Relocation service

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Relocation services, employee relocation, military permanent change of station (PCS) or workforce mobility include a range of internal business processes to transfer employees, their families, and/or entire departments of a business to a new location. Like other types of employee benefits, these processes are usually administered by human resources specialists within a corporation. In the military, these processes are administered by the Transportation Management Office (TMO) and Personal Property Shipping Office (PPSO). [1]

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Such business processes can include domestic residential services where an employee moves within a country or state as well as international relocation services which include planning for diplomats, managers, etc. working abroad. An agency providing relocation services directs and manages the process of relocation including arranging necessary documents (visa, long-term stay permissions), finding a new house (accommodation), finding a school for children (education), finding a job for the partner or "trailing spouse", arranging a teacher for the family (language training) and introduce expatriates to the local culture.

International relocations

Dating back to the Dutch East India Company, sending an employee to work in another country (sometimes called a "global assignment" in current HR jargon) has carried considerable costs while theoretically opening the potential for financial returns for the employer. [2]

With tax equalization, housing allowance, cost-of-living adjustment, and other benefits, the typical expatriate compensation package is two to three times the home-country base salary. For example, an expatriate with a €100,000 annual salary will cost the employer €200,000-300,000 per year incl. the relocation costs. Shorter term assignments have lower costs, especially when they avoid taxation thresholds.

Reasons why a company might give an employee a global assignment include filling functional needs, developing the employee for upper management, and developing the company itself. Anne-Wil Harzing of the University of Melbourne further categorizes these employees as "bears, bumblebees and spiders". [3] Those playing the role of bears are the long arm of headquarters control. The bumblebees transfer (cross-pollinate) their corporate culture. Harzing's spiders weave the informal communication networks so important in connecting far-flung branches, subsidiaries and all strategic partners.

Responding to a 2005 survey of global assignment management practices commissioned by a US-based third-party relocation management company, 31 percent of surveyed employers indicated that they track exceptions on a per-assignment basis for budgetary purposes, 23 percent track exception on an overall basis in order to identify policy components that need review, and 39 percent do not track the cost or type of exceptions granted. (Seven percent were not able to answer the question.) [4]

Depending on the size and organization of a company, different departments, such as finance or human resources, may administer the relocation program. Some may lack any formal programs while others have highly structured processes. Moreover, different operating units may administer different aspects of the program.

Some may manage and execute all of their relocation processes in-house while others outsource them. This is done to save time, focusing internal resources on company workforce strengths, or for providing better service to each transferee.

Of the companies participating in the 2005 Survey of Global Assignment Management Practices, 43 percent indicated that they either outsource or co-source some assignment management services (staffing 1:58 assignees, 7 percent declined to answer).

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<span class="mw-page-title-main">Expatriate</span> Person living outside of their country

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An international assignment is an overseas task set by a company to an employee. Companies that engage in international assignments are mainly multinational corporations (MNCs). MNCs send employees from the home country to a different country for business operations at overseas offices or subsidiaries. These employees are called expatriates. International assignments can fulfil a number of key organisational functions and are viewed as development opportunity for organisations to build a global and mature workforce. As a result of globalisation and the saturation of domestic markets, international assignments are a strategic tool for organisations to compete successfully on the global stage and achieve specific organisational objectives. These organisation missions are a key way of developing global perspectives. They can encourage diverse inputs into decision and develop shared values within the Headquarters, home country and subsidiaries. International assignments are a component of the training and development activities of international human resource management. Other main activities include human resource management in the global environment, selection, performance management, compensation and repatriation.

References

  1. "Preparing Financially for PCS Season". Military Times. 2017-08-08. Retrieved 2020-12-15.
  2. Rei, Claudia (2014-01-01). "Careers and wages in the Dutch East India Company". Cliometrica. 8 (1): 27–48. doi:10.1007/s11698-013-0093-3. ISSN   1863-2513. S2CID   255345445.
  3. Harzing, Anne-Wil (2001-12-01). "Of bears, bumble-bees, and spiders: the role of expatriates in controlling foreign subsidiaries". Journal of World Business. 36 (4): 366–379. doi:10.1016/S1090-9516(01)00061-X. ISSN   1090-9516.
  4. "US managers' willingness to accept a global assignment: Do expatriate benefits and assignment length make a difference?". ResearchGate. Retrieved 2021-04-12.