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EY Human Capital Conference 2012: Managing global mobility risk - Is cost the barrier?

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EY
EY

A definition of “business risk”; risk management in leading organizations; global mobility risk; the General Electric's risk management environment; global mobility risk — current themes and trends; General Electric global mobility services; how General Electric manages the risks that matter; conclusion — is cost the barrier?

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2012 Human Capital Conference 23–26 October Managing global mobility risk: I cost the barrier? Is t th b i ?
Circular 230 disclaimer ► Any US tax advice contained herein was not intended or written to be used, and cannot be used, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions. Page 2 Managing global mobility risk: Is cost the barrier?
Disclaimer ► Ernst & Young refers to the global organization of member firms of Ernst Y E t & Young Global Li it d each of which i a separate l Gl b l Limited, h f hi h is t legal entity. l tit Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited located in the US. ► This Thi presentation i © 2012 E t & Y t ti is Ernst Young LLP All rights reserved. N LLP. i ht d No part of this document may be reproduced, transmitted or otherwise distributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, photocopying transmission recording rekeying or using any information storage and retrieval system, without written permission from Ernst & Young LLP. Any reproduction, transmission or d st but o o t s o o a y o t e ate a e e s p o b ted and s distribution of this form or any of the material herein is prohibited a d is in violation of U.S. and international law. Ernst & Young LLP expressly disclaims any liability in connection with use of this presentation or its contents by any third party. ► The views expressed by panelists in this session are not necessarily those of Ernst & Young LLP. Page 3 Managing global mobility risk: Is cost the barrier?
Presenters ► Ben Webb ► Robert Bodie ► GE Europe ► GE International ► benjamin.webb@ge.com ► robert.bodie@ge.com ► Michael Mulroy ► Ernst & Young LLP (UK) ► mmulroy@uk.ey.com Page 4 Managing global mobility risk: Is cost the barrier?
Agenda ► A definition of “business risk” business risk ► Risk management in leading organizations ► Global mobility risk ► The General Electrics risk management environment ► Global mobility risk — current themes and trends ► General Electric global mobility services ► How General Electric manages the risks that matter ► Conclusion — Is cost the barrier? Page 5 Managing global mobility risk: Is cost the barrier?
Business risk — culture, trends and practices
A definition of “business risk” ► Any event, action or inaction that threatens achievement of business objectives. ► Part of doing business, take risk to gain return ► Four quadrants in “The Risk Universe”: ► Strategic — achievement of strategic objectives ► Operational — inherent in the day to day business operations day-to-day ► Compliance — regulatory and legal obligations ► Financial — impact on financial and reporting processes Page 7 Managing global mobility risk: Is cost the barrier?
Risk management trends in leading organizations ► Top of mind in the “C-suite” p ► Driving improved business performance through risk management ► Mitigate the risks that matter ► Reduce cost by eliminating overlapping risk processes and optimizing controls ► Use risk data analytics to improve decision making ► HR is fully aligned with the wider approach to Enterprise Risk Management (ERM): ► Appreciation of appetite and tolerance ► Strong tone from the top and governance embedded in the function ► Differential investment in the risks that matter ► Controls are optimized, effective and observed Page 8 Managing global mobility risk: Is cost the barrier?
Global mobility risk – an overview ► People/talent impact on market reach now in the top three p p p risks for the CEO ► People costs are a significant p p g portion of operating p g expense ► Globally mobile employees carry disproportionate cost/risk ► Risks inherent in global mobility: ► Regulatory compliance ► Operational inefficiency ► Financial ► Damage to reputation ► Stiffer sanctions – including executive p g prosecution Page 9 Managing global mobility risk: Is cost the barrier?
Trends in global mobility risk ► Challenges of fiscal stimulus with reducing tax revenues g g ► Increasing audit activity and focus on enforcement ► Technology improving access to and sharing of data ► A golden age of legislative change driving complexity ► Perceived threat to employment base from emerging economies ► Immigration a key electoral issue g y ► Increasing focus on governance, ethics and anti-corruption ► Statutory and internal audit are taking an interest Page 10 Managing global mobility risk: Is cost the barrier?
General Electric global mobility services
General Electric overview ► General Electric is a global infrastructure and finance g company ► Founded by Thomas Edison 130 years ago y y g ► Businesses include – Aviation, Capital, Energy, Healthcare, Home & Business Solutions and Transportation ► Over 320,000 employees in more than 150+ countries Logos courtesy of GE Page 12 Managing global mobility risk: Is cost the barrier?
General Electric risk management environment ► Integrity p g y policyy ► Bottom-up compliance ► Risk management environment applies to global suppliers and their suppliers Employees Global suppliers Extended local suppliers Page 13 Managing global mobility risk: Is cost the barrier?
General Electric global mobility services ► Operates across more than 90 countries p ► Supporting mobile employees including: ► Traditional expat assignments p g ► Short-term assignments ► Commuters ► Leadership programs ► Peers ► Field engineers ► Short-term business travellers Page 14 Managing global mobility risk: Is cost the barrier?
Global mobility services (GMS) ► GMS mission – support GE businesses with their g pp global growth and people development strategy ► Provide standardized flexibility to deliver on GME policy guidelines as determined by business and assignment needs ► Engage and support GE businesses and globally mobile E d t b i d l b ll bil employees (and family members) through the life cycle of an assignment ► Deliver cost-effective services and subject-matter expertise through a global network of external suppliers and internal partners ► Ensure compliance with immigration and tax legislation Page 15 Managing global mobility risk: Is cost the barrier?
Risk management across the assignment ► Assignment life cycle: g y ► Pre-assignment – intercompany/secondment agreement, package design, multiple approvals, restricted payroll activation, acquisitions ► Immigration – strong DD, compliant entry/exit, constant monitoring ► Relocation – local supp e s, HHG s p e t, relocation e pe ses e ocat o oca suppliers, G shipment, e ocat o expenses ► International payroll – completeness, accuracy ► Tax/social security – payroll tax compliance, short-term business travellers, taxation of equity i ll i f i income, hhypothetical taxes, social h i l i l security ► Security, EHS – local policies y, p ► Repatriation – tax/pension status Page 16 Managing global mobility risk: Is cost the barrier?
Conclusion
Conclusion – Is cost the barrier? ► Effective risk management is commercially imperative: ► Regulation is increasing, enforcement is becoming ever more sophisticated and aggressive ► International mobility is more varied and complex ► There is a shift from developed to emerging markets ► Organizations are looking to drive value from risk management activities: ► Optimized processes and controls ► Reduced costs through stronger policies ► Strong data facilitates better business decisions ► Doing the right thing is critical to brand protection: ► Immigration is more politically sensitive than ever before ► Governments and electorate are less tolerant of unethical business practice ► Shareholders and investors place a premium on good risk management Page 18 Managing global mobility risk: Is cost the barrier?
Questions Page 19 Managing global mobility risk: Is cost the barrier?

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EY Human Capital Conference 2012: Managing global mobility risk - Is cost the barrier?

  • 1. 2012 Human Capital Conference 23–26 October Managing global mobility risk: I cost the barrier? Is t th b i ?
  • 2. Circular 230 disclaimer ► Any US tax advice contained herein was not intended or written to be used, and cannot be used, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions. Page 2 Managing global mobility risk: Is cost the barrier?
  • 3. Disclaimer ► Ernst & Young refers to the global organization of member firms of Ernst Y E t & Young Global Li it d each of which i a separate l Gl b l Limited, h f hi h is t legal entity. l tit Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited located in the US. ► This Thi presentation i © 2012 E t & Y t ti is Ernst Young LLP All rights reserved. N LLP. i ht d No part of this document may be reproduced, transmitted or otherwise distributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, photocopying transmission recording rekeying or using any information storage and retrieval system, without written permission from Ernst & Young LLP. Any reproduction, transmission or d st but o o t s o o a y o t e ate a e e s p o b ted and s distribution of this form or any of the material herein is prohibited a d is in violation of U.S. and international law. Ernst & Young LLP expressly disclaims any liability in connection with use of this presentation or its contents by any third party. ► The views expressed by panelists in this session are not necessarily those of Ernst & Young LLP. Page 3 Managing global mobility risk: Is cost the barrier?
  • 4. Presenters ► Ben Webb ► Robert Bodie ► GE Europe ► GE International ► benjamin.webb@ge.com ► robert.bodie@ge.com ► Michael Mulroy ► Ernst & Young LLP (UK) ► mmulroy@uk.ey.com Page 4 Managing global mobility risk: Is cost the barrier?
  • 5. Agenda ► A definition of “business risk” business risk ► Risk management in leading organizations ► Global mobility risk ► The General Electrics risk management environment ► Global mobility risk — current themes and trends ► General Electric global mobility services ► How General Electric manages the risks that matter ► Conclusion — Is cost the barrier? Page 5 Managing global mobility risk: Is cost the barrier?
  • 6. Business risk — culture, trends and practices
  • 7. A definition of “business risk” ► Any event, action or inaction that threatens achievement of business objectives. ► Part of doing business, take risk to gain return ► Four quadrants in “The Risk Universe”: ► Strategic — achievement of strategic objectives ► Operational — inherent in the day to day business operations day-to-day ► Compliance — regulatory and legal obligations ► Financial — impact on financial and reporting processes Page 7 Managing global mobility risk: Is cost the barrier?
  • 8. Risk management trends in leading organizations ► Top of mind in the “C-suite” p ► Driving improved business performance through risk management ► Mitigate the risks that matter ► Reduce cost by eliminating overlapping risk processes and optimizing controls ► Use risk data analytics to improve decision making ► HR is fully aligned with the wider approach to Enterprise Risk Management (ERM): ► Appreciation of appetite and tolerance ► Strong tone from the top and governance embedded in the function ► Differential investment in the risks that matter ► Controls are optimized, effective and observed Page 8 Managing global mobility risk: Is cost the barrier?
  • 9. Global mobility risk – an overview ► People/talent impact on market reach now in the top three p p p risks for the CEO ► People costs are a significant p p g portion of operating p g expense ► Globally mobile employees carry disproportionate cost/risk ► Risks inherent in global mobility: ► Regulatory compliance ► Operational inefficiency ► Financial ► Damage to reputation ► Stiffer sanctions – including executive p g prosecution Page 9 Managing global mobility risk: Is cost the barrier?
  • 10. Trends in global mobility risk ► Challenges of fiscal stimulus with reducing tax revenues g g ► Increasing audit activity and focus on enforcement ► Technology improving access to and sharing of data ► A golden age of legislative change driving complexity ► Perceived threat to employment base from emerging economies ► Immigration a key electoral issue g y ► Increasing focus on governance, ethics and anti-corruption ► Statutory and internal audit are taking an interest Page 10 Managing global mobility risk: Is cost the barrier?
  • 11. General Electric global mobility services
  • 12. General Electric overview ► General Electric is a global infrastructure and finance g company ► Founded by Thomas Edison 130 years ago y y g ► Businesses include – Aviation, Capital, Energy, Healthcare, Home & Business Solutions and Transportation ► Over 320,000 employees in more than 150+ countries Logos courtesy of GE Page 12 Managing global mobility risk: Is cost the barrier?
  • 13. General Electric risk management environment ► Integrity p g y policyy ► Bottom-up compliance ► Risk management environment applies to global suppliers and their suppliers Employees Global suppliers Extended local suppliers Page 13 Managing global mobility risk: Is cost the barrier?
  • 14. General Electric global mobility services ► Operates across more than 90 countries p ► Supporting mobile employees including: ► Traditional expat assignments p g ► Short-term assignments ► Commuters ► Leadership programs ► Peers ► Field engineers ► Short-term business travellers Page 14 Managing global mobility risk: Is cost the barrier?
  • 15. Global mobility services (GMS) ► GMS mission – support GE businesses with their g pp global growth and people development strategy ► Provide standardized flexibility to deliver on GME policy guidelines as determined by business and assignment needs ► Engage and support GE businesses and globally mobile E d t b i d l b ll bil employees (and family members) through the life cycle of an assignment ► Deliver cost-effective services and subject-matter expertise through a global network of external suppliers and internal partners ► Ensure compliance with immigration and tax legislation Page 15 Managing global mobility risk: Is cost the barrier?
  • 16. Risk management across the assignment ► Assignment life cycle: g y ► Pre-assignment – intercompany/secondment agreement, package design, multiple approvals, restricted payroll activation, acquisitions ► Immigration – strong DD, compliant entry/exit, constant monitoring ► Relocation – local supp e s, HHG s p e t, relocation e pe ses e ocat o oca suppliers, G shipment, e ocat o expenses ► International payroll – completeness, accuracy ► Tax/social security – payroll tax compliance, short-term business travellers, taxation of equity i ll i f i income, hhypothetical taxes, social h i l i l security ► Security, EHS – local policies y, p ► Repatriation – tax/pension status Page 16 Managing global mobility risk: Is cost the barrier?
  • 18. Conclusion – Is cost the barrier? ► Effective risk management is commercially imperative: ► Regulation is increasing, enforcement is becoming ever more sophisticated and aggressive ► International mobility is more varied and complex ► There is a shift from developed to emerging markets ► Organizations are looking to drive value from risk management activities: ► Optimized processes and controls ► Reduced costs through stronger policies ► Strong data facilitates better business decisions ► Doing the right thing is critical to brand protection: ► Immigration is more politically sensitive than ever before ► Governments and electorate are less tolerant of unethical business practice ► Shareholders and investors place a premium on good risk management Page 18 Managing global mobility risk: Is cost the barrier?
  • 19. Questions Page 19 Managing global mobility risk: Is cost the barrier?