The EMEA region calls for special considerations when managing relocation.
By Jonathan Langueneur
As the world becomes more globalised, cross-border transfers are becoming more common. Permanent relocations can be a win-win for both organisations and employees alike; they can help companies achieve talent and workforce management goals whilst offering workers personal and professional development. They are also an effective way for companies to develop or retain talent, especially in the EMEA region where employees have greater freedom to move across borders.
Whilst permanent relocation best practices and industry standards continue to evolve, a recent analysis of industry programmes and relocation benefits conducted by Graebel Companies, Inc. found five key areas that HR managers should consider in 2018 when transferring employees across borders.
1. Employee benefit packages. In the past, permanent relocations came with incremental costs that discouraged employees from accepting these positions. Companies can lessen those burdens by offering special benefits above the minimum compliance requirements. This can include:
- a housing allowance;
- destination support;
- a furniture and appliance allowance; and
- additional healthcare coverage.
Organisations should take into consideration the employee’s level of seniority and the justification of the transfer to determine the benefits offered. In instances where the employee has elected to relocate, companies may not need to offer as many incentives, but they should still support the move with a benefits package to help offset the additional costs as standard practice.
2. Orientation and preparation. In order to ensure a successful permanent relocation, organisations need to provide their transferees with the tools needed to navigate cultural differences. Most companies offer preparation assistance for employees and their spouses through instructor and online cultural training. This ensures that employees approach their new destination with realistic expectations regarding their new lifestyle and experiences.
However, in the EMEA region, this service offering has become less common. It’s often not considered essential in relocation cost estimates, and transferees are simply expected to recognise that there will be cultural differences between their home and host countries. When deciding whether or not to offer orientation and preparation services, companies should closely examine these cultural differences as well as the comfort level of the transferee. However, if the host country speaks a different language than the home country, language training is a critical service that should be offered to support the transferee’s local work life and general adaptation. In fact, the study found that 48 per cent of companies offer language instruction for transferring employees and their spouses, whilst 14 per cent offer language instruction only to employees.
3. Housing-related benefits. On top of concerns about uprooting their lives and families, many relocating employees have housing-related challenges to deal with -from selling their current homes to finding a home in their host country. Transferees who have previously relocated on assignment packages expect their companies to pay for advance trips to explore housing options in the new country. The study found that 86 per cent of companies offer company-sponsored, pre-transfer home-finding trips to employees and their spouses. These trips are typically five days, report 42 per cent of respondents. Combining advance orientation trips with business trips and meetings with local mangers is an efficient way to engage employees and their families whilst also preparing for the upcoming relocation.
4. Destination services. The sooner transferees and their families feel at home in their host countries, the more successful their relocations will prove to be. Satisfied transferees are happier and more comfortable in their host countries, ultimately leading to increased productivity which benefits the company. Organisations need to demonstrate to their transferees that they will do everything they can to support the relocation, particularly in the complex areas of immigration and tax where expert guidance is especially needed. This will foster stronger permanent relocations because employees know they are being taken care of.
5. Repatriation. Whilst a permanent relocation suggests no need for repatriation services, repatriation entitlement periods are commonly included in benefits packages. Maintaining a safety net and the option to return home if necessary is a key priority for relocating employees, especially those with families. Many organisations view employees on permanent relocation assignments as residents of their host countries after one to two years. Typically, in-country benefits are phased out over time to the point where employees are given the option to remain in the host country, return home, or embark on a new relocation.
Organisations need to consider the potential cost of repatriating transferees when building out permanent relocation cost estimates. These estimates should examine the costs associated with difficult tax and immigration issues, and should determine if the host or home country will pay for repatriation costs. For example, immigration-related issues are not as difficult or expensive when repatriating from Germany to France, but become more of a burden when repatriating from Morocco to France.
When planning successful cross-border transfers, companies must establish a programme that best fits their goals, culture, and resources whilst offering competitive benefit allowances. As more companies of all sizes achieve multinational status, search for cost-efficiencies, and seek to convince key employees to accept global relocations, standard permanent relocation programme offerings will continue to evolve. Organisations are adapting by designing relocation packages that are built less on compensating employees for relocating, and more on wider company performance and employee talent and development goals. This creates a win-win relocation opportunity for both sides.
Jonathan Langueneur is director of account management at Graebel Companies, Inc.