What should an international relocation package include? - Part 3

Is your company relocating an employee overseas for the first time? If so, your company may not have a relocation policy in place, and perhaps not much knowledge of what relocation support you should offer your employee.

Read on to discover what points you could consider for inclusion in your relocation package or policy to ensure your employee is not left high and dry when it matters. We have broken down the assignment cycle into three stages: pre-assignment, on assignment, and end of assignment. In this article, we will consider some points for when the assignee is relocating and actually on assignment.

In part 3 of the relocation package we will consider some points for when the assignee is actually on assignment.

1. Company car

As well as establishing eligibility criteria, you will need to consider whether the company wishes to provide a car or a cash allowance. In high-risk locations, you may also want to consider hiring a chauffeur.

2. Relocation allowance

It is common to pay an allowance to cover any miscellaneous and unforeseen expenses that are not specifically eligible for reimbursement or payment under the relocation policy. For example, cleaning the home property, excess baggage costs, and cancellation penalties.

3. Hardship premium

There may be some circumstances where the organization is operating in a location where the assignee may suffer some hardship based on factors such as housing, climate, disease, sanitation pollution, medical facilities, education facilities, infrastructure, physical remoteness, etc.

If your assignee is based in a hardship location, how are you going to compensate for this? You may wish to pay an allowance, "rest and relaxation" trips, or a combination of both.

4. Domestic and security staff

Depending on where they are arriving from, some employees may wish to employ domestic staff. In some countries, e.g. India, the hiring of domestic helpers is commonplace. Usually, this would not be covered by the company, but if you have a particularly senior employee who is spending very little time at home you may wish to provide some support.

In terms of security staff, this is very much dependent on the host location. If the company considers a location as high risk, it should consider the provision of security staff.

5. Base salary

You can adopt the home-based approach (balance sheet), the host-based approach, or the global market approach.

Salary and taxation is a complex area so you are advised to engage the services of a tax specialist before finalizing salary arrangements.

6. Bonus and equity-based awards

Decide whether you want to include the employee in any home or host bonus scheme. Ultimately, the adopted approach should be fair.

7. Tax returns

Expatriate taxation can be complex and burdensome for an employee to handle. You may wish to provide tax support for the duration of the assignment to relieve the employee of this concern.

8. Annual leave and public holidays

Are you going to base this on host or home country habits? Or are you going to create something completely different for an assignee population? Aligning holiday entitlement with the host country means that the assignee isn't left alone in the office on a national holiday.

9. Home leave

Some organizations allow the assignee additional time off to keep in touch with extended family and friends in the home location. You could either provide a fixed allowance or reimburse the cost of air travel and airport transfers.

10. Travel policy

Will your assignee's relocation travel be subject to the company's standard travel policy? Do you need to offer any enhancements to the standard travel policy?
Consider how many trips you might wish to permit.

11. Medical insurance

Your organization may already provide medical cover but if not you should make such insurance available to your assignee. Whether the company or the assignee pays for this is ultimately the company's choice but it would be prudent to ensure that appropriate cover is in place prior to an assignment starting.

12. Social security

If any home benefits (e.g. child benefit) are lost because of the relocation, you may wish to maintain the same level of benefits in the host location. This could be done by either enrolling in host location schemes (which may be a local requirement) or by means of a cash allowance.

 Look out for our fourth and final article on an international relocation package, where we will look at what could happen when an assignment ends. 

Whether you’re moving your entire company or individual experts, your people need to feel at home and be up and running immediately at their new location. Brunel offers customisable, digital and flexible mobility services to ensure the smoothest transitions possible. From individually budgeted spending to full and extensive global mobility programs, Brunel offers the right solutions and supports your people every step of the way.