In the past, many companies relocated employees only occasionally. Typically, these relocations included limited benefits and a narrow range of locations, so it was relatively simple to administer the program and manage a small group of local suppliers in house. Today, global relocation brings so many program, tax and legal considerations that outside expertise is an essential component of administering successful domestic relocation and international relocation packages. Outsourcing global relocation can bring companies several benefits:
Specialized Executive Relocation Expertise
The specialized expertise of full-service relocation management companies is a key reason that companies outsource. Relocation management companies like TRC Global Mobility offer a complete suite of executive relocation services and broad geographic coverage. Experienced relocation providers bring policy consulting expertise and knowledge of relocation best practices and tax and legal requirements. This expertise can help companies to ensure their policy is as competitive and cost-effective as possible—and create time for the company to focus on core business priorities. (more…)
Worldwide ERC just issued the following statement regarding the Supreme Court’s decision to allow a partial travel ban to take effect.
Arlington, VA— On June 26, the U.S. Supreme Court issued an unsigned order to allow the implementation of parts of an executive order signed by President Trump to temporarily suspend foreign nationals from six countries from entering the U.S. Based on the facts of the case, the Court formed a distinction between nationals who have “a bona fide relationship with a person or entity in the United States” and all other foreign nationals. The Court upheld the suspension of the ban for foreign nationals who have such a relationship, including individuals employed by a company in the U.S. (more…)
In the not-so-distant past, a “trailing spouse” was typically the female partner of an expatriate male who ran the household and took care of the children’s needs while the family was on assignment. Today, the term “trailing spouse” is rarely used at all. As in non-expatriate society, family relationships are far more fluid and individual today. The accompanying partner or spouse might be responsible for the household and the children, might have a career or might have some combination of work and family responsibilities. (more…)
What makes the “ideal expatriate”? Companies that deploy employees abroad are keenly interested in the answer to this question. According to Worldwide ERC, a traditional, long-term international assignment can cost a company $1m or more. In the worst-case scenario, if the expatriate or family are unhappy in the host location and the assignment fails, the company could potentially lose not only this substantial investment but also a valued employee—and usually to a competitor.
According to ECA International, in 2016, up to 7.2% of international assignments were terminated before the actual anticipated or scheduled completion date. The cost of terminating the assignment and repatriating the employee and family are only the beginning. The company faces another talent search to re-fill the role, loss of productivity while the role is vacant and the costs of a new assignment for a replacement employee. Intangible, less easily measured costs include the negative impact on the expatriate’s morale and that of his team and sometimes damage to the company’s reputation in the host location. (more…)
You have just accepted the role you have always dreamed about: a long term, international assignment in London! There are so many things to think about before leaving the US. Will you succeed in your new role? Will you fit in with your colleagues? Where will you live?
The one thing that you don’t want to have to worry about when taking an international assignment is whether or not you can afford it financially. You’ve always heard that London is a very expensive city, so how will you make ends meet on your current salary? Will your cost of living allowance cover your needs? (more…)
In an increasingly volatile world, companies are trying to ensure their global mobility strategy remains competitive while increasing their return on investment from costly global assignments. Interestingly, more employees are interested in a global stint now than in the past, even those at relatively junior levels. In many organizations, realizing one’s career potential all but requires a global assignment.
Because of this, employers usually do not need to offer windfall-level benefit packages to coerce employees into taking these assignments, and there is much more variation in the assistance offered to global assignees than in the past. Senior executives might still receive rich packages but more inexperienced Millennials who are embarking on developmental assignments might require surprisingly modest assistance. As a generalization, they do not see these assignments as the hardship more senior employees often do.
These changed demographics free employers to pay more attention to cost containment when they are developing policies. The goal is to deliver the support needed for a successful assignment without spending money on unnecessary frills that may not be necessary to remain competitive.
The economy has recovered and job-hunters have more leverage than they’ve had in years. They are much more willing to relocate for the right opportunity if the employer is willing to offer relocation assistance that meets their unique needs. Gone are the days of strict, one-size-fits-all policies. Instead, the modern corporate relocation policy structure includes several tiers and offers flexibility to the employee to make the relocation as comfortable and simple as possible.
Whether it is a domestic transfer or a global assignment, even the best-managed relocation will upset the employee’s sense of equilibrium. We expect this with international assignments and are much more likely to provide the support needed to make the assignment (and substantial) investment successful. But it is equally important to consider fit and adaptability for domestic moves. Ignoring these concerns will only make things more difficult for the employee and create needless risk of attrition. (more…)
Because the tax aspect of any relocation is so important, clear and continual communication with the transferring employee is essential. A transferee should never be surprised at tax time with a large and unexpected payment due to the IRS. It is the responsibility of the transferring employee to understand the tax implications of each relocation benefit, but it is incumbent upon the employer and the Relocation Management Company (if one is involved in the process) to ensure that the tax implications of benefit usage are fully explained to the transferee verbally and in writing. (more…)
To facilitate a relocation, many employers offer home selling assistance to homeowner transferees. Home sale assistance can come in various forms; however, the IRS specifically calls out the Amended Value (AV) program as the favored method in terms of compliance.
An AV program allows the transferee to market the property and attempt to find a buyer before the employer acquires the property and takes it into inventory. If the transferee finds a buyer, he sells the home to a third party Relocation Management Company (RMC) for the agreed-upon price, and the RMC, in a second and separate transaction, sells the property to the buyer for the same price.