Category: Global Relocation Tips

Best Practices for Relocation: Multiple Bids for Household Goods Moves

Post author By Ann Knapp | CRP, GMS, CMC
Post date February 14, 2017

It is no secret that competition leads to an array of benefits, including significant savings for the end user. We have seen the opposite when a company owns a monopoly on a product. Examples can range from Mylan raising the price of retail EpiPens over 400% in a very short time to dealing with customer service of the only cable provider offered in a neighborhood. Having one choice has never worked out well for consumers. The same applies to corporate relocation.

A lot of relocation management companies (RMCs) either own, or are owned by, van line companies. Therefore, when a client company wants to move its employees, the employees do not have a choice of van lines. The RMC and the van line know that the transferee is at their mercy with regard to price, scheduling, and customer service.

However, some RMCs use a multiple bid process in order to ensure that transferees are getting the best price and service. There are some significant benefits to having van lines compete for relocation business:

It encourages the providers to “sharpen their pencils” to provide the lowest reasonable cost
It ensures adherence to a company’s relocation policy guidelines
It is a way to eliminate any service day surprises

This is all accomplished by having at least two carriers meet with the transferee to create estimates based on how much needs to be moved, what needs special handling, and to where it all needs to be moved. Then the RMC audits the estimates to look for inconsistencies, for example:

Do the pickup and delivery dates correspond with the move?
Does one company estimate more crates than another?
Does one company show specialty items that the other company may have missed?
How close are the estimated prices?

Auditing the bids ensures an apples-to-apples understanding of the van line options and helps weed out the opportunity for overages.

Each carrier understands that its objective is to win the business. Therefore, they try to provide estimates that are fair and accurate with relatively no cushion to the costs. Many relocation policies that deal with van lines will also include a “not to exceed estimate” guarantee. This ensures relocation best practices are followed and provide the best solution.

Companies that utilize a multiple bid process save an average of $1,547 per move! This breaks down to an average of $1,473 to $1,604 for household goods movement and an average of $175 to $289 for car shipments per move.

While cost is very important, so is the transferee’s experience. By allowing the transferee to meet with multiple van lines, he or she will feel more engaged in his or her relocation process. In some cases, the transferee is actually empowered to choose the van line they prefer. Even if an estimate is slightly higher than another, if it falls within a certain percent (based on the client company’s relocation policy) of the lower bid, a transferee may select the more expensive carrier if he or she feels more comfortable with that specific household goods mover. This promotes an overall good experience, because transferees tend to be happier if they feel that they are being heard throughout the relocation process. And we all know that happy employees are productive employees.

Global Mobility Solutions (GMC) is the pioneer of the “Freedom of Choice” model in relocation. By following relocation best practices and providing multiple bids for an array of providers, client companies and their transferees have saved money on services like household goods movement and, of course, mortgage loans. GMS continues to be an innovator of workforce mobility programs in an effort to make relocations easy and practical for clients and their employees.

Learn more about the multiple bid process for household goods movement, as well as other relocation services.

Need to include multiple bids in your relocation policy? Ask for a complimentary policy review.

Tags corporate relocation, Corporate Relocation Services, Domestic Relocation, Global Mobility Best Practices, Global Mobility Solutions, global relocation, Household Goods Movement, Household Goods Movement Management, Mobility Cost Management, Moving Costs, Relocation Costs, Relocation Household Goods Movement, Relocation Van Line Management, Workforce Mobility

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Managing Mobility Costs

Post author By Tamara Molino | CRP, GMS
Post date January 31, 2017

Department heads all over the globe are constantly asked to identify cost-saving opportunities within their departments. Human resources, employee mobility, talent acquisition, and procurement are no exceptions. As you scrutinize your budget, try utilizing these three steps to help better manage and ultimately reduce your relocation expenses:

Cost Estimates

Managing mobility costs starts with understanding what those expenses are. First estimate what costs should be involved with your vision of a successful mobility program. A cost estimate will provide you with a clear picture of the potential costs of individual relocation assignments. You can then use these cost estimates to correctly establish a budget prior to initiating any relocations.

One effective way to determine your cost estimates is by utilizing cost estimate technology. There are many software programs that by using the latest upgrades will help you:

Save time
Reduce human error
Ensure compliance

Policy Reviews

By reviewing your relocation policies, either internally or with an outside relocation management company (RMC), you will be able to identify cost-saving opportunities and eliminate expensive exceptions. When reviewing your mobility management policies, you should:

Do so in conjunction with cost
Benchmark against other companies within your industry
Leverage technology for key services (i.e. Virtual destination tours, online school reports, etc.)

Example:

Tracking and Reporting

Lastly, you want to ensure that you are continuously tracking all expenses and reporting any overages or savings. Get a detailed account of how your cost estimates match up with your actual spending. Then the whole process repeats itself. Once you have your data:

Take action – Make any necessary adjustments to your budget, policy, or both
Review – Go over the detailed reports to identify more cost-saving opportunities
Incorporate technology – Save time and money by offering key services online

Global Mobility Solutions (GMS) is an award-winning RMC and, since 1987, has been helping companies save time and money with regard to their corporate relocations. As a courtesy service, GMS will review your current relocation policies and provide expert feedback to ensure that your policies are competitive within your industry and to identify any cost-saving opportunities, so you can focus on managing mobility costs.

Click here for your free relocation policy review

Tags Domestic Relocation, Global Mobility Best Practices, Global Mobility Solutions, global relocation, managing mobility costs, Mobility Cost Management, mobility expenses, mobility management, relocation best practices, Relocation Costs, relocation expenses, relocation management, Workforce Mobility, workforce relocation

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Pre-Decision and Best Practices for Global Mobility

Post author By Sam Hoey | CRP, GMS
Post date January 3, 2017

Singapore business district skyline panorama over Marina Bay

Pre-decision Best Practices: Why do many companies have a 50% rate for assignment rejection? It is primarily because the potential transferees do not have a clear understanding of the destination location and the support available for their families.

Assignment rejection and failure can be very costly to a company. Firms spend an average of half a year’s salary in recruiting and training when onboarding a new employee. For high-level executives, the expense can be six to nine months of their salaries. However, according to the ERC, it can be as high as three-times an annual salary for international executives. If assignments are rejected, or fail after a move – which adds much more to the financial loss – companies must go through the expense of onboarding and training new staff.

How can companies ensure that they get the right people in the right place at the right time and for the right price?

The answer is to use pre-decision programs. Global Mobility Solutions (GMS) is the pre-decision pioneer and we continue to develop new, innovative features for pre-decision programs.

Although the number is growing, currently only 22 percent of companies around the world are utilizing pre-decision programs. However, when working with an RMC, nearly 60 percent choose to incorporate pre-decision into their mobility management solutions.

Employees decline relocation assignments due to housing, family, and spousal/partner employment concerns. Many firms had a 50% rate for assignment rejection. 32% housing/mortgage, 55% spouse/partner employment, 69% family issues. By using pre-decision, companies increase assignment acceptance, reduce failed relocations, save money, and project a progressive and employee-friendly image.

Going back to the reasons cited for assignment rejection, let’s see how the in-depth questioning and available services of pre-decision can address each of those concerns.

Housing

Candidates are interviewed to learn about community and lifestyle preferences. Candidates are presented with destination spotlights that highlight the cost of living and attractions of the assignment location. Area tours are arranged. Candidates are pre-approved by participating mortgage lenders. Candidates are provided with home selling and home buying assistance.

Spouse/Partner Employment

The pre-decision interview includes an employee’s spouse or partner. Pre-decision best practices programs offer a career assessment to develop an action plan that will help the spouse or partner adjust to the new location. This can include resume services, aggressive job searching, and more.

Family

Through the pre-decision interview process, the specific needs of the family are determined. To help candidates better understand the new location before moving, they are presented with school reports and detailed community information. Community tours are arranged so that transferees and their families can see schools, hospitals, and centers of culture and entertainment prior to moving.

The talent acquisition program manager of a large healthcare company said, “By using pre-decision to initiate relocations prior to the face-to-face interview, we know that transferees have arrived more quickly, have settled better, and stayed longer.”

Because of how it engages relocation candidates and their families, increases assignment acceptance and success, and saves companies time and money, pre-decision best practices should be utilized when it comes to mobility management.

Learn more about how pre-decision programs can benefit both you and your transferees.

Tags corporate relocation, Corporate Relocation Services, Global Mobility Best Practices, Global Mobility Solutions, global mobility trends, Global Relocation Tax, Pre-decision, Pre-Decision Programs, relocation best practices, relocation trends, Workforce Mobility, workforce mobility management

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Strategic Tax Reimbursement and Best Practices for Global Mobility

Post author By Tamara Molino | CRP, GMS
Post date December 20, 2016

There are five steps you should employ when developing a global program for strategic tax reimbursement that balances the needs of both the company and employees with regard to managing tax costs:

Strategically Align Company Objectives and Employee Values

Consider Tax Impacts of Likely Host Locations

Choose a Tax Reimbursement Method that Best Fits, for example:

Tax Gross Up
Tax Protection
Tax Equalization
A Hybrid Solution

Tax Reimbursement Policy Design

Tax Reimbursement Policy Launch & Implementation

By following the five-step process outlined, you can develop a global mobility program that keeps your company compliant, reduces tax burdens, and, by saving them money, demonstrates to your relocating employees how much you appreciate them. At Global Mobility Solution (GMS), we like to think that there is a sixth step – contacting an expert for help. Outsourcing your workforce mobility program provides an expert partner in relocation.

Workforce mobility consulting at Global Mobility Solutions means our consultants focus on reducing organizational costs and minimizing relocation timelines in order to increase assignment success. Our in depth consultation includes competitor benchmarking, policy analysis, and relocation evaluations.

Global Mobility Solutions will perform a full review of your existing policies, to ensure the goals of your organization are properly aligned with the policy. If necessary, we will write new or change existing relocation policies and coordinate the implementation of the changes. If no policy currently exists, GMS will work with you to determine what your relocation needs are and develop new policies that best fit them. Your dedicated account manager will advise and counsel you throughout the relationship to ensure your relocation policy is the most cost effective.

In order to reach an experienced relocation policy expert who can help your company plan for strategic tax reimbursement and best practices, please contact us now.

Tags corporate relocation, Corporate Relocation Services, Global Mobility Solutions, global relocation, Global Relocation Tax, Global Relocation Tips, Global Tax, global tax tips, Workforce Mobility, workforce mobility management

Why Benchmark?

Post author By Tamara Molino | CRP, GMS
Post date December 6, 2016

Thai family using technology in their everyday live.

Relocations can generate a lot of excitement as companies eye the potential for increased revenue, organizational growth, and the development of their employees. It is important for those managing workforce mobility to know if their company’s relocation policies make sense in today’s evolving, global business environment. It is critical for all the stakeholders in employee relocation – talent acquisition, human resources, procurement, finance, legal, etc. – to fully understand the best practices to ensure that their policies are competitive, compliant, and effective.

Here are the top 5 reasons you should be reviewing your relocation program and policies:

To ensure competitiveness within your industry in order to attract and retain the best talent
To identify enhancement and cost-saving opportunities (i.e. process, service cost, exception reduction, etc.)
To maintain alignment with your overall mobility objectives across key disciplines
To educate internal stakeholders on current best practices and trends
To learn about innovative ideas for managing a changing workforce mobility environment

Policy Benchmarking Options

A best practice across all industries is to conduct program and policy reviews every 12 to 18 months, depending on an individual company’s relocation volume, size, and scale of programming. You can receive expert guidance and award-winning service by submitting a request for contact.

Tags corporate relocation, Domestic Relocation, global relocation, mobility management, relocation benchmark, Relocation Benchmarking, relocation best practices, Relocation Costs, relocation management, relocation tips, Workforce Mobility

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Making Global Tax Less Scary for International Relocation

Post author By Tamara Molino | CRP, GMS
Post date October 31, 2016

Modern Nairobi cityscape - capital city of Kenya, East Africa

Making Global Tax Less Scary for International Relocation: Relocating across international borders can be a little scary. However, the experts at Global Mobility Tax were kind enough to provide these treats to take the trickiness out of workforce mobility.

When sending employees on assignments, careful planning can minimize overall tax cost. Each country has its own set of laws that are subject to change. Employees should seek guidance from their tax advisors, making global tax their specialty.

Social security tax

If there is a totalization agreement in force between the home country and the host (assignment) country, a certificate of coverage should be obtained in order for the assignee to be exempt from social security tax contribution in the host country.

Physical presence

If an employee has regional responsibilities and is required to travel to countries like Singapore (60 days), Taiwan (90 days), Malaysia (60 days), China (90 days) and Hong Kong (60 days), he can arrange his visits in order that the physical presence stays below the de minimis day threshold and be exempt from income tax in these jurisdictions. In addition to physical presence, other requirements, such as no cross charge of costs, will also have to be met in order to be exempt from income tax.

Japan

Preferential tax treatment on employer provided housing can be achieved if the lease is signed by employer, the employer pays the rent to the landlord directly and the employee pays back “legal rent” to the employer with after-tax money. If all the conditions are met, the valuation of the taxable benefit is reduced.

Individuals who are residents in Japan on Jan 1^st are required to pay local inhabitant tax assessed on income paid in the preceding year. If the assignment is expected to end in early January, the employee may consider repatriating before Jan 1^st so that local inhabitant tax does not apply in the final year of assignment.

China

In order for certain non-cash benefits such as housing, relocation, education, home leave, meals and laundry as well as language training to be treated as non-taxable compensation, the amounts have to be reasonable and have be paid by the employer directly or reimbursed by the employer upon presentation of official receipts (fapiao).

Learn more about global relocation programs and services

DISCLAIMER

Although the above information is presented in good faith, it is for general guidance on matters of interest only and is not intended as tax advice. The information presented herein may not be applicable to or suitable for the individuals’ specific facts and circumstances.

The information should not be used as a substitute for consultation before any actual transaction with a professional tax adviser who is familiar with all the relevant facts making global tax their specialty.

Global Mobility Tax, LLP assumes no obligation to inform any person of any changes in tax law or other factors that could affect the information contained above.

About Global Mobility Tax (www.glomotax.com)

Global Mobility Tax, LLC (GMT) is dedicated exclusively to the tax and HR issues impacted by global mobility. Our quality people and high-touch client service approach enable us to offer world-class service to global organizations.

Their core specialty is tax planning for international assignments and relocations. In concert with our global service partners, we can offer your organization global strategy, planning and compliance.

GMT clients include both public and private companies, ranging from Fortune 500 companies to industry start-ups, based in the US and abroad.

Tags corporate relocation, global relocation, Global Relocation Tax, Global Tax, global tax tips, International Tax Laws, Workforce Mobility

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3 things assignees need to know about expat health insurance

Post author By Tamara Molino | CRP, GMS
Post date November 17, 2014

Shot of a young businessman using a digital tablet during a late night in a modern office

An increasing number of assignees are extending their stays abroad, which may require employers to consider more permanent relocation benefits for their expat mobile workforce. For instance, employees moving internationally for longer periods of time may likely have a greater need for expatriate health insurance.

Talent living and working abroad should have access to quality health care; but for a wide-variety of reasons, insurance may not be the same in the host country as it is in the United States. Keeping that in mind, here are three things assignees and their employers should know about expat health insurance:

One-quarter of uninsured respondents cited good health as the primary reason for a lack of coverage.

Uninsured individuals face massive health bills: Relocate Magazine cited a recent online survey conducted by health insurance provider Now Health International that found one-quarter of expats fail to take out international health insurance when they move abroad. The 25 percent of uninsured respondents cited good health as the primary reason for a lack of coverage. Yet, as medical care costs in popular expat areas continue to grow, the uninsured will face large bills if their optimism proves to be incorrect.
Some countries are better providers than others: Access to medical resources and the level of industrialization are two key reasons why some nations have better expat healthcare options than others. Taiwan is one of the highest rated countries for both healthcare affordability and quality. In fact, in its most recent Expat Explorer survey, HSBC found that nearly 70 percent of assignees in Taiwan spent less on health care while on assignment than in their home country. While assignee satisfaction with Taiwanese healthcare affordability and quality is 3 times the global average, inexpensive health care options can also be found in the U.K., Thailand, Japan and Saudi Arabia. The U.S., Ireland, Brazil and New Zealand are on the opposite end of the spectrum.
Employers want to provide it, but they can’t always afford it: A study conducted by Expacare found 23 percent of employers want to provide health insurance for talent abroad but don’t have room in their budgets. However, budget restricted employers can still help their assignees by providing information and resources covering the host location’s healthcare system and available expatriate insurance options. Although some countries provide universal health care solutions, dependence on government programs can be risky. In fact, Twelve percent of respondents in the Now Health International study thought they would be taken care of by their host country’s health care system. However, a growing number of nations are beginning to pass legislation that limits expat coverage to accident and emergency incidents only; one of many reasons that highlight the need for quality assignee education on expatriate healthcare.
There are sources to learn about expat health insurance: VisaGuide.World has developed a useful resource that explores the topic of health insurance for expats, including its importance and how to purchase an expat health insurance plan.

Brought to you by Global Mobility Solutions, a trusted partner in global talent management.

Tags corporate relocation, Corporate Relocation Services, global relocation

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HR innovation and talent management: A perfect pair

Post author By Tamara Molino | CRP, GMS
Post date October 30, 2014

The global economy is a more diverse marketplace than ever before. Workers on one end of the world can connect with employees thousands of miles away in real time thanks in part to the latest technological advances. As a result, international operations are growing, and global mobility is now an integral part of expanding business processes.

Although international relocation has become an important aspect of improving global operations, a surprising number of companies are still handling assignments in similar ways they were performed years ago. Development in technology has had a major impact on talent mobility over the years, but if companies want to keep pace with increasing global demand, they’ll need to implement cutting-edge systems as international assignments become more common in the workforce.

HR technology can drastically impact talent mobility processes.

Human resources must embrace technology
A stand-alone approach to global assignments is outdated now that mobility has become a standard practice across different verticals. Human resource information systems must integrate with supporting technologies that incorporate assignee data into the company’s general HR database, as it is crucial to creating a ubiquitous mobility process. A unified system helps create affordable, scalable and realistic processes that can grow in unison with increasing global demand.

Cutting-edge HR technology plays an integral role not only in streamlining mobility processes, but it also aids in back-end organization. For these reasons, the HR technology market is now worth more than $15 billion in software alone, according to a recent study conducted by Bersin & Associates, which cited Bloomberg statistics. In fact, the human resources consulting firm said the value of new tools that help in managing employee communications, recognition and workplace wellness is also growing rapidly. In fact, the top 50 venture deals completed in 2014 totaled more than $560 million.

What’s the next step?
Certainly, the recent influx of investment in HR technology is promising for international relocations, but human resource departments need to make smart and strategic steps when implementing new technology into existing mobility processes. According to workforce mobility association Worldwide ERC, member companies individually invest an average of more than $15.7 million in each year for global transfers. This points to the need for businesses to outline a smart and strategic mobility framework. Too much money is at stake to consider anything otherwise.

Since international mobility has become a norm, organizations need to know how to outline an actionable and profitable plan for a successful assignment. A recent Deloitte study outlined how businesses can diversify their talent mobility designs based on two key dimensions: development value and business value. The design helps companies ensure that the level of support they provide to assignees is justified based on the forecasted business value of each assignment. There are four categories in the value-based approach:

Learning experience: These assignments are high in development value and low in business value because the talent – often young, promising employees – are expected to bear some of the costs associated with the move in exchange for global experience and professional growth.
Commodity job: Target employees are volunteers or low-cost talent, which makes this level of support low in business and development value. These are designated for local and at-risk assignees.
Strategic opportunity: These assignees are the future leaders. The focus here is on development, experience and retention, which makes this level of support high in development and business value.
Skilled position: Although low in development value, skilled position employee support during a relocation is high in business value because these assignees typically have specialized skill sets. They have deep, niche capabilities and are rapidly deployed on project-based assignments.

This type of framework, when used in unison with cutting-edge HR technology, can add significant value to any international assignment process. Not only will it help businesses decide the financial viability of certain assignees, but it also provides a framework for HR departments on how much support to give during the process. Companies can also use smart strategies and technology to develop and retain the next generation of leaders – the majority of which are not only willing to, but expect to be internationally relocated at some point in their careers.

Brought to you by Global Mobility Solutions, a trusted partner in global talent management.

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Top 5 emerging international markets

Post author By Tamara Molino | CRP, GMS
Post date October 14, 2014

Walking through the beautiful streets of Dublin, Ireland

When it comes to the corporate relocation process, finding the right fit for employee mobility can be difficult. Different areas of the world are better positioned for personal and professional growth depending on the vertical, but developing in an emerging market is much easier said than done. A multilayer economic hotspot may be the ideal location to relocate talent for new or existing business ventures, but it takes time and a depth of knowledge to successfully adapt and find personal success in a new market.

A recent Forbes analysis of international GDPs found 70 percent of world growth in the next several years will come from emerging markets. Although China and India comprise about 40 percent of that maturation, there are still other viable options for businesses aiming to relocate talent. Keeping that in mind, here are five emerging markets to keep tabs on for a potential international relocation and reasons to further invest in talent relocations in these geographical areas:

Emerging markets offer unique opportunities for expatriates.

Central America: Although this encompasses several different countries, the region is small enough where businesses could individually identify local economies and choose which one best aligns with their business needs. CBS News recently came out with a list of the ten best places to invest in real estate, and half of the locations were located in Central America. The low cost of living and typically warm climate make for happy employees, which is a primary objective of global relocation. In terms of real estate investment, finding a return in this region of the world won’t be as difficult, either. CBS specifically cited Mexico, two cities in Belize, Nicaragua and Panama as possible real estate investment gold mines. Businesses and their employees can consult relocation services on the best areas to buy or lease property once a move location is decided.
Colombia: The South American nation isn’t exactly well-known on the international stage as a manufacturing haven, but it’s proximity to the coastline, strong economic growth and cost of doing business make it a viable possibility to relocate talent. Bloomberg predicts GDP growth between 2013 and 2017 will occur at a rate of nearly 22 percent with just a 3 percent inflation rate. A separate Reuters report noted Columbia’s economic growth was as high as 6.5 percent in the first quarter of 2014, although that figure dipped to 4.3 percent in the second quarter. A strong economic backbone and low projected inflation present an opportunity for relocated talent to find personal and professional success.
Indonesia and Malaysia: While China, India and Korea dominate the economic growth talks, smaller nations such as Malaysia and Indonesia are gaining a considerable amount of attention with regard to commercial prosperity. The two nations are separately governed bodies, but the bordering nations’ economies will likely continue to grow in the next few years. Indonesia’s GDP is projected to grow more than 30 percent between 2013 and 2017, while Malaysia is expected to mature 22 percent in the same time period. The latter nation’s inflation rate is as low as 2.5 percent and has a considerably low ease of doing business rank, according to Bloomberg. While vast cultural changes may prove to be a challenge for newly moved employees, global relocation firms can provide talent with services to help the settling-in process, whether it’s through offering van line services, tax preparation or providing ongoing counseling and support after the move.
Turkey: Bloomberg also ranked Turkey in its top-20 emerging markets, calling the nation the seventh-most viable nation for economic growth. Its GDP is forecast to grow more than 21 percent between 2013 and 2017, but its inflation rate is 5.4 percent, which has pundits jumping off the Turkish bandwagon. However, Turkey is a highly opportunistic market not only because of the current local real estate boom, but also because its workforce is packed with young and emerging talent. CBS News reported that half of residents in Istanbul, the nation’s capital and largest economic market, are aged 30 and younger, meaning buying power in Turkey is likely to increase as the rest of the population ages. Young talent may enjoy moving to this Western European and Southeast Asian nation not only because of its projected GDP growth, but also because of the young and emerging talent surrounding them. A youthful workforce in the nation’s capital specifically may help newly moved talent find individuals who have similar interests and desires, thus making the relocation process easier.

Emerging markets provide a strong opportunity to relocate top talent. Businesses can benefit from sending employees to other countries to help further develop company production and create new business resources. Recent Ernst & Young forecasts show investors are already exploring emerging markets as developing countries are attracting half of foreign direct investment. Companies focused on employee mobility are moving toward emerging markets, and a business that relocates its top talent to these locations could directly benefit from regional economic growth.

Brought to you by Global Mobility Solutions, a trusted partner in global talent management.

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