By Michael S. Schell, CEO RW³
rw-3.com
Various company policies will dictate the services an expatriate will receive when heading out for an international assignment. In most cases, your expatriates will have visited the destination on their homefinding trip, and will, in all likelihood, chosen (or narrowed down) the place their going to live and will be familiar with the household items they will be needing in the destination country. That will mean that certain items will be packed for shipment, certain items will be stored. Those packed for shipment will be divided into the ones needed for shipment by air so they can use it immediately upon arrival, and others will follow in overland and sea shipments.
No matter what the policy, there are certain key items that you’ll need to coach your IAs about, and certain policy and program definitions you will have to have. Most of those items are included in the following list and will require policy definitions:
- Home disposal (lease, sale, rental, property management, etc.)
- Automobile disposal
- Household goods management
- Travel arrangements
Home disposal (lease, sale, rental, property management, etc.)
Whether or not you deduct for a hypothetical home country housing, you will need to counsel your employees on whether they should sell or have their properties rented and managed. In most cases, it is advisable to encourage employees to retain ownership of their home country housing since often the price of re-entry to housing market may escalate disproportionately during the term of their assignment.
It is important to advise the employee that if he or she chooses to rent the property, their role (and emotional disposition) must transfer from homeowner to landlord. Of course, that is easier said than done, but it is important to make that point. Many companies have policies reimbursing for the cost of property management that oversees and approves tenants, and some policies provide the property management service for their employees. Property management services for vacant property is an activity fraught with pitfalls, and often reimbursement for such services rather than the company selecting property management vendors, represents less risk for HR and the company.
Automobile disposal
In most cases, it will be preferable for employees not to take their cars with them on an international assignment. This being the case, identifying a fair market value for the car and facilitating the disposal of it needs to be a part of the company policy. Most policies define an automobile Blue Book value (which employees will inevitably feel is inadequate) as a minimum guarantee. However, there is no better way to resolve this issue.
Household goods management
Most companies select preferred Moving (or Removal)l Companies to handle their shipment requirements. This is a big budget item, and many organizations define separate land services from international forwarders. The secret here is to find a vendor you can trust. Carefully check their references with other corporations, and have more than one company providing these services to your firm.
Some policies require that the employee obtain multiple estimates. This is often a good idea, not because the price will differ dramatically, but it involves the employee in the process, taking some responsibility for the decision. In any event, it is generally required for expatriates to have a separate air shipment that needs to meet them immediately upon arrival, containing the urgent necessities that they will need for everyday life even in a temporary living situation. This entire subject is rather complicated. Various insurances are required, but fortunately you are following a path well-trodden, so your company will probably have defined policies and practices, and others can be obtained from Best Practice organizations.
Travel arrangements
Travel arrangements for expats is another sticky wicket. Some companies allow business class travel; others insist on coach. Some companies have defined travel agencies through whom travel arrangements must be made; other allow their employees more flexibility within specific budgets.
Regardless of company policy, it is best to make travel arrangements as far in advance as possible, and for HR to be as helpful and sympathetic to the travel requirements the expatriate family has. This is the first step in the international living experience for the IA family. It is loaded with trauma and anxiety. After all, people are leaving home, leaving friends and family, and recognition that this is not a vacation or a short business trip puts additional strain on the family at a particularly emotional time.
In general, enabling employees to make their own arrangements within a reasonable budget is the most empowering and successful tactic to take. Also, take a sympathetic view to reimbursement requests for overweight luggage. People are moving a lifestyle with them on this trip.
Coordination of departure services is fundamentally a logical process that may seem mundane. However, it’s important to keep in mind that your role as an IA HR manager might best serve the corporation if you take a longer-term, strategic view of the role the expatriate is about to play for the company. These individuals would not have been selected for their assignments if they had not been outstanding performers. The assignment itself would not created if there was not a vital business need for an employee in this position. Therefore, creating a flexible, logical, empowering approach with a strategic (rather than administrative) focus will, in the long run, serve the company and the business mission best.
