Even though you know this is the right move, it won’t come without some stress. You need to find a new place to call home, learn how to navigate a different town, master your job, build a support network, and if you have a family, find schools for your kids and perhaps a job for your spouse or partner. (more…)
We are considering closing down one of our offices in Brazil, and moving some key resources to another office. We do not have an intra-Brazil relocation policy. Can we use our US domestic policy to move these individuals?
Dear Global Mobility Professional,
Great question! The short answer is no, you should never use your US domestic relocation policy to relocate employees or new hires from city to city, within other countries outside of the US. (more…)
Excerpted from Mobility May 2015
Professional athletes are a not-so-obvious audience for relocation services. Interestingly, enough, the players themselves are often responsible for their own relocation arrangements and expenses.
Chris Dingman, President of The Dingman Group, the leading sports relocation company, said: “According to the Collective Bargaining Agreements, across all 5 major sports, if it’s a trade then the team that receives the player is responsible for relocation expenses. Outside of a trade, like free agency, it’s almost always the responsibility of the athlete to pay relocation costs.” (more…)
I’ve worked with domestic transferees for quite a while but I’m brand new to global relocation. Do you have any dos and don’ts you can share for a global mobility newbie?
Dear Global Mobility Professional,
Congratulations on your new responsibilities! You’ll find that global mobility has some similarities to domestic relocation, but even more differences. Here are ten dos and don’ts for you, in no particular order:
Family considerations, including the spouse/partner’s career, have traditionally been the number one reason for reluctance to relocate. According to Worldwide ERC®, real estate concerns eclipsed family and career considerations during the Great Recession (imagine having to sell an “upside down” house and give up a spouse/partner’s job during a recession), but as the real estate market recovers, personal issues are again rising to the forefront.
Dual-career families have become the norm. Ozzie and Harriet are gone: according to the U.S. Census bureau, men are the sole breadwinners in only one out of four married couples. So even with a great offer on the table, most families are reluctant to embark on a relocation unless the spouse can either continue his or her job in the new location or find a new one. International assignments bring special challenges as many countries limit or outlaw spouse employment. (more…)
We are trying to determine an effective currency exchange (FX) rate for our upcoming expat assignment. Specifically, we were wondering what FX rate we should use when setting and updating COLA and other assignment allowances? Should we use the rate from the day the assignment starts? Or rather a 3 month/6 month/12 month average?
Dear Global Mobility Manager,
I can understand your company’s and your assignee’s nervousness around exchange rates lately, especially given the recent burst of global currency volatility. Based on what I have seen, the most common practice is for companies to set somewhat frequent update periods (quarterly is best but semi-annually is ok too) and use the most up-to-date rate available on that day.
I have asked one of my industry colleagues who is a subject matter expert in this area to provide a more meaningful explanation of why it is best to use the most current rate possible when determining the FX exchange rates for international assignments. Jordan Blue is a Senior Associate at Mercer and has this to say:
For FX rates we typically recommend that you use the most current rate possible. At first thought, it would make a lot of sense to use an average, right? But when we consider which approach would get closest to truly equalizing the salary the average doesn’t work out so well. Essentially, using an average means you include a lot of data points that simply aren’t relevant to our purpose.
If you think about it, our purpose is to set the COLA for the next quarter or 6 months based on what we believe the FX rate will be. In other words we want to try and predict the FX rate moving forward. If I want to know what the FX rate will be tomorrow my best reference point is today’s FX rate. Using an average would likely put me way off (consider the graph below). The average FX over the past year would be somewhere around 1.25 but the FX rate tomorrow is likely to be somewhere around 1.35 which is a big shift. Even if we used a 3 month average we would still be around 1.3 which is again, pretty far from where we want to be. So while using an average seems like a great idea, it actually means the assignee won’t be equalized due to the difference in the FX rate we use to calculate the COLA and the FX rate they actually experience when they transfer money.
Jannette Matula is TRC’s Director, Global Relocation Services
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In today’s lean business environment, most companies no longer have the luxury of a dedicated relocation department, staffed with experienced professionals who can devote their full attention to the process.
More likely, if the function is managed in-house, it’s just one of many responsibilities juggled by busy HR professionals. Complicating matters further, relocation has gotten more specialized and complex over the years.
For domestic relocation, in-house professionals must keep abreast of current best practices and tax/legal regulations, control costs, source and manage suppliers and sometimes even manage inventory. Global moves are even more challenging. Companies must identify, qualify and manage global partners, worry about immigration and tax matters and source and coordinate a whole array of support services.
Family Tips for Relocating Employees
Moving is disruptive for adults, but an employee relocation can be even more unsettling for children. Preparing a child for a new home begins weeks before moving day, and today we offer suggestions for making the transition as seamless as possible.
Positioning the company for continued growth
MILWAUKEE, Wis. February 11, 2014 – TRC Global Solutions (TRC), a leading talent mobility company, is pleased to announce several management changes and promotions:
Sean Lickver, CRP, GMS, has been promoted to Executive Vice President and will assume responsibility for TRC’s day-to-day operations. He works with the Chairman in setting the strategic direction for the company, and oversees the senior leadership team to ensure that TRC’s resources are optimally deployed to support the company’s mission and objectives. Lickver also oversees the company’s performance against key metrics; evaluates the performance results to ensure departmental and organizational goals are met; and manages the company’s quality control initiatives. Lickver has more than 15 years of operations and management experience in the relocation industry. Before joining TRC in 2011, he held management roles at AIReS and Cendant Mobility.
We have a Canadian employee we are moving to the US permanently. Our policy provides for Canadian home sale assistance, including equity advance. However, the policy does not address protection against drastic currency fluctuations when it comes time for the employee to convert his equity in CAD to USD. You have probably noticed the drastic exchange rate fluctuations over the past several weeks between CAD and USD. The exchange rate was .88887 when the employee listed on October 6. Then it was .87341 on December 9, when the home buyout was presented. The employee received their equity today and the exchange rate is .79655. That’s a 10% devaluation over the course of 3 months! Our employee is asking us to provide currency protection due to this drastic devaluation of the Canadian dollar against the US dollar. What is our obligation? What do other companies do when this comes up?
Dear Global Mobility Manager,
Thankfully, these kinds of drastic currency fluctuations between Canada and the US have historically been rare. Nonetheless, here we are.
Since you do not have a relocation policy provision currently which addresses this issue, the best solution is to find a way to validate the employee’s concern and come up with a compromise that will satisfy the employee, maintain his trust, and also maintain consistency and compliance with company practices, all within the hiring manager’s budget. No small task!