By Globalization Partners
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When your company is considering expanding internationally and opening new locations or branch offices in different countries, you can either hire people who already live in the countries or transfer current employees to the new office location. International relocations can make sense when you have experienced team members who know your business well and can serve as guides to help the new international offices thrive.
Companies that are relocating employees have a few things to consider before they send their team members abroad. You must follow the new country’s rules when it comes to taxes, employee wages, and benefits. Before moving employees to another location, check out this employee relocation guide.
Why do companies relocate employees internationally?
When you can connect to people around the world without ever having to leave home, why should companies bother to send their team members abroad? Businesses decide to move employees for several reasons and can benefit from doing so in many ways.
One of the primary reasons why a company might decide to transfer a manager or another upper-level employee to a new, international office location is that doing so puts a knowledgeable, experienced team member in a leadership role in the new office. Relocating a current employee also saves a company the time it would take to hire employees who already live in the target location.
Sending current team members to a new country also allows a business to test the waters of the international market without committing to hiring locally. If things don’t work out in the new country, the company can always recall the employees, bringing them back to the domestic office. Another option is to have existing employees relocated to the new market on a temporary basis. They can train local employees to bring them up to speed on the company’s products and services, then return to their home country at the end of the assignment.
Relocating employees internationally can give a company a better chance of making strides in its new location. The employees might know all there is to know about the way the business operates, but they likely have a lot to learn about the culture and expectations of the new country. Having one or a few employees transfer means a business is more likely to get a better sense of how things work in a particular country. The team members can see firsthand what the cultural expectations and norms are, and they can better tailor their company’s service or product to the new market.
How does global relocation differ from domestic relocation?
In many ways, international relocations are similar to domestic relocations. Both require employees to pack up their lives and move to a new location. However, there are some key differences between the two, which can present challenges for both employees and the employer. Some of the ways international employee relocation is different from a domestic relocation include:
- Visa and work permit requirements: If your company is sending employees to a new country to work for your business, they need to have the right work permits and visas for that country. A tourist visa won’t be sufficient if they are going to be working abroad. When your business transfers employees from one office in your home country to another, it doesn’t need to focus on immigration or ensuring employees have the appropriate paperwork.
- Expenses: Moving employees abroad can cost more than relocating people domestically. Travel expenses can be significant, depending on where the employees are headed and how much airfare is. There’s also the cost of moving their possessions. International shipments might cost more than domestic ones, especially with the cost of customs to consider. It might be more cost-effective to give employees moving abroad a relocation allowance so they can buy furnishings when they arrive at their destination.
- Language: Depending on where your company is growing, there might be a language barrier to consider. You’re less likely to have to worry about language differences when employees relocate within their own country. Language differences can mean that the pool of employees you can choose from is smaller. If your company is based in an English-speaking country and you want to expand into a Spanish-speaking country, you’ll need to find employees who speak Spanish relatively fluently.
- Culture: Although cultural differences can occur within a country, such as the difference between attitudes on the East Coast versus the West Coast of the U.S., cultural differences are likely to be more pronounced between countries. People used to Canadian work culture might find it challenging to adjust to office culture in Japan, for example. Reading up on cultural differences can help businesses best prepare for international transfers.
- Employee wages and benefits: Different countries have different rules regarding wages and benefits. In some countries, employees must receive a certain number of paid days off annually. Other countries have no paid leave requirements. The same is true of wages. Some countries require employers to pay a certain minimum amount hourly, while other places don’t have minimum wages.
- Taxes: Employees who move domestically might then have different taxes to pay. For example, in the U.S., some states don’t have an income tax while others do. The tax differences are likely to be more pronounced when employees move abroad. Employers need to ensure that they withhold the appropriate amount and type of taxes from employees’ paychecks to avoid any issues.
- Support: International relocation tends to bring a more dramatic change to people’s lives. They have to adjust to different expectations in the office as well as differences in their personal lives. They might be abroad without their spouses or have uprooted their families. In any case, employees tend to need more support when they move internationally than when they move within their country.
What does a company need to relocate employees internationally?
Moving employees to a new location in a different country requires a fair amount of planning and preparation. Your company needs to decide how it will help the employees it transfers and how to decide which employees to send abroad. You also need agreement from the employees who are relocating. People who want to travel internationally are much more likely to thrive in their new roles than people who move begrudgingly.
The two most important things your business needs as it establishes locations abroad and starts to relocate employees are a relocation policy and an employee contract:
1. A global relocation policy
Before you send employees abroad, it’s a good idea to create a relocation policy. The policy can outline the global relocation services your company will provide to team members. It should also detail what aspects of the relocation process employees are expected to handle. As you create the policy, it’s useful to think about:
- Housing: Your employees might need to sell their current homes and will have to find a place to live in the new country. Your relocation policy can detail the type of assistance your company offers people. For example, will you provide help connecting employees to real estate agents who can list and sell their homes? If employees want to keep their houses, can you connect them to rental management companies? Finding a place to live from a distance can be challenging. Your company might consider offering temporary housing and assistance searching for a home once employees arrive.
- Employee paperwork: Transferring employees to an international location can involve a significant amount of paperwork. Will your company have someone available to help ensure employees have the visas, work permits, and other documents they need to work and get settled into their new role?
- Settling in and adjusting: A move abroad can mean culture shock for employees. Consider what services your company will offer to help people acclimate to their new environment. If you’re sending employees to a country that has a different language from your own, will you pay for language courses for your team members? Will there be someone available to help recently relocated employees navigate life in their new country? How much will your company allot to pay for housing, relocation expenses, and settling in?
2. Employee agreement and contract
The key to a successful international relocation is ensuring employees want to move abroad and understand everything the process will entail. Just as your company might have had employees sign contracts as part of the onboarding process, it’s important to have them sign a contract before they move internationally. The contract and employee agreement should clearly outline the following:
- The length of the assignment: The contract should state how long the employee will be working internationally, such as one month or one year. If the contract is for an indefinite time, it should state that.
- The expectations of the role: Employees might take on new responsibilities when they move abroad. The contract should outline the expectations of the role, what their responsibilities are, and who they will be supervising.
- The salary and benefits: Sending employees to work in a different country can mean that their salary changes and that they receive a different benefits package, based on the labor laws and requirements of the new country.
- Termination procedures: When employees no longer want to work with your company or when your company needs to let them go, what is the process? How to legally terminate contracts can vary based on the country where your employees work.
- Employer’s role in relocation: The agreement should detail what types of support your business will provide employees through the relocation process. This could include how much you’ll pay to cover moving expenses, if you’ll pay for training or cultural support once they arrive, and if you’ll help members of their family relocate, too.
Additional global relocation advice
Whether your global expansion project succeeds depends in large part on how well your team members adapt to living and working abroad. Here’s what you can do to help employees adjust and adapt to their new location:
- Give employees time to settle in: Ideally, you’ll give your employee some time off to get settled into their new home or to find a permanent place to live after they arrive. Depending on the location, the employee might also need time to recover from jet lag. Offer a few days or a week of paid time off so employees can get the lay of the land before they jump into work.
- Introduce employees to current team members: If employees are joining an existing team in a new country, plan an event that introduces them to their new co-workers. You might set up a welcome lunch or dinner soon after they arrive. It can also be worthwhile to partner recently relocated employees with someone who’s locally based. Local employees can answer questions your new team members have or help them get around.
- Keep in touch with employees: Have someone from your home country check in with the relocated employee regularly to see if they are adjusting well and to offer any support or guidance, as needed.
- Ask for feedback: Ask employees who have relocated to share their thoughts and feedback about the process. You may want feedback from them shortly after they arrive, in the middle of their assignment, and after they’ve returned. You can use their feedback to shape future relocation programs.
How will your company manage global mobility?
While there are potential benefits to sending talented employees abroad, the expenses involved in relocation can make it cost-prohibitive for many companies. Changes to regulations regarding visas or concerning who can get a work visa can also make it challenging for companies to send employees from one country to another.
One way to eliminate the high costs and other challenges of international relocation is for a business to use a global employment platform to hire employees abroad. It’s an easier way to manage the onboarding process, so your company can become operational in a new country within days rather than weeks. Using a global employment platform to hire locally in a new country also saves your company the expense of sending team members abroad.
Learn how Globalization Partners simplifies managing international employees
Globalization Partners helps companies hire in 187 countries. As your company’s global employment platform, we provide a team of in-country experts who are available 24 hours a day, seven days a week. We handle the work of onboarding and compliance so you can focus on growing your company and successfully growing internationally. To learn more, request a proposal today.