The art of corporate relocation

With the need to meet multi-generational employee expectations, while simultaneously fulfilling business needs, corporate mobility has now become a canvas of experimentation for HR leaders trying to formulate a solid relocation strategy. Akankasha Dewan explores how best to dabble in the art of corporate relocation today.

Worldwide, mobility programmes are increasingly being included as a key element in attracting, recruiting and engaging talent. Such programmes also allow companies to take advantage of emerging opportunities and markets and cope with macro-economic events in a flexible manner, while controlling costs.

“There seems to be an increase in the ‘internationalisation’ of business with increased trade and travel between countries, in technology providing new opportunities and in the world generally becoming a smaller place,” says Stephen Park, head of global mobility at Fonterra.

The art of corporate relocation

In line with such trends, companies today are stepping up efforts to enhance their relocation strategies to ensure relocated employees are being taken care of optimally.

“In the past, corporate relocation involved sending a business leader from the company’s headquarters as a representative or figure head to keep a watchful eye on the local subsidiary and ensure the local subsidiary repatriated profits home,” Park says.

Now, he adds, an “industry” has been “developed for high-touch services to support this focus and the art of corporate relocation has formed”.

Echoing his views, Tarun Gulrajani, the head of human resources at REHAU, says firms who don’t focus on supporting relocated staff may lose out on the global war for talent.

“Companies now want to ensure that employees have the best experience in every aspect of their work life, and this goes without saying, is addressed towards corporate relocation as well,” he says.

In essence, the delivery of the relocation experience – and its implications for a successful future relationship – is more critical than ever before.

The pressure on HR departments to justify expenditures, manage programme costs and support mobility decisions will only increase in the future.

To stay ahead of this trend, HR departments should consider setting up specialised centres and dedicated units to incorporate solid relocation models.

This is exactly what Siemens has done, according to Rahima Ibrahim, senior vice-president of human resources at the firm.

She explains that because of the massive relocation of employees worldwide, Siemens has created several regional hubs to manage specific country legal and tax laws.

“The delivery centre and personnel in each country are well trained to be specialists and experts in handling all relocations, and in meeting country specific requirements. The speed and the quality of services are measured to ensure effective and efficient services are provided and business needs are met.”

She adds that corporate relocation or, as Siemens calls it, “international delegation” is essential to supporting the company’s strategy because it helps in “placing competent managers and experts where they are needed”.

Complexities of relocating a multi-generational workforce

The inherent problem in doing this, however, is that placing and developing the right talent at the right place involves dealing with employees of all ages and skill levels.

“Currently, it seems corporate relocation has moved down the organisation. For example, companies are relocating armies instead of just sending their captains overseas. This means that employees even in their early careers are being expatriated from more diverse home locations than in the past,” Park explains.

Indeed, as the mobility industry has grown, it has attracted Baby Boomers, Gen X and now Millennials at a consistent rate, on par with the labour demands of the industry.

Because of this, all interviewees agree that mobility strategies will need to evolve to meet more sophisticated deployment demands, while simultaneously managing the very different needs and expectations of the new multi-generational workforce.

“Implementing an effective strategy for corporate relocation enables the teams performing/supporting business activities to have the right skills set at the right time to deliver business results with the least amount of distraction,” Park says.

“However, one of the fundamental points for corporate relocation to include is the human touch and being able to develop individuals, family units, teams, clients and other networks in person in real time.”

Essentially, multiple stakeholders are involved in the process, and to develop all of them, it becomes important for HR professionals to understand generational profiles and differences.

Of course, there are always candidates that don’t fall into neat categories based on age. But when relocation managers understand the needs, desires and expectations of each generation, it is easier to create a relocation offer that aligns with needs and expectations and which begins the future relationship in a positive way for employer and employee.

“It is about setting realistic expectations at the HR policy level, coaching the business about managing their own expectations of relocation along with their employees’, being transparent and consistent so there are no surprises, and creating a sense of trust as relocating is a huge commitment,” Park says.

The Millennial conundrum

But this is easier said than done, considering today’s well-informed and inter-connected workforce.

“People are well read, well travelled, some of them have even had early experiences living in another country for a few months either through an exchange programme in a school or later in life through short project assignments to other countries. Employees have no qualms moving to a new location with family in tow, as they feel they gain a lot more from new work experiences, new collaborations with team members and spending some time developing expertise outside their home turf,” Gulrajani says.

Because of the possibility of such previous experiences in travelling, he adds HR needs to be extra careful in not making promises regarding relocation policies and benefits that cannot be sustained.

“On the same token, it also hurts HR’s reputation when relocation companies over promise and under deliver. I have moved countries a couple of times and it is never an easy thing to do, too many factors are at play and it does not help when the relocation does not go well,” he says.

This is especially important for Millennials, who seem to be fast dominating the relocated population.

While those aged 50-59 are currently the largest age group of assignees, the 2014 Brookfield Global Relocation Trends Survey found the fastest growing age group within the mobility sector is 30-39 at an overall 33%.

Indeed, the report adds that as Baby Boomers start to retire, the Millennial employee is advancing in an increasingly connected global marketplace. More complex mobility patterns are emerging across the region, both intra-regional and west to east.

This complexity is, however, made more prevalent because Millennials seem to bring with them new and sometimes contradicting perspectives regarding relocation.

According to PricewaterhouseCoopers’ “Millennials at Work: Reshaping the Workplace” report, 70% of Millennials want or expect an overseas assignment at some point in their careers.

And with 1.8 billion Millennials globally predicted to make up 50% of the workforce by 2020, employers need to ensure their relocation programmes are attractive to this generation – a feat which is not devoid of its own challenges.

Gulrajani believes Millennials are “easier to relocate” than other generations because they are “fresh off the block” and are willing to take on challenges and new experiences.

This is echoed by Park, who says that at “the moment we can generalise and say they are at the early stages of their careers”.

“They are at a phase where they are developing their skills and capabilities and our concept of co-investing in their career is very relevant. They typically have no children or have infants so they are more mobile and able to relocate and their partner (if they have one) is able to be mobile as well.”

Interestingly, while admitting Millennials are easy to relocate because they are “keen to learn and want international exposure for their career development”, Ibrahim warns that being “ambitious”, the young generation can sometimes get “impatient” and companies need to fast-track their careers and provide them with challenging assignments.

Maintaining a delicate balance

In such a situation, it becomes difficult to formulate fixed and solid relocation policies for each generation.

However, the issue at hand, Park explains, doesn’t remain at whether a particular generation is easier to relocate, but how to maintain the delicate balance between standardising relocation practices and meeting the specific requirements of relocating each employee.

“The biggest challenge is managing expectations when you have a duty of care to two parties (business versus employee),” he says.

He adds that in the process of relocating, employees talk among themselves and compare themselves to other organisations and do their own informal benchmarking.

“The danger is that perceptions are generated based on incomplete information and you have challenging discussions as to what is right.”

Park suggests it is precisely due to the erratic nature of relocating employees that HR leaders need to be able to firstly analyse the needs of all the stakeholders involved.

“Each relocation has competing drivers and there is no such thing as a one-size-fits-all approach. You have to think who is involved with each corporate relocation and there’s a lot of interested people: the employee, the hiring manager in the home location, the hiring manager in the host location, HR in the home location, HR in the host location, finance, etc,” he says.

“I think you have to quickly identify parties who are decision makers, who are supportive, who provide challenges and juggle the competing drivers to come up with a business decision. It’s an art, you will always receive different interpretations from the interested people.”

Gulrajani warns, however, of the dangers of catering to everyone’s demands, adding that HR should also not hesitate to take help from experts where necessary.

“Don’t look at pleasing everyone because you won’t. And don’t try to do everything yourself,” he advises.

“The biggest disservice HR can do is trying to focus on everything instead of letting the experts deal with it. This also helps in neutrality as you are taking yourself out of the equation.”

He cites an example of maintaining such a balance between catering towards employee demands and fulfilling business needs – in the area of relocation pay packages.

“One option that I implemented in my previous company was to completely transform relocation benefits to a relocation cost. So instead of offering employees ‘X’ number of relocation benefits, we started given them a relocation amount. We told them they now have ‘Y’ dollars to play with, and they get to decide how to use that amount.

He added the company’s policy was to not take back any unused dollars and employees got to keep savings, if there were any.

“That was a win-win as there were fewer complaints as the onus was on their employees to ‘manage their finance. From an administrative perspective it was a lot easier on HR as our relocation costs table was created based on job levels and the host country costs. This made it fair for everyone,” he says.

Similarly, Park elaborates on the philosophy Fonterra has adopted to structure relocation employees of different age groups.

“For international assignments, we are moving towards balancing the employee’s needs for support while on assignment versus business requirements for the employee’s assignment.

“The key thing is to understand if there is a need to have a connection to the home country whether it is for legal requirements, duty of care for the employee (immigration/tax/healthcare/pension/social security), talent requirements for the employee to remain globally mobile, etc. If so, then we look at providing the home-based approach to compensation structures.”

He adds the company generally does not try and differentiate employees’ pay packages based on age.

Instead, it looks at “the personal circumstances relative to their level of seniority within the organisation and benchmarks constantly”.

“For example, the housing budget for a single person is generally smaller than the budget for a family of five, and the housing budget for a person in their early career is generally smaller in dollar terms than a person in the senior career category (maybe in absolute terms only, but percentage of housing allowance to relative income may be the other way around).”

Such an approach is, undoubtedly, in line with the firm’s efforts to maintain the balance between flexibility and consistency when it comes to relocation. Though far from achieving “global mobility nirvana”, as Park terms it, is a step towards attaining it.

In essence, shaping a corporate relocation programme to fully enhance and support multigenerational needs and business goals is one of the most effective ways that organisations can meet the challenges of the future. The winners now and in the years to come will be those companies that adjust their relocation strategies now to address these requirements.