Let’s say you have two employees in the same position, with similar personal situations, who are both relocating with your company. One is relocating from New York to Los Angeles, and the other employee is relocating from New York to London.
You know that London is farther away than Los Angeles and requires additional services, like getting through customs, which will probably result in a more expensive household goods shipment. Aside from this, both cities have English speaking populations, both are large urban cities, and both are known for gridlock traffic at all hours of the day.
However, what other factors do you need to consider when offering relocation assistance to each of these relocating employees?
There’s more than just mileage and language barriers to consider when you’re relocating an employee to an international destination. In fact, mileage is just one of many factors that will contribute to the relocation experience for your employee. If you want to relocate employees internationally or nationally, it’s important to consider all of the aspects of both. Whether you’re relocating employees overseas or to another state, you’ll be able to plan ahead to keep the process running smoothly.
Some differences between domestic relocations and international relocations are more obvious (like distance and language), while others are more subtle. If you’re creating your company’s first international relocation program, it’s critical to be aware of these differences and the impact they have on the success of the relocation—these seemingly subtle differences can actually have just as much of an impact (if not more) as the obvious ones.
It’s essential to understand the nuances and complexities of an international relocation before you create your company’s international relocation policy. Your international relocation policy can maintain the integrity of your domestic policy, but there will be important discrepancies between the two to ensure the needs of your employees are satisfied.
Let’s take a look at some of the key differences between international and domestic relocation policies and, most importantly, the impact they have for your relocating employees.
When relocating an employee domestically, there are usually a few different classifications. You might be relocating an employee for an internship, permanent position, or rotational employee relocation program. The concept of short-term and long-term assignments are present with domestic relocations, but typically relocations fall into one of three categories:
The differences between these relocations can impact taxes and the relocation benefits employees might receive. For example, an intern may only receive short-term housing benefits, while a full-time employee who’s gone through the onboarding process may receive more benefits like household goods shipment, storage, home-finding trips, etc.
The differences in assignment type and length become even more important with international relocations due to:
Let’s start with the cost: international relocations inherently cost more than domestic relocations.
Assignment length and type affect cost due to different visa requirements, tax implications, and, of course, relocation benefits needed by the employee.
For example, an employee relocating for a long-term assignment (over a year) will need the appropriate visa for the duration of stay, will need to move the majority their belongings, and will require a long-term rental or house to live in. Compare this to a short-term assignment (less than a year) where the visa type may be different, and the employee only needs an allowance for shipping some belongings and short-term housing.
Because the costs of an international relocation are higher and the type of assignment is a major cost factor, you need to clearly define the goals of your international relocation program before you decide the different international relocations your company will support.
Is your goal to develop leadership skills within top performers? Are there key employees who need to manage the opening an international office? How long does the employee need to be abroad in order to accomplish the goal?
Whatever the case, be sure to have a clear understanding of the business needs required from your international relocation program, as it will subsequently inform the assignment types (permanent, long-term, short term) that your company will offer to employees.