CapRelo Blog

Global Mobility Snapshot

Posted by CapRelo on Thu, Aug 09, 2018

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.

Global Mobility Snapshot Infographic

Topics: global mobility, talent mobility, global mobility policy

Benefits of Using Global Mobility Management Company Compensation Services

Posted by Amy Mergler on Thu, Aug 02, 2018

Top view of successful businessman standing near the entrance of labyrinthCompensation 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.

The Value of Global Compensation Services

Topics: compensation services, compensation and benefits, global compensation services, global mobility management company, global mobility policy

5 Important Topics to Include in a Global Assignment Letter of Understanding

Posted by Amy Mergler on Thu, Jul 19, 2018

Image of businessman at airport looking at airplane taking offOne 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

Taxes Concept on File Label in Multicolor Card Index. Closeup View. Selective Focus.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.

Writing an International Letter of Understanding

Topics: global mobility, global assignments, global mobility management, letter of understanding, global mobility policy

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