relocation

Relocation policy - key factor in the success of a company's relocation program

According to Worldwide ERC, US companies alone spend $12.2 billion each year on corporate relocations. Companies that relocate or plan to relocate a large number of employees may find that putting in place a relocation policy is essential.

Each company's relocation policy can be different as it is tailored to suit the needs of the firm and their employees. This written policy serves as a foundation for each aspect of the relocation as it outlines the protocol to be used, the benefits offered, the different relocation packages provided, the partners used to assist and the people to contact at each step.

Relocating employees can cost upwards of $25,000 per employee and this cost can increase dramatically depending on the employee's position, family size etc. Despite this cost, it can sometimes be more cost effective to relocate existing employees rather than recruiting, interviewing, hiring and training a new employee.

In the case of relocating existing employees instead of new hires, businesses can continue operating as usual as the employees do not need training in order to start working efficiently. However, the transition to a new location can still be stressful for transferees and can therefore affect their productivity. In order to ensure that productivity levels stay high, having a good relocation policy that addresses all of the transferees needs inside as well as outside of the workplace is key.

Upcoming relocations can be daunting for employees; they therefore have many questions they require answers to regarding their move. Human Resources teams are often the ones these questions are directed at; a clearly set relocation policy therefore saves the HR department time, as it informs employees of what to expect during their relocation and reduces the need to answer so many questions.

Developing a relocation policy is therefore key to making corporate expansion run more smoothly, however the goals and benefits of the policy need to be fully defined before its implementation. 

Cost of Living index

It is sometimes hard to estimate the financial impact moving to a new city will have. Using cost of living indices allows you to compare the financial differences between two cities and get a better idea of what to expect.

The consumer price index is an indicator of the price of consumer goods, which includes groceries, restaurants, utilities and transportation, however this index does not include expenses linked to accomodation. Rent, restaurant and local purchasing power indices can also help can a bet overall view of the cost of living in a new city.

In the following table each index is relative to New York City, which means that all indices for NYC are 100. Therefore for example, if rent in another city has an index of 80, it means that on average rent in that city is 20% less expensive than in New York City.

Source of data: Numbeo

Diversity, the overlooked advantage of relocating employees

Corporate relocations of employees has drastically increased over the last decade with more and more companies deciding to send their employees abroad. The reason motivating Human resource departments to relocate employees is often to address imbalances in their work forces, however it can also stem from a need to hire new employees for a new location or as a way to develop an employee’s competencies to improve their career path.

As mentioned in our previous article Global mobility: beneficial for both employees and employers, relocation is beneficial to all parties and increases a company’s effectiveness and productivity. However, a key factor that is often overlooked is the fact that it brings diversity to the workforce.

A Gallup study of more than 800 units from two companies from two different industries showed that businesses with a more gender diverse work force have on average 57% better financial outcomes overs workforces dominated by one gender.

Gender diversity is not the only type of diversity in the work place that leads to beneficial results. An age neutral work force, where different generations work hand in hand can lead to better communication between different age groups and the business reaps the benefits of the strengths and values of each group.

According to research led by the Harvard Business school, companies with diverse work forces made 18 to 69% more net income and 91% reported that customer satisfaction was higher. Sales performance was also proven to be higher at companies with a diverse team.

Through diversity a company appeals to a larger customer base, which improves the image of the business. Furthermore, this diversity allows the company to have different perspectives on issues both internally and externally and source ideas from a larger more creative group. Diversity in a work force also proves that the company does not discriminate which can increase its appeal to new candidates.

Increasing diversity in a work force can be a challenge as conflicts between the different members of the group can occur. Differences in opinions and work styles can lead to difficulties with teamwork and unproductive arguments.

By communicating with the workforce and giving all employees time to adapt, the difficulties companies encounter should be minimized. Relocating employees and adding more diversity to a business are a great way to improve effectiveness and are worth considering. 

Apostille legalization of documents - what is it and when is it needed?

Relocating to another country can be daunting as a great deal of elements come into play both before the relocation and after arrival in the new country.

An overlooked but important issue is the question of the validity of the expatriate’s official documents in the foreign country.

Government bodies, employers, schools, banks and other entities can require that the expatriate produce official documents proving identity, education or even marital status. Document requirements differ from country to country and their validity may be limited to certain regions, which can may the task more complicated. 

An apostille certificate solves this issue. This process results from the Hague Convention; a treaty signed by over 100 countries that allows documents issued in one country to be accepted in another.  The apostille certificate authenticates an official stamp or signature of a document and confirms that the entity that produced the document had the authority to do so. Thanks to this certification the document can be recognized as legal without further evidence in foreign countries.

Common examples of documents that require apostille certificates are public documents such as birth certificates, educational certificates, degrees and documents and marriage certificates.

The apostille certificate is a paper attachment, which is glued to the supplied documents and contains the country of origin, the name of the signatory on the document, the capacity in which they have acted, the place of certification, the date of certification and the issuing authority details among other things. Once the apostille certificate is attached to the document, it is recognized as legal in foreign countries.

Getting documents authenticates and legalized can be a complex procedure. Expat US takes care of the entire process quickly and efficiently for its clients and therefore facilitates the transition for employees moving abroad.

Making moving abroad easier for employees

More and more companies are expanding their operations abroad in order to take advantage of emerging consumer markets and foreign resources, which dramatically increases the need for employees to relocate abroad.

By using relocation service providers such as Expat US, the employee’s relocation is handled by professionals and is ensured to go smoothly, which can facilitate the employee’s decision to relocate. Assignees are taken care of from the beginning to the very end of the relocation process and all their needs are met in order for them to transition as smoothly as possible into their new life.

In general, a great deal of junior employees in companies are eager to move abroad for professional reasons, as they see it as a great way to further their careers and have less personal commitments in their home country. However, unfortunately for companies, most of the time more experienced workers would be a better fit in overseas operations and these employees are often less willing to uproot their lives and move abroad.

 Human resources department therefore face the challenge of motivating the ideal candidates to accept an international assignment.

According to a survey conducted by IPSOS and BDO, there are 5 incentives that companies can take to incite employees to accept an international assignment are: 

- 45% would like to receive relocation & repatriation assistance as well as the guarantee that once the assignment is over they will be able to return to their former position in their home country.

- 43% would like their company to provide a round trip airfare so that they may return home to visit family at least once a year.

- 43% would like for their company to send them (expenses paid) to the selected country before they are asked to make a decision about relocating there.

- 42% would appreciate it if their company paid for language training when necessary. 

- 42% stated that assistance with immigration issues for their spouses so that they could obtain employment would be appreciated. 

There are some incentives that can be brought up when pitching an international assignment to an employee which can ensure that they will truly consider the proposal.

The following elements can help employees take the leap and accept an international assignment.

 

Reassure employee about career development opportunities

The number one fear of employees relocating is that it will have a negative effect on their position in the company. For example reassuring employees that they will be able to return to their current position once the international assignment is finished will reduce the risks they feel faced with.

By making international assignments into an important part of an employee’s career development plan can mean that the relocation is viewed as a promotion or the path to a future promotion.

 

Send employees on shorter term assignments

Typically international assignments run for 34 months, however this is a long time for employees to be away from their home countries. By offering shorter term assignments, which last less than a year, the employee’s reluctance to relocate can be reduced.

 

Increase commuter policies

Nowadays about 20% of employers use “commuter policies” which is a large increase compared to the 8% of employers using them in 2002. These policies allow international assignees to fly back and forth between their host country and their home country as much as possible, which can be a major motivating factor for employees.

 

Broaden the definition of “family”

Over the last 12 years the number of expatriate family policies, allowing same sex partners, or non-married partners to qualify, has almost tripled, increasing from 17% to 49% (KPMG survey).
This means that the resource “pool of potential assignees” has expanded.

 

English speaking countries appeal more to employees than non-English speaking countries

The desire to be assigned to English speaking countries is considerably stronger than for other countries. This can mean having to offer greater incentives and support for individuals going to non-English speaking countries in order to increase the attractiveness.

With years of experience relocating employees, Expat US knows the important factors to take into account and the KSF (Key Success Factor) for expatriates.

 

 

Global mobility: beneficial for both employees and employers

Over the last decade global mobility has increased with the BRICS countries (Brazil, Russia, India, China and South Africa), the UAE and Qatar all becoming attractive destinations for employees looking to relocate.

According to a recent survey conducted by international recruitment consultancy firm Robert Walters, more and more professionals believe that working overseas is both beneficial from a personal perspective and is also important to their current careers and future prospects. International assignments are good resume builders as they allow access to new cultures and languages and broaden professional networks.

The survey that focuses primarily on career lifestyles shows that 47% of the professionals spoken to rate overseas experience as “important” or “very important” to their future careers, which constitutes a 6 percentage point increase compared to the figures from 2013. Furthermore 76% of the individuals surveyed have already worked abroad or would like to carry out an international assignment at some point in their careers.

The main reasons behind this desire to be professionally mobile are the opportunities to experience new cultures (48%) or improve long-term career prospects (21%) with only 13% claiming salary as the main driver.  

Global mobility is therefore beneficial for employees but is also an important element for employers to take into account. The Robert Walker survey found that opportunities for career progression are deemed more important for employees than pay, flexible hours or benefits; therefore an organization that shows that they offer international mobility opportunities can attract new talent to the company as well as securing current employees.

Furthermore, international mobility can help organizations that have multinational operations face potential talent shortages and allows them to optimize their activities by putting the best employees in the best locations. Employees that have experienced international assignments also offer new knowledge, skills and languages and can help companies become more competitive and efficient. 

 By providing assistance at every step of the relocation process, Expat US facilitates global mobility for employees and employers.

*The survey concerning career lifestyle can be found at the Robert Walters website. 

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