This article is the second in a series on company relocation. This article focuses on the important considerations to make when sending employees abroad. Whether it’s your first time sending employees abroad or you’ve done it before, you must have a strategy and plan in place. In fact, a comprehensive global mobility program is ideal. You can learn more about the importance of a global mobility program in Globig’s article and podcast on the Top Reasons to Create a Global Mobility Program for Your Company. Below is a nonexhaustive list of important considerations to make when asking your employees to move abroad.
Understand what you’re required by law to offer (include in an offer package).
Employer responsibilities and employee protections vary greatly around the world. Many countries, and likely any country you are considering expanding into, have comprehensive employment laws. Because employment law violations often carry stiff penalties, it is imperative that you understand your obligations as an employer. For example, in the UK (and many other countries), employees have very specific protections, one of which is a written statement of employment. Working hours are heavily regulated and monitored in Singapore. Even China has strict employment laws that tend to favor employees over employers. Because every employment situation is unique and laws are very country specific, we recommend that you work with an HR expert familiar with local employment law to ensure your offer package includes everything that is required. Using your local (home country) processes and written employment agreement is not an acceptable option and will not protect you.
Consider working with a Professional Employer Organization.
A Professional Employer Organization (PEO) is a firm that offers HR management and benefits services. PEO firms offer a variety of employee management services, including employee benefits, payroll and workers’ compensation, recruiting, risk/safety management, and training and development. When you work with a PEO firm you essentially created a co-employment model, under which the PEO becomes the employer of record and you retain control of your employees’ day-to-day activities.
Working with a PEO firm is very common and highly advantageous to SMBs during their initial expansion abroad. The biggest advantage to working with a PEO firm is in the sharing of legal responsibilities, meaning you will not face the threat, impact of, and difficulty with compliance with foreign laws and regulations alone. A good PEO firm will help you stay within the confines of the law. Furthermore, because PEO firms have so many “employees,” they have access to large networks, which often means more access to and lower costs for employee benefits, such as group insurance. For this reason, some companies, particularly small companies, work with PEO firms even within their home country. The bottom line is this, you should strongly consider this route, at least for your initial expansion into a new country.
Carefully consider what compensation you are willing to offer.
Because compensation, benefit, and tax requirements and expectations vary greatly by country, carefully consider what you are required, willing, and able to offer your employees. As an employer, you have a vested interest in making sure your employee relocation is successful, and your employees’ attitude and support will help you to achieve this success. The cost of a relocation failure can be high. Your company should think through the following:
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- base salary and what, if any, cost of living adjustments should be made;
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- local and home country income tax implications;
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- stock vesting, grants, and options, including their tax implications;
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- bonuses, commissions, and other compensation, including their tax implications.
Carefully consider what additional benefits you are willing to offer.
Benefits are an important part of any offer, and perhaps more important in an offer to relocate abroad. Consider what other benefits you can offer and what expenditures you can make for your employees. Below is a list of commonly offered benefits and expenditures companies make for their employees who are relocating for work.
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- costs associated with a site visit before the relocation;
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- visas and work permits for family members (including adopted children, children of divorce, civil partnerships, etc.);
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- health benefits—How will you provide comparable benefits to what your employees are currently receiving? Will type of health insurance, including supplemental, will suffice? Is there a provision for major medical to fly back to the home country?;
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- travel expenses, including a schedule for how often employees can return to their home country and who will pay for that travel;
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- temporary housing/hotel costs;
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- moving and shipping expenses;
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- purchase or lease of a car or public transportation;
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- other insurance such as life, rental, home, etc.;
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- required education or foreign language classes and/or cross cultural training;
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- a timeline for employees to live abroad with an anticipated time frame for their return home; and
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- reintegration assistance for employees who have returned home.
Successful expansion abroad depends in large part on the successful relocation of key employees. The failure of an employee relocation can cost your company a lot of time and money. As an employer, you should do what you can to make the relocation of your employees smooth. An appropriate offer includes both financial and logistics assistance.
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