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US FOCUS


Business as usual Eighteen months into this Republican presidency, domestic


economic data remains positive. The latest US Bureau of Labor Statistics’ Employment Situation Report highlights both employment and the US labour force are continuing to grow, adding a further 213,000 jobs in June after May and April’s figures were also revised upwards. Non-partisan global, independent business membership and


research association, The Conference Board said accelerating business economic activity since the start of 2017 has allowed job growth to strengthen further in the first half of 2018, despite tighter labour markets. “Much of the acceleration is driven by manufacturing employment,


now growing at its fastest rate in 23 years,” commented Gad Levanon, the Conference Board’s North America chief economist. “Given the continued strength in the US economy, we expect


more of the same for the labour market in coming months: more people joining the labour force, but strong job growth will continue to tighten the labour market, further accelerating wage growth.”


Will growth continue? This positive domestic growth in the economy and labour market


is tempered by shifting sentiment among CEOs on confidence and conditions. The Conference Board’s Measure of CEO Confidence, which grew in the first quarter of 2018, declined slightly by two points to 63 in Q2. (A reading above 50 reflects more positive than negative responses.) CEOs’ expectations on economic outlook are also much less


optimistic than last quarter. While it is still too early to tell if those doubting the economic credibility of President Trump’s foreign trade policies are correct, now just 48% of CEOs surveyed expect economic conditions to improve over the next six months, compared to 63% in the second quarter. CEOs’ expectations regarding short-term prospects in their own industries over the next six months were also relatively flat, with only 42% anticipating an improvement in conditions. Summing up, Lynn Franco, director of Economic Indicators at


The Conference Board, said, “CEOs’ optimism regarding the growth prospects for both mature and emerging economies have eased considerably since the beginning of the year. However, most CEOs expect profits will increase over the coming year, with market/demand growth and cost reductions the major driving forces.” Internationally, the Conference Board also found sentiment


regarding Europe and Brazil “declined rather sharply”, with confidence regarding current conditions in Europe also declining from “positive to neutral.”


Key impacts for mobility In many ways, the surveys in this mobility space are telling us


much that we already know. Volatility and uncertainty are inherent in the decisions being made under the America First policy. There is also complexity and ambiguity in Trump’s messages on trade agreements with a post-Brexit UK. But, for now at least, it seems to be business as usual for US


mobility on the broad themes of cost, talent, assignment types and compliance, with some noteworthy points on taxation. In January, the Internal Revenue Service’s (IRS) issued Notice


2018–01, providing guidance for implementation of IRC 7345. This new code affects people who have “seriously delinquent tax debt” of more than $50,000. Under the guidance, the IRS began sending certifications of unpaid tax debt to the State Department in February 2018, meaning


the Department of State can now more easily deny a passport application, limit or revoke a current passport.1 For global tax,


compensation, benefits, rewards and payroll specialists already grappling with a raft of other major tax updates for the 2018 tax year under the Tax Cuts and Jobs Act (TCJA) – including suspensions of the deduction for moving expenses from December 31, 2017 for years 2018–20252


– IRC


7345 means it is more important than ever for globally mobile assignees to be supported in getting their financial house in order.


Challenges ahead A tightening labour


market, tougher visa protocols


and continued 49%


pressure on overheads are all playing out in US relocation research. Cartus’ latest domestic US Relocation Policy & Practices Survey found cost is still the number one challenge for US companies, followed by talent management. Over half of its respondents said that talent shortages are a “significant” or “somewhat significant” issue. Cementing these themes, another Cartus survey Trends in Global


Relocation: 2018 Biggest Challenges, finds that after cost control, immigration and tax compliance are the biggest issues. Seven out of ten of the 205 mobility managers surveyed around


the world said immigration is more challenging than previous years for both internal and external reasons. Internally, respondents note concerns arise because of managers’ lack of awareness of host location requirements when selecting assignees or setting move timings. Externally, obstacles arise because of visa wait times (63%), application complexity (55%) and geopolitical events like the US travel ban and Brexit (43%). Tax compliance, specifically a lack of business managers’


understanding of the costs taxes add to an assignment, was the next big issue, affecting 49% of respondents to Cartus’ survey. In both cases, the solution is for global mobility to inform and support business managers.


Millennial influence Looking through the talent lens, identified by Cartus as the second


biggest challenge for US global mobility managers, 65% relied on targeted recruitment. With 48% offering golden handshakes for new joiners, 43% looking to campus recruiting and 35% on internship programmes – activities all very much geared to the millennial generation and a trend also picked up by Crown World Mobility. “This year, we expect millennials to have an even greater influence


on mobility trends,” said Lisa Johnson, global practice leader of Crown’s consulting services at the launch of its 2018 Global Mobility Trends





The percentage of relocation managers citing tax compliance as a challenge


70%


Mobility managers who say immigration is a greater concern than last year


relocateglobal.com | 25


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