CapRelo Blog

Controlling Global Assignment Costs

Posted by Amy Mergler on Thu, Dec 06, 2018

Business man pulling a big green dollar sign concept on background

Finding a balance between employee support and cost management when overseeing global assignments is a challenge, but it can be done. Most importantly, it's imperative to properly plan for assignments and actively manage expenses.

No two global assignments are identical, so rather than creating a one-size-fits-all solution, you may opt to evaluate some custom-fit solutions that take the bigger picture into consideration to create opportunities to save. In addition, you may consider these measures to help manage and reduce global assignment costs.

Assignment Cost Control Measures

  • Establish goals and select the appropriate candidate for the assignment. To avoid the cost of a failed assignment, one of the most important steps is to properly plan your business goals and objectives to screen candidates and identify the best talent for the assignment. Candidates can be assessed not only on their job skills, but also on their ability to manage and adapt to a different culture and environment.
  • Review your assignment program regularly. There may be areas in your program where minor adjustments can be made to reduce costs without negatively impacting employees. For each possible adjustment, analyze how it will impact the relocation process and how it will affect your employee's productivity during the assignment.
  • Regulate cost-of-living allowances. There may be 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. Use a salary cap when calculating the COLA to further contain costs.
  • Reevaluate host country housing guidelines. To control housing expenses, employ more conservative standards to determine guidelines for host housing using the most current data available. Remember to review and adjust the guidelines regularly to account for local real estate value and currency fluctuations.
  • Lower house-hunting trip reimbursements. International airfare, transportation at the location, as well as lodging and food can be expensive. Reduce these costs by limiting the number of days allocated for these trips. Unless necessary for school enrollment, limit trips to the employee and spouse/partner only.
  • Reassess the costs of language training, cultural training services, home-finding and familiarization trips. Though these services are often crucial to an employee's successful assignment, you may be able to do some research and compare providers to determine if there are more cost-effective ways to provide them, such as providing web-based language training. Pay attention to service quality and client satisfaction to ensure you make both cost-effective and responsible decisions.

Managing Global Assignment Costs

Topics: global assignment costs, managing costs, global assignments, global mobility, global relocation

Webinar - My Way, your Way, Our Way

Posted by CapRelo on Tue, Sep 11, 2018

September 2018 WERC Webinar 1


In a global marketplace, it's important for U.S.-based global mobility leaders to strike the right balance when working with global colleagues and customers.

Join us on Tuesday, September 18, 2018, at 11:00 a.m. ET for our WERC Learning Zone Webinar: My Way, Your Way, Our Way, where we will discuss a case study that encapsulates the pain points U.S. global mobility professionals have experienced when failing to get buy-in from their foreign counterparts.

In this webinar, you’ll learn:

  • Examples of situations global mobility professionals have experienced
  • The critical importance of understanding diverse assumptions about effective communication, rules vs. expectations and hierarchy
  • How to strike the right balance to communicate effectively

 

Webinar presenters:

Chris Finckel
VP, Client Development
CapRelo

Nigel Ewington
TCO International

 

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

Register today for our September 18th Learning Zone Webinar: My Way, Your Way, Our Way.

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

Controlling Global Mobility Costs

Posted by Jim Retzer on Fri, Oct 13, 2017

Aditi-Sharma-Jan-2015-relocation-destination-shutterstock.jpgCompanies that provide global relocation assistance for their employees can expect the usual concerns from their employees, 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 assignments in our free eBook.

Typical Global Mobility 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 Mobility 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 mobility expenses.

  1. Establish a fair ceiling for housing and related costs for employees, making sure to account for the area’s monetary and real estate market fluctuations.
  2. Consider the length of the assignment. The longer the employee will 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 mobility 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 budget, you will be better prepared to get your employees off to a good start in their new locations.

Global Assignment Guide

 

Topics: Corporate Relocation Costs, global mobility, global relocation

Global Assignment Services

Posted by Amy Mergler on Fri, Jun 16, 2017

crumpled paper and traveling around the world as concept.jpegAs an HR director, you may have encountered a situation similar to the following: Your company is planning to open a new sales division in Europe and will relocate several members of the sales team to the new office. You and your staff must take on the responsibility of coordinating their relocations.

A global relocation is more complex than a domestic transfer, which means there are more details to take into account. Many of the details – from the actual move to expenses – may not even have occurred to you. Here are just a few things you need to consider.

Assignment Services

Remember when it was a hassle to get a passport? Now, you likely also need to think about taxation, compensation, immigration.

Language and Cross-Cultural Training

When traveling, it takes a while to become accustomed to a new country’s language, culture and customs. If traveling for pleasure, this doesn't usually pose a problem because it doesn’t need to happen quickly. However, when employees have to adjust to a new worksite in a foreign country it can mean a delay in productivity.

Destination Services

Don’t forget the employee’s partner and family. This is a tough transition on them, too. Quality-of-life questions are a real concern for the relocating family. Will the neighborhood be nice? How about the cost of living in the new country?

Departure and Destination Housing

We all know the anxiety that goes with selling a home in this uncertain economy. If the employee is in another country, worrying about their home sale situation can be a major distraction from work. You want to do everything you can to help with a smooth transition and get your employee back in productivity mode. If the employee opts to rent out their home, property management services are also a good option.

Moving a Household

Moving is one of the most stressful life events, even when it's a positive exciting opportunity. It's important to manage this aspect of the relocation process as efficiently as possible to eliminate as much stress on your employee as possible to ensure a quick return to productivity in the new location.

 

Global Assignment Guide

 

Topics: global mobility, global relocation, international relocation services, Relocation Services

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.  

Create your own user feedback survey

Topics: relocation taxes, global relocation, tax impact of 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: lump sum package, relocation packages, global relocation

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

Posted by Amy Mergler on Thu, Oct 20, 2016

Relocation Costs Tips and Tricks 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?

Our lively discussion with global relocation experts who are on the front lines of the industry shared 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

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

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

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

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

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