Expanding Global Relocation Challenges
Years ago, only HR managers working at Fortune 500 companies were likely to find themselves faced with international mobility issues, because Fortune 500 companies were the primary employers moving people internationally. In today’s genuinely global economy, however, as more and more companies are discovering the benefits—and often, the necessity—of doing business worldwide, global employee relocation is an area that is increasingly likely to be included in scope for many HR leaders. While some companies with large volumes are designating global mobility specialists or other functional titles with deep specialty in the area, smaller and newer companies are also sending employees on assignment around the world, and managers new to relocation can find the area of global mobility deeply complex.
Some of the complexity is due to the changing nature of global relocation itself: for instance, the increase in assignment types, with shorter and more temporary forms making inroads on the traditional long-term assignments of one to three years or more. Another is the increasing difficulty of keeping up with changing, and often bureaucratic, regulations in many areas (e.g., compensation and tax compliance), that can sideline many programs. And yet another is the increasing need to ensure assignment return on investment (ROI), which means protecting the company’s investment in the assignment and in the assignee. These challenges require different policy considerations and approaches, compounding the information that new relocation managers need to know.
Three Key Tips for Managing Risk
Relocation managers have a big role to play in helping to mitigate the risk inherent in these challenges. A few fundamental tips can help set the right foundation.
1) Identify the right candidate!
A key factor, of course, is choosing the right candidate to begin with, and then ensuring that they are well prepared for success. This is an essential step because costs associated with a failed assignment—which often occurs due to the inability of the spouse or dependents to adjust to the new destination—may be far greater than the compensation, in itself potentially significant. Effective candidate assessment and readiness underline the importance of determining the need for providing support services to the transferee’s family, as well as to the transferee. This support not only includes host country services at the new destination, but may also include intercultural training and/or international language training.
2) Address compensation issues up front.
Compensation becomes an enormous—and often complex—issue that necessarily begins before any foundation for evaluating ROI commences; even before candidates have been selected for assignment. This advance preparation is due mainly to the aggregate costs that a company must be prepared to shoulder over the course of an assignment. Employers are finding a core need for cost estimations and accruals to track these expenses, both at the outset of the assignment and as it runs its course. And, as the assignment progresses, managing a compliant and comprehensive international assignment compensation program is key.
3) Understand the regulations of the new locations.
Another important consideration to a successful international work assignment can be working through the stringent requirements of various countries’ immigration laws. Both the importance and complexity of the immigration function have increased as countries have placed more emphasis on requirements and restrictions. Further, many countries’ immigration regulations are changing more rapidly than in years past; this often means that an assignee or dependent who is compliant today, may not be compliant three weeks from now.
Many countries’ tax laws are also more stringent now than ever before, so compliance has become paramount. Risk, both to the company and to its employee, has become a significant component of managing a global workforce.
Make sure you work with a trusted provider! Cartus’ experience in managing issues for our global clients has helped them reduce or eliminate significant risk. Our guide to Cartus International Assignment Compensation Services, which includes an overview of our robust compensation support services, including cost projections and accruals, is a must-read for companies that are considering sending employees on assignment. Also, thorough assessment and readiness preparation will help you make the decisions that aid in reducing attrition as well as the cost and impact of rehiring, thereby getting a head-start on increasing ROI.
For more information, write to us at TrustedGuidance@cartus.com.