct research on area neighborhoods, schools, child care, typical commute times, medical services, places of worship, etc., and provide that information to help your employees become familiar with the new location and assist them during paid house hunting trips.
Look for and provide access to real estate professionals in the area who have relocation experience. These professionals will be best suited to manage the time constraints of your employees’ house hunting trips to maximize the use of their available time.
Summer can often be a good time for hiring with so many new college graduates on the job hunt. According to a recent job report, the unemployment rate in the United States is 4.3 percent, the lowest it has been since March 2001. There are jobs out there and people willing to work. But if you’re looking for a job in a specific field or industry, where is the best location to look?
At CapRelo, we wanted to take a look at some of the job opportunity hotspots throughout North America. As a global relocation company, we are always interested in the business landscape as a whole, what the best cities are for jobs, and who is hiring the most. So, we decided to look at the 25 largest metropolitan areas in the United States as well as the top five areas in Canada and Mexico in order to find out what industry has the most open jobs. To do this, we used data from LinkedIn (taken the first week of June) to look at job listings for each metropolitan area and then put together a map of our findings.
Overall, we were surprised by some of the results while other results were to be expected. For instance, it was not shocking to see that New York was the best city for jobs in 2017, with the most total open jobs, but specifically the highest number of financial jobs. It also made sense that Los Angeles is hiring in large numbers for construction. The city has a number of development projects going on, including in the downtown area where the LA Times says there hasn’t been that much construction since the 1920s.
One of the most surprising results was that Washington, D.C. was hiring the most information technology jobs in the country, ahead of markets like San Francisco, Seattle, and Austin. San Francisco and Seattle were numbers two and three, respectively, but Washington had thousands more open positions. Boston was another interesting result. Healthcare is their top hiring industry with just over 23,000 open positions. Digging a little deeper, healthcare jobs have been steadily rising since June 2016, adding about 20,000 jobs. Internationally, IT jobs were most in demand. It was the top industry in all five metropolitan areas in Canada, as well as Mexico City.
The business landscape is always shifting and those shifts have a variety of impacts on different cities and different regions. Currently, plenty of companies are hiring and unemployment is a level not seen in years. At CapRelo, we wanted to see which industries had a large number of open jobs in some of the largest metropolitan areas in North America, and present our readers with a list of the best cities for jobs and opportunities. Some results were surprising while some were not. However, taking a step back and looking at the overall hiring landscape helps give perspective to both employers and job seekers.
The current talent landscape poses several challenges to companies acquiring and retaining the human capital they need to expand. Without quality workers, their ability to reach operational objectives and build companies that are poised to thrive in the digital economy can be compromised.
This is where rotational assignments come in. A rotational assignment is a consecutive series of professional assignments designed with specific employee or business outcomes in mind. A series usually comprises between three and five assignments and typically consists of short-term placements of between three and six months each.
Companies use rotational assignments for two main purposes: talent development and project work.
To boost their human capital, employers are investing in rotational assignments to develop their in-house talent and add new talent. This type of rotational assigning is typically used for four more targeted purposes:
Companies also use rotational assignments to manage projects or fill skills gaps on projects, whether those are internal or for clients. These are projects that, without the right leadership or skills, would fall short of their objectives – for example, internal manufacturing process improvement that require Lean Six Sigma experience or product for clients that require niche engineering skills. Companies are hard-pressed to find qualified STEM talent – so when the necessary skills and experience aren't available onsite, companies can use alternative solutions. Sending employees on rotational assignments can perform the double function of providing the needed abilities at a fraction of the cost of hiring external talent while simultaneously challenging and developing employees.
In business, it’s important to keep up-to-date on the country’s economic landscape. An improving economy and the addition of new jobs have prompted us to investigate some of the top employers across the country.
Our investigation examined employers in two categories: Largest Employers (based on the number of employees) and Best Places to Work (based on Glassdoor rankings and reviews). It was interesting to see which companies made the lists.
First, we looked at the largest employers in each state and found that they were most often university systems or “big box” retailers. So, instead, we took a different approach and looked for the largest company headquartered in each state based on the total number of employees worldwide.
Using this approach, we could see where some of the largest brands, not only in the United States but around the globe, chose to locate their base of operations. Some of the most well-known brands immediately stood out, such as UPS, AT&T and Starbucks. But it was a surprise to see a large state like Florida have a lesser-known company like Jabil Circuit as a top employer (the company has more than 175,000 employees worldwide). It was also interesting to see who lead in smaller states, like Hawaiian Airlines in Hawaii (6,100+ employees).
Next, we explored the best-rated employers across the country. To map this out, we researched information on Glassdoor to find the 50 Best Places to work in North America. Forty-nine of the top companies are located in the United States, while one, Lululemon, is headquartered in Canada.
California led the way, with 17 California-based companies making the top 50. Many are tech companies and household names like Apple, Facebook, Google and Aibnb. With Silicon Valley and the Bay Area attracting top talent, it’s no surprise to see so many tech companies based in the state.
In addition to technology companies, a number of restaurant and grocery store chains made the national list. Trader Joe’s (CA), Wegmans (NY), H-E-B (TX) and Costco (WA) all appeared on the list of great places to work. Two quick-serve restaurants joined the top 50 list – In-N-Out Burger (CA) and Raising Cane’s (LA). We found it particularly interesting to find these six companies reviewed as some of the top workplaces because quick-serve and retail work is not often seen as glamorous.
Overall, we found only one company on both lists – FedEx, based in Tennessee.
It’s sometimes good to look at the big picture when you’re examining the biggest and best companies in North America. In this case, it was eye-opening to see how states compare when it comes to employers. Every state is unique, and the companies on these lists add to their individuality.
A tax gross up is when the employer adds to the taxable relocation amount to assist with the tax liability of the addition of taxable relocation costs to an employee's income. For example, if the relocation costs include $5,000.00 taxable dollars, the employer may pay a total of $7,500.00 so that the employee gets the full benefit of the $5,000.00, as the estimated taxes of $2,500.00 are paid by the employer.
It's said that death and taxes are the only certainties in life. I'll leave the answer to that question to the great philosophers. However, one thing is an absolute certainty: taxes are a fact of life.
This is particularly true in the employer, employee relationship. The government requires that the employer withhold taxes from the employee's paycheck. Some would call this wise on the government's part, others wouldn't be so kind. In the corporate world, practically everything is taxed, including aspects of relocation packages provided to employees. Most relocation expenses associated with a move, whether it is a reimbursement made to a transferee or a payment made to a vendor on the transferee’s behalf, is required to be reported as taxable income to the employee and is subject to IRS supplemental withholding regulations.
Can you imagine the look on your employee's face when you gently explain that the generous relocation benefits provided will increase his or her tax burden? It is a guarantee, the once happy employee's mood will change quickly and not for the better. Well, fortunately for these employees, a portion of the tax liability of the relocation package can be covered by tax assistance (gross up) paid by the employer. Unfortunately, grossing up can add 55% or more to taxable relocation costs. If you consider the obvious benefit to the employees’ long-term happiness, it is money well spent.
Gross Up Formula #1 - The Flat Method
The flat method is a flat percentage calculated on the taxable expenses and then added to the income. For example, an employer will gross up at a rate of 25% for taxable expenses. If the transferee is paid $1,000, the gross up would be 25% of this, or $250, and therefore the transferee would receive a benefit of $1,250 total. Note that the gross up is also considered taxable income and may create an additional tax liability to the transferee.
It’s important to note that this method likely doesn't cover the employee's tax liability since the gross up is taxable income. Additionally, this tax gross up formula is not compliant with supplemental withholding regulations.
The following tool will help you calculate tax gross up using the flat method:
Gross Up Formula #2 - The Supplemental/Inverse Method
This gross up formula is often used because not only are relocation expenses considered income, but the gross up is considered income too. Therefore employers will pay the gross up on the gross up. To determine the amount, add up all the tax rates (fed, state, OASDI, SS) and then divide the taxable expense by the sum of the tax rates. Take this number and subtract the taxable expense.
This methodology covers gross up on the gross up, but may not accurately reflect the tax bracket of the employee.
The following tool will help you calculate tax gross up using the supplemental/inverse method:
Gross Up Formula #3 - The Marginal/Inverse Method
This method is typically handled by a CPA or full-service relocation companies and also incorporates the tax on tax calculation. The difference is this methodology takes into account employee income and IRS Form 1040 tax filing status. In most cases policy dictates that only company-earned income will be considered and other forms of income, such as spousal income or investment income, won't be taken into account.
These three tax gross up formulas represent the essentials of grossing up taxable relocation expenses to assist with the employee's relocation tax liability. While one can do the calculations, it is always wiser to seek the help of experienced relocation experts.
When done properly, a tax gross-up can reduce the tax burden on a transferee and offer consistency in records and paperwork to better prepare both the employee and employer for tax filing. That said, if not done correctly, a relocation tax gross-up can result in the following problems:
The IRS has several publications concerning tax consequences of moving expenses, including the gross-up concept, in their Publication 521 "Moving Expenses" and Publication 523 "Selling Your Home." Both are recommended reading for transferees planning a job-related relocation move.
Many corporate accounting and finance departments, while adept at handling day-to-day corporate financial operations and record-keeping, may not have the expertise when it comes to accurately and fairly figuring tax gross up. Due to the complexity of tax laws and other local, state and federal regulations, turning the work over to a full-service global mobility management company may be beneficial.
Working with an experienced global mobility management company that can efficiently handle all aspects of a transfer may prove beneficial in eliminating tax errors and omissions. Among its many services, a good global mobility management services provider will track expenses and submit accurate reports of taxable costs as well as help calculate tax gross up. As one of your preferred suppliers, a trusted global mobility management company can give you and your transferees peace of mind – along with a lower tax bill.
Although this written communication may address tax issues, it is not a covered opinion as described in Circular 230. Therefore, to ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments), unless expressly stated otherwise, was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matter(s) addressed herein.
There are many corporate relocation costs to consider before a group move. Typically, easily quantifiable, up-front corporate relocation expenses are foremost in the minds of management and HR staff. Rarely is the cost of losing key talent considered.
Here are just a few of the added corporate relocation expenses you may face if your key talent refuses to make the group move:
Potential loss of intellectual property and human assets
Cost of key talent going to a competitor if a non-compete clause was not signed
Bad public relations if high-profile company leaders leave
Loss of company morale during and following the move when a company already in a state of flux loses well-respected personnel
In addition to severance pay that has the potential to equal up to a year's salary for a top executive, there are other tangible costs associated with losing company leaders. These costs won't be considered part of your corporate relocation expenses because they'll be incurred after the company has settled into the new location. But if you are unable to keep the desired staff on board, you will find that these hidden expenses will add up. Even worse, these hidden costs are not tax deductible like some corporate relocation expenses.
The costs of hiring and training new employees, which can equal up to five times the amount of an executive's salary
Loss of productivity during ramp-up time with new employees
Potential corporate relocation expenses if you need to look outside your new region for talent
If your company is planning a group move, wouldn't you rather have your top performers make the move with you?
Millennial workers, defined as those born after 1980, are graduating from college and ready to take on the world – literally. According to a Pew Research study, millennials are expected to comprise 37 percent of the workforce in the U.S., which will grow as Boomers retire. Because they have grown up with digital media, the world of the millennials is wider than that of their parents. Consequently, they have developed a global mindset that is reflected in their choice of career paths as well as the need for balance in work and personal life.
Unlike their grandparents or even parents, most millennials see career travel as a given, seldom staying in one job for more than two or three years, especially if few opportunities exist for relocation and career growth. On the other hand, millennials also value personal growth, balance and meaningful work in addition to career advancement. To successfully manage workers of this generation requires an understanding of what millennials need and want.
Millennials are more likely than their parents or older siblings to delay marriage and family to establish themselves in a career first, one which preferably includes travel and all of its career-supporting, culturally enriching benefits. Lack of family and other external "baggage" often gives them the freedom to pick and choose plum assignments without worries about spousal employment, quality school availability or other concerns and restrictions often experienced by employees with families. Once millennials do marry and settle down, however, they insist on a work environment that allows a balance of work and family.
Until recently, relocation was usually considered an "earned right" reserved for higher-ranking executives. Millennials believe that organizations intent on keeping their loyalty should offer them the chance to experience other locations and cultures as part of their employment experience.
A characteristic of millennials is authenticity in their work as well as personal lives, reports a Bentley University study, with most refusing to compromise values. This includes a willingness to leave companies whose work demands restrict their ability to live an authentic life aligned with their values, including a healthier balance of work and leisure than that experienced by their parents. Pew Research Center studies confirm that many millennials preferred fulfilling careers, where they are valued and enjoy what they do, to high salaries. (Benefits, however, did rank highest in millennials' corporate "wish lists.")
Far from rejecting the corporate world, over 72 percent of millennials surveyed in the Bentley study would enjoy working with a large company; 48 percent of responders also reported that they want to be loyal and would prefer to work for no more than two companies over the course of their careers. The good news is that companies offering great benefits, including travel as well as flexibility, balance and purposeful work should find it easier to keep their millennial workers productive and happy.
Around the globe, employers are becoming aware that the low participation rate of women in the high tech industry has a negative impact on business. According to Sharon Florentine in her CIO article, “6 Ways to Attract and Retain Female IT Talent,” research shows that actively recruiting, retaining and advancing more women is good for a company’s bottom line. And when women are in leadership positions, turnover is reduced, the overall performance of the organization is enhanced and a strong leadership pipeline is established.
Also, since the high tech industry is overwhelmingly male-dominated, companies are missing out on a significant pool of quality talent. Especially in a labor market where employers are concerned about a talent gap in professions such as engineering, companies can’t realistically afford to not foster female talent. However, statistics indicate a lack of success when it comes to retaining women: a Harvard Business Review report led by Sylvia Ann Hewlett shows that 41 percent of highly qualified STEM workers are female, yet more than 50 percent of them leave the field in their mid to late thirties.
According to the Kelly Services article, “Attracting and Retaining Women in the High Tech Industry,” some of the reasons women leave the IT industry include a lack of female colleagues and role models, as well as distinctly inferior treatment such as lower salaries and fewer advancement opportunities when compared to their male peers. It’s only logical, therefore, that addressing these issues would make for more attractive work environments for women. Employers should consider taking the following measures:
Attracting and retaining women in the high tech industry is an ongoing endeavor. But by understanding what women want and where companies fall short, employers can effectively adapt their talent management strategies to foster and support top female talent.
A 2015 financial article titled “Global organizations face looming crisis in engagement and retention of employees, according to Deloitte survey” states that 87 percent of business and HR leaders agree a lack of employee engagement is their primary concern.
What’s more, while the percentage of leaders who stated engagement was very important doubled from 26 to 50 percent from last year, an overwhelming 60 percent said they didn’t have specific processes to measure and enhance employee engagement.
These numbers are disturbing, especially when you consider that employees are most companies’ primary resource. A lack of engagement signals a lack of motivation and retention, resulting in reduced productivity, costly turnover and the inability to successfully and continuously expand business operations.
Moreover, according to Achieve Global’s report “Worldwide Trends in Employee Retention – How to keep your best employees in any market,” talent mobility is on the rise. In the United States alone, 23 percent of workers plan to leave their current jobs within the next 12 months. This level of attrition is concerning, especially since replacing employees is a lengthy, costly process.
And though many companies are streamlining their recruitment processes in order to minimize recruitment and return to productivity time, these types of measures can’t be effective without addressing the lack of employee engagement.
Obviously, for companies looking to enhance engagement and retention, it’s key to understand employees’ motivations for remaining satisfied with their jobs and their companies.
And this is where some interesting facts become clear. According to Towers Watson’s research, the factors that influence engagement include leadership’s sincere interest in employees’ wellbeing, a healthy work-life balance, flexible work arrangements and reasonable workloads. In other words, employees who feel supported by their companies’ leaders and whose jobs allow them a reasonable work-life balance are far more likely to be engaged than those who don’t.
Other factors that influence retention include a good understanding of a company’s goals and how a job contributes to those goals; a company’s public image; and empowerment (i.e. that management actively seeks out employees’ opinions in decisions that affect them).
When it comes to attracting, engaging and retaining top talent, employers around the world are advised to adapt their talent management strategies to better meet their employees’ expectations. Without taking this all-important step, employees are far more likely to look elsewhere when their job experience isn’t as good as expected.
Adjusting talent management strategies can involve a number of steps, including providing more transparency about the company, creating more flexible work arrangements and facilitating a more collaborative work environment.
Another aspect of enhancing engagement involves providing the best relocation experience possible for relocating employees. When talent feels supported by their companies during the demanding and often stressful time surrounding a relocation, they’re more likely to settle into their new positions smoothly. And that in turn greatly enhances the chances of them being engaged for the long term.
Of course, enhancing engagement and retention isn’t a process that happens overnight. By continuously staying abreast of talent trends and assessing why employees leave their companies, employers can gain the insights necessary to adapt their strategies to better engage and retain top talent.