How Companies are Raising Compliance Awareness
Posted by: Cindy Madden, Director, Consulting Solutions
Compliance, including payroll, tax, immigration, and data security, is a significant and often cumbersome challenge for relocation managers. And, as respondents to Cartus’ recent Policy & Practices survey report stated, the issue of compliance is growing more important, with 79% saying that their organization’s focus on the issue has increased over the past two years.
Compounding the issue, many relocation managers say their organizations don’t fully understand the need for compliance, making consistency across the board just as big of an issue. And, as many have found (and some found out the hard way), the “cost of non-compliance significantly outweighs the cost of maintaining compliance.”1 I’ll briefly address some of the reasons compliance has become such a hot button issue, and some of the solutions Cartus clients are putting in place in order to address compliance challenges.
First, a few more key statistics from Cartus’ Policy & Practices survey report:
- Nearly half (45%) of respondents don’t track all employee travel (including assignments, international transfers, and business travel)
- To manage compliance risks, companies are placing increased focus on early involvement of tax and immigration providers (72%) and better tracking of assignees’ days in country (56%)
- 46% don’t know if their company has incurred fines, fees, or other issues related to non-compliance.
Impact of Compliance on Relocation Programs
Many companies point to visa and immigration as key contributing factors to compliance problems, as complex regulations, long processing periods, and evolving regulations all impact the requirements for managing their relocation program. Sixty-three percent of respondents to a recent survey named visa wait times as the top challenge for staying in compliance with laws and regulations.
Additional factors include:
- Audits, which are increasing and taking place in all areas, such as tax, immigration, social security, invoice audits, local registration, etc.
- Short-term business travel
- A deficiency in adequate resources to manage compliance
- Lack of awareness that compliance issues are important
Consistency in Application
It’s difficult to comply when you don’t understand the implications of non-compliance, or really even understand the process. This is the reality facing relocation managers worldwide. We see this predominantly with assignees and suppliers.
Take destination home finding as an example. Many companies report assignees going online in-country to source property information, such as accommodation availability and rental asking price comparisons. What they find are “dummy” listings on websites created to attract them with false, and often duplicated, information by landlords and real estate agents. The ramifications can have far reaching and costly implications on the process.
Awareness is Key
Addressing the issue begins with education, which comes with strategically developed policies and consistent communication with HR and business leaders. Just over half of survey respondents (53%) said they have a policy in place to accommodate employee-initiated moves, with visa acquisition, relocation travel, and tax return preparation being the top three areas of support offered, thus proactively addressing compliance. Worldwide integration of program administration has also allowed many client companies to realize enhancements to global compliance programs.
Clients are also specifically addressing compliance consistency in a number of ways, with program administration as a primary focus. As such, clients are benefitting from:
- More consistency between locations and business divisions.
- Better organization and communication between teams (HR, Deployed Ops, Accounting, etc.).
- Global posting policy allowing employees to self-select for permanent transfer early in their career.
- Changes to host administration (versus home); regional policies.
To learn more about Cartus clients’ thoughts, advice, and insights into their biggest challenges, download our white paper.
Additional Resources for Relocation Managers
For more information on how organizations are approaching compliance, as well as other global mobility trends, request a copy of Cartus' 2016 Global Mobility Policy & Practices survey report. If you weren’t able to attend our Worldwide ERC® webinar on September 21, you can listen to a playback of the webinar where we shared information on key survey trends and the specific issues our clients are facing.