Ilona A. Keilich, our Managing Director, has recently shared her views on mobility policies with People HR. She believes a flexible approach is more fitting to the current global market.
Relocation Policy is an important guideline that is supposed to treat fairly relocating employees and help them to settle in well in the new environment. It is meant as a tool to support home and host unit as well as the transferees themselves during this challenging move.
However, some companies find it hard to create fair relocation policies easing stress during associated with the move. In some other cases, SMEs that are new to mobility are not having any policies in place at all. Additionally firms trying to cut the cost of relocation, offer a lump-sum approach by giving relocating employees an additional allowance and making them take the responsibility for the whole process of relocation. In this case however a lump-sum budget in mobility polices are seen by many transferees as a bonus rather than actual money to spend. Ilona shared a few examples in the interview with People HR.
When thinking about biggest mistakes in HR policies, Ilona has recalled a few examples when very strict and rigid guidelines, caused stress and limited choices of transferring employees.
You can read the full article on the People HR blog.
Copy of the transcript below originally published on Aug. 8, 2017 (author John Crowly from People HR)
Global mobility is important if you want your business to be an international success. Despite this, many companies operate an HR relocation policy that is awkward at best, and sometimes downright counterproductive.
Today, I’m talking to relocation expert Ilona A. Keilich, of ExpatsGuide. We’ll be talking about the biggest mistakes companies make when setting an international HR relocation policy – and some of the things you can do to become more globally mobile.
Setting the right relocation policy from the start
It’s best to get your HR relocation policy right from the start. This means that the first time you ever send an employee abroad, you should be thinking hard about how you’ll manage the relocation. Why? Because according to Ilona, many companies tend to make it up as they go along the first time – and eventually, this becomes a sort of embedded policy that holds them back in future.
“Many global corporations have international personnel policies in place that are inflexible or rigid” she explains. “This disrupts the deployment of talent, and also lengthens the time people take to relocate.”
Luckily, Ilona has shared with me the most common reasons why international relocation policies fail. This means that if you are a small or medium business, you may still be able to nip these mistakes in the bud, before your need for global mobility hits a critical point.
You’re giving employees too much responsibility
By far, the biggest mistake Ilona sees companies make – especially in smaller companies – is where HR provides employees with a lump sum, and tells them to get on with it.
“When HR simply provides a lump relocation sum, employees often see this as less of a budget, and more of a bonus” she tells me. “They get caught up in organising the move themselves – seeing how much they can save, or what they can afford with the money… but in the end, the responsibility wears them down.”
Ilona explains that when employees who are relocating are given full control of their relocation budget, they often end up feeling stressed, engaging in very time consuming research, and failing to realise important details – like the local lease property market, or immigration compliance.
You’re placing too many restrictions on different elements of the budget
Some companies try to overcome this hurdle by allocating a specific budget for each element of the relocation. But while this can indeed reduce some of the stress caused by planning – and can help employees to remember the finer details – it can still cause many problems.
“We recently had a customer who got a very specific budget for strictly described services” recalls Ilona. “But the budget was based on a US market – and the employee was moving to Germany! As a result, the employee was allowed to spend a fortune on real estate, but had very little money to spend on domestic appliances.”
If you don’t have in-depth local knowledge of the place you’re sending an employee, then you should be very careful before allocating a strictly itemised relocation budget!
Your policy needs to be very flexible, or localised
Ilona tells me that the HR relocation policy that tends to work the best, is one where the relocation is being supported by a local expert in the target destination.
“A local service provider can ease the stress of the relocation” she explains. “This doesn’t mean losing control of your budget – it simply helps you distribute your budget into the right areas, and the local knowledge of the provider helps the relocation to happen quickly, so that your employee is ready to begin working on schedule.”
If having a local service provider isn’t an option in each destination, you should make sure your HR policy is as flexible as possible. This overcomes issues like a wrongly allocated budget that is essentially useless – but remember to give support to your employees who are moving, so they don’t have to take all the stress themselves.