Global Assignment Policies Practices Survey Final

INTERNATIONAL EXECUTIVE SERVICES
Global Assignment Policies and Practices

Survey 2012
kpmg.com
2012 KPMG International Cooperative (KPMG International). KPMG International provides no client services and is a Swiss entity with which the independent member rms of the KPMG network are afliated.
Contents
Introduction How to Access KPMGs GAPP Survey KPMGs International Executive Services Executive Summary GAPP Survey Highlights 2012 1. Organization: Prole 2. Program: Demographics 3. Program: Families 4. Program: Assessment and Performance 5. Program: Outsourcing 6. Program: Danger Planning/Preparation 7 . Program: In Your Opinion 8. Policy: Assignment Compensation 9. Policy: Planning and Preparation 10. Policy: Housing 11. Policy: Taxation 12. Policy: Home Leave, Travel, Wills, Schooling, Cars Glossary Index 2 4 5 6 8 8 11 14 17 20 26 29 31 39 50 64 75 84 88
2 | Global Assignment Policies and Practices 2012
Introduction
On behalf of KPMGs International Executive Services (IES) practice, I am pleased to present the 2012 report of the Global Assignment Policies and Practices (GAPP) Survey. This web-based survey, 14 years after its launch, continues to provide valuable trends and insight on how global organizations administer their international human resource (HR) programs. Benets of the survey The survey allows you to benchmark your organization in relation to other survey participants on numerous aspects of an international assignment program. The survey covers areas such as assessment and performance, assignment compensation and allowances, preparation and planning, administration and outsourcing, as well as taxation policies. Participation in the survey is free and results are available immediately upon completion to participants. A feature of the survey website is the ability to view the data by any specic question of interest. Participants nd this useful in evaluating their organizational policies against a specic set of parameters, as well as against peer or competitor organizations. For the purpose of this report, the data is sorted in a number of insightful ways. For example, survey results are featured by headquarters location, organization size, program size, and industry classication. About the survey website and report Upon logging onto the site, you will notice, in addition to the GAPP survey, other valuable surveys are available for easy viewing. This report is a snapshot of the GAPP survey, which is the main survey housed on the site. The GAPP survey is dynamic changing every time a new participant logs in and answers the questions. Results are published as of February 2012 for purposes of comparison. At the time of this publication, more than 577 organizations have participated. Of these participants, 36 are FORTUNE 100 companies and 102 are FORTUNE 500 companies. Real-time information is available on the website, www.kpmglink.com, thus statistical variances between todays results and the February 2012 report may occur. Even with additional organizations results added, the trends are not likely to deviate from those highlighted in this report.
Global Assignment Policies and Practices 2012 | 3
The survey is divided into the following three broad categories: Organization Prole This gathers information such as the headquarter country, number of employees, and industry classication of the participating company. Program Prole This gathers information about the size and nature of the participants overall assignment program, including various policies and assignment types. Policy This gathers information about the provisions of the participants expatriate policy. A written analysis, which reveals some of the signicant differences, is included in the beginning of each section of the report. In summary This report represents a broad overview of the international assignment policies and practices used in the marketplace today. If you have any questions regarding this report or need additional information about KPMGs Global Mobility Advisory Services, please feel free to contact us at go-ies@kpmg.com.
Sincerely,
Achim Mossmann Partner, Global Mobility Advisory Services KPMG International Executive Services KPMG in the US
How to Access KPMGs GAPP Survey

Survey instructions: Please go to www.kpmglink.com. Click on Need Help or Username. You will be asked to select a KPMG account type. Choose Administrator or Program Manager Account and click Continue. On the next page, headed Get Help on KPMG LINK, select do not have a KPMG LINK account. Fill out and submit a registration form. You will be asked why you need an account. Here, type GAPP Survey. You will be sent login information please allow 24 hours for us to respond during normal business hours. Please log onto the site and take the survey. Click on Benchmarking Center. Click on Take a Survey. Under Long Term Surveys, click on Global Assignment Policies and Practices Survey and begin to take the survey. Once you have submitted your survey responses, the results will be displayed with your responses highlighted. Please note, it is necessary to complete the survey in order to view results. How to view results: You can log back in and review the results of the entire survey at any time. Please log on to www.kpmglink.com. Sign in using your login ID and password. Click on Benchmarking Center. Click on See Results. Under See Results, click on Long Term Survey Global Assignment Policies and Practices and view results. Data cut If you would like a data cut from this survey, please send an e-mail to us-kpmg-gmas@kpmg.com. Please note that while the full survey results are free, a nominal fee is charged for the data cut.
KPMGs International Executive Services

KPMGs International Executive Services (IES) practice is dedicated to helping global companies better manage their international workforce. When clients send their employees on international assignments, KPMGs IES professionals provide proactive expatriate services along with international human resources and tax advice. When clients are considering acquisitions, mergers, or downsizing, the practice offers professional advice and guidance on related issues affecting an expatriate workforce. How KPMG can help KPMGs IES practice has the people, experience, and international presence to serve member rm clients effectively. Established more than 30 years ago, the practice today comprises more than 2,200 dedicated IES professionals from KPMG member rms worldwide. All told, the practice serves more than 2,500 clients and their expatriate populations. KPMGs IES practice provides broad compliance, advisory, and administration services to support clients worldwide businesses and assignees. International assignment tax compliance services KPMGs tax professionals complete tax returns for clients international assignees, a service personalized for each expatriate. As part of the compliance process, the practice also offers payroll advisory services to help member rm clients obtain payroll information to be used in processing tax returns. Global Mobility Advisory Services KPMGs Global Mobility Advisory Services (GMAS) practice has in-depth experience in assisting clients in managing their international human resources. For more than 11 years, GMAS has provided services to companies to help them manage their assignment administrative processes and related costs more effectively. In addition, our clients rely on our knowledge and experience to help them benchmark, design, and implement their international assignment policies. Our experience serving global employers truly distinguishes KPMG as a leader in progressive process improvements for international human resources. Our services encompass both strategic and administrative support. One potentially effective way to contain the administrative costs associated with international transfers is for organizations to consider outsourcing those processes that are not part of their core business to external service providers. Our professionals can provide assistance with effective management of routine administration for international assignment programs that allow companies to focus on the high-level strategic human resource aspects of their programs. The service can encompass nearly every component of international assignment administration, including pre-departure services, coordination of services in the host-country, ongoing support and tracking, and assignee repatriation. We can also provide support in coordinating international vendors such as moving companies, destination services, cross-cultural consultants, and language lesson providers. Global equity tax advisory Global equity tax compliance for employees that have worked or lived in a location and received or earned equity and incentive awards can expose companies to the tax reporting and withholding associated with providing these types of awards long after the employees has physically left the location. Understanding the complex tax rules in this area, and dening a process to report, withhold, and handle large volumes of transactions are just some of the services we offer in this area. International social security advisory KPMGs member rms can help companies plan for, and control costs of, social security taxes by understanding the rules and how they impact the cost of international assignments. Employment tax services KPMG member rm professionals can help companies identify payroll and unemployment tax issues early on and help resolve them before they escalate into signicant tax problems. This includes assistance in identifying, quantifying and recovering payroll tax overpayments, complying with employment tax requirements during M&A activities and securing the abatement of penalties for payroll-related assessments. Technology The IES practice combines its knowledge of web-based technology with its practical experience in helping clients manage their assignment programs to provide companies with applications designed to streamline their global mobility and tax processes. The practices technology offerings featuring the web-based, integrated and user-friendly KPMG LINK suite provide applications for tax compliance, compensation collection, nancial modeling, and international assignment program management. For more information on the above services, please contact the team via e-mail at go-ies@kpmg.com or visit our website at www.kpmglink.com.
Executive Summary
As the competition for international talent picks up steam, companies are increasingly looking to enhance their mobility policies to attract and retain key global talent. According to KPMG Internationals Global Assignment Policies and Practices Survey, mobility programs are undergoing a number of subtle yet important changes. Some changes, such as the adoption of a broader denition of family or the incentives being incrementally added to strengthen competitive advantage, are bringing more exibility and adaptability to mobility practices. Others, such as tightening policies around the treatment of tax equalization, are providing more control over the cost of mobility programs for employers. The survey also found that against a backdrop of growing political and economic turmoil and uncertainty less than half of companies indicate that they have either a global or a countryspecic emergency plan for their employees. As these adjustments to mobility policies and practices continue to evolve, we anticipate seeing a widening gap in the competitive positioning between regions, industries and companies. Broadening denition of family One of the most signicant long-term trends is the evolving denition of the family for assignment-related benets purposes. Since our rst survey in 1999, we have seen the number of mobility plans that include unmarried domestic partners of the opposite gender rise from just 24 percent in 1999 to 55 percent in 2012; the number of plans that include same-sex partners has risen from 17 percent to 49 percent in the same timeframe. Interestingly, the tendency to include same-sex couples is most marked in Europe (63 percent of organizations) and Asia (60 percent), whereas only about 40 percent of American-headquartered companies extend their classication of family to include same-sex partnerships. As this trend increases, we will likely see growing implications for companies offering international assignments and their global mobility managers. For example, expanding the denition of family could help companies become more attractive for new employees and help with retention of existing staff. At the same time, organizations could likely see an increase in the cost of mobility per employee as more couples become eligible, thus requiring an extension of spousal benets such as work visa support and job search expense allowances. Obtaining visas for non-married domestic partners continues to be a great challenge especially in countries where domestic partnerships are not recognized as legal unions. Seeking competitive advantage A growing number of organizations with international assignees are looking to tweak their mobility policies and practices in order to enhance their competitive position in the marketplace. One area where signicant divergence is becoming clear is in the treatment of cost-of-living allowances. While 58 percent of all companies have no limits or caps (subject to the tables and indices) on allowances of this kind, companies headquartered in Asia Pacic are much more likely (77 percent) to have no limits, versus those in the Americas (55 percent). And while 41 percent of European companies impose negative cost-ofliving allowances on their assignees, only 13 percent of Asian companies do the same. The energy industry seems to echo these ndings; seven in ten respondents suggest that their organization has no caps on cost-of-living and only 6 percent impose negative allowances. For assignees, these variations between industries and regions act as a signicant draw when calculating the impact of their relocation and clearly demonstrate some of the levers that companies are using to achieve competitive advantage in regions or industries where the ght for talent is heating up. Tax equalization remains a key benet Almost three quarters (73 percent) of companies offer tax equalization policies, meaning that their assignees pay no more or no less tax than they would have paid had they not accepted an international assignment and remained in their home jurisdiction. Interestingly, the practice is more prevalent in the Americas than in Asia Pacic or Europe. But while tax equalization policies have remained fairly common since 1999, the survey indicates signicant changes in how they are being managed. For example, over the past 10 years, companies have become 50 percent more likely to expect assignees to pay any tax due on share purchases. The results show that companies are taking a more strategic approach to calculating their tax equalization payments to achieve greater control and certainty over costs. At the same time, companies seem to be balancing out when it is appropriate for assignees to manage their own tax liabilities and when it is more cost-effective for the company to manage this role. The results show that companies are taking a more strategic approach to calculating their tax equalization payments to achieve greater control and certainty over costs. At the same time, companies seem to be balancing out when it is appropriate for assignees to manage their own tax liabilities and when it is more cost-effective for the company to manage this role. Indeed, when it comes to personal income tax, companies are taking a much more proactive role in tax treatment.
For instance, in 1999 a majority, 63 percent, used a laissez faire approach to who manages the tax on non-company income versus 29 percent in 2011. The same holds true for spousal income: only 38 percent of companies currently use a laissez faire approach to tax treatment compared with 63 percent in 1999. Ultimately, this shows that companies are starting to take a more granular view of tax equalization in order to achieve mutually benecial arrangements with their assignees. Keeping assignees safe Another surprising trend is a signicant drop in the number of companies that develop specic emergency plans for each country in which they have assignees. Whereas in 2003, 21 percent of respondents indicated they had such a plan, only 13 percent note the same today. At the same time, less than 10 percent encourage their assignees to complete wills or document arrangements for child custody in case of emergencies while they are on assignment. There has also been a steady decline in the number of companies that have reduced the number of assignees that are sent to high-risk locations. Not surprisingly, industries that tend to operate in higher-risk locations such as energy companies demonstrate a higher likelihood to have country specic emergency plans. Energy companies are also much more likely to have contracted an external service provider to manage emergency evacuations or assistance during a crisis (51 percent versus an average of 33 percent).
However, given the rise in geo-political turmoil over the past few years and the increased prevalence of natural disasters, one would expect this practice to have dramatically increased rather than diminished. As companies look to update their policies, this would be a prudent area of focus especially in locations with high risks of natural disaster or emergency evacuation due to political unrest. Maximizing the impact of international assignments Our survey indicates that almost three quarters of respondents (72 percent) suggest that the main objective of international assignment programs is to support the organizations business objectives and create greater adaptability to changing business requirements. To achieve this goal and drive greater efciency into the assignment process, many companies (48 percent) now outsource parts of their international assignment program to gain access to a service providers global resources and expertise. And, as global mobility transformation projects grow in popularity, outsourcing has become a valuable way to streamline and improve program process models. As a result, many organizations are reducing the effort spent by internal human resource professionals while allowing the organization to tap into the economies of scale offered through an outsourcing environment, as well as decreasing risk and increasing employee satisfaction.
GAPP Survey Highlights 2012

1. Organization: Prole
1
Organizations headquartered in the United States continue to represent the single largest share of participants in the survey. However, over 40 percent have their parent entity based in other nations (see Question (Q) 1.1). Companies with more than 1,000 but fewer than 10,000 employees (36 percent) dominate the survey and 49 percent of them have a program size of 50 or more assignees (Q 1.2 and 2.1). The participants are fairly evenly represented in terms of revenue, with 32 percent having revenue of more than USD7 .5 billion (Q 1.3). Industry sectors are also widely represented in the survey (Q 1.4), with only four sectors comprising more than 10 percent each of the total survey pool: consulting/professional services (10 percent), manufacturing (14 percent), nancial services (16 percent), and high technology (14 percent).
1.1. In which country is your organizations headquarters located?
United States
57%
Canada Australia
2% 1%
China Hong Kong Ireland (Republic of) Mexico New Zealand Russia Singapore 2% South Africa Other South Korea Spain 2% Other: Africa Belgium Other: Asia
4%
Switzerland
Italy
6% 2%
France
0%
Japan
Other: Americas
1% 4%
1%
1%
Other: Europe
Denmark
3%
Netherlands
2%
Sweden
2%
Germany
6%
7%
United Kingdom
Source: KPMG International, GAPP Survey 2012
1.2. According to your best estimate, what is the total number of employees in your organization worldwide?
Less than 1,000
13%
1,000 to 10,000
36%
10,001 to 25,000
15%
25,001 to 50,000
15%
50,001 to 100,000
13%
More than 100,000
9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Note: Total may not add to 100% due to rounding Source: KPMG International, GAPP Survey 2012
1.3. According to your best estimate, what were your organization's revenues for the most recent year (in millions of USD)?
13%
Less than 250
32%
10%
250 to 500 501 to 2,500 2,501 to 7,500 More than 7,500
26% 18%
1.4. How would you classify the industry in which your organization operates (select all that apply)?
Academic and educational Advertising and marketing Agriculture, forestry, and shing Apparel and textile Automotive Construction/Engineering Consulting/Professional Services Electronics Energy Entertainment and media Financial services (including banking and insurance) Food and beverages Government (national and local) Healthcare and medicine High technology (including computers and software) Industrial products (including Chemicals) Manufacturing Not-for-prot and voluntary (including religious) Pharmaceuticals Real estate/Property development Retail and consumer products Telecommunications Transportation (passenger and freight) Waste management Wholesale and Distribution Other 0%
1% 2% 2% 1% 4% 8% 10% 4% 7% 2% 16% 3% 2% 3% 14% 5% 14% 2% 4% 3% 5% 5% 5% 1% 1% 11% 5% 10% 15% 20%
2. Program: Demographics
Half of the organizations that participated in the survey have up to 50 assignees. Twenty-four percent of organizations have between 51 and 200 assignees. Eleven percent have between 201 and 500 assignees, and 14 percent have more than 500 assignees (Q 2.1). The majority (55 percent) of participants identify their organizations as having assignees in up to 10 countries worldwide. However, only 13 percent of organizations have assignees in 26 to 50 countries and only 5 percent have their assignees in more than 50 countries. A greater percentage of
2.1. How many assignees does your organization have?
companies now have assignees in more than 30 countries, increasing from 12 percent to 13 percent from 2011 to 2012 (Q 2.2). There is also a wide variety of different assignment types with long-term and short-term continuing to be the most widely used. Over the last two years organizations are increasingly using commuter assignments and rotational assignments. There is a 2 percent increase in rotational assignment policies (18 percent) and a 4 percent increase in commuter assignment policies since 2010 (Q 2.5).
19%
Less than 10
31%
10 to 50
14%
51 to 100
10%
101 to 200
11%
201 to 500
5%
501 to 1,000
9%
1,000 +
2.2. According to your best estimate, in how many countries does your organization have assignees?
5% 13% 28%
Less than 5 5 to 10 11 to 25
2
27%
26 to 50 More than 50
27%
2.3. According to your best estimate, for how many years has your organization had an international assignment program?
12%
9%
Less than 2
10%
2 to 10 11 to 20 21 to 30
43% 27%
More than 30
2.4. Which of the following best describes the most important goal for your international assignment program?
Controlling program costs and ensuring an acceptable return on investment
12%
Attracting and retaining assignees by maintaining competitiveness with other organizations' programs
10%
2
Supporting the organization's business objectives and being adaptable to changing business requirements 72%
Being perceived as fair and equitable
5%
0% Note: Total may not add to 100% due to rounding Source: KPMG International, GAPP Survey 2012
10%
20%
30%
40%
50%
60%
70%
80%
2.5. Which of the assignment types or policies listed below are employed by your organization (select all that apply)?
Long term or standard (for example, 1 to 5 years) Short term (for example, less than 12 months) Commuter Rotational Inter-regional Permanent transfer/indenite length Unaccompanied (spouse and family remain in the home country) Developmental/training Assignee requested Project/contract-specic Other 0% Source: KPMG International, GAPP Survey 2012 2% 20% 40% 60% 80% 20% 42% 36% 36% 18% 22% 47% 25% 81%
96%
100%
3. Program: Families
In dening family (for assignment-related benets purposes), more than half of the participants now include opposite-gender unmarried partners and nearly half now include same-gender unmarried partners. Each of these categories increased by 1 percent from 2011. This percentage is higher in European and Asia-Pacic headquartered companies and signicantly higher for companies in the nancial services industry (Q 3.1). Nearly seven out of 10 participants offer some form of assistance to accompanying spouses/partners of assignees, although it is virtually never in terms of compensation for the loss of the spouses/partners salary. European-headquartered companies tend to offer more help to spouses, particularly in the area of job search, work visa assistance and reimbursement of educational expenses (Q 3.2).
3.1. In addition to legally married spouses and dependent children, does your organization include any of the following in its denition of family for purposes of international assignment?
Unmarried domestic partners/companions of opposite gender Unmarried domestic partners/companions of same gender
Dependent parents/extended family of assignee Other
None of the above
All participants
55% 49% 12% 3% 34% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Europe
77% 63% 7% 1% 17% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Asia Pacific
77% 60% 9% 0% 16% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% HEADQUARTERS
Americas
40% 41% 13% 4% 46% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
3.1. In addition to legally married spouses and dependent children, does your organization include any of the following in its denition of family for purposes of international assignment? (continued)
Unmarried domestic partners/companions of opposite gender Unmarried domestic partners/companions of same gender Dependent parents/extended family of assignee Other None of the above
Financial
73% 67% 14% 1% 19% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Non-Financial
51% 46% 11% 3% 37% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Hi-Tech
54% 51% 14% 5% 37% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
INDUSTRIES
Energy
46% 32% 8% 5% 43% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Manufacturing
46% 31% 11% 1% 50% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
3.2. Does your organization provide any of the following types of assistance to accompanying spouses/partners of assignees whose careers are interrupted by an assignment (select all that apply)?
An allowance or payment which must be used for designated expenses (such as job search expenses or education) An allowance or payment which can be used for any expense Job search assistance at host country Work visa assistance at host country 14% 20%
28%
32% 21% 4% 1% 4% 32% 0% 5% 10% 15% 20% 25% 30% 35%
Reimbursement of education expenses Partial nancial compensation for lost salary Full nancial compensation for lost salary Other None of the above
3.3. With which of the following statements regarding the issue of dual-career couples do you agree (select all that apply)?
Employees facing this issue are less likely to put themselves forward as candidates for assignment
58%
This issue increases the chances of assignment failure
34%
This issue reduces the length of assignment the employee is willing to take
27%
This issue does not have a noticeable impact on our organization's program
30%
None of the above
6%
0% Source: KPMG International, GAPP Survey 2012
10%
20%
30%
40%
50%
60%
4. Program: Assessment and Performance

Organizations tend to use either informal assessments as an evaluation methodology to assess potential assignees, or no assessment at all (Q 4.1). This pattern is followed by a majority of companies using the same goal setting processes as for their domestic employees (Q 4.5). Assignment failure may be evidenced by either recalling assignees early or by their voluntary resignation from the organization within 12 months from the end of the assignment. There is a problem with the tracking of assignees once they return from assignment since participants reported that 26 percent of companies do not know whether or even why assignees have left the organization within 12 months of returning from international assignment (Q 4.2 and 4.3). For repatriated assignees who are tracked as leaving the organization soon after returning from assignment, the overriding reason cited is a lack of appropriate job after repatriation; however, there is a signicant knowledge gap in this area as many organizations may not have a deep understanding of the reasons for the turnover associated with their repatriated assignees. Thirty percent of organizations do not know why their assignees leave the organization within 12 months of returning from their assignment. For organizations with international assignment programs of less than 51 expatriates, 37 percent do not know why their assignees leave (Q 4.4).
4
4.1. Which statement best describes your organizations approach to assessing a potential assignee's suitability for international assignment (select all that apply)?
Line management or HR conducts an informal assessment
56%
Trained evaluators from within the organization conduct assessments
5% 8%
Potential assignees complete self-assessments An external 6% evaluator is used
8%
5%
Other assessment tools are used
39%
We have no provision for assignee assessment
4.2. Approximately what percentage of assignees are recalled from the host country or dismissed from the organization because of inability to perform effectively during the international assignment?
None
26%
5% or less
55%
6% to 10%
5%
11% to 20%
1%
21% to 30%
1%
More than 30%
0%
Do not know 0% 10%
12% 20% 30% 40% 50% 60%
4.3. Approximately what percentage of assignees leave the organization within 12 months of returning from an international assignment?
None
14%
5% or less
35%
6% to 10%
12%
11% to 20%
7%
21% to 30%
3%
More than 30%
3%
Do not know 0% 5% 10% 15% 20% 25%
26% 30% 35%
4.4. What is the main reason assignees leave the organization after returning from an international assignment?
No appropriate job available in the home country Local employee compensation perceived as insufcient
35%
1%
Family issues
1%
Difculty in adjusting to local employee status Offered a better job/career in another organization
4%
21%
Other
4
7%
Do not know 0% 5% 10% 15% 20% 25%
30% 30% 35%
4.5. Which of the following best describes your organizations approach to establishing goals for international assignments (select all that apply)?
The process is no different from our domestic employees goal-setting process It is a different process than that which we use for domestic employees Goals are established for every assignee They are often set but not required for all assignments 6%
63%
21%
7%
They are rarely set
5%
We do not have any process for establishing assignment goals
16%
Other 0%
2% 10% 20% 30% 40% 50% 60% 70% 80%
5. Program: Outsourcing
Tax and immigration services remain the most outsourced processes. Organizations headquartered in the United States and in the nancial services and high-technology industries tend to outsource services more than those organizations based in other regions and in other industries (Q 5.1). The major reason for outsourcing cited in the survey is the ability to access a service providers global resources and knowledge (Q 5.2).
.
After the merger, Mercer/ORC continues to have the largest market share for cost-of-living and housing data. However, AIRINC has a signicant share of the market for both Asia-Pacic-headquartered companies and for Europeheadquartered companies. (Q 5.3 and Q 5.4).
5.1. Does your organization outsource any aspects of the following functions?
Yes No Not Applicable
Assignment compensation calculations
All participants Europe

27%
36%
62% 2% HEADQUARTERS 70% 3%
Asia Pacic Americas Financial Non-Financial Hi-Tech Energy Manufacturing

0% 10% 20% 24%
35% 42% 41% 36% 43%
63% 2% 56% 2% 54% 4%
62% 2% 51% 6% 76%
INDUSTRIES
35% 30% 40% 50% 60% 70% 80%
60% 90%
5% 100%
Assignment orientation sessions HR
All participants Europe Asia Pacic Americas Financial Non-Financial Hi-Tech Energy Manufacturing
0% 10% 18%
25%
71%
4% HEADQUARTERS
79% 3% 28% 28% 26% 25% 30% 22% 25% 20% 30% 40% 50% 60% 70% 80% 67% 67% 68% 71% 5% 5% 6% 4%
INDUSTRIES
66% 4% 76% 3% 71% 90% 4% 100%
5.1. Does your organization outsource any aspects of the following functions? (continued)
Assignment orientation sessions Tax
0% 10% 20% 30% 40% 50% 60% 70% 74%
82%
16% 2%
HEADQUARTERS
84%
13% 3% 26%
83% 92% 80% 82% 81% 89% 80% 90%
15% 2% 4% 3% 18% 2% 15% 3% 16% 3% 10% 1 % 100%
INDUSTRIES
Compensation reports (annual summaries of taxable remuneration)
0% 10% 20% 30% 40% 43% 38% 35%
47%
47% 52% 58%
6% HEADQUARTERS 10% 7% 4% 6% 6% 4% 8% 8% 100% INDUSTRIES
54% 51% 47% 58% 49% 51% 50% 60% 70% 80% 41%
43% 44% 47% 38%
90%
Expense processing
11% 13%
22%
% 77% 1 85% 2%
HEADQUARTERS
21% 28% 22% 23% 31% 84% 25% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
79% 71% 1 % 78% % 76% 1 69% 5%
INDUSTRIES
% 74% 1 100%
Immigration/work permit assistance
0% 10% 20% 30% 40% 50% 60%
75% 72% 72% 78% 86% 74% 76% 73% 73% 70% 80%
% 23% 1 HEADQUARTERS 25% 2% 26% 2% 21% % 13% 1 % 25% 1 24% 27% % 26% 1 90% 100% INDUSTRIES
Assignee payroll
0%
19% 18% 21% 20% 22% 19% 26% 19% 16% 10% 20% 30% 40% 50% 60% 70% 80% 90%
80% 1% HEADQUARTERS INDUSTRIES 79% 2% 79% 79% 1% 76% 1% 80% 1% 72% 3% 81% 84% 100%
Tax compliance
0% 10% 20% 30% 40% 50% 60% 70% 80% 83% 74%
87% 87%
12% 1% HEADQUARTERS 12% 2% 21% 5%
89% 93% 86% 89%
10% 1% 4% 2%
INDUSTRIES
13% 1% 11% 17%
88% 90%
12% 100%
5.2. What is the single best/most important reason to outsource?
To reduce costs/decrease internal head count
6%
To improve service quality and efciency
24%
To reduce administration so that HR can concentrate on core activities
20%
To gain access to service provider's global resources and expertise
48%
To gain access to service provider's technology
0%
5
Other 3% 0% Note: Total may not add to 100% due to rounding Source: KPMG International, GAPP Survey 2012 10% 20% 30% 40% 50%
5.3. From which of the following sources does your organization receive international assignment cost-of-living data (select all that apply)?
AIRINC (Associates for International Research Inc.) ECA (Employment Conditions Abroad) EIU (Economist Intelligence Unit) Government sources Internal sources (such as host-country management) Mercer/ORC NFTC (National Foreign Trade Council) Runzheimer International Other Not applicable (we do not purchase cost-of-living data) 0% 3% 9% 10% 20% 30% 40% 50% 60% 70% 80% 2% 7% 1% 12% 12% 63% 12% 19%
5.4. From which of the following sources does your organization receive international assignment housing data (select all that apply)?
AIRINC (Associates for International Research Inc.) ECA (Employment Conditions Abroad) EIU (Economist Intelligence Unit) Government sources Internal sources (such as host-country management) Mercer/ORC NFTC (National Foreign Trade Council) Runzheimer International Other Not applicable (we do not purchase housing data) 0% Source: KPMG International, GAPP Survey 2012 10% 1% 5% 7% 14% 20% 30% 40% 50% 60% 1% 6% 19% 54% 9% 17%
6. Program: Danger Planning/Preparation

Most organizations have taken steps to address emergency planning for their international assignees, although the extent of the planning varies. In the energy sector and companies with relatively large international assignment programs (>500 expatriates and >50 countries), all of the organizations who participated had taken proactive steps toward emergency preparedness and evacuation planning (Q 6.1). The type of planning and preparation is fairly evenly split between reducing the number of assignees/operations in high-risk areas and increasing the planning, preparation, knowledge, and use of global third-party emergency/evacuation service providers (Q 6.2). Again, the energy sector and organizations with a large number of foreign ofces are much more likely to increase their emergency/evacuation preparedness than reduce the number of assignees/operations in high-risk areas. Overall however, there has been a 4 percentage point decrease in danger planning and preparation since 2003 (Q 6.2).
6.1. Which of the following statements describe your organizations emergency planning for international assignees (select all that apply)?
We have determined that there is no current requirement for assignee-specic emergency planning We have not yet implemented an assignee-specic emergency plan We have a global (not location-specic) plan in place We have a specic plan in place for each country where we have assignees We have contracted a service provider for emergency evacuations/assistance during crisis Other Dont know
All participants
6
2%
10% 13% 9%
22%
28% 33%
0%
10%
20%
30%
40%
50%
60%
Financial
6% 17% 2% 0% 10% 13% 20% 30% 40% 50% 60% 20% 24% 36%
Non-Financial
11% 13% 2% 0% 8% 10% 20% 30% 40% 50% 60% 22% INDUSTRIES
29% 34%
Hi-Tech
10% 6% 1% 0% 10% 13% 20% 30% 40% 50% 60% 27% 29% 28%
6.1. Which of the following statements describe your organizations emergency planning for international assignees (select all that apply)? (continued)
We have determined that there is no current requirement for assignee-specic emergency planning We have not yet implemented an assignee-specic emergency plan We have a global (not location-specic) plan in place We have a specic plan in place for each country where we have assignees We have contracted a service provider for emergency evacuations/assistance during crisis Other Dont know
Energy
0% 8% 27% 0% 0% 8% 10% 20% 30% 40% 50% 60% 35% 51% INDUSTRIES
Manufacturing
15% 13% 3% 0% 8% 10% 20% 30% 40% 50% 60% 18%
29% 35%
< 51 Expatriates
15% 7% 2% 0% 0% 10% 13% EXPATRIATES 20% 30% 40% 50% 60% 21% 28% 27%
> 500 Expatriates

11% 25% 1% 0% 7% 10% 20% 30% 40% 50% 60%
41% 46%
< 5 Countries
15% 8% 1% 0% 0% 10% 15% 21% 18% COUNTRIES 20% 30% 40% 50% 60% 31%
> 50 Countries
4%
33%
41%
0% 0%
4% 10% 20% 30% 40% 50%
52%
60%

6.2. Which of the following are likely responses of your organization to perceived increases in danger for assignees abroad (select all that apply)?
A reduction in the number of assignees in high-risk locations A reduction of operations in high-risk locations An increasing reliance on local nationals in general Increased emergency/ evacuation preparation Better demographic information on the country and contact information for your assignee population Retention of service providers to conduct security briengs and location updates Retention of service providers to assist with evacuations and security planning Encouraging assignees to complete wills and document arrangements for child custody in case of their death on assignment Other None of the above 4% 16% 0% Source: KPMG International, GAPP Survey 2012 10% 20% 30% 40% 50% 9% 18% 27% 21% 20% 23% 40% 42%
7. Program: In Your Opinion

Over the years there has been little change in the perceptions of program managers toward assignee compensation and the time it takes to administer assignment programs. Results have consistently shown that 40 percent and 51 percent of program managers believe assignees are over-compensated and take too much time to administer, respectively (Q 7 .1 and Q 7 .2). The survey shows that the future use of international assignment programs is strong, particularly in European-headquartered and energy sector companies where 90 percent and 92 percent respectively, of respondents will be using assignees the same amount or more than they are currently. Additionally, for 88 percent of companies with more than 500 expatriates, the future use of international assignment programs is strong (Q 7 .3).
7.1. Do you think that assignees are over-compensated (are assignment programs more generous than they need to be)?
60% 40%
All participants
> 50 Countries
YES NO
30% 70%
< 5 Countries
53%
47%
7.2. Do assignees take too much time and effort to administer?
51%
49%
54%
46%
41%
59%
Yes No
All participants
< 5 Countries
> 50 Countries
7.3. How frequently will assignees be used 5 years from now?
Considerably less
5%
Somewhat less
11%
About the same
42%
Somewhat more
32%
Considerably more
10%
0%
10%
20%
30%
40%
50%
8. Policy: Assignment Compensation

The majority of participants continue to use a home-country compensation methodology (Q 8.1). However, among European-headquartered companies there is a signicant use of alternative compensation methodologies such as host-country or the higher-of-home-or-host. Many organizations still provide a foreign service/mobility premium, but there is a general trend against the use of pure cash-based incentives for assignees to accept an international assignment. There are also very few companies across all industries and headquarter locations that pay their premium dependent upon the assignees performance (i.e. completion of assignment goals). For the Energy sector, the allowance is almost entirely based on a percentage of base salary (Q 8.2). It is still very unlikely that an organization will place limits (caps) on cost-of-living allowance (COLA) amounts and instead, have them subject to tables and indices (Q 8.3). A majority of the participants do not implement a negative COLA; however, European-headquartered companies are much more likely, at 41 percent, to implement a negative COLA (Q 8.5). Even in Europe, this methodology has decreased two points since 2010. Companies headquartered in the US tend to make more use of standard and efficient purchaser COLA indices, rather than requesting a customized index (Q 8.4). Energy companies are more likely to use customized COLA indices and considerably more likely to communicate with their assignees the benet that they are receiving by not implementing a negative COLA. Lastly, a signicant percentage (20 percent) of participants maintain a customized or modied index which removes or reduces certain elements for cost savings purposes (Q 8.4). Many organizations pay hardship and danger premiums, and of those that do, less than half limit or cap the allowance (Q 8.6). The exceptions seem to be among the energy and manufacturing sectors, where over 40 percent provide unlimited (not capped) hardship/danger allowance. For companies located in greater than 50 countries, almost 60 percent provide unlimited (not capped) hardship/danger allowance. Relocation/disturbance allowances (Q 8.7) are generally paid at both the start and end of the assignment (Q 8.8), although the calculation methodologies vary. European-headquartered organizations are more likely to calculate their allowance based on family size, while organizations in the energy sector and companies in greater than 50 countries are more likely to calculate the allowance based on salary, with no cap or limitation.
8.1. Which of the following statements best reects the intentions of your assignment policys compensation approach?
60% 49%
To pay assignees in accordance with compensation levels in their home countries
8
19%
11% 5% 8% 8% 7% 7% 12% Europe 68% 8% 4%
To pay assignees in accordance with compensation levels of the countries to which they are assigned (host countries) To pay assignees in accordance with compensation levels in the organization's headquarters country To pay assignees the higher of the home or host country compensation
All participants 58%
No predominant philosophy (determined on a case-by-case basis)
19% 5% 9% 4% 8%
60%
6% 3%
Other
7%
2%
10%
Asia Pacic
Americas
8.2. Which of the following statements best describe your organizations policy regarding foreign service/mobility premiums (select all that apply)?
Assignee receives a percentage of base salary (for example: 10%, 15%, or one month's salary) Assignee receives an amount based upon job grade, family size, or host location Assignee receives a lump sum at the beginning and/or end of the assignment The payment of the premium is partly or entirely dependent on the assignee's performance (for example: completion of assignment goals) Other Not applicable (we do not provide a foreign service/mobility premium)
All participants 43% 11% 16% 3% 6% 36% 0% 10% 20% 30% 40% 50% 60% 70% 80%
Financial 30% 11% INDUSTRIES
8
1% 4%
13%
49% 0% 10% 20% 30% 40% 50% 60% 70% 80%
Non-Financial 45% 10% 17% 4% 7% 33% 0% 10% 20% 30% 40% 50% 60% 70% 80%
8.2. Which of the following statements best describe your organizations policy regarding foreign service/mobility premiums (select all that apply)? (continued)
Assignee receives a percentage of base salary (for example: 10%, 15%, or one month's salary) Assignee receives an amount based upon job grade, family size, or host location Assignee receives a lump sum at the beginning and/or end of the assignment The payment of the premium is partly or entirely dependent on the assignee's performance (for example: completion of assignment goals) Other Not applicable (we do not provide a foreign service/mobility premium)
Hi-Tech 34% 13% 24% 0% 3% 39% 0% 10% 20% 30% 40% 50% 60% 70% 80%
Energy 76% 3% 11% 5% 0% 14% 0% 10% 20% 30% 40% 50% 60% 70% 80% INDUSTRIES
Manufacturing 49% 9% 14% 3% 6% 33% 0% 10% 20% 30% 40% 50% 60% 70% 80%
8.3. Which of the following statements best reects your organizations approach to the use of caps or limitations on the amount of cost-of-living allowances?
No limits or caps; subject to the tables and indices
58%
Limited, in that the base salary on which it is calculated is capped
18%
Limited, in that the allowance is capped at a pre-determined amount
10%
Not applicable (we do not provide cost-of-living allowances) 0% Note: Total may not add to 100% due to rounding Source: KPMG International, GAPP Survey 2012 10%
13% 20% 30% 40% 50% 60%
8.4. Of which of the following types of cost-of-living indices does your standard policy make use (select all that apply)?
All participants Europe Asia Pacic Americas 46% Standard indices 40% 56% 49% 31% Efcient purchaser indices 28% 12% 37% Indices which have been modied or customized in some way to remove or reduce certain items/elements 6% International standard reversible indices 2% 3% 7% 8% 7% 7% 0% Source: KPMG International, GAPP Survey 2012 10% 20% 30% 40% 50% 60% 20% 26% 19%
16%
11%
Other
8.5. If the cost-of-living in the host country is determined to be lower than that of the home country, which statement best describes your organizations approach?
All participants Europe Asia Pacic Americas
Negative cost-of-living allowance is implemented (including if it is deducted from a combined allowance such as housing and cost-of-living)
8%
19%
41%
13%
Negative cost-of-living allowance is not implemented, and the assignee is informed of the benet he or she is receiving
46%
34% 53% 52%
Negative cost-of-living allowance is not implemented, but the assignee is not informed of the benet 7% Other 10%
5% 5%
28%
15% 30%
34%
0% Note: Total may not add to 100% due to rounding Source: KPMG International, GAPP Survey 2012
10%
20%
30%
40%
50%
60%
8.6. Which of the following statements best reects your organizations approach to the provision of a hardship/danger allowance?
It is unlimited (it is not capped) It is limited, as the base salary on which it is calculated is capped It is limited, as the allowance is capped at a pre-determined amount Not applicable (we do not provide a hardship/danger allowance) All participants 31% 31% 16% 16% 18% 18% 35% 35% 0% Financial 22% 20% 14% 44% 0% 10% 20% 30% 40% 50% 60% INDUSTRIES 10% 20% 30% 40% 50% 60%
8.6. Which of the following statements best reects your organizations approach to the provision of a hardship/danger allowance? (continued)
It is unlimited (it is not capped) It is limited, as the base salary on which it is calculated is capped It is limited, as the allowance is capped at a pre-determined amount Not applicable (we do not provide a hardship/danger allowance) Non-Financial 31% 16% 18% 35% 0% Hi-Tech 26% 9% 23% 42% 0% Energy 46% 19% 14% 22% 10% 20% 30% 40% 50% 60% INDUSTRIES 10% 20% 30% 40% 50% 60%
0% Manufacturing
10%
20%
30%
40%
50%
60%
42% 13% 19% 27% 0% < 5 Countries 15% 12% 16% 57% 0% > 50 Countries 59% 15% 22% 4% 0% 10% 20% 30% 40% 50% 60% 10% 20% 30% 40% 50% 60% COUNTRIES 10% 20% 30% 40% 50% 60%
8.7. Which of the following statements best reects your organizations approach to the calculation of a relocation/disturbance/miscellaneous expense allowance (select all that apply)?
It is calculated using base salary without a cap or limitation It is calculated using base salary but the salary is capped It is an amount based on family size It is an amount based on home or host location It is an amount based on job level/grade An allowance is provided but the calculation method is none of the above Not applicable (we do not provide such an allowance)
All participants
18% 23% 20% 11% 9% 24% 13% 0% 10% 20% 30% 40%
Energy
32% 11% 14% 14% 5% 22% 11% INDUSTRIES 0% 10% 20% 30% 40%
Financial
12% 37% 34% 9% 11% 18% 9% 0% 10% 20% 30% 40%
Manufacturing
23% 21% 18% 10% 6% 21% 14% 0% 10% 20% 30% 40%
Non-Financial
20% 20% 19% 12% 9% 25% 14% 0% 10% 20% 30% 40%
< 5 Countries
20% 19% 16% 13% 12% 27% 16% COUNTRIES 0% 10% 20% 30% 40%
INDUSTRIES
Hi-Tech
24% 23% 22% 11% 6% 19% 15% 0% 10% 20% 30% 40%
> 50 Countries
30% 30% 15% 7% 7% 26% 0% 0% 10% 20% 30% 40%
8.8. Which of the following statements best describes your organizations timing regarding the payment of a relocation/disturbance/miscellaneous expense allowance?
It is paid at the beginning of the assignment only It is paid at the beginning and at the end of the assignment It is paid at the end of the assignment only Other Not applicable (we do not provide such an allowance)
27%
All participants
1%
54%
5%
13% 27%
Europe
1%
46%
7%
19% 33%
Asia Pacific
0%
49%
9% 9% 24%
Americas
1%
59%
4%
12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
9. Policy: Planning and Preparation

Organizations headquartered in Asia-Pacic, with small programs, and those in the energy industry sector are less likely to have any form of localization policy (Q 9.2). The use of cost estimates is quite widespread, although they are generally only one of several factors to be used when determining the feasibility of an assignment and are applied predominantly for budgeting purposes (Q 9.3 to 9.6). Most estimates include tax and social security costs and are calculated using assignee-specic data. Most companies provide language training for the employee. Of note, 28 percent include spouse and 42 percent provide the service to accompanying children and spouse (Q 9.7). European-headquartered companies, the manufacturing sector and companies with over 50 foreign ofces are far more likely to provide the service than US and Asia Pacic-headquartered companies. Although 36 percent of participants do not offer cross-cultural training, of those that do, 42 percent offer it for every assignment (Q 9.8 and Q 9.9). Pre-assignment visits are usually provided to both the assignee and spouse. Companies headquartered in the US tend to allow longer visits (Q 9.10 and Q 9.11). Organizations are providing repatriation and related services. Most organizations start planning for the return of the assignee three to six months prior to the scheduled assignment end date (Q 9.12 and 9.13). Forty-eight percent of European and 45 percent of Asian headquartered companies start this process six months before the assignment ends. Overall management of the repatriation process is perceived to be lacking, as evidenced by 34 percent responding that the repatriation process is not well managed. With an additional 32 percent who are only neutral in their perception, 66 percent of respondents are either neutral or not very satised with the process.
9.1. Under your standard policy, how long is the average assignment?
3%
6 to 12 months
18%
1 to 2 years
51%
2 to 3 years
19%
3 to 4 years
6%
4 to 5 years
3%
More than 5 years
9.2. Which of the following statements best describe your organizations approach to localizing assignees (select all that apply)?
All assignee benets are removed after a certain period of time on assignment Assignee benets are gradually phased out over several years Assignee retains limited assignee benets after localization Assignees base salary is changed to reect the compensation system of the host country Assignee is removed from the home country retirement/pension plans and placed into those of the host country The assignee has to effectively resign from the home country entity and a new employment relationship is established in the host country (new home country) Approached on a case-by-case basis (no formal policy) Other Not applicable (we do not localize any assignees) 0% Source: KPMG International, GAPP Survey 2012 5% 10% 15% 1% 18% 20% 25% 30% 35% 26% 35% 8% 27% 28% 18% 18%
9.3. Which of the following statements best describes your organizations approach to the frequency of preparation of cost estimates related to international assignments?
9
11% 1%
Estimates required for all assignments Estimates required for most assignments
17% 47%
Estimates are used only in select cases Estimates are used only when requested
7%
Other We do not estimate costs related to international assignments
17%
9.4. Which of the following statements describe your organizations approach to the accuracy of cost estimates related to international assignments (select all that apply)?
Estimates are detailed and precise
33%
Estimates are rough calculations
39%
Estimates include tax and social security costs
49%
The costs are calculated using assignee-specic data
51%
The costs are calculated using general data (not assignee-specic)
13%
Other
2%
10%
20%
30%
40%
50%
60%
9.5. Which of the following statements best describes the importance of cost estimates in determining whether or not a pending assignment will be approved?
9
4% 12% 6%
They are the most important factor when considering whether to approve an assignment They are one of several important factors considered
8%
They are important but other factors take precedence
47%
They are a minor factor They are used but are not a factor in determining if an assignment will be approved Other
24%
9.6. Aside from assignment approval, which of the following statements describe your organizations use of cost estimates (select all that apply)?
They are used to compare against actual assignment costs
20%
They are used for budgeting purposes
77%
They are used for other purposes
21%
0%
10%
20%
30%
40%
50%
60%
70%
80%
9.7. Does your standard policy offer language training?

Yes - to assignee only Yes - to assignee and spouse Yes - to assignee, spouse, and children No
7%
All participants
23%
28% 42%
7%
Europe
16%
23% 54%
HEADQUARTERS
12%
Asia Pacific
29% 29% 31%
7%
Americas
23%
33% 37%
3%
Financial
25%
30% 42%
8%
Non-Financial
22%
29% 41%
8%
INDUSTRIES
Hi-Tech
26%
35% 32%
14%
Energy
19%
24% 43%
10%
Manufacturing
13% 0% 10% 20%
28% 50%
30%
40%
50%
60%
9.8. Does your standard policy offer formalized cross-cultural training?

6%
All participants
20% 38% 36%
7%
Europe
28% 34% 31% HEADQUARTERS
7%
Asia Pacific
14% 40% 38%
6%
Americas
18% 40% 36% 7%
Financial
26% 33% 34%
6%
Non-Financial
20% 38% 36%
INDUSTRIES
10%
Hi-Tech
19% 28% 43%
8%
Energy
19% 35% 38%
6%
Manufacturing
20% 40% 34% 0% 10% 20% 30% 40% 50% 60%
9.9. How frequently is cross-cultural training offered under your standard policy?
It is offered for every assignment It is only offered when it is felt that the assignment country may pose a challenge for the assignee and family It is offered when requested by the assignee Other
All participants
8%
42% 40% 10%
41%
Europe
7%
40% 12%
HEADQUARTERS
52%
Asia Pacific
33% 7% 7%
Americas
7%
41% 42% 10%
35%
Financial
5%
53% 8%
44%
Non-Financial
38% 10% 9%
33%
INDUSTRIES
Hi-Tech
47% 10% 10%
40%
Energy
4%
36% 20%
53%
Manufacturing
40% 4% 4% 0% 10% 20% 30% 40% 50% 60%
9.10. Does your organization allow pre-assignment visits to the host country?
9%
All participants
14%
60% 17%
8%
Europe
13%
49% 29%
HEADQUARTERS
19%
Asia Pacific
38% 19% 24%
7%
Americas
70% 11% 12%
3%
Financial
13% 9%
62% 21%
Non-Financial
14%
59% 17%
9%
INDUSTRIES
Hi-Tech
56% 15% 19%
5%
Energy
57% 14% 24%
11%
Manufacturing
9% 0% 10%
66% 14%
20%
30%
40%
50%
60%
70%
9.11. For how many days (on average) does your organization allow pre-assignment visits?
Less than 5 days 5 to 10 days 11 to 15 days More than 15 days
40%
All participants
58% 2% 1%
57%
Europe
41% 1% 1% HEADQUARTERS
47%
Asia Pacific
50% 0% 3%
29%
Americas
0%
69% 2%
45%
Financial
55% 0% 0%
39%
Non-Financial
58% 2% 1%
41%
INDUSTRIES
Hi-Tech
59% 0% 0%
43%
Energy
57% 0% 0%
32%
Manufacturing
64% 1% 3% 0% 10% 20% 30% 40% 50% 60% 70%
9.12. Which of the following services does your organization provide to its assignees (select all that apply)?
All participants Europe Asia Pacic Americas 29% Repatriation counseling at the end of assignment 16% 28% 31% Internal career planning/job placement toward the end of the assignment 10% Formalized mentoring program throughout assignment 8% 12% 12% 21% Pre-repatriation visit to the home country 9% 19% 25% 40% None of the above 38% 41% 2% 2% 2% 10% 20% 30% 40% 50% 47% 26% 27% 37% 33%
Other
0%
9.13. How far in advance do you begin planning the assignees return to the home country?
9
6% 13% 4%
7%
At the beginning of the international assignment One year before repatriation Six months before repatriation Three months before repatriation
6%
39% 24%
One month before repatriation We usually do not have the opportunity to plan the assignees repatriation Other
9.14. Do you agree that your organization manages the repatriation process well?
10%
5%
Strongly agree
24%
29%
Somewhat agree Neutral Somewhat disagree Strongly disagree
32%
10. Policy: Housing

Temporary living assistance tends to be provided for a greater period of time in the host country during the post-arrival period (usually between 15 and 30 days) than in the pre-departure period in the home-country (Q 10.1). Actual expenses are usually reimbursed (Q 10.2). The practice regarding the use of housing norms is varied. European- and Asia-Pacic-headquartered companies with a relatively small international assignment program are less likely to deduct a housing norm (Q 10.3 to 10.7). Of the companies that withhold a housing norm, most use standard external data to determine the appropriate amount for the housing norm. The amount and types of housing assistance follow various factors, two of note being seniority/position of assignee and assignees family size. Assignee preference is the most frequent response in determining the housing location, with neighborhood and housing security being most important in the energy sector (Q 10.8 and 10.9). Organizations offer a variety of assistance to nd a home (Q 10.11) often through a destination services program provided by a local resource in the host country.
.
A large majority of organizations discourage their assignees from purchasing a home in the host country, particularly the manufacturing industry and organizations with more than 50 foreign ofces. Organizations split evenly on the consequences of host-housing purchases between those who discontinue housing assistance and those who continue the housing allowance at the same rate as if the assignee were still renting (Q 10.12 and 10.13). Virtually all organizations provide home-country storage (Q 10.18). Few organizations pay substantial expenses related to the sale of a home-country residence, with the exception of companies in the energy sector, which are much more generous in paying sale expenses and loss on sale (Q 10.16 and 10.17). Companies headquartered in the US are more likely to provide assistance for home-country property-management. Europeanand Asia Pacic-headquartered companies rarely provide this assistance (Q 10.15).
10.1. Which of the following best describes the length of time an assignee is entitled to temporary living assistance?
Less than 15 days Other Between 15 and 30 days Between 31 and 45 days Between 46 and 60 days More than 60 days
We do not provide any temporary living assistance
37%
10
48% 24% 8%
23%
4% 3%
3% 14% 9% 6%
Upon arrival in the host country
7%
2%
12%
Pre-assignment (in the home country) Source: KPMG International, GAPP Survey 2012
10.2. Which of the following best describe your organizations approach to temporary living expenses (select all that apply)?
Assignee receives a per diem
26%
Assignee's actual expenses are reimbursed
60%
Assignee receives his or her cost-of-living allowance during the temporary living period
17%
We do not provide any assistance to assignees with regard to temporary living expenses
6%
Other
8%
0%
10%
20%
30%
40%
50%
60%
10
10.3. For those assignees to whom you provide a host country housing benet, do you deduct a notional housing expense (also known as a housing norm or housing offset), to reect the assignees share in housing expenses?
Yes - in all cases Yes - in most cases with rare or specic exceptions Yes - in a minority of cases Issue treated on a case-by-case basis No - we never withhold a notional housing deduction from assignees
All participants
23% 21% 5% 9% 43%
17%
Europe
14% 1% 9% 59%
HEADQUARTERS
26%
Asia Pacific
16% 5% 7% 47%
Americas
25% 25% 6% 10% 34%
10
< 5 Countries
1%
20% 12% 13% 54% COUNTRIES
41%
> 50 Countries
0%
26% 4% 30% 0% 10% 20% 30% 40% 50% 60%
10.4. How do you determine the appropriate amount for the notional housing expense/housing norm (select all that apply)?
A best estimate of the assignees actual housing expense prior to assignment A xed percentage of base salary Standard external data of hypothetical housing expenditures Other All participants 13% 9% 37% 6% 0% Europe 11% 12% 20% 5% 0% Asia Pacific HEADQUARTERS 12% 12% 26% 5% 0% Americas 14% 6% 47% 7% 0% < 5 Countries 18% 5% 26% 8% COUNTIRES 0% 10% 20% 30% 40% 50% 10% 20% 30% 40% 50% 10% 20% 30% 40% 50% 10% 20% 30% 40% 50% 10% 20% 30% 40% 50%
10
> 50 Countries 7% 22% 44% 0% 0% 10% 20% 30% 40% 50%
10.5. For which of the following home countries do you not normally withhold a notional housing deduction/housing norm (select all that apply)?
Australia 32% Canada 24% France Germany Italy Japan UK USA Other: Americas Other: Asia and the Pacic Other: Europe Other None - we rarely/never waive the notional housing deduction 0% 5% 10% 15% 20% 25% 30% 35% 2% 7% 40% 40% 2% 4% 2% 2% 2% 2% 1% 1% 2% 4%
10.6. Under what circumstances would you waive the notional housing deduction/housing norm for those assignees that would otherwise be subject to it (select all that apply)?
When the assignee's home-country residence is not rented and/or cannot be rented 26%
10
When the assignee's home-country residence is not yet sold and/or cannot be sold When the assignee demonstrates that he or she did not have a home country housing expense prior to assignment
16%
12%
For senior executives
3%
Other
11%
None - we rarely/never waive the notional housing deduction 0% Source: KPMG International, GAPP Survey 2012 5% 10% 15% 20%
22%
25%
30%
10.7. Which statements best describe your policy toward updating the notional housing deduction/housing norm during the assignment (select all that apply)?
The housing deduction remains frozen at the level it was at the beginning of the assignment
25%
It is adjusted annually when data provider's tables are updated
16%
It is based on a xed percentage of salary
5%
It is adjusted every time there is a salary increase or change in family size
8%
Other
11%
5%
10%
15%
20%
25%
10.8. What is the single most important factor in determining the amount and type of host country housing assistance?
10% 12% 2% 10%
6% 20%
The anticipated length of assignment The seniority/position of the assignee The assignees base salary The assignees family size Quality/size available to the host country peers
10
7%
Quality/size available to the home country peers Type/quality of housing provided to other assignees in the area
32%
Other
10.9. What is the single most important factor in determining the location of host country housing?
5%
9%
Proximity to international schooling Proximity to the organizations site Neighborhood and housing security
16%
42%
7%
Cost Presence of other assignees in the area
20%
Assignee preference Other
2%
6%
10.10. Does your organization provide an incentive to assignees to nd housing which is less expensive than data providers recommendations by offering an incentive or "savings share" scheme?
8%
6% 2%
10
3%
Yes assignee is paid all of the difference as an allowance and the organization pays the tax on the allowance Yes assignee is paid all of the difference as an allowance but he or she are responsible for any tax payable on the allowance
7%
Yes assignee is paid part of the difference as an allowance and the organization retains the rest No the organization simply pays the reduced housing cost Other
81%
10.11. Which of the following do you provide in order to help assignees nd housing in the host country (select all that apply)?
A pre-assignment house-hunting trip Destination services (for example: neighborhood tours) The services of an organization-designated real estate agent A web-based location information service An organization employee (possibly an existing assignee) provided as a contact in the host country ofce Other 3% 11% 70%
51%
53%
37%
None of the above 0%
5% 10% 20% 30% 40% 50% 60% 70% 80%
10.12. Which of the following statements reects your policy toward the purchase of housing by assignees in the host country?
Assignees are discouraged
67%
10
Assignees are encouraged 1%
Assignees are neither discouraged or encouraged
28%
Other
4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
10.13. If the assignee purchases housing in the host country, what does your organization do (select all that apply)?
Host housing assistance is discontinued Housing allowance continues at the same rate as if he or she were renting Purchase expenses are reimbursed When assignee is leaving the host location, sale expenses are reimbursed Tax costs of sale are reimbursed (for example: capital gains, mortgage exchange rate gains) Loss on sale is partially or entirely reimbursed Other All participants 34% 34% 4% 3% 1% 1% 24% 0% 10% 20% 30% 40% 50%
Europe 26% 42% 5% 3% 1% 2% 20% 0% 10% 20% 30% 40% 50%
Asia Pacific 40% HEADQUARTERS
10
5% 0% 5%
19% 12%
28% 0% 10% 20% 30% 40% 50%
Americas 39% 30% 2% 3% 1% 1% 26% 0% 10% 20% 30% 40% 50%
10.14. In addition to addressing rental costs, does your organization provide any of the following to assignees (select all that apply)?
Settling-in allowance Miscellaneous expense allowance Relocation allowance
21%
27%
58%
Furnishings/appliance allowance Reimbursement for purchase of small household items (adapters small appliances, lamps, etc.) Key money or similar expense 7%
32%
17%
Other
7%
None of the above 0%
7% 10% 20% 30% 40% 50% 60%
10
10.15. Which statement best describes your policy toward payment of fees for property management of the assignees residence in the home country?
Property management fees are paid for by the organization in all cases Property management fees are paid for by the organization only when a notional housing deduction is taken Property management fees are paid for by the organization only when the property is not rented Property management fees are paid for by the organization in other circumstances Property management fees are never paid for by the organization
All participants
30% 9% 7% 8% 47%
0%
10%
20%
30%
40%
50%
60%
70%
Europe
17% 4% 4% 5% 69%
0%
10%
20%
30%
40%
50%
60%
70%
Asia Pacific
HEADQUARTERS 28% 7% 2% 0%
10
63%
0%
10%
20%
30%
40%
50%
60%
70%
Americas
37% 10% 9% 12% 32%
0%
10%
20%
30%
40%
50%
60%
70%
10.16. Which statements best describe your policy toward the payment of fees for sale of the assignees residence in the home country (select all that apply)?
All sale expenses are reimbursed Specic sale expenses are reimbursed Certain sale expenses are reimbursed on a case-by-case basis Sale expenses are reimbursed up to a predetermined nancial limit Sale expenses are reimbursed for certain assignees only No sale expenses are reimbursed All participants 10% 6% 7% 0% Financial 7% 11% 10% 12% 9% 20% 30% 40% 50% 9% 14%
56% 10% 20% 30% 40% 50% 60% 70% 80%
57% 60% 70% 80%
0% Non-Financial
10%
11% 6% 7% 0% Hi-Tech 3% 4% 5% 0% Energy 9%
14%
56% 20% 30% 40% 50% 60% 70% 80%
10%
INDUSTRIES
9% 9% 73% 10% 20% 30% 40% 50% 60% 70% 80%
10
24% 3% 3% 3% 0% Manufacturing 15% 15% 16% 10% 20%
27%
41% 30% 40% 50% 60% 70% 80%
5% 0%
11%
41% 10% 20% 30% 40% 50% 60% 70% 80%
10.17. Which statement best describes your policy toward the reimbursement of losses related to the sale of the assignee's residence in the home country?
Any loss on sale is reimbursed Loss on sale may be reimbursed on a case-by-case basis Loss on sale may be reimbursed up to a predetermined nancial limit Loss on sale is never reimbursed (assignee's responsibility) All participants 3% 18% 10% 69% 0% Financial 2% 22% 13% 64% 0% Non-financial 3% 17% 10% 71% 0% Hi-Tech 0% 14% INDUSTRIES 10% 20% 30% 40% 50% 60% 70% 80% 10% 20% 30% 40% 50% 60% 70% 80% 10% 20% 30% 40% 50% 60% 70% 80%
10
0% Energy
6% 79% 10% 20% 30% 40% 50% 60% 70% 80%
6% 26% 17% 51% 0% Manufacturing 1% 18% 14% 67% 0% 10% 20% 30% 40% 50% 60% 70% 80% 10% 20% 30% 40% 50% 60% 70% 80%
10.18. Does your organization reimburse the cost of storage of household goods in the home country?
15%
36%
Yes unlimited Yes limited No
7%
49%
10
11. Policy: Taxation

A majority of respondents tax equalize their assignees on their earnings (Q 11.1), especially organizations headquartered in the US. Social insurance and local government taxes tend to be included in the estimation of hypothetical taxes. Actual deductions and credits are generally used to calculate hypothetical tax (Q 11.3). For those companies that offer equity compensation, there are inconsistencies regarding how income generated by obtaining, exercising, or selling company shares is treated for tax purposes (Q 11.4 and 11.5). Companies are evenly split between treating this income as personal versus employment-related, except in the case of the energy industry and companies with more than 500 expatriates, which tend to treat this income as personal. There is a mixed pattern in the treatment of personal income and spousal income. European and Asia Pacic-headquartered companies tend to make assignees responsible for all of their taxes in both cases (Q 11.6). However, many organizations have no policy on the tax treatment of spousal income. Since 1999, there has been more than a 10 percentage point shift away from laissez-faire to an increasing number of companies that tax equalize either for a pre-determined amount of income or all income for assignees. For spousal income, there has also been a shift away from laissez-faire treatment of taxes. Full or partial tax equalization has remained the same, but there has been an increase in case by case treatment or no formal written policy component to address it. For a majority of companies, rental income on the principle home-country residence (Q 11.7) is considered personal and outside the scope of the tax equalization policy. Most organizations offer standard tax preparation and tax brieng services to their assignees (Q 11.8). Very few organizations provide related personal nancial services outside of the standard tax preparation and briengs.
11.1. Which one of the following statements best describes your approach when addressing the assignment tax costs in relation to the assignees earnings?
Tax equalize assignees (assignees pay no more or no less tax than they would have had they not taken the assignment) Tax protect assignees (assignees pay no more tax than they would have had they not taken the assignment, but may pay less) Assignees pay all taxes on base and incentive compensation, while the organization pays tax on assignment-related allowances and reimbursements Laissez-faire (assignees are responsible for all their taxes) Other
All participants
73% 7% 5% 9% 6% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
11
Europe
59% 7% 12% 13% 10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% HEADQUARTERS
11.1. Which one of the following statements best describes your approach when addressing the assignment tax costs in relation to the assignees earnings? (continued)
Tax equalize assignees (assignees pay no more or no less tax than they would have had they not taken the assignment) Tax protect assignees (assignees pay no more tax than they would have had they not taken the assignment, but may pay less) Assignees pay all taxes on base and incentive compensation, while the organization pays tax on assignment-related allowances and reimbursements Laissez-faire (assignees are responsible for all their taxes) Other
Asia Pacific
68% 12% 5% 12%
2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% HEADQUARTERS
Americas
85% 5% 2% 5% 4%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
11.2. If you tax equalize or tax protect assignees, what do you include in the estimation of the hypothetical tax or tax norm in addition to federal/national tax (select all that apply)?
Social insurance/social security/social taxes
63%
State/provincial/cantonal income tax
63%
11
Local/city income tax
45%
Other
5%
Not applicable (we do not tax protect or tax equalize assignees) 0% 10%
11%
20%
30%
40%
50%
60%
70%
80%
11.3. If you tax equalize or tax protect assignees, what do you include as deductions and credits in determining the hypothetical or tax norm?
10% 9% 6%
7%
The actual (income) deductions and/or (tax) credits on the current home country tax return (if there is an ongoing ling requirement) OR the deductions and credits that would have been on the home country tax return if the assignment had not taken place (if there is not an ongoing ling requirement)
54%
As above, but with selected deductions and credits replaced by a hypothetical amount A pre-determined percentage of salary or compensation A standard or universal deduction Other
21%
11
11.4. Which one of the following statements best describes your approach when addressing the assignment tax costs in relation to the assignees earnings?
The assignee's participation is suspended during the international assignment Any tax due (home and/or host country) is payable by the assignee Any income generated is treated as "personal income" and not "employment income" for the purposes of the international assignment policy (including tax policy) No restrictions apply and any income generated is considered "employment income" for purposes of the international assignment policy (including tax policy) Other Not applicable (we do not make use of equity compensation) In restriction of the exercising of rights-of-purchase or obtaining shares: 4% 15%
All participants
7%
22% 22% 31%
6%
Financial
5%
18% 20% 27% 24%
3% 15%
Non-Financial
7%
21% 21% 32%
6% 21% INDUSTRIES
Hi-Tech
4%
29% 14% 26% 0% 15%
11
42%
Energy
6%
15% 21%
3%
Manufacturing
4%
21% 20% 23% 29%
0%
10%
20%
30%
40%
50%
11.4. Which one of the following statements best describes your approach when addressing the assignment tax costs in relation to the assignees earnings? (continued)
The assignee's participation is suspended during the international assignment Any tax due (home and/or host country) is payable by the assignee Any income generated is treated as "personal income" and not "employment income" for the purposes of the international assignment policy (including tax policy) No restrictions apply and any income generated is considered "employment income" for purposes of the international assignment policy (including tax policy) Other Not applicable (we do not make use of equity compensation) In restriction of the selling of shares: 2% 18%
All participants
5%
23% 19% 32%
2%
Financial
4%
22% 20% 26% 26%
1%
18% 23% 18% 5% 33%
Non-Financial
4% 29% INDUSTRIES
Hi-Tech
3%
23% 14% 27% 0% 19%
11
Energy
6% 16%
48% 10%
1% 26%
Manufacturing
4%
18% 18% 32%
0%
10%
20%
30%
40%
50%
11.5. How do you treat equity compensation?
Organization-source income (unlimited amount covered)
21%
Organization-source income (limited to a certain amount the balance is treated as personal income)
6%
It is all considered to be personal income
25%
Other
6%
Not applicable (we do not have an equity compensation scheme or we do not tax equalize or tax protect assignees) 0% 10% 20% 30% 40%
42%
50%
11
11.6. Which one of the following statements best describes your organizations approach?
When addressing taxes payable on income from sources other than the organization such as investments (excluding spousal income): Tax equalize assignees for all income Tax equalize assignees up to a pre-determined amount of income Tax protect assignees for all the income Tax protect assignees up to a pre-determined amount of income Assignees pay all tax in the home country, while the organization pays all tax in the host country Laissez-faire (assignees are responsible for all their taxes) There is no policy on the issue (case-by-case basis) Other
All participants
20% 15% 1% 2% 8% 29% 14% 10% 0% 10% 20% 30% 40% 50%
Europe
8% 6% 1% 4% 9% 46% 13% 13% 0% 10% 20% 30% 40% 50%
Asia Pacific
5% HEADQUARTERS 15% 3% 3% 10% 35% 25% 5% 0% 10% 20% 30% 40% 50%
11
Americas
28% 18% 1% 1% 7% 20% 15% 8% 0% 10% 20% 30% 40% 50%
11.6. Which one of the following statements best describes your organizations approach? (continued)
When addressing taxes payable on spousal income: Tax equalize assignees for all income Tax equalize assignees up to a pre-determined amount of income Tax protect assignees for all the income Tax protect assignees up to a pre-determined amount of income Assignees pay all tax in the home country, while the organization pays all tax in the host country Laissez-faire (assignees are responsible for all their taxes) There is no policy on the issue (case-by-case basis) Other
All participants
12% 6% 1% 1% 4% 38% 23% 14% 0% 10% 20% 30% 40% 50% 60%
Europe
5% 3% 0% 1% 3% 54% 19% 16% 0% 10% 20% 30% 40% 50% 60%
Asia Pacific
3% 3% 3% 3% 11% 47% 24% 8% 0% 10% 20% 30% 40% 50% 60%
HEADQUARTERS
11
Americas
16% 8% 1% 1% 4% 30% 25% 14% 0% 10% 20% 30% 40% 50% 60%
11.7. If the assignee rents his or her principle home country residence during the assignment, how do you treat the rental income/loss on the tax reimbursement calculation?
Rental income/loss is personal and is outside the scope of the tax reimbursement policy (the assignee is responsible for any home or host country taxes) Rental income/loss is considered "stay at home" and is included in the income when calculating the assignee's theoretical (nal hypothetical) tax liability The organization pays any host and home country tax due on the rental income (the assignee receives the rental income without bearing the cost of any tax) The income is considered personal and the tax paid by the organization depends on the total amount of personal income of the assignee (the organization protects/equalizes a dened amount of personal income only) Other Not applicable
All participants
48% 17% 3% 4% 0% 10% 18% 10% 20% 30% 40% 50% 60% 70%
Europe
61% 4% 2% 10% 3% 0% 10% 20% 21% 30% 40% 50% 60% 70%
Asia Pacific
65% 13% 0% 10% 13% 18% 0% 10% 20% 30% 40% 50% 60% 70% HEADQUARTERS
11
Americas
40% 24% 5% 3% 0% 10% 12% 16% 20% 30% 40% 50% 60% 70%
11.7. If the assignee rents his or her principle home country residence during the assignment, how do you treat the rental income/loss on the tax reimbursement calculation? (continued)
Rental income/loss is personal and is outside the scope of the tax reimbursement policy (the assignee is responsible for any home or host country taxes) Rental income/loss is considered "stay at home" and is included in the income when calculating the assignee's theoretical (nal hypothetical) tax liability The organization pays any host and home country tax due on the rental income (the assignee receives the rental income without bearing the cost of any tax) The income is considered personal and the tax paid by the organization depends on the total amount of personal income of the assignee (the organization protects/equalizes a dened amount of personal income only) Other Not applicable
Financial
61% 16% 4% 1% 11% 0% 10% 20% 30% 40% 50% 60% 70% 7%
Non-Financial
47% 16% 4% 4% 0% 10% 11% 19% 20% 30% 40% 50% 60% 70%
Hi-Tech
50% 18% 4% 10% 0% 18% 0% 10% 20% 30% 40% 50% 60% 70% INDUSTRIES
Energy
45% 3% 3% 3% 0% 10% 33%
11
12% 20% 30% 40% 50% 60% 70%
Manufacturing
21% 3% 8% 6% 0% 10% 15% 20% 30% 40% 50% 60% 70% 47%
11.8. Which of the following tax services does your organization provide to assignees (select all that apply)?
Senior executives Other assignees
Tax preparation assistance 56% 52% 11% 2% 4% 1% 4% 1% 0% 4% 4% 0% 10% 20% 30% 40% 50% 60%
64% 62%
Tax briengs at the home or host country
Financial planning
Investment planning
Death duty/estate and gift tax/inheritance tax planning
Other
None of the above
70%
80%
11
12. Policy: Home Leave, Travel, Wills, Schooling, Cars

Organizations tend to split between allowing assignees to go wherever they want on home leave and requiring them to visit their home country. Organizations in the energy industry sector and companies with representation in fewer countries (greater than 50 countries) are increasingly allowing assignees to go wherever they would like instead of requiring them to visit their home-country (Q 12.1). It is notable that more than half of the survey respondents do not address the preparation of wills or estate planning with their assignees. And 33 percent inform the assignee but the organization does not pay for any costs. The assignee is expected to pay for any costs out of other allowances (for example: miscellaneous expense/relocation allowance) (Q 12.4). The provision of primary and secondary schooling for assignees children is almost universal (Q 12.5). Pre-school benets are stable at 45 percent of organizations for 2 consecutive years (Q 12.6). Of the respondents who do provide assistance with the disposition of cars (Q 12.8), the loss on sale of one car is usually provided for single employees. Organizations based in the US are more likely to assist employees with the disposition of their cars. Companies headquartered in the US, companies in the energy sector, and companies with more than 50 foreign ofces are more likely to provide assistance with host-country car costs.
12.1. Which of the following best describes your organization's home leave policy?
Assignees are free to go wherever they would like on home leave Assignees are required to go to the headquarters country (if different from home country) Assignees are required to go to their home country We do not provide for home leave
All participants
Energy
45%
Financial
3%
46%
6%
Manufacturing
71%
0% 29% 0%
32%
Non-Financial
1%
60%
7%
< 5 Countries
34%
5%
57%
4%
12
45%
Hi-Tech
4%
46%
5%
40%
> 50 Countries
7%
44%
9%
38%
6%
49%
6%
54%
0%
42%
4%
12.2. Which of the following best describes your organization's policy regarding home leave expenses?
64% 18% 18%
Actual costs are reimbursed
Assignee receives a lump-sum payment
Other
12.3. To which class of air travel are most of your organization's international assignees entitled (please select one)?
56% 24% 20%

12
Economy class
Business class
Class depends on travel time
0%
First class
12.4. Which statement best describes your organization's approach to the preparation of wills (or review of existing wills) for assignees?
56% 33% 5% 2% 4%
The issue is not addressed/the assignee is not informed of the issue The assignee is informed of the issue, but the organization does not pay for any costs/the assignee is expected to pay for any costs out of other allowances (for example: miscellaneous expense/relocation allowance) The assignee is informed of the issue and the organization reimburses the costs up to a predetermined limit The assignee is informed of the issue and the organization reimburses all of the costs
Other
12.5. Which statement best describes your organizations approach to primary and secondary schooling benets for assignees children?
51% 5% 26% 10% 7%

Benets are available to all assignees
Benets are available only to selected assignees Benets are only provided if there is no suitable, free education in the host country
Benets are paid on a case-by-case basis
12
Not applicable (no benets are provided)
12.6. Do you provide education benets to children other than those of school age?
All participants Europe Asia Pacic Americas
36%
Yes - preschool only
29% 31%
50%
Yes - tertiary (college/university) only
1% 2%
0%
5%
9% Yes - preschool and tertiary 6%
12% 14%
54% No 36%
52% 62%
0%
10%
20%
30%
40%
50%
60%
70%
80%
12
12.7. Which statement best describes your organizations approach?

With regard to the preschool costs of assignees children:
7% 17% 18% 18% 39%
All costs (unlimited) are paid by the organization Selected costs (unlimited) are paid by the organization Costs are paid up to a predetermined amount by the organization
Some costs may be paid on a case-by-case basis
Organization pays none of the costs
With regard to the primary and secondary school costs of assignees children:
21% 40% 21% 10% 8%
All costs (unlimited) are paid by the organization Selected costs (unlimited) are paid by the organization Costs are paid up to a predetermined amount by the organization
Some costs may be paid on a case-by-case basis
12
Organization pays none of the costs
12.8. Does your organization provide assistance to assignees relating to the disposition of their personal cars in the home country?
Single assignees
Yes, for an unlimited number of vehicles
Yes, for up to two vehicles
Yes, for one vehicle
Other
No, we do not provide any assistance
1%
17%
35%
0%
46%
Assignees with spouses/partners
Yes, for an unlimited number of vehicles
Yes, for up to two vehicles
Yes, for one vehicle
Other
No, we do not provide any assistance
1%
34%
12%
0%
52%
12.9. What type of assistance does your organization normally provide to assignees relating to the disposition of their personal cars in the home country (select all that apply)? Reimbursement for loss-on-sale Payment of costs for shipping car to the host country Payment of costs for storage of car in the home country Other We do not provide any assistance in this situation
42%
6%
9%
7%
43%
12
12.10. Which of the following statements best describes your organizations policy toward assistance with host-country car costs?
All assignees are provided with assistance to purchase or lease a car Assignee only receives assistance if he or she was entitled to similar assistance in the home country Assignee only receives assistance if his or her host-country counterparts are entitled to similar assistance Assistance is determined on a case-by-case basis Other We do not provide any assistance with the cost of purchasing or leasing cars in the host country All participants 8% 8% 0% Europe 13% 6% 0% Asia Pacific 10% 7% 0% Americas 5% 32% 10% 9% 0% Financial 7% 5% 0% Non-Financial 9% 9% 0% 10% 29% 12% 17% 20% 30% 40% 50% 60% 25% 10% 20% 19% 26% 24% INDUSTRIES 20% 30% 40% 50% 60% 10% 16% 20% 30% 40% 50% 60% 28% 21% 21% 31% HEADQUARTERS 10% 14% 20% 21% 26% 20% 30% 40% 50% 60% 10% 28% 14% 18% 20% 30% 40% 50% 60% 24%
10% 20% 30% 40% 50% 60%
10%
12
12.10. Which of the following statements best describes your organizations policy toward assistance with host-country car costs? (continued)
All assignees are provided with assistance to purchase or lease a car Assignee only receives assistance if he or she was entitled to similar assistance in the home country Assignee only receives assistance if his or her host-country counterparts are entitled to similar assistance Assistance is determined on a case-by-case basis Other We do not provide any assistance with the cost of purchasing or leasing cars in the host country Hi-Tech 8% 8% 0% Energy 3% 44% INDUSTRIES 6% 12% 0% Manufacturing 12% 7% 0% < 5 Countries 9% 8% 6% 0% 10% 21% COUNTRIES 20% 30% 40% 50% 60% 27% 29% 10% 33% 16% 20% 10% 21% 15% 20% 30% 40% 50% 60% 10% 21% 40% 19% 20% 30% 40% 50% 60%
4%
12% 20% 30% 40% 50% 60%
> 50 Countries
12
0%
4% 4% 12% 12% 10%
52% 16%
20%
30%
40%
50%
60%
Glossary
Accompanying spouse/domestic partner: As determined by the assignees home country organizations policies, a companion to the assignee who is included in the denition of family for purposes of international assignment benets. Status may be married or unmarried and same gender or opposite gender. Assignee: An employee of the organization who leaves his or her original country of employment to work in another country for a temporary period of time, normally longer than three months. Assignee-requested assignment: Employment provided by the organization in another country at the request of the employee for a specic period of time that is solicited/initiated by the employee. This type of policy normally offers minimal benets, and is often used when the employees spouse/partner is offered an assignment by his or her employer. Also known as an accommodation assignment. Assignment-related benets: A general term covering all elements of remuneration provided in connection with a temporary transfer across national borders. Candidate assessment/selection: A prescreening process used to identify assignment-ready employees often by functional area (e.g., finance, marketing, product support). Typically, this includes assessing an employees potential for an international assignment relative to his or her career path and the needs of the organization. A familys adaptability may also be analyzed. Commuter assignment: A temporary transfer across national borders that allows the employee to reside part-time in his or her home country on a regular basis, often weekends, while working in the host country, usually weekdays. Most often seen among neighboring countries, especially in Europe. Company/employment/organization-source income: All compensation paid to the assignee by his or her employer. Cost of living: The aggregate of goods and services prices for a specific market basket of items that enables comparisons among locations. Cost-of-living allowance (COLA): A differential payment to (or withholding from) assignees to address differences in purchasing power between home and host countries. It is usually derived by applying a cost-of-living index to an employees home country spendable income. Cost-of-living index: A ratio of costs of goods and services in the home country compared to the host country (generally provided by outside vendors) used in calculating the cost-of-living allowance. It incorporates differences among nationalities with regard to spending and purchasing patterns. Cross-cultural training: Education in the customs, practices, and/or languages of the host country for the assignee and/or accompanying family to familiarize them with the new environment in which they will live and work during the international assignment. Most often provided by a thirdparty vendor. Dependent (child or parent): Those who rely on the assignee for the majority of their nancial support, and are usually considered family for the purpose of calculating the assignees international assignment-related allowances. This may include unmarried children (natural or adopted) typically under the age of 19 who would normally reside with the employee in the home country or other dependent relatives as approved by the organizations international assignment policy. Destination services: Assistance provided to the assignee and family upon arrival in the host country to help them settle into their new surroundings. Usually includes assistance in nding a residence, arranging schooling for dependent children, and guidance regarding shopping, transportation, and drivers licenses. Most often provided by a third-party vendor. Development/training assignment: A temporary transfer across national borders that is primarily aimed at providing the employee with the skills and experience judged necessary to progress within the organization. These types of assignments usually provide limited ongoing assignmentrelated benets. Dual career: A situation where both the prospective assignee and his/her spouse/ domestic partner are fully employed professionals, either by the same organization or by different organizations. When the spouses/domestic partners are employed by different organizations, this often forces the couple to choose between the assignment opportunity and the spouses/domestic partners job. Efcient purchaser index: A measurement of the ratio of the cost of living between the home and host locations that assumes that an assignee is a smart shopper and is able to purchase goods and services more economically than the average (newly arrived) assignee. A variation of the standard index, it incorporates differences among nationalities with regard to spending and purchasing patterns. Estate tax: A tax imposed on the right to transfer property by inheritance and assessed on the net value of a deceased persons estate before distribution to the heirs. Also called death tax. Family size: A number that includes the assignee and any dependents who accompany the assignee to the host country. The home country family size may include qualied tax dependents who do not physically relocate to the host country.
Foreign service (mobility) premium: An incentive payment (usually expressed as a percentage of base salary) to encourage the acceptance of an assignment. Some organizations also pay upon the successful completion of an assignment. Furnishings/appliance allowance: A payment to an assignee to purchase or rent certain household furniture, white goods, or other appliances for his or her host country accommodation, if such items are either absent or of unacceptable quality in the host country. Gift tax: A supplement to the estate tax, it is a graduated tax assessed against a person who gives money or an asset to another person without receiving fair compensation in return. Each countrys income tax code governs the amount of each gift that can be considered tax-free. Hardship/danger allowance: A payment (generally calculated as a percentage of base salary) to compensate the assignee for undesirable cultural, social, physical, or other conditions. Hardship is usually determined by the measurement of certain criteria by both vendors and government agencies. Home country: The location where the assignee worked prior to the international assignment, and to where it is intended he or she will repatriate at the end of the assignment(s). The home country may or may not be the assignees country of citizenship or residence. Home leave: A benet provided to the assignee and family to enable them to travel to the home country in order for them to maintain ties with colleagues, friends, and family at home. Some organizations do not require home leave to be taken to the home country. Host country: Location across national borders to which the assignee is temporarily sent to work from the home country. Household goods: Household items, including furniture and personal effects that are sent by sea, air, and/or ground to and from the host location. Housing benet/allowance: Financial assistance related to the provision of accommodations in the host country for the assignee and accompanying family. Sometimes expressed as the total cost of foreign housing, or alternatively as the foreign housing cost net of a home country housing norm. Housing offset/norm/notional expense/contribution: An approximation of typical home country housing costs that would normally be borne by employees of the same base salary and family size in the home location. Many organizations will adjust the housing norm annually to reect increases in home location housing and operating costs (e.g., property taxes, utilities). Hypothetical/tax norm: Under the process of tax equalization, the assignees share of his or her worldwide tax burden. This is normally determined by estimating the amount of taxes that the employee would have paid had he or she remained in the home country. Indenite assignment: A temporary transfer across national borders that does not have an anticipated end date, but which is still intended as a temporary (rather than permanent assignment/permanent transfer). This type of assignment typically offers minimal relocation and transition benets. International assignment: A temporary transfer across national borders, normally lasting more than 3 months. International assignment policy: The organizations formal statement of international assignment-related compensation, benets, perquisites, logistical, and other assistance. Interregional assignment: A temporary transfer across national borders where the home and host countries are both within a dened geographical area (e.g., Western Europe, Southeast Asia). Key money: In some locations, payment made to a landlord as an inducement to assure a host housing rental contract. Laissez-faire: The organization takes no stand and offers no assistance to the employee in income and social tax matters; the employee is on his or her own for the ling and payment of home and host taxes. Language training: If the language spoken in the host country is not the employees native language, language training classes may be offered for the assignee and/or accompanying family members. Local employee: A person working for the organization in his or her home country without any assignment-related benets. Localization/localizing: The transitioning of an assignee to an employment status/ package in the host country equivalent to that of host country nationals. The length of transition may vary among different organizations and industries. Long-term (standard) assignment: A temporary transfer across national borders, normally lasting between one and ve years, though often extended. Lump sum: A one-time cash payment to an assignee of at least two or more international assignment-related allowances or expenses, combined to replace separate or itemized payments.
N/A (not applicable): Elect this choice when the question pertains to a policy, practice, or issue that does not arise in connection with your program. Norm: A standard, model, or pattern regarded as typical. Organization: Term relating to the business entity primarily responsible for the creation and administration of international assignment policies and practices, and a general term used to describe the assignees employer, such as a company, foundation, or rm. Outsource: Retaining the services of an outside party or vendor to perform a function that was previously performed within the organization. Per diem: A cash payment to an employee to cover certain temporary living expenses, usually meals, hotel, and incidental expenses, expressed as a daily rate. When delivered at a government-determined rate to cover business travel expense, can often be tax-free. Permanent assignment/permanent transfer: A one-way transfer across national borders. The individual is normally considered to be an employee of the host country entity, severing ties with the home country entity, and is often only provided relocation and limited transition benets. Personal income: All earnings realized by the assignee (and spouse/dependent family members) from sources other than the assignees employer. Preassignment: The period of time after a candidate for assignment has been identied, but prior to his or her departure from the home country. Preassignment visit/trip: A trip to the host country for the assignee (and possibly other accompanying family members) prior to the start of the assignment, to make certain arrangements and view the possible new surroundings. Project-/contract-specic assignment: A temporary transfer across national borders that is dependent on the completion of specic tasks or deliverables. The level of assignment benets is often dependent upon the relative generosity of the nancial terms of the contract or project budget. Property management: Services of a vendor to maintain and/or rent the assignees home country residence (usually restricted to his or her primary residence) during the assignment. Relocation/disturbance/miscellaneous expense/settling-in allowance: A lump sum cash payment to the assignee to cover the cost of incidental expenses not specically covered by other aspects of the companys international assignment policy. Repatriation: The return of the assignee to the home country at the completion of the assignment. Rest & relaxation (R&R): Additional leave(s) usually provided when the host country is deemed a hardship location. This is often a separate leave from vacation and is used to allow the employee and eligible dependents a chance to visit a country that is similar to the home country culture for rest & relaxation. Return on investment (ROI): Evaluation of the overall cost (investment) of an expatriate assignment relative to the impact to the bottom line for the organization. Often measured against the metrics and goals set for the assignment. Reversible/international standard index: A ratio of costs of goods and services on specific items (market basket) in the home country compared to the host country that does not incorporate the assumption that different nationalities will spend differently (as opposed to other cost-of-living index calculations). Rotational assignment: A temporary transfer across national borders that requires the assignee to work for a designated number of consecutive days in the host country, followed by a designated number of consecutive days leave (taken in the home country, host country, or another leave location). Salary cap: An upper limit or ceiling, usually expressed in terms of annual base salary to be used in the determination of allowances, or a limitation on the maximum value of an allowance. Sequential/subsequent assignment: Often called back-to-back assignments. Rather than repatriating at the conclusion of the original assignment, the assignee is expatriated to another subsequent location without returning to the home location. Short-term assignment: A temporary transfer across national borders that generally lasts more than 3 months and less than a year. Spendable income: The portion of base salary that is normally devoted to the purchase of goods and services (e.g., food, clothing, entertainment, medical care). This amount is not a xed percentage of base salary; rather, it varies according to nationality, income level, and family size. Spousal assistance: Assistance to recognize that spouses who accompany employees on international assignments may experience a disruption in their careers or self-improvement pursuits. May include job search, personal development, or other assistance. Spousal income: All earnings attributable to the assignees spouse/domestic partner.
Tax: A fee charged (levied) by a government on a product, income, or activity. If tax is levied directly on personal or corporate income, then it is a direct tax. If tax is levied on the price of a good or service, then it is an indirect tax. Tax briengs/consultations/orientations: A meeting or discussion between the assignee and a tax service professional to discuss the income and social tax implications of the assignment for both the home country and the host country. Tax equalization/equalize: A compensation methodology for calculating the assignees share of his or her worldwide tax burden by attempting to ensure that the employee is financially no better or worse off than he or she would have been had the assignment not taken place. Tax gross-up: A mathematical calculation to determine the nal obligation to the taxing authorities when the company pays a tax liability on behalf of the assignee. Tax preparation: Services of a tax professional to prepare the assignees home country and/or host country tax returns. Tax protection/protect: A compensation methodology for calculating the assignees share of his or her worldwide tax burden by attempting to ensure that the employee is financially no worse off than he or she would have been had the assignment not taken place. It differs from tax equalization in that, in theory, the employee could receive a tax windfall in an assignment location with a tax rate lower than the assignees home country. Tax reimbursement calculation: The reconciliation of the assignees tax contribution (via a hypothetical/tax norm) versus his or her obligation as dened by the tax reimbursement methodology. Tax reimbursement methodology: The compensation philosophy used to calculate the assignees share of his or her worldwide tax burden (e.g., laissez-faire, tax equalization, tax protection). Temporary living: The period of time between the assignee leaving permanent accommodation in the home country and moving into permanent accommodation in the host country. Unaccompanied assignment: A temporary transfer across national borders where the employees immediate family remains in the home country. These types of assignments often provide for additional trips to and from the home and host countries for the separated family members. Host country assignment benets are normally based on that of a single person. White goods: Household merchandise, as bed sheets and curtains, formerly made from white fabrics, but now often colored, and/or large household appliances, such as ovens and refrigerators, formerly nished with white enamel, but now often colored. Work permit/visa: All countries require valid identication (passport) for lawful entry. In addition, most countries require a valid work permit/ visa before an assignee may live and work in that host country. Often, a spouse cannot be gainfully employed under the work permit/visa of the assignee.
Index
Administration Air travel AIRINC (Associates for International Research Inc.) Allowance Hardship Relocation/Disturbance/ Miscellaneous Settling-in Assignee Goals Increase or decrease of use Selection Termination Assignment length Career planning Cars COLA (cost-of-living allowance) Caps Data Indices Negative allowance Commuter policy Compensation Calculations Equity Intention Opinion Report Cost estimates Counseling, repatriation Cross cultural training Danger 24, 34 80 25,27 41, 46, 64 4143 46 64 1720, 3334, 35 20 35 17 1819 47 54 84, 85 2526, 39, 40 39, 44 39 39 40 13 21, 34, 37 , 70 21 74 37 34 22 5051 54 52 3033, 41 Housing Demographics Destination services Disturbance allowance Domestic partners Dual-career couple ECA (Employment Conditions Abroad) Efcient purchaser indices EIU (Economist Intelligence Unit) Emergency planning Equity compensation Estate planning Evacuation Expense, miscellaneous allowance Expense processing Family Family assistance Financial planning Foreign service mobility premiums Goal Assignee International assignment program Goods and services differential Caps Data Indices Negative allowance Hardship allowance Home leave Expenses 27 11 62 46 14 1516 25, 27 39 25, 27 3031 72 76 32 46 22 14 14, 15 76 38 13, 20 20 13 25, 39, 40, 44 39, 44 39 39 40 41 7879 79 Housing Data Location Norm Offset Purchase in host country Hypothetical tax Immigration 27 , 5667 27 61 5861 5961 6163 69 23
Income 7275 Other Rental Spousal Industry International standard indices Investment planning Language training Length of assignment Localizing Loss on sale Mentoring Mercer/ORC Negative COLA allowance NFTC (National Foreign Trade Council) Notional housing expense Number of assignees Number of countries 7273 7475 7273 10 40 76 5152 47 4849 63, 66, 84 54 26, 28 40 26, 28 5961 11 12
Opinion 3435 Orientation HR Tax Outsourcing Payroll 2122 21 22 2124 23
Data 2527 COLA 25
Planning Estate Financial Investment Preassignment visit/trip Preschool Property management Relocation allowance Rental costs Rental income Repatriation Counseling Planning Process Revenue Runzheimer International
76 76, 80 76 76 53 8182 64 46 64 74 5455 54 54 55 10 26, 28
Tax briengs Tax compliance Tax costs Tax equalization Tax norm Tax orientation Tax preparation Temporary living assistance Expenses Host country Preassignment Termination
76 23 6870 6869 69 22 76 5758 58 57 57 1819
Training 51-52 Cross-Cultural Language Visits, preassignment Wills, estate planning 52 5152 53 76
School 8183 Preschool Primary and secondary Tertiary Security Selection Settling-in allowance Spousal income Spouses Spouses career Standard Indices Storage 8182 83 81 33 17 64 7273 1416 1516 39 67
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The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. 2012 KPMG International Cooperative (KPMG International), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International. Designed by Evalueserve. Publication name: Global Assignment Policies and Practices Survey 2012 Publication number: 120502 Publication date: June 2012

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INTERNATIONAL EXECUTIVE SERVICES

Global Assignment Policies and Practices

2 | Global Assignment Policies and Practices 2012

Global Assignment Policies and Practices 2012 | 3

4 | Global Assignment Policies and Practices 2012

How to Access KPMGs GAPP Survey

Global Assignment Policies and Practices 2012 | 5

KPMGs International Executive Services

6 | Global Assignment Policies and Practices 2012

Global Assignment Policies and Practices 2012 | 7

8 | Global Assignment Policies and Practices 2012

GAPP Survey Highlights 2012

1.1. In which country is your organizations headquarters located?

Source: KPMG International, GAPP Survey 2012

Global Assignment Policies and Practices 2012 | 9

Less than 1,000

More than 100,000

250 to 500 501 to 2,500 2,501 to 7,500 More than 7,500

10 | Global Assignment Policies and Practices 2012

1% 2% 2% 1% 4% 8% 10% 4% 7% 2% 16% 3% 2% 3% 14% 5% 14% 2% 4% 3% 5% 5% 5% 1% 1% 11% 5% 10% 15% 20%

Source: KPMG International, GAPP Survey 2012

Global Assignment Policies and Practices 2012 | 11

Source: KPMG International, GAPP Survey 2012

12 | Global Assignment Policies and Practices 2012

Source: KPMG International, GAPP Survey 2012

Global Assignment Policies and Practices 2012 | 13

Being perceived as fair and equitable

14 | Global Assignment Policies and Practices 2012

Dependent parents/extended family of assignee Other

None of the above

Source: KPMG International, GAPP Survey 2012

Global Assignment Policies and Practices 2012 | 15

Source: KPMG International, GAPP Survey 2012

16 | Global Assignment Policies and Practices 2012

32% 21% 4% 1% 4% 32% 0% 5% 10% 15% 20% 25% 30% 35%

Source: KPMG International, GAPP Survey 2012

This issue increases the chances of assignment failure

None of the above

0% Source: KPMG International, GAPP Survey 2012

Global Assignment Policies and Practices 2012 | 17

4. Program: Assessment and Performance

Trained evaluators from within the organization conduct assessments

Source: KPMG International, GAPP Survey 2012

18 | Global Assignment Policies and Practices 2012

More than 30%

Do not know 0% 10%

12% 20% 30% 40% 50% 60%

Source: KPMG International, GAPP Survey 2012

More than 30%

Do not know 0% 5% 10% 15% 20% 25%

26% 30% 35%

Source: KPMG International, GAPP Survey 2012

Global Assignment Policies and Practices 2012 | 19

Do not know 0% 5% 10% 15% 20% 25%

30% 30% 35%

They are rarely set

We do not have any process for establishing assignment goals

2% 10% 20% 30% 40% 50% 60% 70% 80%

Source: KPMG International, GAPP Survey 2012

20 | Global Assignment Policies and Practices 2012

Assignment compensation calculations

All participants Europe

62% 2% HEADQUARTERS 70% 3%

Asia Pacic Americas Financial Non-Financial Hi-Tech Energy Manufacturing