As you may have heard, credit reporting agency Equifax yesterday announced that it had suffered a cybersecurity breach that may impact more than 143 million U.S. consumers. Names, Social Security numbers, birth dates and other highly sensitive personal and financial information is among the data that may have been accessed.
We encourage you to visit the Equifax website for more details about the hacking, including whether your information was impacted and how to register for credit file monitoring and ID theft protection.
Your policy is the core of your workforce mobility program and it can dictate as much as 98% of the costs you incur. You want to control spend, especially since average domestic relocations can cost upwards of $80,000. International moves can be even more expensive. How do you contain common cost drivers and still attract and retain the “A” players that will take your organization to the next level? Here are 5 tips.
1) Watch home selling related expenses. Your key talent will be keener on relocation if you make it easier for them to find and purchase a new home. Yet, this one of the of the largest cost components, particularly when it comes to moving employees from a low cost to a high cost location. Something to consider is to take advantage of tax deductible expenses and leverage home sale programs that comply with tax avoidance strategies to reduce tax implications. Continue Reading →
Life on assignment drives mobile employees’ ability to advance their careers. Providing an automobile or car allowance to enable assignees to drive themselves around their destination location is another story. How do you decide whether or not to offer this type of benefit and how do you define its scope?
Provisions are typically made based on country, assignment type and tier. For the star talent you want to deploy, having access to independent transportation can be the positive tipping point in the favor of accepting an international assignment. Host location norms matter above all else, putting safety and security first. Considering the importance of this topic and the impact it can have on recruitment and retention, Weichert recently partnered with RES Forum to research best practices among transportation policies in use at multinational companies. Here are some results of that survey.
Provisions by Country
Just about half of all companies provide cars as part of the international assignment policy, irrespective of host or home country norms and less than 10% provide cars based on home country practices. Driving in another country can be quite a challenging experience, especially if the rules of the road are radically different. For some, an allowance to cover the costs of public transportation is the way to go. To ensure safety in potentially dangerous host locales, there are two approaches: an assignee can receive a home car allowance and car or be provided a car and driver. Where local norms include either a car and driver or transportation allowance, 49% of companies let their employees choose their preference.
Provisions by Assignment Type and Tier
Almost all respondents indicated that the type of coverage that is provided depends upon the length of the assignment. For short term assignments, it’s most cost effective to reimburse for car rental expenses. An annual car allowance that is paid via home country payroll is the preferred method for long term situations. Forty-four percent of all companies provide a car allowance or some form of transportation for all long term assignees, without adding the home or host country policy into the mix. Salary level is the other determinant for 30% of organizations. Corporate seniority also influences the application of the benefit where car or car allowance is standard but the offering is country specific. Only 2% of respondents said that their international assignees never receive a car or transportation allowance.
Offering an attractive transportation benefit to employees considering international assignment is just one way to distinguish your organization and there are many approaches. You want to use information provided by at least 3 sources to help you craft your policy and these include:
• Your relocation provider, experts with anecdotal data
• Cost of living data providers (such as Mercer)
• Host country human resource contacts
Generally, you’ll find a common recommendation from this triumvirate and the standard bearer is the host location norm. Think the “Goldilocks” approach: not too much, not too little, just right – with issues of safety preeminent.
To read the full research report and get the most up-to-date best practices, email firstname.lastname@example.org.
Convincing your key talent to take a move can be a tough sell when the cost of living in the destination location is higher than in the current home base area. An effective strategy to entice your best and brightest employees to consider relocation is to offer COLA (cost of living assistance). This infographic provides an overview of top US cities with the highest and most affordable cost of living, factors that add pressure, COLA components and how companies provide the allowance. The image above is the map only. For the full infographic, click the image below.
Relocation can be an incredibly exciting opportunity for the rising talent with your organization. Enthusiasm can dampen, however, if the cost of living in the destination location is higher than in their current home base. Business may be booming in hot housing markets like San Francisco, New York, LA and Boston, but asking employees to make a move that impacts their bottom line can prove a burden to yours. Offering COLA (cost of living assistance) to talent considering assignment can offset increased living expenses that relocating employees incur when they make a move from a low cost area to a high cost one. There are a host of options to employ. Here are 5 simple tips to avoid problems.
1. Use pre-decision services
It’s easy to make the right decision when you’re fully informed. A pre-decision service is a wise investment to help employees understand the ins and outs of the new location. Housing options, commute times and local/state tax issues can all influence an employee’s decision to take a move or go on assignment. Homework done ahead of time can go a long way to saving costs affiliated with a failed relocation.
2. Base eligibility on location or threshold
You can limit the cost of living provision by considering a minimum differential that triggers the benefit. This enables you to contain costs while providing assistance to employees impacted by the greatest difference in costs. Differentials are usually 5% or 10% and very few companies exceed 15%. Homeowners and renters are typically treated identically. If you are asking a reluctant family to move from Des Moines to New York, this tactic may be to your best advantage.
3. Cap maximums and tax assistance
Whether or not allowances are capped or salary amounts are considered varies from industry to industry. The majority of companies don’t cap the allowance or use a maximum salary in their COLA allowance calculation. Just over a third of organizations provide tax protection on COLA.
4. Create a transparent payment schedule
Paying a large COLA up front introduces risk for an organization. Most programs provide assistance over a 3 year period on a declining basis. Including a payment with each pay period is the most common method. Some companies make annual, semi-annual or quarterly payments. Whatever your method, be sure to have clear and explicit language written into the agreement so there’s no surprises on either end and no litigation drama.
5. Implement declining scale allowances
Provide allowances on a sliding scale as employees become used to their new home area and what it costs to maintain their lifestyle in the new locale. Time periods can range from 3 to 5 years. Lump sums are ideal for renters who need help with one-time expenses such as security deposit.
Deploying critical talent to high cost markets can be a hard sell but it’s not impossible. Showing your employees that you understand their point of view and can provide reasonable solutions through the judicious use of COLA can mobilize your staff to sign on to assignment.
For more information on COLA best practices, request a copy of our latest COLA whitepaper.
Weichert Workforce Mobility will be conducting complimentary, half-day educational summits for HR & corporate mobility professionals in Zurich and Geneva. These programs offer strategies for measuring engagement levels across your mobile workforce and insight to key mobility trends that will impact your program for years to come. Subject matter experts from the corporate and provider perspectives will provide valuable insights and best practices to make it faster, easier and more cost-effective to manage mobile talent.
To ensure an intimate learning environment, attendance at these events will be limited. Dates and locations are as follows:
Tuesday, 10 October, 15:00 – 20:00
Rennweg 7, 8001 Zürich, Switzerland
Wednesday, 11 October, 15:00- 20:00
Rue de Lausanne 14, 1201 Geneva, Switzerland
Following up on our earlier post about the Ontario Non-Resident Speculation Tax that became effective June 1, the following is a summary of current status as obtained from reliable sources but which cannot and should not be relied upon as legal or tax advice and Weichert clients should review this tax law status with their applicable tax advisors.
Quite simply, several material developments have occurred that corporate clients and relocation companies should be aware of as they undertake home sale transactions within the Greater Golden Horseshoe* Region (GGH).
Foreign national purchasers (essentially any buyer who is not a Canadian citizen or permanent resident or a couples purchase in which neither spouse is a Canadian citizen) will be subject to paying the 15% purchase price speculation tax, and relocation companies and clients should be prepared accordingly. Please note that some special foreign purchaser exemptions may apply, and would need to be pursued by experienced local counsel with the Ontario Ministry of Finance.
Today, we have a lot of Jetsons-style technology, literally at our fingertips. Who doesn’t love FaceTime, Google searches and the Roomba (Ok, maybe not the Roomba)? To remain competitive and keep your rising mobile talent happy, it’s vital to acknowledge that the construct of family has also progressed. Let’s visit some of the major points that are part and parcel of 21st century mobility management.
What Makes A Family A Family
As technology has changed, so too has our definition of “family.” No longer defined by Dad, Mom and 2.2 children, families can be multigenerational, include domestic partners, be single parent in nature and even have members of a different species. Being sensitive to your mobile employee’s particular situation strengthens the corporate relationship, increasing the likelihood of a successful assignment.
When your mobile employee is not flying solo, it’s imperative to lend support and consideration to a spouse or partner who may be feeling less than thrilled about uprooting his or her life. Often, there is an entirely separate, established career to consider and offering career counseling assistance can help. The loss of a second income may be the kind of financial hit the family just can’t take and can influence whether or not your preferred assignee signs on. Continue Reading →
Today’s post was authored by guest blogger Dave Leboff, President, US Operations for Immedis Inc., a premier global payroll solutions provider based in Dublin and New Jersey.
The Brexpat vote is a year in the rear view mirror and it continues to create growing ripple rings for Europe, the US and the world. A year ago I wrote a short article about the potential effects of Brexpat on exchange rates and, therefore, on expatriate allowances. That prediction is bearing out.
If we take a look at employees with Cost of Living Allowances the effect over the past year can be illustrated by looking at the Cost of Living Allowance (COLA). Continue Reading →