Questions about Relocation
Employee relocation plays an essential role in modern business. Today, when skilled workers are scarce in many relevant professional areas, companies offer relocation support to prove how sincerely they care about their employees’ wellbeing and to score in the harsh competition for specialists. Companies include employee relocation in their human assets strategy. More and more companies open up to the possibility of hiring skilled workers from other countries.
Easy to imagine, relocation management has become a lot more efficient with the use of technology. But there are still challenges that technology cannot solve and, as any Relocator knows very well. We’ve put together a few common questions about employee relocation, each with a brief answer:
1. What is Employee Relocation?
It means that a company hires a new employee from another city or country or moves one of its employees to another location for business purposes. Companies usually pay for the expenses of a move to a new location. Also, they try to assist transferees with the moving arrangements. They can do that by outsourcing this support to a relocation management agency. For lots of companies, an employee relocation program is essential to meeting their recruiting goals.
Some reasons why companies use employee relocation are:
• To hire the best specialists internationally
• To promote proven employees by sending them to a more critical branch
• To fill gaps due to the shortage of skilled workers in the employer’s home country
• To bring along key employees when opening up a new location
2. What’s involved in Employee Relocation?
We can structure the areas involved in relocation into four key activities:
• Obtain a permit for the new employment relationship and the corresponding residence permit for the employee (significant for international hires)
• Physically moving the employee, his family, and belongings to his/her new location
• Finding housing for the transferee and his/her family
• Helping the employee set-up his new life and acclimate to his/her new area
There are infinite small steps in each area that have to be considered, organized, and procured. Among them are translating relevant international documents, finding good schools for the kids, transporting goods, or storing belongings until permanent housing is found. In short, every relocation is different and every situation is unique. Therefore one essential aspect of a well-designed employee relocation program is that it’s flexible enough to address all variables and react adequately to problems that might occur in the process.
3. What are some typical Relocation Benefits for employers?
While relocation benefits for employees are obvious, they are mostly organized around helping employees accomplish the tasks outlined in question #2.
For employers, relocation benefits include:
• Assistance with the skilled immigration procedures, handling respective authorities
• Short-term housing (some employers provide corporate housing)
• Making sure that the wanted employee is available at a specific time and location without delays, problems, or difficulties
• A clear mind and being able to focus and the actual work the company is supposed to do
4. What are the typical relocation expenses?
Typical relocation expenses include the coverage for all the services and benefits mentioned above. Depending on an employer’s relocation program, the expanses might vary very much. The costs can be paid for by the employer or employee. Often, a cost-sharing strategy is applied.
A company can decide if it wants to hire an in-house relocation team and cover the team members’ salaries or pay fees to a third-party relocation management partner. Generally speaking, employee relocations are expensive, although it depends on each employer’s relocation benefits package. As a rule of thumb, it is more expensive to relocate a current employee to a new location than a new hire a new worker.
5. What are the challenges of relocation?
Global relocation is more expensive and more complicated than domestic relocations within the same country. Greater distances, language barriers, time-consuming logistics, visa questions, customs, tax issues – all these points, and many more must be considered.
Therefore, it is important to consider also the length of an international assignment. It doesn’t make sense to relocate employees internationally for a very short period of time. The length of the assignment impacts many aspects of the required relocation support. Nevertheless, most international relocations are restricted to a fixed length of time, which is agreed on before the assignment.
Domestic relocations are generally more permanent or with an open end.
If you are thinking about putting a relocation policy in place in your company, if you’re facing the challenge of international relocation for either a new employee or yourself, don’t hesitate to contact us to ask all your questions. We are looking forward to hearing from you.