CapRelo Blog

July Relocation Survey

Posted by Amy Mergler on Tue, Jul 25, 2017

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.

June Survey Results

1. Do you offer destination services to address issues associated with relocating your employees' families?

Yes: 50%
No: 37.5%
Don't Know: 12.5%

2. Which destination services do you offer? (Choose all that apply)

Research on Schools: 57.14% 
Spousal/Partner Support: 14.29%
Social Assistance: 28.57%
Research on Places of Worship: 28.57%
Unsure: 0%
N/A: 42.86%
Other (please specify): 28.57% (Orientation, Home Search, Locating Banking)

3. Which of the following are included in your mobility program? (Choose all that apply)

Home-Selling Assistance: 62.5%
Home Purchase or Rental Assistance: 50%
Household Goods Packing and Moving: 75%
House-Hunting Trips: 62.5%
Temporary Living Allowances: 62.5%
Unsure: 12.5%
Other (please specify): 12.5% (Currently provide a lump sum)

 

This month's survey addresses Global Mobility.  

Topics: relocation packages, global mobility, employee relocation, international relocation expenses

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

Controlling International Relocation Costs

Posted by Jim Retzer on Tue, Jun 03, 2014

global employees

Companies planning to provide international relocation assistance for their employees can expect to have the usual concerns from transferees: selecting a mover, help with selling an existing home, support in the new location, and so on. In addition, there are also visas, international taxes, housing allowances, and replicating previous living standards as closely as possible. Other typical services include:

  • Assistance with the management of relocation expenses
  • Household goods moving
  • Destination and arrival support services
  • Spousal support and counseling
  • Cross-cultural training and language classes
  • Locating quality schools for children who may be accompanying the transferee
  • Ongoing support while becoming oriented to day-to-day life in the new location
  • Security for employees and their families
  • Personal transportation car purchasing, leases or company drivers
While all these services are important, they help increase the costs and complexity of international relocations. Utilizing the services of a relocation management firm is an effective means of controlling relocation costs. Third-party relocation management firms work with a network of trusted suppliers and know how to make the most cost-effective use of resources.Whether you manage your relocation program in-house or utilize the services of a relocation management company, following are several strategies that have proven helpful in controlling international relocation expenses:
  1. Establish a fair ceiling for housing and related costs for transferees, taking into account the area’s monetary and real estate market fluctuations.
  2. Consider the length of the relocation. The longer the transferee will stay, the more the compensation rates should be in line with those of the host country. Keep in mind, however, that such containments should not fall significantly below what was previously earned; no employee wants to lose money as a result of a transfer.
  3. Offer the transferee financial incentives to reduce the amount of larger household goods to be moved. In addition to the extra expense, transporting some appliances, such as washers or other appliances may be counter-productive as power and other operating requirements in the new location may be incompatible with the appliances. This will spread some of the responsibility for expenses with the employee.
  4. Get quotes from several relocation companies to determine what services are available, as well as check any available customer ratings. As with movers, not all relocation firms are created equal.
  5. Carefully estimate the amount of 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 have a full list of actual and anticipated expenses drawn up in advance.

While there is much within your control, other factors affecting costs – the value of overseas real estate, for example, as well as international monetary fluctuations - are not. Be prepared and allow for at least a few surprises when planning your transfer budget for optimum assistance in getting your transferred employee off to a good start in his or her new location.

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Topics: Corporate Relocation Costs, international relocation expenses

How To Help Employees Assimilate To A New Culture During An International Relocation

Posted by David Macpherson on Tue, Jul 09, 2013


International relocations typically involve assignees adapting to a new, very different culture. Even a transfer to English-speaking countries requires some language training, to understand different word usage, and cultural variations.

From both an assignee and employer perspective, the quicker the transferred employee assimilates the new culture, the more beneficial the international relocation. Adopting the following suggestions can make your international relocation policies more successful for both assignee and company. 

Culture Assimilation Services

  • House hunting trips. Depending on your lead time for the relocating employee, multiple house hunting trips, along with finding an appropriate residence, help assignees understand and assimilate the impending cultural differences they'll face.

  • Language training. Although American assignees transferring to English-speaking countries must often deal with some different spelling of common US words, the local usage and meaning of other words can present a short-term challenge. Employees transferring to some other global locations, such as Berlin, Paris or Tokyo, encounter even greater challenges. Language lessons focused on more common words and terms help assignees communicate and assimilate the new culture quickly.

  • Familiarize assignees with local laws. Just as in America, local laws in different areas of the country can be 'quirky,' to be polite. These differences in US laws can be even more confusing in the destination countries. Offering information on local laws helps assignees better assimilate the legal culture differences in the new country.

  • Help assignees navigate the confusing waters of documentation requirements. Required documents in destination countries can be vastly different from common documentation in the US. Even common, simple documents that we often take for granted in America, such as obtaining drivers' licenses, can confuse transferred employees. Work visas and permits can be even more baffling to expatriates. Helping your assignee manage these initially-confusing documentation requirements increase the success of your international relocations.

  • Assist assignees with children register for school. Do not overlook this important requirement in your relocation policy. Employees with families may want English-speaking top schools or local schools for their children to retain their American culture or assimilate the new country's culture and language. The requirements in countries with dramatic cultural differences often also have substantial school registration 'red tape.'

Employee and Employer Beneficial Features

Assimilating the new culture has important ramifications, as vital for the company as they are for the transferred employee. For your assignee to immediately contribute with high performance, consider the following issues.

  • Prepare the assignee. Once the transfer is proposed and accepted by the employee, employer preparation for the future assignee should begin, particularly surrounding language and cultural differences. Properly preparing the assignee by offering cultural information and language lessons may be the most critical component of successful international relocations. The real value to both assignee and the company cannot be overstated. Just as proper preparation helps students pass difficult exams, athletes perform better in big games or public speakers deliver more impressive talks, preparing employees for the cultural and language differences they'll face leads to similar superior performance.

  • Clearly state international relocation policies. Because of the importance, cost and significance of international relocations, employers should take great care in adopting and publishing features of their program in clear, concise and detailed language. The sheer immensity of employee transfers to different countries demands that companies leave little--preferably, no room--for misinterpretations or misunderstandings by their assignees in the monetary or expert assistance offered.

  • Partner with experts in the destination country. This is the final major component in a successful international relocation. Your company can help ensure a comfortable relocation by enlisting the aid of experts familiar with relocating employees to the experts' country. If natural language barriers exist, these professionals should be bi-lingual to effectively communicate with the assignee, eliminating misinterpretation, while helping the transferring employee assimilate the new culture rapidly.

These international relocation services benefit both assignee and company. Cultures are always a bit confusing to assignees, at least in the short-term. Companies that offer extensive preparation help the assignee become more comfortable with the relocation.

Comfortable employees perform better. Even transfers within the US can present local cultural and corporate culture differences that may confound the transferred employee. International relocations multiply the "cultural difference factor' by some level, typically a large exponent. Comfortable assignees usually reduce the 'learning curve' to a minimum.

Use these suggestions to improve your international relocations, which will translate to increased bottom lines. Always stress the positive effects of these transfers, while backing up company claims with services that help employees transfer with comfort by assimilating the new, local culture rapidly.

 

4 Tips for a  Smooth International  Relocation

 

Topics: international relocation expenses, international relocation services

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

How To Make An International Relocation Go As Smoothly As A US Move

Posted by David Macpherson on Thu, May 30, 2013

2349684.jpgYou may, at first, believe that an international relocation as smooth as an intra-US transfer is impossible. Not true. Much depends on the professionalism and scope of the components of your international relocation policy. Because of the perceived uncertainties of many country relocations, consider using a proven employee relocation firm instead of potentially over-taxing the time and ability of your HR department.

Incorporating some popular features of your domestic relocation policy, while adding some internationally-focused components, often helps both assignee and your company enjoy a successful employee transfer. Among the features that typically apply to US and international relocation programs are the following.

Relocation Services Applicable to US and International Transfers

  • Home selling assistance.
    Employers can offer both monetary rewards for fast sales or loss on sale compensation, along with expert professional assistance.

  • Home finding help.
    Important services for US transfers, offering monetary and/or expert assistance in finding an appropriate residence in other countries takes on much greater importance. Policies that offer multiple house hunting trips abroad tend to be the most successful component for both assignee and employer.

  • Expert documentation help and features.
    Assignees without substantial world travel experience appreciate assistance with procuring necessary documentation. For example, as a tourist, assignees may only need a valid passport. However, as an assignee, moving the family to a new employment location, documentation needs multiply. Valid visas and/or work permits issued by the country can be time-consuming and frustrating to receive. Expert help in getting these documents smooth out the relocation process immeasurably.

  • Provide understanding of country laws and responsibilities.
    Local laws within the US can often be quite different and initially strange to assignees. While this feature is often part of US relocation programs, it takes on greater importance for international moves. Since 'ignorance' of local laws seldom is a valid defense for infractions, offering information and suggestions on local laws can prove invaluable to the assignee.

International Relocation

  • Language lessons.
    It's counterproductive to depend on company translators for more than the short-term. Offering at least rudimentary training in the language of the destination country helps your assignee on the path to communicating clearly with local employees and others in the new location.

  • Explain major cultural differences.
    Whether as simple as the Japanese custom of bowing, often in lieu of a traditional handshake, or highly complex as the deep cultural differences of some other countries, advising your assignee of these differences makes the assignee more comfortable, less apprehensive and better attuned to cultural differences.

Adopting and incorporating these services into your international relocation service policies will pay back the company many times over in the future. It is unreasonable to expect an assignee, however seasoned, to be totally comfortable in a new country.

However, offering these few features can remove much of the anxiety, concern and apprehension assignees typically face with international relocations. The company will quickly have a high-producing employee, as he or she will quickly meld into the new local and corporate culture as a valuable decision-maker.

 

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Topics: international relocation expenses, international relocation services

International Relocation Policies: What's Best for Your Company?

Posted by David Macpherson on Tue, May 28, 2013

Corporate relocation programs are costly. When your company relocates employees internationally, the cost – and the importance – dramatically increases. You probably realize that the short-term cost pales in comparison to the long-term employee contribution to the company's bottom line.

reeditor-03-d2-2015-top-trends-in-global-mobility-in-2015_3946.jpg

U.S. employee relocations are complex. International relocations are off the charts complex. However, you should adopt policies that benefit both your company and the assignee. Consider the following suggestions to facilitate the international relocation process. International relocation services reduce assignee stress and promote better transfer results.

Popular – Successful – Relocation Service Options

  • Passport services. While some people formerly considered getting a passport a confusing, mysterious, time-consuming process, since 9/11 the process has come under even more scrutiny. Helping your assignee obtain or renew an expired passport is a valuable service.

  • Visas and work permits. Another sometimes mysterious process, getting appropriate visas and/or work permits in different countries can cause assignees to lose time and focus without employer help. Country policies for issuing proper documentation can differ widely.

  • Destination services. International transfers can be tougher on the family than on the assignee. Questions and concerns arise at a rapid rate, particularly about the quality of life the assignee's spouse and family will face. Helping them settle in to an initially strange new location is valuable.

  • Cross-cultural training. A country's language and culture can be perplexing. Relocation policies that include language training and explaining the new country's customs go a long way to smooth the transition to an international location.

  • Moving household goods. Along with the excitement and anticipation of moving to a different country, comes the stress of packing, moving and unpacking household goods. Moving a household is more than transporting just furniture and appliances. It also involves moving a lifestyle and irreplaceable items.

  • Home sale assistance. Nothing creates more anxiety than worries about a timely sale of a current residence and renting and locating another home. The anxiety level ramps up considerably when an international move is immanent. Employer assistance can be monetary, enlisting experienced professional help or both.

  • House hunting trips. International relocation house hunting trips deliver multiple benefits to the employer and the assignee. Along with helping find an acceptable home, the assignee and family also get a 'taste' for the new culture they'll be entering. This helps them become more comfortable in their new location – and country – before making the final one-way move.

The company benefits from offering these relocation services on various levels. Consider the following benefits the employer receives.

  • Assignees endure much lower stress levels. Knowing that the company – or a top proven relocation firm – will assist the transfer, the stress factor diminishes, sometimes disappears.

  • Transferred employees and their families assimilate to new cultures faster. Simply moving from Maine to Texas in the U.S. can be a short-term dramatic culture change. Relocating from America to a new country can be a longer-term shock to an assignee's psychological system. These relocation services help assignees become comfortable with new cultures and help employers integrate employees into their new environments.

  • Language lessons help assignees communicate with other company employees indigenous to the new country. Unless employees are transferred to another English speaking country, there can be language barriers. Some might say that even transfers to London or Perth pose some short-term language differences. Moving to other locations, such as Berlin, Brussels, Tokyo or Beijing, pose more daunting language challenges. Prepping soon-to-be-transferred employees with language training helps the assignee and the company better communicate with co-workers.

  • Employees arrive at their new, location ready to produce, without extended down time. The cost of offering these international relocation services is minor as compared to the input a top-performing employee can bring to your company.

The combination of less stress, faster assimilation, at least rudimentary language skills and family settlement helps the company get the most out of its transferred employees. The typical settling in issues and concerns about an international move often result in low assignee production for some period.

Offering these relocation services can often minimize the all-too-common 'transfer syndrome' that translates to lowered production. Your employee will be energized and anxious to contribute immediately. The company wins big, as the assignee begins contributing to the bottom line from day one.

These services smooth out the entire international relocation process to keep your company operating at peak efficiency without any significant interruptions. You can attach appropriate operational and monetary benefits you wish. The company wins under any scenario.

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Topics: international relocation expenses, international relocation services

Help Employees Adapt to New Culture During International Relocation

Posted by Tamara Bianchi on Wed, Feb 22, 2012

International relocation presents unique challenges that employees and your HR staff do not face during a domestic relocation. When you help your employees assimilate the foreign culture in the weeks prior to, and during, an international relocation, you'll ensure greater productivity in the long run, a faster return to full productivity in the office, and increased employee retention.

International Relocation

How can you help make an international relocation go as smoothly as a move within the states?

  1. Multiple trips abroad can help your relocating employees assimilate the new culture. Help 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 embrace the foreign country prior to their international relocation.
  2. Foreign language lessons not only make your relocating employees more productive in the office, but also make them happier following the move, which improves retention.
  3. Help your employees make sense of laws affecting expatriates. New health care laws slated to go into effect in 2014 and 2015 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 international relocation, too.
  4. Help your employees navigate the confusing maze of paperwork that comes with international relocation, including obtaining visas and registering children in a new school. A relocation management company accustomed to dealing with international relocation services can help this process go smoothly, especially if this is the first international relocation for your HR staff.

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Topics: international relocation expenses, international relocation services

Managing International Relocation Expenses and Expatriate Salaries

Posted by Rick Bruce on Thu, May 26, 2011

There are several methods to calculate expatriate salaries during international relocation services. One of the most common, albeit often the most costly, is the home-based method. 

V  CRS KristinS Blog Posts Blog Photos cut expenses resized 600

This method looks at the cost-of-living at the expatriate employee's home base, and calculates the salary based on those figures. This may result in an expatriate being paid more than his local counterparts, but is a fair arrangement to employees, especially for short-term assignments. 

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International Relocation Expenses to Cut

Even if you use a home-based system for calculating salaries, there are other ways you can reduce international relocation expenses.

  • Reduce the location allowance by taking into account “hardship” in the home location, as well reduce or eliminate the hardship allowance or any transferee bonuses
  • Select a lower level of subsidy for the Cost of Living Allowance
  • Use more conservative housing standards to determine host housing subsidies
  • Let the employee contribute to home housing costs
  • Reduce or eliminate familiarization trips, language lessons and other benefits, or find lower cost ways to offer these services

Reduce International Relocation Expenses with a Host-Based Salary System

With most international relocations, U.S.-headquartered companies can save money by using a host-based system to calculate salaries, where employees are paid based on the cost-of-living and average salaries in the host country. 

 

A Guide to  Relocation Costs

 

Cut Costs with Trainees

Twenty-three percent of companies expect an increase in the number of trainee or developmental assignments overseas, according to a white paper released by Worldwide ERC. Many of these employees are willing to accept a reduced salary or relocation package in exchange for the experience of an international assignment. 

This is good news, since 44% of the companies surveyed are looking to adopt a “low-cost alternative package” in order to cut international relocation expenses.

Topics: relocation packages, international relocation expenses, expatriate employees, international relocation services

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