Six Tips for Relocating Employees that Attract & Retain Talent

Employee relocations or even temporary assignments to a new location can be complicated and stressful for your employees. You’re not just shifting employees from one location to another, you’re uprooting them from their community, friends, extended family, and everything familiar. You’re also moving their partner, children, and pets. As an employer, you have a huge responsibility when moving an employee and family to a new city, state, or even country. It’s very important that the employee’s move experience is as stress-free as possible. Employee relocations handled correctly will help your organization attract and retain valuable top talent.

1. Consider Employees’ Emotional & Mental Health: Meet their Needs

If a relocation is not handled well, the employer risks losing the employee to another company – someone whom your company may have already invested time and money into. If you want to attract and retain top talent, and you consider your employees one of your most valuable assets, remember to address more than just relocation costs and logistics. Taking care of an employee’s emotional health will pay out for years to come. Is your relocation policy meeting your employees’ needs? The right policy helps to reduce transferee stress so that employees can focus on working in their new location.

Do:

  • Give employees time off to assimilate in their new location. Many organizations give employees 2-3 paid days off.
  • Provide support to transferees’ families (spousal assistance, language lessons).
  • Gather employee post-relocation feedback to make future policy decisions (WHR Global sends out a 1-year post-relocation survey).
  • Have your Relocation Management Company (RMC) help with logistics including visas, shipping, customs fees and clearances, transportation, legal issues, and more.

The stress of moving might impact an employee’s mental health and subsequently, engagement with their employer. Transferees and their families may face a host of potential emotional and mental tolls from a relocation. According to an article in Employee Benefit News, “When it comes to employee relocation, most organizations focus on the nuts and bolts, thinking strategically about the costs associated with the move and what will be the most affordable option to get their people from point A to point B. It makes sense from a business perspective, but it’s not how to make a relocation successful. Employers must remember they are moving people, not just boxes. Any time you deal with people, you need to adopt a human-centered approach. While you’re helping them get their belongings from one place to the next, they’re dealing with switching insurances, licenses, and addresses. If they have a family, they need to enroll their children in new schools, find doctors, and a new job for their spouse or partner. On top of that, they might be dealing with some negative emotions from their family, unhappy with the move. All of this can influence how your employee feels about their new position and how they assimilate into their new role.”

 

Be Aware:

  • If one or more family members are unhappy with the move and having trouble settling in, the stress could affect the employee too. The employee might be feeling distracted, disengaged, or unhappy, and they might even consider leaving the new role and moving back to their original location. Uprooting an entire family’s life and acclimating to a new community can be stressful.
  • If an employee becomes disengaged, productivity could decline. The transferring employee may be worried about whether the new job will work out. A tired, disengaged, or distracted employee’s attitude may be felt by other team members and affect team dynamics.
  • Employee stress associated with moving to a new location might also include concerns about a partner’s career, children’s education, learning new languages, cultural differences, selling their old home, leaving old coworkers behind, or concerns about the new destination’s real estate market or crime rates.

“The Great Resignation is unprecedented; recruiters are competing against talent ready for a change and even talent that has been placed within the last two years. Employers will need to be strategic in their efforts to hire and retain.”

Kimberley Uitz, SHRM-CP, GPHR

WHR Global Human Resources Manager

Do:

Make sure you have a relocation policy that includes all potential support. The following list includes just some of the possible benefits to consider:

  • Immigration & Visa Support
  • Tax Assistance
  • Household Goods Move
  • Help Buying & Selling Homes, Finding Rentals
  • Language & Cultural Training
  • Medical Options (healthcare coverage, medical evacuation services)
  • Education Options (tuition reimbursement, tutoring)
  • Transportation Information
  • Utility Connections
  • Education Assistance
  • Site Visits/Area Orientation
  • Temporary Storage
  • Family Support
  • Ongoing Assignment Support
  • Destination Services
  • Temporary Housing
  • Driver’s License and Registration Information
  • Spousal/Partner Career Assistance

 

2. Benchmark Relocation Policy Against the Competition

Hopefully, your relocation policy is already part of your total rewards and talent management strategy. By benchmarking your policy against other companies, you will stay competitive in the war for talent. Make sure your policy provides a choice of offerings since relocation policies are wrapped into job offers. If you don’t benchmark against your competitors, you won’t know if your offerings are good or not. Are they subpar to what everyone else is offering? If you are hiring scientists, for example, and the talent is very specific and not easy to come by, you’ll want to make sure you’re competitive with salary, benefits, and your relocation policy. The right policy will help your company retain current employees and attract top prospective candidates. A weak relocation policy could have a negative impact on your recruiting and retention success rate. 

At the same time, benchmarking will ensure you’re not giving away too much when none of your competitors are doing that. Benchmarking your policy against others shows you’re in line with the industry. Maybe you’re offering unnecessary benefits and eliminating those offerings could yield cost savings. It’s also important to look at your industry and other industries you compete with for talent.

3. Compensate for Cost-of-Living Differences

Some of your employees may be moving to an area with a lower cost of living and some may be moving to a much higher-cost destination. If higher costs exist, provide a limited-term cost of living allowance to bridge the financial gap. Options for payout could include monthly, quarterly, annually, or a one-time lump sum. Set an ending time for this benefit and decide whether the benefit will slowly decrease or taper. It is best to only offer this benefit to those employees moving to higher-cost destinations; if your employee is moving from one high-cost of living area to another, consider withholding this benefit. Often, employers will establish a threshold (typically a percentage), for the benefit. Other employers will identify specific areas and only offer the benefit to employees moving to predetermined locations such as Boston, Chicago city limits, New York City, San Francisco, Geneva, Paris, London, Singapore, and Shanghai, for example.

4. Review your Relocation Policy

Review your employee relocation policy annually or every couple of years, at the very longest. It’s an opportunity to pause and look at employee survey feedback, plus confirm any changes in your company culture, driving principles, core values, talent strategy, the industry, and your competition. Make sure you’re allocating the right amount of dollars to both transferees and organizational needs. It’s also important you’re not paying for unneeded or outdated benefits. Lastly, review the purpose of your relocation program. This is a time for you to make sure your policy is aligned with your key stakeholders (talent acquisition teams, recruiting teams, and HR business partners).

To summarize, there are many benefits you’ll want to consider including in your relocation policy (not an all-inclusive list):

  • Home Sale (Guaranteed Buyout versus Buyer Value Option)
  • Direct Reimbursement
  • Policy Tiers vs Core Flex Benefits
  • Lump Sums (Lump Sum Only; Managed Lump Sum; Lump Sum in addition to other benefits)
  • Cost of Living Assistance (COLA)
  • Home Inspections (Major and/or Specialized)
  • Home Sale Bonuses
  • Loss on Sale
  • Rental Assistance/Lease Break Assistance
  • Destination Services (Temporary Housing, House Hunting Trips, Destination Closing Costs, Renter Destination Services)
  • Household Goods Movement (Vehicle Shipment; Temporary Storage)
  • Policy Exceptions

 

5. Compensate Employees for Their Tax Burdens

Tax Assistance & Tax Equalization

If you’re competing for talent and your competitors are compensating for tax burdens and you are not, you could lose in the war for talent. By offering tax benefits, you can take away some objections you might receive from current or future employees regarding relocation or assignment. Remember, in December 2017, the US government passed legislation that directly impacted taxpayers. Under the 2017 law, known as the Tax Cuts and Jobs Act (TCJA), taxpayers are unable to claim certain deductions, including job-related moving expenses.

Do:

Provide Tax Assistance

This alleviates some of the tax burdens on a portion of the employee’s income. Also referred to as gross-up, this is the additional money an employer pays their employee to offset any additional income taxes the employee would owe the IRS when that employee receives a company-provided cash benefit, like relocation expenses.

Tax Assistance Benefits
  • Helps your relocation program remain competitive
  • Improves employee retention and attraction
  • Alleviates some of the employee’s tax burdens
  • Lowers employee stress, allowing the transferee to focus on the new role sooner

Do:

Provide Tax Equalization

Tax equalization neutralizes an assignee’s tax liability associated with a global assignment. This compensation approach means an assignee pays approximately the same taxes if they remained in their home country. In other words, the assignee is not paying more or less had they not left their home country, regardless of the actual tax burden in the home and host country. WHR estimates that 95% of all global mobility programs offer tax assistance.

 

Tax Equalization Benefits
  • Decreases expatriate stress and allows the assignee to focus on the new role sooner. The less economic stress an employee feels, the more they can focus on the personal and professional development of an international opportunity.
  • Improves employee retention and recruiting efforts since the assignee would not have a tax reason to turn down a foreign assignment, transfer from one foreign country to another, or be repatriated.
  • Limits tax burden. Maintains a comparable home country tax basis for the assignee while on a foreign assignment. This means the assignee’s tax gain or loss is minimized and equalized as much as possible and remains the same had the assignee stayed in the home country.
  • Facilitates positive corporate citizenship for tax compliance in every location the company operates and eliminates the risk of local law non-compliance, tax regulations, and exchange rate controls.
“By providing tax benefits, employers help offset tax burdens for employees, and in doing so, some of the stress typically associated with relocations or international assignments can be decreased. When you consider that these benefits also help companies stay competitive, it’s a win-win for everyone,”
Jami Long

WHR Global CFO

6. Hire a Professional Relocation Management Company (RMC) that Provides 24/7/365 Dedicated Assistance to You and Your Employees

Moving is considered one of the most stressful events in a person’s life. Add in crossing international borders, plus taking care of one’s partner and children, and that stress can be even higher. The right Relocation Management Company (RMC) will partner with your organization to write, implement, and manage a global relocation program that meets your company goals and helps you attract and retain the talent you need for success.

Contact Us!

Find helpful relocation resources and guides in our Relocation Toolbox

What is a Buyer Value Option (BVO) Home Sale Program & How Does it Compare to a Guaranteed Buyout (GBO) Home Sale Program?

In a Buyer Value Option program (BVO), the employee is responsible for listing their home for sale, with marketing assistance from the Relocation Management Company (RMC). The employee must secure an outside buyer willing to purchase the home at a fair market value. A BVO provides all the tax benefits to the employer and employee, but it is dependent upon the employee securing an outside buyer. If the contract is deemed valid, the employee is funded their equity based on this outside offer amount and the RMC closes the sale with the buyer at a future date. In a BVO scenario, home appraisals are never ordered.
expatriate assignment, WHR Group, expat assignment

This differs from a Guaranteed Buyout (GBO) program. Under a GBO, the RMC orders two home appraisals and then averages the two to determine a guaranteed offer. If the employee is unable to sell their home on their own, the employer takes the home into inventory and must maintain it until the company is able to resell it. This obviously carries potential risks and additional costs for an employer. A BVO, on the other hand, minimizes this risk since the employer only purchases the home after the employee has secured an outside buyer. Both BVO and GBO home sale programs provide tax benefits to the employer and employee.

Consider both options to decide which aligns best with your company objectives.

BVO versus GBO Summarized

Buyer Value Option (BVO)

  • Employee is responsible for listing their home (with marketing assistance from the relocation company), securing a buyer, and then the RMC closes the sale with the outside buyer.
  • Broker Market Analysis completed by two real estate agents to establish an appropriate marketing parameter.
  • Tax advantage for the company & transferee.
  • No home appraisals.
  • Employee is not required to attend closing.
  • Minimizes company costs as buyer is secured by employee.
  • If home sale falls through, home goes into corporate-owned inventory.
  • Employee remains financially responsible for their home until an outside offer is accepted which might delay their move to new work location.

Guaranteed Buyout (GBO)

  • RMC orders two home appraisals and then averages the two to determine a guaranteed offer.
  • Guaranteed offer expedites the relocation process so that transferee can relocate faster.
  • If the employee is unable to sell their home on their own, the employer takes the home into inventory and must maintain it until the company is able to resell it.
  • The company carries risk of owning and maintaining the home until it is sold.
  • Tax advantage for the company & transferee.
  • Employee is not required to attend closing.

WHR can help employers and employees with BVO, GBO and other home sale program benefits including:

  • Direct Reimbursement
  • Home Inspections
  • Home Sale Bonuses
  • Loss on Sale
  • Rental Assistance/Lease Break Assistance
  • Destination Services (temporary housing; house hunting trip; destination closing costs; renter destination services)
  • Household Goods Moves (plus vehicle shipment and temporary storage)
  • Lump Sum Benefits
  • Cost of Living Assistance
  • Policy Exceptions
  • Policy Tiers vs Core Flex Benefits

Let us know if we can help you with your relocation and global mobility programs

Contact: 262-523-2800, sales@whrg.com

 

Contact Us!
Read more about Buyer Value Option (BVO) Home Sale Programs.

Offering Tax Assistance & Tax Equalization Ensures Higher Employee Retention & Improved Recruitment Outcomes

Many companies are struggling to find and retain good talent. It’s important that benefits, including relocation and assignment benefits, are very competitive and offer employees what they need to have the best possible experience as they uproot their lives and move – be it a long or short-term move.

There are many benefits a company should consider for their employee relocation and global mobility programs. In this article, we discuss tax assistance and tax equalization. According to WHR Global (WHR) Chief Financial Officer, Jami Long, “By providing these tax benefits, employers help offset tax burdens for their employees. By doing so, some of the stress typically associated with relocations or international assignments can be decreased. When you consider that these benefits also help companies stay competitive in the hiring process, it’s a win-win for everyone.”

Tax Assistance versus Tax Equalization

Tax assistance also referred to as gross-up, means an employer grosses up an employee’s taxable relocation benefits. In other words, gross-up is the additional money an employer pays their employee to offset any additional income taxes the employee would owe the respective tax authority when that employee receives a company-provided cash benefit, like relocation expenses. This benefit alleviates some of the tax burdens on a portion of the employee’s income.

Tax equalization, on the other hand, neutralizes an assignee’s tax liability associated with a global assignment. This compensation approach means an assignee pays approximately the same taxes if they had remained in their home country. In other words, the assignee is not paying more or less had they not left their home country, regardless of the actual tax burden in the home and host country.

The following may be old news, but still important to review. In December 2017, the US government passed legislation that directly impacted taxpayers. Under the 2017 law, known as the Tax Cuts and Jobs Act (TCJA), taxpayers are unable to claim certain deductions, including job-related moving expenses.

Tax Assistance in Detail

Per the 2017 legislation, taxpayers must treat any direct payment or reimbursement of moving expenses received from their employer for job-related moving expenses as taxable income. Previously, employees only needed to pass the time and distance test (criteria 50 miles, 39 weeks, and 1 year), to be qualified to deduct moving expenses related to household goods moves, storage, and final moving expenses. Alternatively, an employee paying their moving expenses could deduct those moving expenses even if they didn’t itemize.

Under TCJA, all moving expenditures are taxed accordingly, at least until 2025. However, active-duty military members may still deduct moving expenses. For employers, this can have a significant impact because it could be a deterrent to attracting new talent, or current employees may be less inclined to take a promotion that involves moving.

Benefits of Providing Tax Assistance

If you’re competing for talent and your competitors are offering this benefit and you are not, you could be at a significant disadvantage. Tax assistance can take away some of the objections you might receive from current and/or future employees for relocation. In summary, the benefits of providing tax assistance can include:

  • Helps your relocation program remain competitive.
  • Improves employee attraction and retention efforts.
  • Alleviates some of an employee’s tax burdens.
  • Lessens employee stress, allowing the transferee to focus on their new role sooner.

Drawbacks of Providing Tax Assistance

  • Increases an employee’s taxable income and can change their tax bracket. This could increase an employee’s tax rate and phase out certain tax credits.
  • Increases company relocation expenses.

Tax Equalization in Detail

The transition from a home country to a host country can be difficult and could keep talent from taking expatriate assignments. Housing, cultural acclimatization, family adjustments, and entering a new work environment are just some of the challenges of international moves. Companies will often offer expatriates assistance to make the experience as smooth as possible, including tax equalization. For example, expatriates coming from the US have a unique obligation to fulfill and are required to file taxes on their global income regardless of where it was earned. They don’t have the benefit of being able to break their home country’s tax obligation. Additionally, they’ll have a tax filing requirement in the host country too.

Even though the US provides foreign tax credits that can be applied to the employee’s US return, it may not be enough of a credit to offset their entire US obligation. By providing tax equalization, expats whose combined taxes are higher than what they would hypothetically be without the assignment are reimbursed by the company for the additional incurred taxes. Conversely, if the combined taxes are lower, the assignee reimburses the company for the difference. When new opportunities arise overseas, businesses sometimes struggle to determine how they will fill positions. Many multinational corporations turn to their proven domestic employees and leverage those abilities to develop markets, monetize product offerings and grow the business overseas.

The recruitment/retainment process is even more challenging in highly specialized fields. Consider pharmaceuticals and bio-medical, for example, where there are a limited number of specialized candidates available, and oftentimes many companies are competing for the same talent. According to an article in Fierce Pharma, “Those technical qualifications become even trickier when applied to fields like cell and gene therapy.” Fabian Gerlinghaus, co-founder and CEO of Cellares said, “There simply aren’t enough humans in the highly specialized fields.”

Since the war for talent is even more competitive in specialized fields, providing the right benefits can make a big difference.

Benefits of Providing Tax Equalization

  • Decreases expatriate stress and allows the assignee to focus on the new role sooner. The less economic stress an employee is under, the more they can focus on the personal and professional development of an international opportunity.
  • Improves employee retention and recruiting efforts since the assignee is less likely to decline a foreign assignment or transfer due to tax obligations.
  • Limits tax burden and maintains a comparable home country tax basis for the assignee while on a foreign assignment. This means the assignee’s tax gain or loss is minimized and equalized as much as possible and remains the same had the assignee stayed in the home country.
  • Facilitates positive corporate citizenship for tax compliance in every location the company operates and eliminates the risk of local law non-compliance, tax regulations, and exchange rate controls.

Drawbacks of Providing Tax Equalization

  • Increases company relocation expenses.

Your Relocation Management Company (RMC) can explain how tax assistance and equalization work and help facilitate the process. RMCs can also manage everything for your company, including providing a global statement of earnings to your tax partner and ensuring tax assistance is correctly calculated and implemented.

 

Buckle Up this Summer for Household Goods Move Challenges: Plan Ahead!

International HHG Moves

Arriving just in time for summer, a familiar story; the household goods industry will have a difficult time over the summer months meeting consumer demand. While COVID-19 impacted how household goods suppliers had to perform their services, the need for moving was still great, plus increased levels of restrictions such as mask mandates, cross-border travel restrictions, quarantine periods, supply chain disruptions, and labor shortages, etc., provided even more hurdles. The list is extensive regarding additional burdens household goods suppliers need to overcome, and consequently, we are seeing a sharp increase in fees for services.   

Internationally, global supply chains have been impacted by the war in Ukraine which was already suffering due to Covid lockdowns. With China implementing additional lockdowns including Shanghai, the world’s biggest container port, this has only exasperated the problem. More than 8 million residents in Shanghai are still banned from leaving their residences and this means people that run logistics are not on the job. According to Project44, which tracks shipment times, the delays between China and the major US and European ports quadrupled since late March. According to Daejin Lee, an associate director at S&P Global Market Intelligence, the situation in China will push global inflation higher this year. Last year, inflation was driven by two factors: supply shortages of key parts led to supply chain bottlenecks; and record-high container freight rates.  Both problems continue into 2022, and the war in Ukraine will only make commodities prices rise as well. 

Not only is there an international shipping problem, but there are difficulties in the US. According to the American Trucking Association, they estimate the industry is short 80,000 truck drivers, and there is a fear this number could double by 2030 as more retire from the profession. To try and remedy this problem, the $1 trillion infrastructure bill includes a three-year pilot program that would allow commercial drivers as young as 18 to drive across state lines. In most states, you need to be 21 to receive a commercial driver’s license. However, this would be a band-aid approach and is unlikely to remedy the immediate situation. In response to the shortage, companies are raising wages for truck drivers and these increases are being passed on to consumers. 

How this translates to the relocation industry is that clients and employees must be extremely proactive. For example, according to the US Army and an article written by Chris Gardner, they have 36,984 soldiers that have reporting dates in 2022 during the peak summer season. Fort Sill’s property supervisor, Shirley Castle, stated, “Soldiers and civilians need to contact the local transportation office as soon as orders are received and keep their chain of command informed of any issues or challenges…waiting until 30 days or less before the move to contact the local transportation office could result in non-availability of DoD approved moving companies.”

The way to address all of this is to understand the situation and over-communicate to all involved in the logistics and household goods moving process. This includes clients and their transferring employees by implementing the following:

  • Work with a knowledgeable Relocation Management Company (RMC)that can navigate these challenges.
  • Plan for more shipment time, especially international moves.
  • 30 days’ notice is the minimum; try and plan well in advance.
  • Change to air freight versus sea freight if feasible and affordable.
  • Consider providing a furniture allowance rather than moving furniture.

At WHR Group, Inc. (WHR), our Supply Chain Management department builds and maintains relationships with quality network providers. We continue to monitor this ever-changing situation and its impact on the supply chain and logistics. Through our extensive and well-vetted supply chain network, we can find the right providers to navigate each employee relocation on a case-by-case basis.

 

 

 

 

 

 

 

 

 

WHR CHOOSES WINNERS OF ITS 2022 PARTNER IN QUALITY AWARD

WHR Group, Inc., (WHR) announces its 2022 Partner in Quality Award winners. Recipients are WHR Global Network Partners who exceeded customer satisfaction and service excellence throughout 2021. To be considered for a Partner in Quality Award, a partner must complete at least 20 transactions in the previous year and receive performance rankings within the top one percentile of the relocation partner’s service category. The award winners listed below exceeded WHR’s expectations in cost management, customer satisfaction, quality and supply chain management.

 We are extremely thankful to our entire supplier network, but specifically to these 22 companies that have gone above and beyond from a service and partnership aspect. Their dedication and commitment to excellence has helped WHR Advance Lives Forward® of countless relocating employees.

 2022 Partner in Quality Award Winners (in no particular order)

 Relo Network Asia – Singapore

 Pro Relocation – Bratislava, Slovakia

 Merchants – A Budd Van Lines Division – Racine, WI

 BHHS Georgia Properties – Roswell, GA

 Tiffany Broecker – Stevens Point, WI

 IOR Global Services – Northbrook, IL

 AltoVita – London, England

 Paramount Transportation Systems – Reno, NV

 Suite Home Chicago – Chicago, IL

 Amanda Howard Sotheby’s International Realty – Huntsville, AL

 Apartments in Town – London, UK

 Aaversal Global Relocation – Sumner, WA

 Packimpex – Bern, Switzerland

 Transportation Worldwide, Inc. – Katy, TX

 Isaac’s Moving and Storage – Stoughton, MA

 Boone’s Moving & Storage (Lytle’s Transfer) – Tipton, PA

 Arpin International – West Warwick, RI

 Avery-Hess Realtors, Inc. – Woodbridge, VA

 Ward North American – San Antonio, TX

 LARM USA, Inc. – Coral Springs, FL

 @ Properties – Chicago, IL

 RE/MAX Partners Relocation – Andover, MA