A Guest Blog Post from Susan Myers, GMS
Director, Global Client Accounting

If your team is anything like ours, you’ve wrapped up your year-end deliverables and switched focus to tasks set aside over the last few months.  But before saying goodbye to another year-end, stop and invest some time in process improvements that will pay significant dividends a few months down the road.  Pull your mobility and payroll teams together to take a hard look at what’s behind the curtain.  If you’ve outsourced the disbursement and payroll function of your relocation and assignment management program, engage your vendors in this exercise as well.  Don’t forget to link your tax provider into this project to get the most out of the effort.

To start, it’s important to ask a few questions of all stakeholders to get the information and ideas flowing.  Some key questions should include:

• How much time was wasted redoing work because teams found they didn’t fully understand the transaction data being passed?
• What portion of the work required was completed through manual efforts?
• Did you have what you needed at the time allocated to complete the task?
• And most importantly, when you combined all data and efforts for tax preparation, how many W2cs will you produce?

What you find will likely surprise you.  And, the answers should give you a clear picture of areas that may need improvement.

If you are dealing with an international assignment population, establish a single coordination point for tracking and preparing all assignment related W2cs.  Make sure you understand why the W2c was required.  Categorize the reasons and attack the issues now.  We often hear payroll teams talk about 100+% W2c rates for their international population.  However, this situation can be avoided by simply identifying where the data is and who will be accountable for managing collection and reporting throughout the year.  Once this team member is identified, they should make sure the data is being reported correctly and any questions or issues are escalated in a timely manner.  If possible, make host country reporting a routine monthly process.

If analysis shows errors came from manual process breakdowns, investigate the possibility of automating the reporting and wage update.  Additionally, let your provider know when you don’t process the file exactly as provided.  The simplest of changes can make a big difference.  If you can’t automate, make sure teams are reconciling between all stakeholders throughout the year.  Since resources are at a premium, your relocation vendor should support the payroll reconciliation of interfaced data.  When examining the data, don’t just identify the differences, fix them.  And, encourage your payroll team to take the time to balance each quarter.  If done right, year-end will be simply another payroll pass.

Throughout the process, strong communication will be the key to your success.  And while communication is clearly a basic requirement in project management, it is not always easy when dealing with virtual teams across time zones, languages, and cultures.  To combat confusion, create a master project plan and calendar now.  Be detailed and stay connected to everyone accountable for a piece of the project throughout the year.  If you have outsourced, ask your vendor to take on this role.  You’ll find when all parties are communicating toward a common goal, issues are minimized.

Most importantly, committing time to review your year-end process now will mean less time and cost down the road.

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The 2012 Summer Olympic Games are scheduled in London from July 27 through August 12 and will present a complex challenge for anyone planning employee assignments.

Delays, Delays, Delays

The UK Border agency and customs department will increase security checks, so delays will start occurring three to four months before the opening of the Olympics.  Delays are specifically to be expected in VISA processing, household goods clearance and delivery, as shipments will be held longer in ports.  In addition, partial closure of London streets and access restrictions will force moving companies to deliver an increasing amount of shipments in a restricted number of hours per day.

Shortage of Properties and Price Increases

A shortage of temporary accommodations is to be expected, especially in the central London and nearby locations.  Because of limited supply of property and an increase in demand, temporary accommodations and long-term lease prices are expected to rise.  These are expected to rise anywhere from 12-25% during the summer months.  Most London realtors are reluctant to talk about short-term tenancies during the Olympics period.  This is because many properties are already booked (with many properties remaining empty until the games draw closer).  Many realtors cannot predict how many or what type of properties will become available for short rentals approaching the Olympics, or what the rental price may be.  However, as the games continue to draw closer, the costs will become increasingly higher.

Avoiding a Budget Increase

Corporations should consider alternatives such as delaying the assignment until after the summer season, to September at the earliest.  If temporary accommodations have not been booked in advance, it is a good idea for global mobility specialists to organize a home search trip before relocating the employee so that they can avoid the need for a serviced apartment.   This home search trip should absolutely not occur during the dates of the Olympics or shortly before or after.

Because of the challenges and unique situations the London Games present, communication is very crucial with relocating employees as well.  They should understand that they will need to be more flexible than usual as it relates to household goods delivery, homesearch time, and the location and costs of serviced apartments.

Summary

Be prepared.  London was awarded the Olympic Games years ago so there should be no surprise that the laws of supply and demand will have a profound effect during this time.  Educated pre-planning of how the “Olympic effect” will impact you and your employees, and communicating with suppliers to develop best strategies, will be worth the investment of time and focus, and will assist with maintaining optimal delivery and performance of your mobility program.

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Please be advised that beginning on July 1st, 2011, in accordance with the Immigration Law Article 38 Supplementary Provisions Article 2, fingerprints of all registered/registering foreigners will be taken.

The following individuals will be fingerprinted:

• Foreigners who are 17 years of age or older, and registering for the first time
• All foreigners who are registered before July 1st, 2011

Fingerprinting Schedule

• Newly registering foreigner : upon the registration, beginning on July 1st, 2011
• Registered foreigner : upon his / her visit to an immigration office for service ( such as applying for a visa extension ), beginning on January 1st, 2012

Important Information

• This law requires all the affected foreigners to visit immigration offices in person to have their fingerprints taken

Effective Date

From 1st July, 2011. If you have any question concerning this notice, please contact Paragon Relocation

Korea ( email to korea@paragonrelocation.com or call +82 2 795 2177 )

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Paragon Relocation is very pleased to announce that we have won first place in the HRO Today Baker Dozen Customer Satisfaction Rantings for their Size of Deals category. We would like to congratulate and thank our clients who make this possible and wish them mutual success for many years to come!

This means that the world’s largest organizations are choosing Paragon Relocation to manage their full service relocation program’s around the world more often than any of our competitors. As a result Paragon Relocation is among the fastest growing companies in the industry.

Recently, we’ve launched our PRISM 2.0 (Paragon Relocation Information Systems Manager) so that all clients can seamlessly manage their global mobility population from a single customizable web based interface. Additionally, last month we opened an office in France and in May we expanded our office in the Benelux region in Europe. Also, we recently announced we are able to now provide even more billing flexibility to our clients because we are able to bill in Renminbi in China (a non-convertible currency) among 22 other global currency options we offer.

Paragon Relocation CEO, Joseph Morabito commented on Paragon Relocation’s reach around the globe in a recent blog post:

Today, there are Paragon branded boots on the ground in Switzerland, France, The Benelux Countries, Spain, Britain, Ireland, South Korea, China and Hong Kong. We also recently incorporated in Russia to allow for billings there. Our goal in 2011-12 is to expand into Germany, Italy, India, Brazil and perhaps other countries where we have significant volume. Otherwise, we do also have affiliates in place to manage moves to 150 or more countries. Though we have experienced challenging times in the past few years, we are still very focused on growing our four subsidiaries; Paragon Relocation, Paragon GeoImmigration, GenEquity Mortgage and Paragon Decision Resources, our consulting company. We will accomplish growth both organically as has always occurred and perhaps through some strategic acquisitions in the years ahead. Most importantly, we are not standing still, even during challenging times because to do so would be going backward.

Paragon Relocation won this prestigious Relocation Bakers Dozen award because of reviews like these from our customers: Paragon Relocation Reviews.

From all of us at Paragon Relocation we can’t say Thank You enough to clients who gave us such a positive review! Thank you, thank you, thank you!

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Paragon Relocation, a leading Relocation Management Company, is going to be exhibiting at SHRM Las Vegas on June 26-28, 2011, stop by booth #2756 for an opportunity to play blackjack to win an Apple iPad! The (Society for Human Resource Management) SHRM Annual Conference will “feature the largest number of practitioners, strategic business management sessions and health care sessions ever.” Paragon Relocation has been serving the Relocation needs of HR departments for over the last 20 years and is looking forward to another exciting SHRM conference.

SHRM 2011 Las Vegas Information:

For more information about the conference please go here: More Information About SHRM Las Vegas

SHRM Keynote Speakers include: Sir Richard Branson, Michael J. Fox, Tony Hsieh, and Arianna Huffington.

At SHRM there will be hundreds of educational sessions organized by the major following tracks: Employment Law & Legislation, Strategic Management, Talent Management, International HR, Total Rewards, and Personal & Leadership Development.

Visit Paragon during the SHRM Exhibit Hall Hours for a chance to win an iPad: Sunday June 26th 4:00-7:00PM, Monday June 27th 9:30AM-4:30PM, and Tuesday June 28th 9:30AM-2:00PM.

To register for the conference please go here: SHRM Las Vegas Registration

Follow Paragon at SHRM Las Vegas:

Follow Paragon Relocation throughout the conference on Twitter as we post updates using the conference hashtag #SHRM11!

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What are the benefits of a BVO (Buyer Value Option) Sunset Clause? The benefits include reducing the costs of additional temporary housing, duplicate housing and storage. In addition to the cost savings there is a significant savings of time because the relocating family’s home isn’t for sale indefinitely and it allows the family to be living together in the new location more quickly. Finally, the other benefit is Tax Compliance. Including a Sunset Clause as part of a BVO insures that the homesale program is in full compliance with IRS standards as it relates to homesale transactions.

While BVO programs are subject to a degree of interpretation, there are parameters which should be followed to ensure the program is tax protected while facilitating employee mobility. Paragon recognizes the risks associated with a BVO program and understands the challenges in overcoming the potential expenses related to homesale transactions. As markets soften, correct and/or decline, client corporations should consider a “sunset clause” for as a Guaranteed Buyout Offer (GBO) at some time during the BVO process.

Why should your relocation policy include a BVO Sunset Clause?

Some of the benefits for the Sunset Clause include:

• Reduces Costs: Companies that have included a Sunset Clause have significantly reduced the costs for temporary living, duplicate housing, and storage costs.
• Saves Time: It reduces the amount of time it takes to complete a relocation and it therefore helps families live in one location more quickly.
• Provides Full Tax Compliance: Although not a mandatory procedure according to IRS Revenue Ruling 2005-76; Worldwide ERC’s Tax Counsel recommends client organizations provide a GBO at the end of the BVO process in order to operate in the most favorable way to protect the tax exempt status of the third party relocation homesale program.

How does a BVO Sunset Clause work?

The Sunset Clause could take effect after the home has been on the market for six months. However, this is client prerogative. Most clients choose mandatory marketing of anywhere from 120-180 days. After this mandatory marketing period, appraisals would be ordered so that a guaranteed offer could be established no more than 30 days later. Upon receiving the guaranteed offer, the transferee would have 30 additional days to aggressively market their property in order to find a buyer, before having to fallback on the guaranteed offer, thus bringing conclusion to the homesale for the employee.

Another consideration for this type of program is to base the guaranteed offer on a percentage of the appraised value. The same process for determining the value is followed except at the time of calculation, an employee is offered, for example, 95% of the appraisal value, resulting in the GBO amount. This approach may allow for an employee to have more incentive earlier in the process and facilitate a change in the strategies for selling a home prior to having to accept a GBO.

Companies that are instituting the Sunset Clause indicated it was primarily to avoid the dual risks of an IRS audit and letting homes languish in slow markets.

For more information about how adding a Sunset Clause can bring added benefits to your relocation program, please contact Paragon Relocation’s Consulting group to hear about their Relocation Program Development services.

More information about the Buyer Value Option and Sunset Clause:

Download the BVO Sunset Clause Client Advisory and Whitepaper:

View the Buyer Value Option with Sunset Clause Client Advisory.

View the Buyer Value Option with Sunset Clause Whitepaper.

Helpful information from Paragon and from around the web:

• Pre-Decision Consulting to Help Find the Right Candidates for Relocation
• Why employees are reluctant to relocate?
• How much does it cost to relocate an employee?
• What is a Buyer Value Option?
• What is IRS Revenue Ruling 2005-76?

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Mortgage interest rates continue to decline to a 5 month low according to Bankrate.com, a financial information publisher. They write “The benchmark 30-year fixed-rate mortgage fell 5 basis points this week, to 4.77 percent, according to the Bankrate.com national survey of large lenders.” This is a decrease of a year ago when the benchmark rate was 4.96 percent. The all time low for mortgage interest rates was 4.42 percent which took place last November.

This is all good news for people looking to buy homes or refinance their mortgages, if they are able to lock in their rates quickly. They continue “The low rates surprise many mortgage experts, who expected the rates to rise after the United States officially reached its $14.3 trillion debt ceiling on Monday”. Experts are indicating that if the US debt ceiling is not raised by the beginning of August these interest rates will begin to rise sharply.

Alan Rosenbaum, chief executive officer at GuardHill Financial Corp. in New York City, says “These rates are surprisingly low and they couldn’t have come at a better time, but I wouldn’t predict it to last very long at all,” he says. “Remember, they come down slowly but they go up very quickly.” When in doubt, the prudent move is to take advantage of the low rates and lock, Rosenbaum says.

Whether rates are rising or falling Paragon Relocation’s preferred mortgage partner, GenEquity Mortgage, always provides the best rates available on the market to its customers. For more information about their mortgage offerings please visit GenEquity.com

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When you are moving an with an international assignment company, what are the most important aspects of moving to a new country for you? Do you think about opening an international assignee bank account first? In a recent study by NatWest Global Employee Banking posted on RelocateMagazine.com they share the results of their survey about the needs of employees moving into the UK. While they mention that although international banking is among the lowest priorities they make the argument that it should be the number one priority because other relocation services often rely on a functioning local bank account.

From those surveyed here is what HR and relocation professionals thought were the most important priorities.

View Graph as an Image

Of respondents to the survey 93% indicated that “accommodations” were the most important of services needed to move into the UK. Therefore, it also makes sense that establishing a local bank account might help secure these accommodations because an apartment may need a deposit or key money in a local currency before you can move in. Often times when employees take an international assignment they would use a direct billed temporary housing provider as recommended to them by their relocation management company or by their HR department. When a company is able to establish a direct billed relationship with various temporary housing providers they can often capitalize on relocation cost savings they may ordinarily not be entitled to without these relationships in place. In addition by the company directly providing the housing for the employee on a temporary assignment it allows the employee to setup a bank account once they are in country and settled into their accommodations.

Paragon Relocation develops customized relocation programs that give HR departments all the options necessary to easily execute sophisticated international relocation policies that fit the needs of their employees and their families. From international banking to temporary housing and much more, Paragon Relocation has been providing the full range of relocation services for over 20 years. Let us know if we can be of assistance!

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One of Paragon Relocation’s business alliance partners, Arpin Group, has notified us of the following message:

Truck Drivers Go On Strike At Shanghai Ports

Please note that operations at major container ports in Shanghai (including Baoshan and Yangshan) have been disrupted due to a strike by thousands of the country’s truck drivers. Although state media did not report on the incident, we have received confirmation of the strike from Arpin Group’s Shanghai office.
As a consequence, delays in receipt of export containers are inevitable and could result in residual delays to sea freight.

Your Arpin service team will do everything possible to minimize delays and manage the expectations of the relocating families to the best of their ability.

Rest assured that your Arpin service team will do everything possible to minimize delays and manage the expectations of the relocating families to the best of their ability.

Please let us know if you have any questions as this relates to your move. You can contact your International Relocation Assignment Consultant or Client Relations Manager to answer any questions you may have.

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Paragon Relocation, a leading provider of global relocation management services, underscored the company’s commitment to a growing global presence by expanding current operations in the Netherlands to encompass both Belgium and Luxembourg as well.  While already providing service in the area through Paragon Relocation–Holland, this strategic expansion will allow more direct presence in region.  The new Paragon Relocation–Benelux office will be led by Geoff Mills, Director of Global Relocation Services.

Mills moved from the UK to the Netherlands in 1996 and worked as section head/project manager for Philips in Nijmegen. He has worked in the relocation industry more than 6 years.  Most recently, he was the managing director of Paragon Relocation–Holland.  As Director of Global Relocation Services for Paragon Relocation–Benelux, Mills will focus on both operations and account management responsibilities within the region as well as in the UK and Ireland.

“We are excited about the new possibilities that are now opened to us as we plan for our future expansion throughout Europe.  We now have significant presence in the Benelux region and expect to see tremendous growth in this area,” said Liam Brennan, managing director of Paragon Relocation’s Dublin office.

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Carol Nichols, Director of Learning Resources, received the highest honor at Paragon Relocation – the 2010 President’s Award, for her demonstrated commitment to excellence by advancing Paragon’s mission and culture of success. Specifically, Mrs. Nichols was recognized for significant contributions including innovations in Learning Resources and global training, which led to cost savings and improved internal and external customer service across all major functions of the organization.

This recognition includes a monetary award, an additional week of vacation and dinner with Paragon’s senior management.

Congratulations to Carol Nichols for her achievements in 2010!

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In an effort to encourage volunteerism and underscore one of the company’s core values, Paragon’s President, Joseph Morabito, established a Community Service Award for Paragon employees. Through the Paragon Foundation, the first annual Community Service Award winner was announced this month. The 2010 winner is Darlene Bustamante, Facilities Coordinator, based in Paragon’s Rancho Santa Margarita, California office. Darlene is active with several groups that have local, national and even international significance.

First, Darlene works to support Just Do Good – The Compton Initiative. This group involves a community outreach program in Compton, California, a city known for violent crime as a result of gang activity. “Rebuilding Compton” has been happening one house at a time for the last four years. Darlene has been working with others on home renovations in Compton. Darlene also recruited other Paragon employees to help with this worthwhile project.

In addition, Darlene has been active with Project Prayer Flag for the past six years sending care packages to U.S. Servicemen in six troops on duty in the war zones of Iraq and Afghanistan. Darlene also works at Camp Pendleton serving lunch to service men and their families during memorial services for soldiers lost in battle.

Darlene is also active in supporting All’s Well Homes, an organization that houses men and women who have had tragic upbringings. These people are often victims of abuse that are living on the streets due to addictions and other personal problems. Darlene has been using her skills to provide young women with training and counseling in computer skills, communication skills and interpersonal relationships. Darlene also assists by serving meals and providing food and clothing to those in need.

Next, Darlene organized a blood drive for the American Red Cross at our corporate headquarters resulting in a donation of 20 units of blood that will help save at least 60 lives. Finally, Darlene is constantly collecting canned goods, other foods and blankets for various charities in Orange County to help the less fortunate. As a result of all of her selfless volunteer work, Darlene has been selected as our 2010 Community Service Award winner. As a part of this award, Darlene will receive $500.

Other nominees for the 2010 Community Service Award included:

• Whitney Patterson for her work with Big Brother/Big Sisters of Dallas
• Carol Nichols for her work with Habitat for Humanity, Youth Front, Franklin Community Center and missionary work in China
• Elaine Martin for her work with Big Brothers/Big Sisters
• Tom True for his work with Big Brothers/Big Sisters
• Pratibha Godbole for her work with her local church
• Tracy Wyttenberg for her work with Season’s Hospice
• Teresa Mahlberg for her work with DAWG (Dedicated Animal Welfare Group)

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Paragon Relocation has a full schedule of spring exhibitions. We hope that you will join us at the following upcoming conferences and exhibitions:

European Relocation Association (EuRA) Congress 2011
April 14-15, 2011
Palma de Mallorca, Spain
Visit us at Booth D
EuRA Website


Institute for Supply Management (ISM) 96^th Annual Conference
May 15-18, 2011
Orlando, Florida USA
Visit us at Booth 127
ISM Website

Procurement Leaders Forum
May 24, 2011
London, UK
Visit us at Booth 14
Procurement Leaders Website

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At Paragon, our thoughts and prayers go out to all those affected by the destruction of the earthquake that Japan recently experienced. Please be advised of the following travel advisory from the U.S. Department of State:

The Department of State alerts U.S. citizens to the situation in Japan in the aftermath of a powerful earthquake, measuring 8.9 magnitude, that struck northern Japan on March 11. U.S. citizens should avoid travel to Japan at this time. This Travel Alert expires on April 1, 2011.

The Department of State strongly urges U.S. citizens to avoid tourism and non-essential travel to Japan at this time. Tokyo airports are currently closed; other airports in Japan may be closed or have restricted access. Public transportation, including trains and subways are closed in the Tokyo area, and service has been interrupted in other areas. Many roads have been damaged in the Tokyo area and in northern Japan.

Strong aftershocks are likely for weeks following a strong earthquake such as this one. The American Red Cross recommends that in the event of aftershocks, persons should move to open spaces away from walls, windows, buildings, and other structures that may collapse, and should be alert to the danger of falling debris. If you are indoors, DROP, COVER AND HOLD ON: If possible, seek cover under a sturdy desk or table, hold on, and protect your eyes by pressing your face against your arm. If there is no table or desk nearby, sit on the floor against an interior wall away from windows, bookcases or tall furniture that could fall on you. Avoid damaged buildings and downed power lines. Great care should be used with matches, lighters, candles, or any open flame due to the possibility of disrupted gas lines.

U.S. citizens currently in Japan should contact family and friends in the United States to confirm their well-being at the earliest opportunity. Where internet and telephone services are not available, it may be possible to contact people using SMS (Cell text message) or other forms of social media such as Twitter and Facebook. U.S. citizens may contact the Department of State at JapanEmergencyUSC@state.gov and the emergency contact numbers below.

U.S. citizens in Japan are encouraged to enroll in the Smart Traveler Enrollment Program (STEP) at the following website: https://travelregistration.state.gov. U.S. citizens without internet access may enroll directly at the U.S. Embassy or U.S. Consulates. By enrolling, U.S. citizens make it easier for the Embassy/Consulates to contact them in case of emergency.

Updated information on travel and security in Japan may be obtained from the Department of State by calling 1-888-407-4747 toll-free in the United States and Canada or, for callers outside the United States and Canada, a regular toll line at 1-202-501-4444. For further information, please consult the Country Specific Information for Japan, as well as the Worldwide Caution, which can be found at www.travel.state.gov.

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If an employee makes a personal decision not to relocate their family, most companies do not pay for any benefit for the time the employee is in temporary/permanent housing. However, there have been rare exceptions for high level employees.

Instances have arisen where clients will pay for 2 (or even more) years of temporary living for a high level executive who decides not to move his family from the departure location. The payment of this expense on an on-going basis for the duration of the assignment is ordinary income to the employee. In the case of high level executives, some companies have grossed-up this expense, which makes this a very expensive as well as, generous benefit.

If this situation were to present itself with a relocating employee, Paragon recommends that it be handled carefully and on an exception basis. For more information on handling these types of scenarios, please contact your dedicated Paragon Relocation account manager.

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The following message from the US Embassy in Tripoli, Libya relates to the current crisis in that country:

The Department of State warns U.S. citizens against travel to Libya and recommends that those U.S. citizens in Libya depart immediately, due to the potential for ongoing unrest. Violent clashes between protesters and security forces continue throughout Libya, including in Tripoli. Spontaneous demonstrations, violence, and looting are possible throughout the next several days. The Department of State has ordered all Embassy family members and non-emergency personnel to depart Libya.

The U.S. Government is in the process of chartering a flight from Tripoli for Friday, February 25th and will provide details in another warden message as soon as they are available. We do not anticipate scheduling another charter flight after the charter on Friday.

Travelers should be prepared to bring valid travel documents and any necessary medications. Each traveler may bring one suitcase and a small personal carry-on item.

U.S. citizens seeking evacuation should be prepared to wait several hours. Travelers are advised to bring food, water, diapers and other necessary toiletries with them to the airport.

U.S. citizens requesting evacuation on U.S. Government-chartered transport must sign paperwork promising to reimburse the U.S. Government for transportation costs at a later date. Exact transportation costs are not yet available, but will be comparable to a one-way commercial airfare of a comparable distance on the date of travel. U.S. citizens who travel on U.S. Government–chartered transport will be expected to make their own onward travel plans.

Immediate family members (spouses and children) who are not U.S. citizens must be documented for entry into the safe haven country and/or the United States, if that is your final destination. A U.S. citizen child may be escorted by one adult, preferably a parent, who has appropriate travel documents. If a family has more than one U.S. citizen child, the one-adult rule still applies. All U.S. citizen travelers and their spouses and children, are required to have valid travel documents. The U.S. Embassy in Tripoli will assist U.S. citizens with travel documents. U.S. citizens who do not hold a valid U.S. passport or visa and are interested in departing Libya via U.S. Government-chartered transportation should contact the U.S. Department of State and U.S. Embassy Tripoli by sending an email to LibyaEmergencyUSC@state.gov or by calling 1-202-501-4444.

For more information on the travel situation in the Middle East please visit the US State Department’s Travel Advisory website.

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