Deploying an employee or a team of personnel overseas is a task that requires a high degree of professional relocating expertise, including planning, and knowledge and contacts local to the destination. We look at some of the practical considerations for HR and global mobility teams responsible for implementing overseas relocation projects.
Is there a relocation policy in place? The relocation policy should inform both the employer and relocating employees as to what to expect from the relocation. It should also be readily available to all members of staff and regularly updated. The policy should include as a minimum:
- Details of the features of the relocation package and what elements of assistance are included. For instance, does the package include a budget for the employee to pay for their own removal or will the employer arrange the removal?
- Is there a process in place for a relocating employee to visit the new overseas location before their move?
- What are the accommodation arrangements for relocated employees? For instance, will the employer arrange rented accommodation, or will the employee be expected to find their own accommodation, whether rented or owned?
- What are the arrangements for accompanying family, for instance, school placement and fees?
- Cost of living allowances
Generally, when an employee relocates internationally, they will be offered a relocation package but what should HR consider when approaching relocation package negotiations with the employee?
- Is there provision for a relocation package in the employee’s contract? This is generally known as a ‘mobility clause’. If so, HR are obliged to honour that clause so that they are not deemed to be in breach of contract.
- Does a relocation policy exist? If so, this will explain what is included in a relocation package and how to approach the process of negotiation.
- The specific details of the relocation, e.g. what costs will be involved in the move and will family members accompany the employee overseas?
- How will the relocation affect the employee’s salary and career prospects? For instance, will this be a promotion for the employee?Who will arrange the move itself, the employer or the employee?
- How will the financial element of the relocation package be paid, for instance, will the employee receive a lump sum prior to the move or be required to provide invoices and receipts during and after the move to receive a reimbursement?
The above factors and the negotiation will arrive at exactly what costs and assistance are included in the relocation package, for instance the cost of the move itself, i.e. moving the furniture and belongings of the employee to their new location, the costs involved in obtaining a visa or other immigration permissions to work in the new location, finding new accommodation, for instance, will the employee buy a new home, in which case they will generally need to visit the new country to carry out a home search and purchase.
Alternatively, the employer may organise a rental property. Also to be factored could be cost of living allowances, travel and transport costs to the new location and temporary accommodation, for instance, while the employee searches for a property to buy.
Preparing your employees for the move
The obvious benefit to relocating an existing employee to an overseas assignment is that it saves on the costs of recruiting a new member of staff and that the employer is already aware of the relocating employee’s skills and experience.
Overseas relocation can involve a high level of expense for the employer, so it is always to the best interests of all involved that the employee is prepared for the move and their life in a new country.
Employee visit to the new location
This is especially useful where the employee wishes to carry out a property search before their move, but they should be encouraged to visit the new country where they will be living so that they can familiarise themselves with the local culture, the neighbourhood where they will live, and the business premises where they will work.
It may be useful to discuss the arrangements for this visit as part of the relocation package negotiations, for instance, who will pay for the visit, will family members accompany the employee, and will it involve time with the employee’s new manager and colleagues?
Provide information for your employee
Do your best to educate your employee on the country they will be moving to and the local culture, for instance:
- Generalised information on the country and more localised details on where they will live and work
- Languages spoken in that country, especially where it will be necessary for the employee to learn a new language
- Customs specific to that country, e.g. clothing, religion, daily routine
- The local transport system
- Currency and the local banking system
- Local risks and health issues, for instance, will the employee be required to have certain jabs before entering the country?
Encourage your employee, and their family, to carry out their own research too. Relevant expat forums may be especially useful for this purpose and provide a way to make connections before the move overseas.
Arrange language lessons
Where the employee will need to learn a new language, you may wish to arrange the relevant lessons or provide materials for this purpose.
Where you are not paying for the language training, you may wish to point the employee to language courses and resources.
What is involved in arranging the move?
When it comes to arranging the move itself, that is, transferring the furniture and belongings of the employee to the new location, there are several factors you should bear in mind:
- Which removal firm will you use? You may already have a removal firm that you have used in the past and are happy with, or it may be that you need to receive quotes from prospective firms. Getting at least three quotes is always recommended.
- How will the items be transferred? This will depend on the new location and what is being moved. Will the items be transferred by air or sea, or a combination of both?
- How large is the load that is being moved? Will the employee bring all of their furniture and belongings because the whole family is relocating overseas and the intention is to set up their life there for the foreseeable future, or is a smaller load being moved for a temporary assignment?
- How far is it to the new location? Is it a relatively short move from the UK to a close-by European city, or a distant location such as New Zealand or the US?
- Where will the load first arrive in the new location, i.e. which sea-port or airport? This will have an effect on the applicable custom duties and mode of transport from there to the employee’s new home.
- What time of the year will the move take place? This may affect the cost quoted by the removal firm.
- For a long distance move, you may consider taking out removals insurance. Who will arrange and pay for this insurance, you or the employee?
- Will it be possible to transfer the employee’s belongings straight to their new home? Where the employee will be in temporary accommodation initially, perhaps until they purchase a new home, or where there is any other reason why their belongings can’t be delivered immediately, it may be necessary to hire storage space. Who will arrange and pay for this, you or the employee?
- Customs duties may be due on the employee’s removal load when it enters the new country, although generally this charge will be waived because the items being transferred are for personal use. This waiver doesn’t apply to every personal item however, for instance, the employee’s car and neither is it used by every country. This is therefore a detail that must be investigated thoroughly before the move, regardless of who will pay for any customs duty charges.
Will the employee be required to obtain a visa or other immigration permission to live and work in the new country? For instance, in the US, the L1 visa is used for intra-company transfers.
If a visa or other form of permission is required, how long will this last, e.g. the above L1 visa generally lasts for 3 years?
Where family members will accompany the employee, will they be required to obtain a visa in their own right, or can they make a joint application with the employee?
Are there any restrictions on their work and life in the new country under this visa?
Where the employer will fund and/or sponsor the visa, it will be necessary to ensure that the correct visa is applied for. It will also be necessary to check timelines for the application, for instance, processing times and whether the application can only be made during a certain part of the year. Failure to do this may mean that a visa is not obtained in time to allow the employee to begin their overseas assignment at the allotted date.
Where will the employee live when they move overseas? Will the employer provide accommodation, or will the employee make their own arrangements to rent or buy their new home?
This may be a topic to be discussed in the relocation negotiations, but it is important that accommodation is arranged by one party or the other before the employee makes the move overseas.
No two international relocations present the same set of challenges. DavidsonMorris are experienced global mobility specialists, with expertise in supporting employers through professional relocating and international assignment support. We understand the difficulties of moving personnel overseas, and the need to balance cost control with ensuring employees and their families are sufficiently supported to ensure focus on the commercial aim of the relocation.
If you have a question or need advice on any aspect of professional relocating and deploying personnel overseas, contact us.