CapRelo Blog

December Relocation Survey

Posted by Amy Mergler on Thu, Dec 15, 2016

Thinking about changing your relocation program or just curious about what other organizations are doing? Each month, we'll feature a short survey and share our findings along with the next survey the following month. Below are the results for last month's survey and this month's survey questions.

November Survey Results

1. Does your company offer a lump-sum package for global relocations?

67% of respondents do provide lump-sum packages. 33 % do not or are unaware of the program parameters.

2. What type of lump sum relocation packages do you offer?

33% of repondents provide alternative (partial) lump sum. Another 33% provide managed lump sum. And 34% provide other types of packages.

3. What are your motivations for using a lump-sum program?

33% of respondents were motivated by cost control. 34% were motivated by ease of administration. The remaining respondents were unaware of their companies' motivations for choosing lump-sum packages. 

 

As the New Year approaches and companies start preparing records for the upcoming tax season, this month's survey focuses on relocation and taxes.  

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Topics: tax impact of relocation, relocation taxes, global relocation

November Relocation Survey

Posted by Amy Mergler on Fri, Nov 18, 2016

Thinking about changing your relocation program or just curious about what other organizations are doing? Each month, we'll feature a short survey and share our findings along with the next survey the following month.

First up, Lump-Sum Relocation packages!  

Create your own user feedback survey

 

Topics: relocation packages, lump sum package, global relocation

Exclusive Webinar - Managing Relocation Costs: Tips and Tricks of the Trade

Posted by Amy Mergler on Thu, Oct 20, 2016

Managing Relocation Costs Webinar


Assignments are critical to your success in the global marketplace. You must get the right talent, in the right place, at the right time. But how can you do that without breaking the bank?

Please join our lively discussion on Wednesday, October 26th at 2:00 pm with relocation experts who are on the front lines of the industry as they share tips and tricks to help you manage costs while still executing a successful relocation program in our WERC Learning Zone Webinar: Managing Relocation Costs: Tips and Tricks of the Trade.

In this webinar, you’ll learn:

  • Why regular policy reviews are critical
  • Pros and cons of two top policies
  • 8 alternate assignment types
  • 11 great cost-saving ideas
  • Hidden costs that could derail your program

Webinar presenters:

Angela Tan, CRP, GMS-T
Director, Client Development
CapRelo

Laura Wilkins, CRP, GMS
Global Assignment Manager
CapRelo

 

CapRelo presents this free, exclusive webinar through the WERC Learning Zone so you can learn more about creating a successful global relocation policy. This webinar is good for one CRP and/or GMS credit.

Register today for our October 26th Learning Zone Webinar: Managing Relocation Costs: Tips and Tricks of the Trade

Topics: caprelo webinars, WorldwideERC, Relocation Services, global mobility, global relocation

9 Measures to Control Global Assignment Costs

Posted by Amy Mergler on Thu, Sep 15, 2016

country_signs.jpgRecently, many companies have reduced, frozen or eliminated their relocation programs in an effort to save costs. However, to remain competitive, companies still need to place the best talent at the appropriate locations, and often that talent isn't available without a global transfer. In these instances, the proper management and oversight of relocation costs becomes imperative.

Learn more about managing global relocation costs with our free article.

How Can You Control Your Relocation Costs?

First, it's essential to actively manage expense packages. Though some companies prefer to set a standard relocation package across the board, when you're working with key talent, it's usually much more effective to be flexible. By compromising on certain points, you can keep your top talent happy and eliminate the risk of losing them in the relocation process.

With that flexibility scenario in mind, it's important to remember that no two global relocations are identical. Therefore, as a rule of thumb, whenever you're presented with a one-size-fits-all solution, you may wish to weigh it against some custom-fit solutions that take the bigger picture into consideration and can save on expenses in the long run. In addition, the measures listed below have proven to be effective in managing and reducing global relocation costs.

  1. Regulate cost-of-living allowances. There's often a significant difference between the costs of living in originating and host countries. Set allowances that are applicable to their respective locations, and recalculate cost-of-living subsidies regularly to reflect financial fluctuations in the host country's economy.
  2. Reevaluate host country housing allowance. It's reasonable for transferees to expect housing allowances in their host countries, but oftentimes the allowances represent high standards of living based on out-of-date data. To control these expenses, employ more conservative housing standards to determine host-housing allowances. Another approach is to set allowances that match home values in the localities transferees will be living and working. Also, review and adjust allowances each quarter to account for local real estate value and currency fluctuations.
  3. Avoid total lease payment. Unless absolutely necessary in light of the competitive environment, avoid providing zero-cost housing to transferees. Determine reasonable housing contributions that employees are responsible for. For some temporary positions, such as highly mobile postings managing the global rollouts of products and services, zero-cost housing may be the only way to keep employees productive. But in most corporate relocations, when transferees are accompanied by their families as well as household goods, a fair employee contribution to housing is usually expected.
  4. Employ a host-based salary system. By paying transferees salaries that are comparable to those of professionals in similar positions in the host countries, US-headquartered companies can save a lot of money without disadvantaging transferees. This way, transferees can maintain their standard of living in their new environments.
  5. Lower house-hunting trip reimbursements. It’s reasonable to reimburse transferees’ house-hunting trips to the host location, but international airfare, transportation at the location, as well as lodging and food can be expensive. Limit these costs by capping monetary reimbursement or reducing reimbursement levels for these trips. In many circumstances, when there’s flexibility based upon the transferees' needs, there will be opportunities to shorten or negate some costs associated with house-hunting trips.
  6. Reassess the costs of language training, cultural training services, home-finding and familiarization trips. Though these services are often crucial to a transferee’s successful relocation, there may be more cost-effective ways of providing them. Do some research and compare providers to see where and how you can cut these costs. Oftentimes, these providers offer different packages and levels of service. To assist you in making both responsible and cost-effective decisions, however, bear in mind service quality benchmarks that take into account client satisfaction. Rule of thumb: The best deal on paper isn’t always the best deal in practice.
  7. Utilize junior-level employees. According to a Worldwide ERC white paper, almost a quarter of companies predict the number of overseas developmental or trainee assignments to grow. That presents the opportunity to increase the ratio of trainee transferees vs. senior transferees when possible. Many trainees are willing to accept reduced relocation packages in exchange for gaining global experience and career growth opportunities.
  8. Cut hardship compensation and bonuses. Financial reimbursement on real estate losses, bonuses on fast home sales and additional compensation pertaining to host-country quality of life issues can all add up. Analyze these elements of your relocation package to see if you can cut or eliminate costs. Don’t forget the option of capping bonuses as a whole; so once a cumulative amount has been reached on bonuses, no further costs to the company accrue.
  9. Review your relocation program for other places to make adjustments and cut costs. There are likely to be numerous other aspects in your relocation package where you can make minor adjustments without negatively affecting transferees. For each possible adjustment, analyze how it will impact the relocation process and make your decision in accordance with its impact on the transferee’s happiness and productivity.

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Topics: Corporate Relocation Costs, international relocation expenses, global mobility, global relocation

Global Mobility: Ways to Help Your Employees to Assimilate

Posted by Amy Mergler on Thu, Jul 14, 2016

business-man-with-globe.jpgGlobal Relocations present unique challenges that your HR team, and your employees, do not encounter during a domestic relocation. When you help your employees assimilate to the new culture in the weeks prior to, and during, a global relocation, you will ensure a faster return to full productivity in the office, greater productivity in the long run and increased employee retention. What can you do to help make a global relocation as smooth as a move within the States?

Learn more about managing global relocations with our free guide. 

How Can You Help Your Transferees Assimilate to the New Culture?

  • Multiple Trips Abroad: 
    Help your employees (and their families) connect with local networking organizations, sports clubs and the like, made up of both locals and expatriates. Find similarities to home, while also helping employees and their families embrace the new culture prior to their global relocation.

  • Foreign Language & Cross-Cultural Training:
    Providing lessons on the local language and cross-cultural training will not only help your transferees acclimate more quickly and become more productive in the office, it can also make them happier following the move, which improves retention.

  • Educate Your Employees on Laws Affecting Expatriates:
    Health care laws that recently went into effect may help reduce costs for employees living and working abroad. Let employees know about other positive changes and benefits they may experience as a result of their global relocation, too.

  • Assist with Paperwork:
    Help your transferee navigate the confusing maze of paperwork that comes with a global relocation, including obtaining visas and registering children in their new school.

A global relocation is more complex than a domestic transfer, but by providing tools to assist your employees and their families adjust to the new culture, you can help ensure a successful relocation and faster return to productivity for your transferee.

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Topics: expatriate employees, language training, global mobility, trailing spouse syndrome,, global relocation

Controlling Global Relocation Costs

Posted by Jim Retzer on Thu, Jun 09, 2016

Aditi-Sharma-Jan-2015-relocation-destination-shutterstock.jpgCompanies that provide global relocation assistance for their employees can expect the usual concerns from their transferees, including selecting a mover, providing help with selling a home, support in the new location, and so on. With a global relocation, however, there are additional concerns like visas, international taxes, housing allowances and replicating previous living standards as closely as possible.

Learn more about managing global relocations in our free eBook.

Typical Global Relocation Services

In addition to the few listed above, other typical services during a global relocation include:

  • Assistance with managing relocation expenses
  • Household goods moving
  • Destination and arrival support services
  • Spousal support and counseling
  • Cross-cultural training and language classes
  • Locating quality schools for accompanying children
  • Ongoing support while becoming oriented to day-to-day life in the new location
  • Security for employees and their families
  • Personal transportation, including car purchasing, leases or company drivers

Strategies to Control Global Relocation Expenses

All these services are important, but they also increase the complexity and cost of global relocations. Here are several strategies you can employ to help control your global relocation expenses.

  1. Establish a fair ceiling for housing and related costs for transferees, making sure to account for the area’s monetary and real estate market fluctuations.
  2. Consider the length of the relocation. The longer the transferee with stay in the new location, the more the compensation rates should be in line with those of the host country. However, it is important to keep in mind that compensation should not fall significantly below what was previously earned; no employee wants to lose money as a result of a transfer.
  3. Get quotes from several relocation management companies, if you decide to use one. Determine what services are available and check customer ratings to assist your decision making.
  4. Carefully estimate the cash and other out-of-pocket expenses and resources needed for a transfer. Underestimating is one of the most common mistakes made – be sure to prepare a list of actual and anticipated expenses in advance.

A comprehensive global relocation policy will keep many factors within your control, but other factors affecting cost – the value of overseas real estate or global monetary fluctuations, for example – are not. If you allow for surprises when planning your transfer budget, you will be better prepared to get your transferees off to a good start in their new locations.

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Topics: Corporate Relocation Costs, global mobility, global relocation

Destination Services and Providers - Global Relocations

Posted by Jim Retzer on Tue, Dec 09, 2014

digital-world-map.jpgGlobal relocations often involve numerous moving parts for companies and major adjustments for professionals and their families. The best way to make the process more streamlined and comfortable is to rely on a destination services provider (DSP).

A DSP delivers professional services designed to help assignees and their family members experience smoother global transitions. DSPs can deliver a range of standard services as well as customized offerings based on a professional’s preferences and interests. The following are just a few of the highly useful services DSPs use to make your organization’s global relocations easier. 

Learn more about managing global assignments with our free guide.

Area Orientation

Adjusting to life in a new country is often the most overwhelming concern for professionals and their families. A DSP eases these concerns by providing in-depth area orientations that include neighborhood descriptions, housing market profiles, lists of medical facilities and even customized information that addresses an assignee’s specific interests. 

Home-Finding Assistance

The home buying and renting procedures can vary significantly in different countries. A good DSP makes this process easier by pulling together data on the local market, laying out buying and renting steps and explaining any legal requirements. If an assignee desires more hands-on help, relocation management providers can actually walk assignees through the entire home-buying or home-renting process, in addition to helping them rent or sell their old homes. 

School Searches

Relocation management services assist families in finding schools that offer the same or a higher level of education than their old schools provided. DSPs can also make sure children and parents are fully prepared for the start of school by gathering details on entrance exams and other enrollment considerations. 

Foreign Language Training

Strong language training is a crucial aspect of helping professionals and their families to feel comfortable in an unfamiliar location. While learning a new language can seem like a large undertaking, professional programs offer options to make the process easier – including at-home classes, classes at the office, and classes customized for each individual’s personal and professional needs. 

Cultural Instruction

It’s common to focus on language skills and forget about another essential part of moving to a new country – learning about that area’s cultural identity and nuances. While most languages have detailed rules and structures, a country’s cultural identity can be much harder to pin down. That’s where a DSP comes in to provide detailed knowledge on a country’s customs, etiquette, taboos and common business practices. 

Spousal Support

While most executives grasp the importance of providing training and service for relocating employees, many forget that it’s also essential to offer services for spouses undergoing the relocation process. Destination service providers can arrange for spouses to receive career counseling, information on recreational activities, opportunities for social interaction, and other services that may help them feel more at home.

 

It’s never too early to start incorporating these destination services into your company’s relocation process. In fact, the sooner professionals find the information and support they need, the more likely they are to enjoy a smooth adjustment and return to full productivity.

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Topics: international relocation services, destination services, global mobility, global relocation

Job Relocation: Why Employers Should Invest in Language Training

Posted by Jim Retzer on Tue, Jul 22, 2014

languages

For an employee, being relocated by his or her employer can be an unnerving process. Yet millions of people move every year at management's request, some of them moving globally to a place where the primary language spoken is different. Your employees will likely face language barriers, cultural barriers, perhaps even discrimination depending on where they are moving to and from. An global move must be managed very carefully, paying close attention to the needs of the person(s) being moved; language training is one very important part of the relocation process.

Find out more about managing global relocations in our free article.

Why Language Training?

It is not difficult to imagine what it would be like to be dropped into a country where you don’t speak the language. There is nothing worse than being lost in every sense in a foreign place. At the very least, one should have some idea of the language well in advance of leaving. Learning to speak a new language is a challenge at best for 99.9% of adults but there are accelerated learning programs available if one’s employer is willing to invest in courses for employees being moved.

Who Benefits?

Who benefits from language training? All parties involved benefit in one way or another. For the employee being moved, language training more fully prepares them for living and working in another country. The better they communicate with their new co-workers, the quicker they will be able to resume work and get back to full productivity. Struggling with the language can be costly in man hours spent correcting issues created by poor communication. Employees feel less stressed with fewer cultural and lingual barriers, and employers benefit from increased productivity as a result. There will be fewer complaints if all parties are speaking and understanding local language and culture, lessening the negative effects of an international relocation.

The Bottom Line

Every dollar invested in language training for employees who are relocating to another part of the world is a dollar well spent. The return on investment in cases such as these is profound. Not only does the employer retain an employee, they relocate a well-prepared employee who will be ready to hit the ground running once the relocation is complete. The employee is happy, his/her new co-workers are happy that their new peer speaks their language. Communication errors are less of a risk and productivity can resume without too much culture shock when the employee is prepared for it ahead of time. Language training: it’s a win-win proposition.

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Topics: job relocation, language training, relocating employees, international relocation services, global mobility, global relocation

Managing Global Relocation Expenses and Expatriate Salaries

Posted by David Macpherson on Wed, Jun 19, 2013

Global Mobility PoliciesManaging and controlling global relocation expenses and assignee compensation is always an employer concern. This is both natural and valid. Global relocations are often vital to company success.

Find out more about developing a global relocation policy in our free guide. 

Consider the following realities.

  • First, the company must accept that global transfers are costly. 
    It is impossible to attract the best employees without being the best employer. Attracting and retaining the highest performing employees demands that companies offer competitive relocation programs--US and internationally.

  • Second, managing these costs, while remaining competitive, is a challenge companies can overcome. 
    Take into account any currency differences to reasonably manage the costs of global relocations. Offer the assistance outstanding employees want, while being frugal wherever possible.

  • Third, compare compensation levels in the host country of the assignee, to arrive at salary control. 
    If the assignment is classified as 'short-term' with a rather rapid return to the US, you can use American compensation as your benchmark. However, when a long-term stay is projected, use the compensation range for the host country, assuming it is reasonable and appropriate for the assignees' responsibilities.

Expatriate Employee Expectations

It is unreasonable to expect global transfers to be successful without examining competitive salaries and cost of living issues in the host country. It can be equally unreasonable to assume that top employees will accept such a major move without appropriate compensation.

Losing money is not a transferring employee's expectation. As exciting as a global relocation may appear to your proven employee and/or new hires, their positive anticipation will dim rapidly and, possibly, permanently if the basics of their former compensation are not duplicated.

Managing Relocation Expenses

While it may be numerically impossible to anticipate and/or reduce many global relocation expenses, companies can manage them by applying foresight and comparing competitive offers. Some suggestions that have worked consistently include, but are not limited, to the following.

  • Control the subsidy level of cost of living allowances. 
    Whether you lower former subsidy levels or set maximums applicable to all global relocations, the company will reduce and manage these costs effectively.

  • Cap relocation housing monetary subsidies. 
    While host locality real estate values are outside of your control, you could cap housing allowances in light of home values in the immediate area of the country where your transferring employee will work and live.

    All subsidies should be adjusted on a quarterly basis to take into account currency fluctuations and other fluctuations in the local area.

  • Require the assignee to make contributions to related housing costs. 
    Typically, your company is not mandated to provide zero cost to the assignee. If the competitive environment permits, you can require the assignee to reasonably contribute to housing costs.

  • Find lower cost requirements for home finding trips, language training and assimilation services. 
    Do your homework. Search for lower cost alternatives to the major components of your global relocation services. Get quotes from top professional relocation firms, who may have already done an extensive analysis of providers and costs, which may save you money.

These tips will allow you to manage your global relocation costs and assignee salaries. Certainly, to attract and/or retain your top employees, you'll need to maintain your competitive edge. However, if the company is reasonable with their transfer offers, it will benefit from controlling and managing these costs as described.
 

 
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Topics: international relocation expenses, international relocation services, global mobility, global relocation

How To Reduce Global Relocation Expenses

Posted by David Macpherson on Tue, Jun 04, 2013

International RelocationGlobal relocations will cost employers dearly. However, not offering competitive relocation programs typically cost employers much more over the long-term. That doesn't change the wisdom of managing, controlling and cutting some global relocation costs wherever possible.

Learn more about global mobility and developing global relocation policies in our free guide. 

Assignee Compensation

Your company may or may not consider assignee salaries as a pure relocation cost. Yet, if the employer needs another staff member to complete the duties of the assignee, these salaries do become another relocation expense. Companies have two primary options for determining assignee compensation.

  • Home-based approach. While allowing for potential currency value differences, employers can offer salaries that match compensation applicable to equal responsibilities in the home country. Particularly valuable in retaining employees targeted for shorter term functions in different countries, this method often creates apples-to-apples comparisons for employees contemplating global relocation. This keeps the employer competitive with other companies.

  • New location comparison. Employers can also offer equitable compensation, while controlling costs, by duplicating new country compensation levels for similar positions. Regardless of additional benefits the employer offers, managing salaries based on similar responsibility levels is typically fair and equitable for the assignee.

Cost Cutting and Control Measures

Depending on your industry and competing company’s relocation policies, there are potential costs that can be reduced and managed to benefit the employer. Carefully assess the competitive environment for talented employees in both the home and host location. Taking any of these measures without such an evaluation might be risky if you want the best of the best talent.

  • Reduce 'hardship' bonuses and compensation. Liberal relocation policies often include hardship rewards for loss on home sales, bonuses for fast home sales and compensation for relocation quality of life issues. To save money, some companies reduce these awards and/or modify policy language to cap these monetary reimbursements.

  • Control cost of living allowance. Host country cost of living issues affect residents, either positively or negatively. Cutting or strictly controlling company subsidies for assignees can save considerable relocation costs.

  • Cap housing duplication and subsidies. If your relocation program includes promises or guarantees of duplicating the assignees' former home in the new location, you could re-evaluate the extent of this feature. For example, it may be nearly impossible or much more expensive to duplicate the assignee's former home in some countries. Eliminate enforceable guarantees and/or cap housing assistance to assignees. Another variation is to require the assignee to contribute some portion of the cost of duplicating his or her former home in the host country.

  • Reduce or cap reimbursement for house hunting trips. While difficult to eliminate home finding trips to the new location, international air fares alone for the assignee and family can be expensive, before housing and meals even enter the equation. Reduce former reimbursement policies and/or cap the monetary reimbursement level to cut some international relocation costs.

You can search for other potential awards and reimbursements, even minor ones, in your relocation program. Companies sometimes find that numerous minor cuts and caps, when added together, offer substantial savings and cost control. Often, these limits do not affect the assignee in a negative manner.

The company still must offer competitive global relocation programs to get the employees they want. However, there is no verifiable reason to offer awards and reimbursements that 'blow away' the competition. Should the company want to do so, they will reap many benefits. The question remains that you must weigh the benefits versus their costs to ensure that your global relocation policy accomplishes the goals the company craves.

In so doing, you'll offer relocation policies that employees want, while also reducing and controlling the short-term costs involved. The company will still have happy, productive assignees along with equally happy stockholders, finance department management and controlled expenses that tend to create impressive financial statements.

 

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Topics: international relocation expenses, international relocation services, global mobility, global relocation

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