In this article, we share our expert advice on the following elements of the employee relocation outsourcing process: (a) What is employee relocation? (b) What are the benefits of employee relocation?
Overview
When a company decides to move an employee from one location to another, the employee relocation is a process of creating a smooth transition for that employee into their new state or country. Employers might relocate an employee because of a need for their unique skill set in the other location, or in service of a promotion the employee has received to assume a higher position in another office.
There are also situations where an employee will ask to be relocated to accommodate their desire to live in a new location or be able to relocate along with their partner or spouse. The goals of the company during the relocation process is to design an affordable and efficient way to help the employee with their relocation to a new office location.
To help companies of all sizes with the process of relocating employees, we’ve put together a list with the five key benefits of outsourcing employee relocation services:
What is Employee Relocation?
Employee relocation is often referred to as global mobility, which allows businesses to be compliant with local immigration laws during the process of transitioning employees into a new country. There is an entire industry centered around relocating employees from one market to another, as the process can be highly complicated without the help of an immigration expert.
When done well, a successful employee relocation can improve the employee’s performance, create a boost in revenue, and facilitate a pleasant experience for all parties involved. Companies will usually offer relocation benefits to employees moving to a new office location outside of their current market.
These benefits can include providing financial assistance for both departure and arrival to cover fees such as paying for a moving truck, plane tickets, hotels, and other travel-related expenses.
Businesses will sometimes offer guidance on more personal matters such as choosing a neighborhood or school district to improve the employee’s overall transition and make the move as seamless as possible. While these kind of support measures are not required, it is important to understand that the less challenges the employee has to face during the moving process, the quicker they can begin contributing to their role in the new location.
Regarding support for managing your employee relocation, Horizons provides comprehensive global mobility solutions to provide clients with a single point of contact during every step of the immigration process. Our streamlined network of immigration support and expertise allows us to assist companies of all sizes to fast-track their global expansion.
Relocate your employees with Horizons EOR services.
How to Partner with a Relocation Management Company
If you choose to partner with a third-party provider to design your relocation program, it’s important that your company’s leadership team knows exactly what it’s looking for in a partner RMC.
To begin, organize a checklist with your top priorities for this service. How much does your company value offering a competitive relocation package? And how much does potential cost-savings influence your decision with whom to ultimately partner with?
Below are a few more relevant questions your business should be asking itself when designing a relocation program for the long-term:
- Approximately how many relocations do you plan on facilitating per year over the next 3-5 years?
- Will the majority of these relocations be within your current country, or will some employees be moving to foreign countries?
- Would you prefer to partner with a single, large relocation provider or a network of smaller suppliers for each individual country you will have employees relocating into
Next, you want to make sure your business places enough focus on choosing the right relocation provider for your business. There are particular factors businesses must observe when making this decision.
It’s important to understand whether the Relocation Management Company will function as a common vendor for your business, or be a partner for your entire relocation experience. The RMC must be flexible in order to meet your business’s ever-evolving needs. A quality RMC also needs to have the ability to provide top-notch customer service in a way that saves your company money in the long run.
Because relocating a high-quality employee is significantly more cost-effective than hiring a new one in-country, partnering with an established RMC is a worthwhile investment for your organization.
There are five core benefits to outsourcing your employee relocation process and partnering with a Relocation Management Company:
Benefit #1: Tailored Relocation Strategies
Once you understand the basic dynamics of the employee relocation process, you can begin constructing relocation policies that best suit your organization’s goals. The most common strategies for this aspect of the process are the “tiered” and “a la carte” approaches.
The Tiered Approach
A tiered policy makes it easier for a company to be transparent with its employees in regards to which benefit package the employee will be eligible to receive.
On average, companies will have 4 tiers available within their relocation policy. This allows businesses to minimize their administrative duties while still offering a quality package to their employees. Tiered policies will often have certain benefits that are guaranteed across all of their packages, with higher value options being available at higher tiers.
Businesses will also implement a tiered policy to try and save money on relocation costs. Traditionally, employees with higher status or longer tenure within the company will be offered the best tier in the organization’s relocation program.
From the employee standpoint, superior relocation packages are another benefit gained from showing loyalty and strong overall work effort with a company over an extended period of time. Properly incentivizing employees with benefits like a premium relocation package is always a intelligent way to get the best out of your team members.
The A La Carte Approach
If implementing a tiered approach is not the best fit for your business, some companies will instead use an a la carte policy. If you are focused on dispersing specific benefits on an individual basis and being highly selective in that process, an A La Carte system may be the best option for your needs.
One key benefit to the a la carte approach is that it allows companies to create a customized relocation plan for each individual employee based on their specific needs and/or the amount of funds the organization is looking to allocate.
In some instances, employees will be able to decide which relocation benefits they receive. When an employer offers an A La Carte package, they will sometimes assign each benefit a certain number of points, and then give an employee an allotted amount of points to work with as they create a package that fits their unique needs.
Options for Businesses
Businesses have the ability to choose the level of benefits employees will receive as part of the company’s relocation policy. Most companies will have a tier system that determines the amount of benefits an employee is eligible to receive for their relocation.
It’s important to consider the impact your relocation package can have on both current and prospective employees. Offering too few relocation benefits can have a negative effect on employee morale, while offering too many benefits can amount to such a large total cost that lead to the benefits no longer outweighing the costs.
Benefit #2: Hiring and Recruitment Networks in-country
For companies to recruit and hire the best professionals on the market, it is important to have a relocation program that provides great incentives to employees while remaining compliant with local employment standards and regulations.
In order to source the very best talent for the job, it has become essential for companies to have a global relocation program that adheres to today’s best practices while also staying up to date on tax and legal requirements.
One key benefit of being able to access a local recruitment and hiring network is that it gives your business an introduction to the best providers in the area, which helps ensure compliance with local regulations. Making this connection with a local recruitment network also makes it easier to recruit new employees in-country, should you need to hire additional staff to support your business’s growth in the area.
Developing a relocation system that allows you to be competitive in the international hiring market is complicated, and it takes a team of dedicated experts to create this type of program. Working with a global mobility partner simplifies the process of developing your employee relocation program and ensures that your company will be able to provide additional benefits by providing access to the following resources:
- Expert relocation specialists
- Connections with reputable third-parties at discounted rates
- The ability to compare your program in its current iteration to that of your competitors in order to ensure that your offering is competitive on a global scale.
- Increased cost savings
In addition to helping businesses gain a legal presence in foreign countries, our end-to-end global mobility and employee relocation solutions allow businesses to transition employees into new markets with full compliance to local regulations. We also coordinate global payroll and benefits payments to ensure accuracy and on-time delivery.
If you are looking to relocate an employee internationally but don’t currently have an office in your target market, Horizons’ PEO & Employer of Record service can take care of all risk mitigation, compliance, payroll, and benefits. You can then focus on making your core responsibilities centered around successfully managing your employee’s work-related duties.
Benefit #3: Technological Solutions
Employer Technology
The majority of relocation management partners rely on some kind of integrated technology to facilitate their duties. Whether it is a make-shift technology created by the company itself or a purchased product integrated into the company’s platform, utilizing technology to simplify your relocation system is something worth exploring.
The most common functions of a RMC technology system include:
- Assistance with partner or spouse relocation
- Organization of relocation packages offered
- Having access to an invoice history
- Live, cloud-based reporting
- Satisfaction ratings
Having technology that is supported by your RMC allows your company to be proactive in establishing your relocation system that is cost-effective for your business and appealing to your employees. Also, it’s important that you use encrypted technology and only give access to a limited number of employees.
Employee Technology
In addition to employers utilizing technology designed to ease their relocation management, there is also technology specifically designed to aid the process on the employee end. Employees will often have a version of the software that only grants them access to their personalized services.These include being able to see a calendar of events and tasks they are required to complete, digital paperwork and forms to sign, and other relevant aspects of their relocation information.
Benefit #4: Transparent Cost Structures
During the process of employee relocation, companies must expect to incur certain fees along the way. When negotiating your relocation management with your provider, make sure you are aware of all potential fees and relevant charges. Below we’ve provided a list of the most common fees a company will incur during a relocation:
- Referral fees – When you hire a real estate agent or a company that will provide transportation services, you can receive payment from the referral.
- Service fees – Costs paid directly to the RMC for services like administrative support, salaries, and profits.
- Non-compliance fee – Fees that may be paid by the company or the RMC in the event of a contract breach by either party.
- Fixed fee – This is the agreed-upon fee of the costs of the property and additional costs from facilitating the move.
As with any business transaction, it’s important to be specific and transparent with partnering providers to prevent miscommunications down the road.
Benefit #5: Benefits to Employees
If you are planning on relocating an employee in a new country, there are certain helpful benefits that will provide assistance to your employees through this process. From finding a new place of residence, to traveling and moving costs, the process of moving one’s entire life internationally can be both challenging and quite expensive. Employees value a company’s support in helping pay for these costs when moving for personal reasons, and typically expect the relocation to be paid for completely when their company is requiring them to make this move.
In addition to providing financial assistance to employees relocating overseas, it’s helpful to help the employee navigate the complex process of passing through customs and acquiring the proper work visa.
Once the employee has physically moved to their new location, there is additional support that will likely be needed. In addition to the logistical challenges your employees will face along the way, adapting the cultural nuances can be an even bigger challenge. From learning a new language to navigating their new city, and also to finding a suitable school for their children, there are quite a few obstacles for your employees to juggle while also assuming their new work responsibilities. Allocating enough resources to fully support your employees during this transition period is key for maintaining high employee morale.
Conclusion
Horizons provides tailored employee relocation services to companies of all sizes. Our global mobility experts deliver global visa services to new hires, business travelers, and employees relocating to new markets. We also help your business obtain all necessary work and residence permits needed for your expansion.
To recap, there are five core benefits of outsourcing your employee relocation services. These include:
- Benefit #1: Tailored relocation strategies, which allows your company to design the right relocation package structure for your needs.
- Benefit #2: Hiring and recruitment networks in-country to simplify the process of integrating your employee into the new market and hiring new employees in the future.
- Benefit #3: Technological Solutions to make it easier for both the business and the employee to access cloud-based reporting for the specific package offered.
- Benefit #4: Transparent cost structures to allow you to plan for the various fees and expenses that accompany employee relocation.
- Benefit #5: Benefits to employees relocating to a new location to support the transition for both the employee and their accompanying family.
Maintaining continuity with your employee’s existing business role and their duties in a new international location is a crucial part of global expansion. Also, it is essential to establish who retains employer obligations and how tax is administered. Our PEO solution and team of expansion experts can guide your business on how best to solve challenges related to employee relocation both in-country and abroad.
With transparent pricing guaranteed, our customized mobility services provide your business with an end-to-end solution for your global immigration and relocation requirements. We ensure a fast and compliant transition to your new market with support through the lifecycle of your expansion. Contact us to learn more today.
