Companies that manage successful international assignments place a lot of energy and resources on making sure the relocation of their employees, and their families and pets, runs as smoothly as the assignment itself. Families feel more vulnerable and usually have more distractions when they’re transferring to a foreign country. If expatriates aren’t comfortable from a personal perspective, you can bet they won’t be comfortable from a business perspective. To that end, it’s imperative human resources managers learn all they can about relocation services, especially if you’re a global organization trying to compete in a global marketplace.
Employees need relocation assistance.
For openers, an international relocation is far more complex than a domestic one, mostly because every country has its own customs and procedures. According to a 1996 survey by the Employee Relocation Council (ERC) in Washington, D.C., failed international assignments tend to be the result of a family member’s inability to adjust to the host country’s culture and physical surroundings. And moving personal belongings overseas is the first step in a long line of processes to make an expatriate’s life just a little easier, says Cindy Cross, director of international moving services for the Danbury, Connecticut-based Cendant Mobility.
In the international assignment arena, the best results come from an understanding of relocation support services. By having a system or plan already in place, a company can help expatriates with the disposition of houses and cars, shipment and storage of household goods, and visas and work permits. Moving an employee’s household goods, for example, can be an extremely time-consuming process, especially when you consider such issues as getting your goods cleared through customs, working with movers in another country who speak another language, and placing a value on everything shipped overseas, by air or surface.
Take the issue of a family pet. This particular process requires everything from obtaining the required documentation to selecting a shipping kennel. "A company loses valuable time when an employee is expected to coordinate his own move," says Cross. "But if a company puts together a package where your employees get benefits—among them the international movement of household goods and pets—there’s less down time for them and less loss to the company."
Will outsourcing save you money?
The biggest challenge a small corporation faces in international relocation is name recognition. You may be moving 10 people to Germany this year, but that’s not enough business on an annual basis to cut yourself a deal with a German moving company. Large corporations, on the other hand, can leverage volume, but they would need a sizeable in-house staff working full-time to guarantee shipments from beginning to end.
According to the ERC survey, while organizations frequently outsource selected policy provisions (cross-cultural training, tax preparation), few (8 percent) have outsourced the administration of the entire U.S. expatriate relocation program. However, another 8 percent are considering this option.
Anyone who’s moving household goods can usually bring to bear significant cost savings with a service provider, says Pete Helgeson, vice president of sales for Seattle-based Atlas Van Lines International. Of course, much of it depends on location, the size of the shipment, and how quickly you want your employee and his or her family relocated.
Outsourcing may also save on indirect costs. When a company uses an outside resource, it usually eases the burden of the already overworked HR manager. Of course, that’s not to suggest you shouldn’t compare the rates and service of one service provider to another.
Global relocations require specialists.
Traditionally, companies have had separate HR managers for domestic and international relocation. These days, both responsibilities are being filled by one person. As a result, this manager needs to be knowledgeable in a wide variety of topics, many of which may be new—including tax and labor laws.
This is why more companies are asking about outsourcing their global relocation programs. Today’s complex global marketplace requires global solutions. Human resources managers will have to know how to leverage and sustain competitive advantage. Outsource providers can handle everything from agreements and relationships with international movers, to any snags that occur in customs. For example, what if an airport shuts down at the same time you’re trying to ship your expatriate’s family pet overseas? Or what if your employee’s shipment was bumped, and won’t arrive for another two weeks or longer? Unless you’re qualified to handle these situations as they occur, you’re better off paying a relocation provider to handle them for you.
"Many employers want to know if we cover insurance, can we assist them with the differences in electrical appliances, these sorts of things," says Helgeson of Atlas Van Lines. "The answer is yes—we handle most everything."
One big issue most companies never consider is how much insurance to buy. Let’s say, worst case scenario, a steam ship gets caught in storm and it has to jettison your expatriate’s household goods into the ocean. It happens. Service providers can and should provide complete door-to-door coverage, right down to the insurance claim. "Damage is greater in international travel simply because there are other entities involved," says Helgeson.
And, of course, the process doesn’t end there. Relocation to a foreign land requires a lot of attention. Since global relocation covers such a wide range of activities, there undoubtedly will be a need for mid-course corrections.
David Gammel, director of the ERC’s center for international assignment management, says, "Relocation and international assignments ultimately come down to dealing with people. And international assignments are where it gets complicated because of the culture and language barriers, especially in regions with serious economic crisis. In order to keep up with the changes, you almost have to have help."
The complex international business environment requires a completely different set of relocation programs. And for global companies, employee mobility will be key to your future business success.
Global Workforce, March 1999, Vol. 4, No. 2, pp. 33-34.