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FM Analysis

For relocations, including Group Moves, the right communication sets the tone. Our group move experience shows that some companies hold back on official announcements until news trickle through the press or grapevine. This is the worst scenario for any company - employees’ speculations run high, potentially damaging the company’s reputation and employees making uneducated decisions without knowing the ins and outs.

The reasons for Group moves are manifold including the need to open an office in a new location, project based moves or the closing of a facility.

Any group move has a number of risk associated, including - retaining their top talent - losing intellectual knowhow is very expensive

- Company’s reputation - if people are laid off Companies should be wisely balancing moves versus risk, loss of talent, exposure and cost. Relocations are not cheap and budgeting should include intangible costs such as hiring new employees, training, company’s reputation, admin etc.

At all times a Group Move should be guided by a Group Move Policy. An individual employee risk assessment for the key talent supports budget and actual spend.

A sustainable approach in attracting, developing and retaining talent - whether one or a hundred people are to be relocated - is to understand the employees/families individual needs and if costs allow - a tailored solution should be reflected.

Q

In your opinion, why do businesses decide that relocation

is best for them?

As Thomas Friedman explored in his book “The World is Flat” – globalization will continue to drive business. It is a chicken and egg situation: Is business driven because of globalization or does globalization drive the corporate to expand?

The war on talent is on. Arguable there are three generations, the Millennial, the X and Baby Boomers. However, people are living/working longer, so are there perhaps more generations in our workforce, not only in the “Western World” but also in the BRIC and the N11 countries?

CEOs/CFOs/HR and BUs should understand the generational significance and its impact on relocations, managing different behaviors, motivation, needs and diversity challenges.

Global Mobility is a very important aspect – talent management including the exporting

or importing of expertise, catering to all generations and the drive for globalization should be aligned with the corporate business acumen and growth.

Q

Corporate Relocation hit the headlines this year after the BBC’s

decision to move its Breakfast news program to Salford caused it to lose over half of the show’s staff. Is this an inevitable outcome with relocations?

The details surrounding the BBC relocation and consequential loss of staff are sketchy at best. It would not be helpful for HCR to comment without knowing all the facts.

As with all relocations, whether it is a group move, one relocation or hundreds, in the end the decision lies with the employee/family. No matter the corporate reason for the relocation or the length of the assignment – in the end the employee/family has the final say. These decisions can be influenced with attractive packages, bonuses and allowances which might assist an employee to agree however, questions of equality, hierarchy and future relocations need to be carefully balanced.

As number of important aspects can ease and influence the decision - - Communication companywide/individually - A clear relocations policy - Tailored assistance matching the employee/family’s needs

- Reason for relocation - Knowledgeable HR/BU Managers who understand the intricacies of relocation, its cost, talent management and corporate implications if position is not taken

Q

Have there been any legislative changes recently (12 – 24

months)? What changes would you like to see happen?

Globally, country specific legislation change constantly, including immigration and tax liabilities. It therefore is imperative for companies to partner with Relocation Management Companies who monitor these changes and are able to advise the potential impact of these changes to their global mobility program.

In the UK the £8,000 Relocation Tax Allowance should be re-evaluated by the Government. The current 19 year-old allowance of £8,000 is now worth less than £5,000 after inflation. If Government just wanted to keep pace with inflation then the allowance should already be more than £10,800. If the Government just wanted to keep pace with their increases in Stamp Duty, then the Allowance should be reset to well over £40,000. Maybe then business would

use the economic encouragement to relocate their staff and help reduce the amount of long-distance commuting and its CO2 emission!

Q

Is there anything else you would like to mention?

International assignments are estimated to cost between 3-5 times the annual salaries. Assignments can fail but can be reduced by clear communication, planned talent management, mentorships and a carefully thought out relocation policy. The softer issues of relocations including dual career considerations, cross culture training and spouse challenges are often misjudged and financially not supported. Companies should balance the costs of softer issues versus the cost of failed assignments.

When choosing a Relocation Management Company the financial stability should be thoroughly researched to reduce any potential risk to the corporation.

When choosing a Relocation Management Company the financial stability should be thoroughly researched to reduce any potential risk to the corporation. In an RFI/RFP process often the question “What is your turnover?” is asked. The answers vary from an honest and open provider who declares their management fees only while others might declare their management fees plus their rechargeable (i.e. rent payments made on behalf of clients), obviously tainting the picture. The same goes for accreditations: Some relocation companies claim to be ISO 9001 certificated. However, when checking into details it might transpire that their parent company is accredited, while the relocation company is not. Therefore, due diligence before selecting a provider is strongly recommended.

By choosing an independent, award-rich and financially strong Relocation Management Company such as HCR, corporations ensure that their best interests and assets are looked after by professional companies whose core business is to relocate employees.

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