International Relocation Services

While globalization has opened many opportunities for business, it has created some significant challenges. One leading challenge for global managers is learning to understand and appreciate cultural values, practices, and various nuances in different parts of the world. Experts in international business agree that to succeed in global business, managers should be open to others’ ideas and opinions and have the flexibility to respond positively and effectively to practices and values that are oftentimes drastically different from what they are accustomed to. Cultural training has been shown to improve an individual’s relationships with host nationals and allows expatriates to adjust more rapidly to a new culture and an international relocation.

There are a variety of training techniques that prepare people for foreign work assignments. They range from documentary programs that merely expose people to a new culture through materials about the country’s sociopolitical history, geography, economics, language and cultural institutions, to intense interpersonal-experience training, in which individuals participate in role-playing exercises, simulated social settings and similar experiences in order to “feel” the differences in new culture. Successful cross-cultural programs can include the following:

Local business etiquette. Even the most veteran and prolific employee can have difficulty without an understanding of business etiquette in other cultures. For example, the U.S. tendency to “get down to business” is regarded as rude in Japan, where business transactions often have a greater personal relationship component. An employee who appears impatient with Japanese traditions designed to establish friendship and trust will have little success in business negotiations.

Cultural biases. International relocation assignees should always examine the way their own culture affects their perceptions of right and wrong, good and bad manners, values, dress, and other customs. Cultural training can improve understanding of the cultural forces that affect their own behaviors and help assignees learn how to adapt to new cultural demands and the international relocation.

Customized training. Additional training can include special modules to help the employee and his or her family with their own individual concerns. For example, if the assignee’s children will be attending local schools, modules and resources on education etiquette would be appropriate.

To learn more, please visit our resource library

Here are a few things to remember when instituting a cross-cultural awareness program into your corporate relocation program. For a full account of information regarding this service visit our resource library.

Don't forget the family
Just as spouses should be involved in the assignment selection process, they should be involved in training for global assignments. Some experts estimate that nearly 80 percent of all failed global (international) assignments can be linked to the spouse's inability to adjust to the new environment. Each member of the family faces special issues in the expatriate environment that should be addressed.

Other cultural resources
Organizations should consider utilizing their returning expatriates for help with cultural awareness initiatives. Employees who have already completed similar assignments can act as subject matter experts (SMEs) to help new expatriates learn business customs and how to navigate foreign business circles. SMEs can also prove invaluable in helping new expatriates learn the hierarchy in companies with which they will be dealing. It's important to note, however, that companies should not rely solely on employees to provide guidance to new expatriates. Relying exclusively on veteran expatriates can be problematic if the guidance reinforces cultural stereotypes or results in the new expatriate adopting the predecessor's bad habits. While other international assignees have a role to play in helping newcomers adjust, they should not replace professional consultants/trainers.

Alternative views
Although cross-cultural awareness is important, some might argue that its importance is just a hyped up myth. In actuality, on average only 30 percent of American managers sent on international assignment lasting from one to five years receive any cross-cultural training. It can be argued that managing is simply "managing," so where it is done is irrelevant. Another point of view is that any type of short-term cultural training would be ineffective because people can't learn to work and live in a foreign culture after only a few days (or even a few weeks) of training. Others argue that an understanding of a country's culture is something people assimilate over many years based on personal experiences in that specific culture. Others will say that corporate culture takes precedence over country culture. For example, a local employee working for a "bullish" American firm in Thailand might show traits of aggressiveness and conflict, which are not traits normally associated with the Thai culture. These traits, however, may be common in the corporate company culture of the employee's organization, causing the Thai employee to act outside his or her normal cultural dimensions.

Nevertheless, in order to be successful, an expatriate must be comfortable with his or her staff, colleagues, clients and business atmosphere--regardless of location. Cultural specialists also agree that to be successful in dealing with people from other cultures, expatriates need knowledge about the cultural differences (and the similarities) among work locations. The global employee of today's business world can only benefit from gaining cultural awareness, either through direct training or personal experience, which would lead to greater professional effectiveness and company performance. Read more

If you would like more information about cross-cultural education and how it can be added to your international relocation package/program, please contact our corporate relocation consulting team.

When localizing an expatriate, there are several compensation items that need to be considered. Here is a checklist to use a guideline:

1. Base salary. Should the employee be "re-priced" to the local market pay structure? Should a premium be offered for international experience? Many organizations move the employee to local salary levels. If there is an extreme difference in salary levels (either lower or higher), however, a phased-in approach is often carried out. On the other hand, oftentimes organizations justify paying an expatriate on a higher pay structure because of his/her international experience and business relationships with the home office.

2. Retirement benefits. Because retirement plans, social security and pensions do not cross national boundaries, this is often the most difficult item to transition. Often employees have expectations to remain on their home country retirement program, but unfortunately there is no typical solution to bridge the gap between country plans. Some basic alternatives include retaining the employee in a tax-qualified home country plan, simply transferring to the local plan or using an umbrella-funded plan.

3. Income taxes. Normally, the expatriate will simply transfer to the local tax system. This is not a problem for most of the world. American workers, however, are put in a difficult situation because they are taxed on a worldwide basis. Many organizations will continue the "tax equalization" process on an as-needed basis to prevent double taxation on American expatriates. Employees of other nationalities do not require such assistance.

4. Housing. It is recommended that organizations remain flexible regarding host country housing because many factors come into play when deciding how to handle housing for the expatriate. In many locations throughout the world, expatriate housing is vastly different than local standards and expectations. In some cases, it may be unreasonable to expect an expatriate to move into a local neighborhood or local style housing, e.g. Mumbai, Beijing, Jakarta, etc. Therefore, if the expatriate is moved to the local salary structure, a housing allowance may be needed to subsidize continued living in expatriate style housing. Other issues that arise with housing tax issues, family matters, property ownership laws, home search assistance and moving costs.

5. G&S differential/assignment incentives. In locations where assignees receive a G&S differential, the common practice is to immediately stop the allowance. Other options include a phase-out or lump-sum buyout, although it is rare for companies to continue to pay a G&S allowance beyond the effective localization date. Other assignment incentives such as mobility premiums, hardship allowances, etc. are also normally stopped upon conversion to local status.

6. Education for dependent children. After housing, this item is the most commonly subsidized cost after an expatriate is localized, especially if the local schools are inadequate based on international standards or if the host country language is an issue. To alleviate the problem, organizations should consider continuing education coverage, or pay a percentage of the education costs for one to two years.

7. Health care. Health care standards and costs vary greatly in different parts of the world and is a priority issue for most employees and their families. Normally, localizing employees will simply transfer into the local health care system, but concerns will arise if the health coverage in the new location is of a lower standard than in the home location. This will be a costly change for an employee coming into the United States, where typically the health care is more expensive. Because of their time spent in the host country, a localized employee will most likely be aware of the issues, and therefore be in a position to make appropriate decisions.

Finally, localization may subject the employee and the company to various employment laws and regulations that apply to employees hired by local companies. It is important to speak with a local employment counsel to understand the legal effects and ramifications of localization, including subjecting the company to stringent employment laws in some European countries.
Localizing expatriates can be a complicated process and is not as simple as transferring expatriates to a local compensation package. By having a strategic plan in place, companies can anticipate potential localization issues and make the process as efficient as possible.

There is no such thing as a small relocation, but some companies don't require the large-scale support needed by those relocating hundreds or even thousands of employees annually. For these companies, SIRVA Advantage might be the answer. SIRVA Advantage is a program developed specifically for companies that relocate fewer than 30 employees per year. Currently, 120 companies participate in the program.

Through the program, companies have access to a dedicated service delivery team with specialized experience in small-volume relocations. Users don't have to be experts in relocation because all the details are handled for them. SIRVA can get a relocation program up and running quickly, and because they manage every aspect of the program, companies don't have to worry about the details. Transferees receive the full benefits of having a corporate relocation provider manage their transfer without the large corporate relocation budget.

"Companies that relocate a small number of employees have different needs than those of their large-volume counterparts," said Tim Callahan, senior vice president of sales and marketing SIRVA, Inc. "These companies may not be as familiar with the process or the complexities involved in different domestic or international relocation scenarios because they simply don't relocate employees as often."

Using SIRVA Advantage, companies can choose their services á la carte, which offers them the flexibility to develop a cost-effective custom program to fit their needs. SIRVA Advantage provides companies with guidance and assistance on a range of relocation issues, including:

• Domestic and international support
• Fixed-fee or traditional home sale programs
• Home marketing services
• Home finding and new home purchase services
• Home rental and temporary housing services
• Mortgage services
• Move management
• Tax and legal services
• Vendor contracts
• Online relocation tracking and reporting

One-on-one attention and interactive tools
The Advantage process starts with a consultation between our client and SIRVA Advantage's Business Development Manager, Jane Yanosko, to coordinate services tailored for each transferee - with this program a corporate relocation policy is not needed, SIRVA's abbreviated contract serves as the purchase order for all services authorized by the client. Once services are determined and the transfer process is initiated, the client and the transferee receive dedicated support from relocation counselors and associates focused on serving clients with fewer than 30 relocations annually.

In addition, transferees have access to MoveOurHome.com, a Web portal designed to help them take an active part in their move. MoveOurHome.com has up-to-the-minute relocation information configured on a per-client basis. On the site, transferees can view company-specific policy information and transferee-specific relocation program information.

"Transferees can submit, view and check the status of expense reports, communicate with their relocation counselor, and specify home and area preferences," continues Callahan. "They also have access to an online move organizer and essential destination information such as weather, crime statistics, school reports, population figures and other community information."* SIRVA Advantage was developed based on input from current customers and internal service teams, and is designed to provide a company will a small or no relocation program a high level of service on a more flexible, on-demand basis.

To learn more about SIRVA Advantage, contact Jane Yanosko, SIRVA Advantage business development manager, at 800.531.3840 or jane.yanosko@sirva.com.

The Panel:

Paul Klemme
President
SIRVA Mortgage

Peggy Love
President & CEO
Full Circle International Relocations, Inc.

Kelly Reiss, CRP
Senior Vice President / General Manager,
Eastern Region / Global Supply Chain
SIRVA Relocation

Connie Swenson
Senior Vice President, Relocation and Referral Services
Coldwell Banker Residential Brokerage / Arizona

Joseph K. Taylor, SCRP
Executive Vice President
Valuation Services, LLC

Kelly Reiss moderated today’s panel of mortgage, destination services, household goods shipment, and real estate supplier representatives.  The session gave clients the opportunity to speak directly with SIRVA’s suppliers, gain a better understanding of how the relocation supply chain operates, and hear a discussion of today’s real estate market from the supplier perspective.

The discussion began with new trends in the relocation industry.  Multiple suppliers cited declining markets as a significant trend emerging this year.  As Paul Klemme noted, the fourth quarter of 2007 ended with 108 U.S. markets identified as declining markets by Freddie Mac.  During the first quarter of 2008, this number has already risen to 205, and experts predict at least 100 more declining markets in the second quarter.  Additionally, the number of foreclosures on U.S. homes has risen dramatically in recent months.  The panel explained how lenders have reacted to the poor markets by decreasing the amount of overall lending and requiring higher down payments from home buyers.  As a result, the number of potential homebuyers has decreased, and relocating employees are having difficulty selling their homes.

While the real estate market lies outside of the suppliers’ control, the panel also discussed issues directly affected by suppliers, such as how they manage the quality of their services.  Several panel members emphasized the important role that employees play in ensuring consistently high quality.  For example, Connie Swenson explained that real estate agents use tactics such as designating certain specialists for SIRVA transferees.  If at any point the specialists lack the appropriate time to dedicate to SIRVA’s clients and transferees, realtors realize the importance of quickly hiring additional employees so quality does not suffer.  Adding to the idea that the quality of a supplier comes from its employees, Paul suggested that a company’s commitment to on-going training and pushing to make people better at what they do forms an essential element of a successful supplier.

Further discussions touched on other interesting topics such as overcoming a seller’s denial that they live in a declining market and the importance of securing a loan quickly in today’s economy.  In conclusion, Kelly requested that each supplier share one last piece of information with attendees; panelists final comments centered on the idea that clients, transferees, SIRVA, and every member of the supply chain must work together for a successful relocation.

The Panel:

Maura Carey, CRP

Vice President,

Strategic Accounts

SIRVA Relocation

Amy Carter

Global Supply Chain Manager

Intel Corp.

Peggy Love

President & CEO

Full Circle International

Relocations, Inc.

Sandy Palmer, SCRP

Manager, Corporate Relocation

Cargill, Inc.

While concrete, logistical items such as household goods shipments or home marketing assistance receive priority treatment in corporate relocation programs, for employees and their families, the “soft” transitional and settling-in services can make the difference between a successful and a failed relocation. As Maura Carey and her panel discussed, the complex process of relocation is hard on the entire family, not just the employee.

Relocating employees and their spouses want and arguably need several “touch points” during the relocation process, where they can receive assistance ranging from the concrete (locating daycare for small children) to the less tangible (ideas for helping teenagers adjust to their new surroundings). Companies can incorporate introductions to social and job networks, school assessments and recommendations, and specialty tours of shopping and cultural areas into their relocation programs in order to ease the family’s transition. Not only are such services relevant from a comfort standpoint, but they are also important from a business perspective. Effective destination services should increase transferee acceptance rates as well as provide a tangible, differentiated benefit for recruitment and employee development.

In order to illustrate some of the points made during the discussion, Sandy Palmer, manager of corporate relocation for Cargill Inc., reviewed a case study. During the last four months of 2007, Cargill conducted a Transition Support Services pilot program. One key finding was that transferees and their families unequivocally enjoyed and appreciated having someone to walk them through the settling-in process, check-in frequently and assist with the “soft” transition issues early in the assignment. Amy Carter, global supply chain manager for Intel, referred to the family’s first two weeks in the new location as the “Golden Window” of opportunity to make sure that they feel comfortable in the new surroundings. Failure to achieve this comfort can sour the entire assignment or even prevent the employee from accepting a future relocation assignment. Basic “niche” services such as stocking the refrigerator prior to the family’s arrival in the new home or getting the children involved in activities immediately can help the transition, Amy explained.

Building on the comments of the other panel members, Peggy Love, president and CEO of Full Circle International Relocation, Inc. asserted that destination services must involve two elements, local knowledge and a focus on the adjustment process for the family. Also, she emphasized the importance of customizing the transition program for each family because the success factors vary for each family’s situation.

Keeping in mind that Peggy cited family concerns as the biggest reason for an employee turning down an assignment, companies cannot overlook transition services when designing their corporate relocation programs. Even domestic transferees can receive tremendous help from a one to two day orientation in their new area.  When the employee and the family experience a smooth relocation transition, it not only mitigates stress and inconvenience, but it also allows the employee to focus more quickly on the reason for the relocation in the first place: the job.

What transition services are your transferees and assignees asking for to support their success in the new location?