CapRelo Blog

CapRelo transforms the global HR and employee mobility experience by combining the best in technology, people, resources and human touch experiences. Get to know CapRelo in our video below!

Millions of American workers relocate annually, many taking on international assignments as businesses develop and broaden their global mobility programs to take advantage of the expanding global economy. Here is a snapshot of global mobility in 2018.

Compensation services are so complex that it may make sense for companies to outsource them to a specialist. Global mobility management companies have extensive experience working with the regulatory requirements of different countries, so they know the relevant intricacies of local compliance and reporting. Because they understand the challenges the employer faces, they know how to relieve the employer of the burden of administration so the company can concentrate on more strategic objectives. In addition, they understand the requirements of compensation data collection by country and can assume this laborious task for the employer.

Global mobility management companies that offer compensation services have technology and processes in place that allow for fast, accurate and compliant reporting. This eliminates the need for companies to invest in acquiring these platforms and results in considerable cost savings.

In addition, they provide the required expertise and manpower. This prevents employers from having to invest in acquiring employees with this knowledge, which can be both challenging and expensive when the level of expertise needed to manage compensation services for a number of different global locations is taken into account.

Furthermore, ensuring accurate, timely payroll and reporting prevents companies from running into problems with regulatory and tax agencies at home and host locations. Being compliant and responsible not only prevents problems, it can pave the way for more business opportunities in the host locations.

A global mobility program can offer significant value to a company, not only due to the business opportunities it presents, but also because it facilitates the attraction and retention of quality talent. However, to remain in compliance with the rules and regulations of various countries, a well-run global mobility program needs accurate, timely administration and bookkeeping. Working with a global compensation services provider offers companies a cost-effective way to gain access to the expertise, manpower and resources needed to maintain centralized, organized payroll and tax reporting. And when the service provider assumes the responsibility of maintaining the latest technology platforms, it frees up the company and its employees so they can concentrate on their core business efforts.

We will be attending and/or sponsoring the following upcoming events. If you’re attending, look for us and say hi, because it's a great opportunity for us to stay abreast of the latest global mobility trends, as well as develop and strengthen trusted partnerships. 

southern California Relocation Council Summer Meeting and Wine Pull

Date: August 23

Location: Westin Carlsbad Resort & Spa, Carlsbad, CA

Attendee: Patrick Cacho

SCRC's summer meeting will feature a panel discussion on diversity and inclusion programs and their impact on global mobility policies followed by the annual SCRC Wine Pull. Funds raised from the Wine Pull will be giving to local SCRC charities.

Click here to learn more and register for the summer meeting.

If you can’t attend, please be sure to follow CapRelo on Facebook and Twitter for updates.

One way to help ensure global assignment success is to prepare an effective global assignment letter of understanding that outlines the pertinent details and benefits of the assignment in a way that leaves no room for misinterpretation. 

After your letter of understanding addresses specific information regarding the scope of the assignment, you can delve into the specifics of your global mobility policy and explain the benefits the employee will receive.

Explain Your Global Mobility Policy

Your letter should summarize the portions of your global mobility policy that are applicable to the employee. Among the issues your policy addresses, it is important to include information on the five topics below because they are:

• The most costly components of an assignment or transfer and
• Usually the greatest stressors to an employee, which can cause reduced productivity.

Relocation Expenses

When writing the letter, review your policies to determine what is relevant to the particular employee. While it’s not recommended to copy your policy verbatim into the letter, you should summarize:

• Specific expenses and the amounts the company pays for directly.
• Types of expenses that can be reimbursed, along with any limits. Note whether the employee is required to document each expense, should submit a consolidated summary or will be given a lump sum amount for miscellaneous expenses.
• The ongoing allowances for specific benefits.
• Expenses the employee is responsible for paying.
• Repayment agreement terms.

Moving Household Goods

Household goods shipments can be a significant part of your overall global relocation expense. The moving cost can vary widely depending upon whether the employee is relocating permanently or will be on assignment for a set length of time, the distance between the current and destination locations and the family size.

Global movement of household goods will typically include sea and air shipments and long-term storage. The letter of understanding should be clear on what is covered. Typical benefits include a 20-foot or 40-foot container and 500 pounds for an air shipment. Long-term storage is generally only provided for those on assignment, and for the length of the assignment.

The cost of storage and valuation coverage for household goods must also be considered. Your letter should specify the amount the company will pay for household goods transport, storage and valuation along with any limitations or restrictions.

Tax Implications and Assistance

Global assignments and relocation can have significant tax implications. The letter of understanding should outline the assistance provided, which may include a pre-assignment/relocation orientation with a third-party tax provider, tax return preparation assistance and tax equalization. It should also include details on the employee’s and the company’s responsibilities. The company’s tax provider may also suggest including a tax equalization addendum that outlines the company’s policy to be signed by the employee.

Immigration

The letter of understanding should emphasize the importance of compliance with global immigration laws and should outline the assistance provided by the immigration partner or department. The employee’s responsibilities to provide accurate and timely information and to follow all instructions regarding travel limitations of the host country should be clearly documented. The assignment or relocation cannot begin until required immigration documents are obtained.

Housing and Settling In Assistance

Getting your employee and their family settled into a new residence is crucial because it helps them to return to full productivity quickly. Each employee is unique. Some may need temporary housing while they search for a new residence. Your letter should reflect the level of assistance the company provides.

• Temporary Housing: Summarize what provisions the company makes for temporary living and for how long.
• Home Finding Travel: Summarize the assistance the company provides, such as home finding trips. Include the number of trips allowed, the expenses covered and the family members approved.
• Destination Services: Summarize the services the company provides, which might include home finding assistance, orientation to the new area, contacts with local schools, colleges, medical facilities, etc.
• Long-Term Housing (Assignments Only): Summarize the housing assistance provided, including monthly housing allowance based on family size and location, method of payment, utilities included and employee responsibilities for maintenance and upkeep.

Ideally, your letter of understanding should focus on the employee and the benefits of the new role while creating a positive impression and enthusiasm for the new opportunity. Make sure to outline the expectations and responsibilities in the new role to avoid any possible misunderstanding. Explain and summarize the relevant points from your global mobility policy, paying particular attention to the five topics discussed above.

Relocating globally or going on an assignment for a job is considered a major life event because it often requires an employee selling a home before moving the family to a new country and changing many of their typical routines. Your employee letter of understanding must cover a number of important topics, but without increasing your employee's anxiety.

A letter of understanding outlines the details and benefits of the assignment. This legally binding document basically serves as an addendum to the employee’s regular employment contract and lays out any varying or additional terms that apply for the duration of the assignment. As such, it must be signed by all parties. In addition to the assignment start and end date, job title and location, the letter of assignment must specify all contractual agreements, code of conduct, compensation and benefits, assignment-specific benefits such as moving expenses and repatriation allowance, tax equalization and other fiscal matters.

It’s important that the letter of understanding lay out all pertinent details of an assignment in a way that leaves no room for misinterpretation. Any lack of clarity could lead to misunderstanding, which in turn could lead to costly and time-consuming problems. This can be a drain on resources, and it can create a distraction for the employee and impact the success of the assignment.

The key to drafting effective letters of understanding begins with knowing your employees and focusing on them and their families. You can find sample templates on the internet to help you draft a letter of understanding, but unfortunately, many of them begin something like this:

Dear Mr. Jones,

This letter is to inform you that you will be transferred effective [date] to our location in...

Considering the upheaval a relocation will cause in your employee's life, this approach is rather abrupt. Here are some best practices to help you write an effective letter of understanding.

Discuss the Global Relocation or Assignment First

Your company has made the decision to relocate or send an employee on assignment to benefit the organization in some way. You may need to add talent to a business unit in another city, or to reduce it at the employee’s current location. You may want to move a manager to provide new leadership in another territory. You may even want to give a high-potential employee broader experience as part of a career development plan. No matter the reason, be sure you or the appropriate manager(s) discuss those reasons with the employee long before you write the letter.

Having a detailed discussion provides an opportunity to create enthusiasm about a new role by:

• Increasing the likelihood of an accepted offer.
• Providing a platform to discuss your global mobility policy and company-provided financial assistance.
• Clarifying the specific skill-building and learning opportunities available in the new role.
• Showing that the company values the employee and wants to make an investment in his or her future.
• Demonstrating that the employee is important to the growth of the business.

Holding a preliminary discussion shows respect for the employee and allows you to craft a letter tailored to that individual. In turn, you’re more likely to increase loyalty and productivity — and reduce the chance of a relocation offer being declined.

Outline the New Role

Your employee’s job title and responsibilities may remain the same in the new location. If that is the case, make sure the transfer letter of understanding includes the name of the person to whom the employee will report and the duration of the transfer or assignment. For employees taking on new responsibilities, you’ll also want to include the following:

• The employee's new job title or position.
• A description of any increased benefits, salary or bonuses.

Similar in some ways to an employment offer letter to a prospective new employee, this portion of the letter of understanding focuses on the specifics of the new role. It documents the job title, salary and related matters to eliminate misunderstandings later. The letter should be dated and signed by the appropriate manager, and be sure the letter contains:

• The employee's full name and current home address.
• Department names — both the current department and the new destination department.
• The effective date the employee should report to the new location.
• The anticipated end date in the case of an assignment.
• The name of the employee's new supervisor.
• The date by which the individual relocation and assignment benefits must be used.

After you proved this pertinent information, you can delve into the specifics of your company's global mobility policy and explain the benefits the employee will receive. Check back next week to learn about the five most important topics to include in your global assignment employee letter of understanding.

All successful endeavors are the result of an efficient operation or organization. Coherence, order and precision oil the wheels of process and reveal the value of efficiency. A company with high organizational capacity is one that can deliver. This is especially true for global mobility management.

When you engage with a successful mobility management firm, you reap the benefits of solution-based practices, better focus and a strong and vetted support network. Outsourcing your mobility management services takes the heavy lifting off of your hands so you can spend time and resources on the big picture: continuing your company's success. Ultimately, handing over the reins to a trusted and seasoned mobility company provides faster decision-making capabilities, quicker response times and a significantly reduced exposure to the risks involved in this process. 

A professional and experienced global mobility management company streamlines all internal business processes and becomes your number one resource for a smooth transition.

Efficiency Matters

Citing research that close to 50% of employees are still under the impression that global mobility management services are intended merely for supporting those relocating, HRO Today reported that providing strategic and expert advice to company leaders and stakeholders should now be an expectation in the industry. Rather than waste time and resources on an overly bureaucratic and complex system, you want a mobility management company that gets things done in a smart, fast and practical manner. You also want a provider that can deliver on tactical analysis benefiting your company's business decisions, talent acquisition and bottom line.

Consider the benefits your company can gain by working with a reputable global mobility management company:

1. Response Time

Working with a global mobility management company that understands your organization and its specific needs fosters a trusted partnership. The opportunity to build a relationship with a seasoned single point of contact who identifies with your company's unique strategies can really set a mobility company apart from the competition. Having that single point of contact is not just beneficial for human resources and company leaders, but for the relocating employee as well.

2. Streamlined Solutions

When you're in the midst of a relocation, there can be a lot of moving pieces and important milestones. Regardless of what you're managing, you need a digital solution that offers quick, easy and seamless access to all of your information in one place. It is essential to have data for suppliers and orders, taxes and payroll, and policies and process controls under one roof to manage relocations efficiently. Furthermore, when integrating sensitive data, it is also imperative to ensure the protection of the company and your employees.

A streamlined solution can help automate tasks and processes while keeping your company on track to reach financial goals, deadlines and business objectives.

3. Alignment with Business Strategy

As detailed by Deloitte in its "Global Business Driven HR Transformation" report, global mobility management solutions are no longer effective as a one-size-fits-all formula. Instead, a carefully crafted plan specifically tailored to your business needs is essential to achieve your goals and bolster talent development, helping to ensure success before, during and after the relocation. When a global mobility management company is efficient in its operations, companies can benefit from the focus on unique strategies and goals, as well as most cost-effectively utilizing existing talent.

Global mobility management companies capable of delivering knowledgeable and seasoned guidance to your organization are crucial in matching business and talent development, according to Deloitte's findings. Proper guidance ensures that relocations and assignments are based on insightful research and planning, sending the right employees on the right endeavors.

According to The Society for Human Resource Management (SHRM), talent management ranks as the number one worry among most companies. The data highlights the need for a global mobility management company to work successfully in tandem with an organization's existing talent management program. This supplements the current initiatives to boost productivity and drive competition.

4. Reduced Risk

Rather than trying to navigate compliance, legalities and the fine print on your own, work with the expert itself: a global mobility management company. Collaborating with a group of experienced professionals that will dive right in and get the job done not only increases efficiency, but lowers risk as well.

According to calculations from FIDI (the largest global alliance of professional international moving and relocation companies), failed overseas assignments are not uncommon and they can result in costly financial burdens of up to US $400,000. When you include airfare, salary and bonuses, school tuition, housing costs, transportation needs, visa fees, ancillary charges and the taxes associated with these reimbursements, mobility is an expensive investment for any company to make. To help secure a return on this investment, it's imperative to partner with an experienced, trusted and efficient global mobility management company.

Leaning on the expertise of a global mobility management company can make a positive difference in the moving and adjustment period for employees. As Deloitte explains, professional services and resources that help employees and their families during a relocation are much more likely to reduce the risk of failed assignments.

When you want your company's business to continue full steam ahead during a relocation, engaging with an efficient global mobility management company can help deliver ideal response times, streamlined solutions, alignment with your business strategy and reduced risk. When you choose the right mobility management partner, you can be confident your business will meet or surpass its goals.

We will be attending and/or sponsoring the following upcoming events. If you’re attending, look for us and say hi, because it's a great opportunity for us to stay abreast of the latest global mobility trends, as well as develop and strengthen trusted partnerships. 

Forum for Expatriate Management Dallas/Fort Worth Chapter Meeting

Date: July 25

Location: Verizon, Irving, TX

Attendee: Scott Williamson

The FEM Dallas/Fort Worth chapter meeting will discuss Robotic Process Automation and cognitive technology in key global mobility, HR, payroll and tax functions.

Visit here to check for registration information on or after July 1.

Pacific NOrthwest Relocation Council Summer Workshop and Golf Tournament

Date: July 26

Location: Twin Lakes Golf & Country Club, Federal Way, WA

Attendee: Patrick Cacho

The PNwRC event will include educational sessions, networking and an afternoon of golf!  

Click here to learn more and register for the summer workshop. 

If you can’t attend, please be sure to follow CapRelo on Facebook and Twitter for updates.

Developing a core-flex program can be challenging, especially for organizations that are inexperienced with corporate mobility.

Determining Precisely What Benefits to Offer

The choice of benefits should be competitive – but it should also be financially viable. The included services must be representative of the company culture and the level of employer support employees can expect, while at the same time fitting within the constraints of the available budget.

Balancing Core and Flexible Benefits

Again, this needs to be competitive and realistic. Adding more services to the core component might bring in more talent, but it could also result in a larger financial investment than necessary or even possible.

Establishing Reporting and Metrics Procedures

Organizations need robust reporting and metrics procedures to keep track of the costs and success of the program. Most corporate mobility companies provide client dashboards where this data is collected and analyzed for review. Employers that wish to manage this aspect in-house will need to integrate relocation reporting and metrics into their existing HR management systems.

Ensuring Consistency of Policy Application

It's critical to be consistent in applying the core-flex policy to ensure compliance and employee satisfaction. Establishing clear rules regarding qualifying factors is a requirement to make sure all decisions to provide specific services to employees are based on data, not personal preference or guesswork.

Developing New Processes

Companies should develop new processes to assess employees' eligibility, assign the appropriate services and accurately document each case. Clear and efficient processes reduce the chances of errors and complications. HR should collaborate with the mobility manager and any other stakeholders to establish streamlined processes that facilitate the implementation and periodic reassessment of the core-flex policy.

Creating a core-flex program is a complex endeavor, and one that requires a certain amount of expertise. Yet it’s also one that can yield considerable returns in terms of employee productivity and engagement, as well as improve employer brand reputation. For many companies, it is the optimal policy to blend the employer's strategic goals with employees' unique needs, providing service benefits while containing costs.

It can be helpful to work with a corporate global mobility company that can assist in developing a comprehensive program that contains mobility expenses, while simultaneously offering a competitive set of core and flexible services.

At CapRelo, we value employees with a sense of mission and service, and encourage our team to pursue a greater purpose both in the workplace and outside of it. To learn more about him and is role at CapRelo, I recently sat down with VP of Global Business Development, Pete Larkin. Or perhaps we should be calling him "Deputy Chief." 

Raised in Hartford, CT by parents who both worked for the state, it's no question that Pete was raised to work hard. His resume includes 20 years as an Assistant Professor in Psychiatry at UConn, 21 years of experience in business development and former PGA caddy for Lee Trevino for good measure. Following in his father's footsteps, he has also worked 20 years as a Volunteer Firefighter in CT, earning the rank of Deputy Chief. He and his wife, a Rehab Occupational Therapist, adopted and raised two loving children from Korea as infants. His son, now 30, is living and working in L.A. as an actor and his daughter, now 26, is living and working in NY as a writer.

While much of his personal time involves Irish music, cheering for the Red Sox and reading biographies, his most rewarding pastime is training and recruiting new firefighters. And while the work Pete accomplishes at CapRelo as VP of Global Business Development is essential to forming strategic relationships with our clients, it is Pete's cultivated experience as a businessman, family man and firefighter that makes employees like Pete our biggest asset.