Six Tips for Relocating Employees that Attract & Retain Talent

by | Nov 1, 2022 | News | 0 comments

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

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

by | Sep 29, 2022 | News | 0 comments

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

 

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Read more about Buyer Value Option (BVO) Home Sale Programs.
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The Duty of Care: Employee Relocation Policies for Better Business

by | Feb 15, 2022 | News | 0 comments

With global relocation becoming the new normal, millions of professionals take up different assignments and relocate annually. Mobility is proving to be the cornerstone for business expansion and increasing revenue. Business owners must understand that there are a range of issues, mental and physical, that an expatriate is likely to encounter with a relocation. This is where the duty of care, the common longstanding principal law, comes into play. It can be defined as the company’s obligation towards its employees to protect health and safety. Hence, the duty of care must be incorporated into an employee relocation policy. The policy should consider warranting the welfare not only of the employee, but also their family throughout the relocation and new location assignment.

When health insurance is portable within the home country, the employer must ensure the employee and the family get all the current benefits in the new location. Since healthcare coverage and systems vary not only from country to country but from region to region, it is the employer’s job to make sure that the employee has global healthcare coverage. The employer should ensure benefits in the coverage area are in place before the transferee arrives at the job location. It is also essential to have a policy that includes medical evacuation services when required. 

Another thing to consider is the treatment for mental health. According to psychologists, the relocation process is ranked as one of the top stressful events in someone’s life. Part of the duty of care is to provide mental health coverage, and companies should acknowledge the inherent stress. Many companies provide an Employee Assistance Plan (EAPs). These plans provide the employee a great mental health resource.

Benefits of Duty of Care in Relocation Policy

When you have a proper duty of care instated within the employee relocation policy, it will help your employees and the development of your business. Here are some reasons why the duty of care in employee relocation is necessary. 

Attracting and Retaining the Right Talent

Irrespective of the industry you are operating in, you always want to have the best employees for your business. Since talent doesn’t always reside locally, you must provide the right relocation policy to attract and retain talent.

Getting the Right Support from the Right Places

When you have a duty of care within the employee relocation policy, you will be warranting that the employee gets all the right support from the HR department and other suppliers who are part of your relocation policies. This may include many types of providers who will provide information about schools for children, finding the right home in the new location, selling a home in the old location, in addition to many other services. 

Ensuring Fairness

One of the biggest hassles that employee relocation managers and businesses face are different relocation benefits among the same grade of employees. This is exacerbated when there is not a relocation policy in place. A proper relocation policy and duty of care outline the support and benefits that an employee is supposed to have during and after the location to a particular place. 

Cost Control

The last thing you want as an employer is to throw away money for lack of a relocation policy, or for your company to get embroiled in a legal battle with an employee for not taking care of them. When you have a relocation policy along with the duty of care, you will keep your employees happy and benefit from cost-effective relocations.  

Contact us to discuss creating or reviewing your current relocation policy.

Competitive Real Estate Market and Relocating Your Employees

by | Feb 8, 2022 | News | 0 comments

A recent study conducted by IBIS World stated that in the last five years, the Employee Relocation Industry has had a growth of $13.9 billion, which is at 0.4 percent annually. It is believed that the impetus for this growth is due to the rising economy and corporate profit. The other factor that boosted the Employee Relocation Industry is the housing market’s positive trend in the last few years. A substantial share of the revenue for the Employee Relocation Industry is generated from the real estate market.

As a result, the study concluded that in 2021 alone, the growth in the economy and house pricing index likely contributed to about a 7.8 percent increase in the Employee Relocation Industry. Unfortunately, this improvement came at a time when the industry is immensely affected due to the COVID-19 pandemic. 

While some employees refused to relocate due to health issues, and with a drastic loss of employment in parts of 2020 and 2021, the Employee Relocation Industry suffered. But with work-life coming back to normal, the relocation of employees is picking up. Furthermore, with the new trend of the Great Resignation, companies and employers are looking to hire talent beyond domestic boundaries. However, the incentive offered to talent doesn’t end here. The existing employees can rise vertically or horizontally within the company to ensure they are retained. 

In such a scenario, where real estate plays an important part in relocation, we need to see how it affects an employee. In many situations, the employee needs to sell a property before relocation and/or purchase a new property in the new location. In this article, we will investigate the effects real estate has on the relocation of an employee and how an employer can help. 

Perspective of an Employee 

For many employees, buying and/or selling their house is critical for relocation, hence understanding their experience would help the employer to prepare and offer a better relocation outcome. 

Low-Inventory and High Prices 

Across the country, many home buyers are facing difficulty with purchases because of the record-high prices in the real estate market. While that bodes well with any employee selling the house for relocation, there is another issue. When the same employee searches for the house in their new destination, they are looking at a price that can be higher than expected. They can also be in the situation of losing out on multiple bids or they may feel rushed to buy an overpriced property. Given such a situation, there are ways the employer can help the relocating employee. 

Employer Can Help to Relocate an Employee 

If you are still wondering why there should be a relocation program for the current real estate market, the answer is simple. The last thing you would want is for your employee to leave your company because of a tough home purchase experience. Furthermore, without a mobility or relocation program in place, you are in the position to lose out on more money. You may lose time, for example, if the employee is outbid by others for a new home, thus delaying their relocation time. You also might receive more exception requests, for example, if the person is moving into an expensive real estate market.  

So, how can an employer help an employee with the relocation program? 

Extending the Corporate Housing Benefits 

If you already don’t have one, you should provide your employee with corporate housing benefits. In case you already have the benefit in place, it is time to extend the benefit longer. Corporate housing offers the transferee a short stay in fully furnished accommodations until they find a new place to call home. But this stay cannot be for an indefinite period. With relocating employees having a hard time finding a house in this real estate market, extending the stay should be an option when applied for by the employee. 

Extending the Timeline 

The high-priced real estate market, with delayed enclosures, travel bans, and the introduction of an air-bubble due to the pandemic resulted in employees failing to utilize the relocation policy within the stipulated time. As a result, some people failed to relocate within the required timeline and had to forgo the benefits. Employers should evaluate existing relocation policies. The impetus is on employers is to identify the areas where they can extend timelines and offer the benefits to the relocated employee, mainly when it comes to real estate. 

Final Words 

One of the best ways to execute an employee relocation assistance program is to work with an experienced Relocation Management Company (RMC). An RMC can help your employees with relocating, finding the right house/closing, plus the many other steps needed in an employee’s relocation. An RMC can also design a cost-effective relocation policy that serves transferees’ needs while still saving your company money.

What is Repatriation Assistance?

by | Feb 1, 2022 | News | 0 comments

What is Repatriation?

Repatriation occurs when an expat employee returns to their home country. Unfortunately, it’s oftentimes an overlooked benefit in employee relocation packages. The process isn’t always easy on the assignee and can result in costly expenditures for your organization. However, if you have a clear plan in place to tackle these challenges, you’ll be ahead of the game.

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The Challenges of Repatriation

These are some of the challenges your expat employees might face when repatriating, and how to navigate these changes.

1. First, remember there will be changes in their job role: The repatriating employee may not know a lot about his or her next role yet, which is why it’s important to stay in contact during the change. Work out a plan with your repatriating employees so they each know what role in the company they will have when returning from their assignments. Even if they will retain their current position or title, their teammates and office culture will be changing once more.

2. Second, employees’ families will also be going through the adjustments: Just like relocating in the first place, it is important to make every effort to help assimilate employees’ family members during and after the move. Does your relocation package include spousal assistance to help the spouse or partner find a job and get re-assimilated? Offering school search benefits will also help when re-assimilating children, as their needs may have changed since they have been abroad.

3. Next, employees will need to re-adjust to their “home” surroundings: While employees may be moving back to their home country, they may not be moving back to the same location within that country. Your repatriation program should be prepared for aspects of the home location that will have changed from the last time the employee lived there.

4. Focusing on these three challenges will help your employees overcome the last potential hurdle of repatriation: Changing their perspective of where “home” is. Employees and their families have potentially been on assignment for a long time, and the country they are coming from may now feel like home. As the employer, be prepared to help those repatriating to think of this next location as home once more. Embracing and overcoming the changes of moving again will help employees re-identify with the location faster and allow you to be assured of their successful repatriation.

Source: Worldwide ERC®’s “Effective Repatriation Planning” Presentation, March 2017

How WHR Group Can Help

WHR Group has helped companies relocate their employees to countries all over the globe. We offer full repatriation program management, including program guidance and ongoing talent management recommendations to ensure your employees feel welcome, settled, and valued back home.

Relocation, Why Do You Need to Focus on Mobility Initiatives?

by | Dec 14, 2021 | News | 0 comments

The global economy is changing, and while it is here to stay, it is time for companies to develop their hiring and employment structures to think beyond domestic borders. Employers should be able to give their employees the right position within the company irrespective of the location.

  1. Deploying Talent in the Market

The speed to market is more cut-throat than ever before in this technology-driven era. However, the failure to put the right talent in the market first means you are opening up space for your competitor, thereby giving them visibility and improved market share. 

As an employer, this isn’t something you would want; therefore, you need a global mobility plan with a cohesive process where your employee gets all the necessary support in relocation, payroll, taxes, immigration, and more. Establishing a proper mobility initiative is essential in creating a global brand.

  1. Mitigating the Risk 

If you do not have a mobility program within your business, it doesn’t mean the organization cannot have mobile employees. You can deploy the right resources in new locations and markets without a concise plan, but there is always the chance of entry being denied in case of international mobility. 

Even within national mobility, your employees can be subjected to pay taxes for multiple locations, succumb to higher tax bills, or it may even cause your company to become taxable in the new location. By having a proper system in place for mobility/employee relocation, you can mitigate unwanted administrative burdens and unexpected costs.

  1. Controlling the Costs 

Often, management groups decide not to have a mobility initiative program as part of the company policy because it costs more. But it’s time to think differently. When you have a proper and planned mobility initiative program, you will be saving more money in the long run. The simple reason is you have a plan in place that is state, federal, and internationally compliant.

  1. Closing the Talent Gap 

Borders no longer define the war for talent. When you hire international employees or send your local talent to new venues, you are not only allowing them to learn something new. Your talent will use that knowledge to benefit your business in the long run. It’s time you identify employee’s potential. Help them develop and nurse their talent by relocating them with good packages and compensation benefits to manage your talent shortage.

  1. Offering A Seamless Experience

Suppose you have decided to relocate your talent to a new place. Without a mobility initiative in place, the employee must figure out the relocation process on their own. They will need to figure out how they will be moving their goods. In the case of an international move they must know the immigration process, the legal implications of earning in a foreign land, taxes, and on top of all that they must learn to adjust to a new culture. 

All these hassles can impact their performance and their ability to do their job. It may even drive them to leave the company due to these high-stress situations. With a mobility program in place, you can sort all these issues out beforehand and offer your employee a positive and seamless moving experience. This will benefit your company in retaining the talent.

By integrating mobility initiatives into your business plan, you are saving time, money, and setting your business up for success. If you are looking for experts who can help you with relocation programs and strategies, contact WHR Group, Inc. (WHR).