Should I Accept a Transfer or Not? What to Expect from Your International Relocation Package

Meet Jackie, a senior manager with a major US-based global technology firm. After a few years of steady career advances in domestic operations, Jackie has just been offered an opportunity to move abroad for a long-term relocation. It is enticing and exciting. Before she finalizes her acceptance and uproots her family to an overseas location, though, Jackie has questions.

She is not unlike many of the employees our global team works with on behalf of our clients. Through our many decades of relocation counseling experience, and thousands of transferees we’ve assisted, here are some insights on what Jackie should expect.

What should be included in an international relocation package?

The basic components of international relocation packages include tax services, immigration support, and the compensation itself. Destination services are commonly covered as well. These include benefits to cover household goods moving, temporary housing and transportation to your new location.

From there, packages tend to get customized. Depending on your situation and your company’s relocation policy, you may also receive:

• Cultural and language training.
• Spousal assistance. This could be career support, or helping the spouse find education resources, or assistance in acclimating to the local culture.
• Repatriation benefits for your return home, if you are on a temporary assignment.

Is compensation the most important factor to consider in a relocation?

We find that, almost universally, compensation is where the eyes go first. But the reality is that these other benefits are just as important as the compensation. Keep in mind that when you relocate for a transfer, everything that is considered a part of the move is taxable in the year of the move. The last thing you want is to make a major relocation, only later to be surprised by unexpected financial impacts.

Probably most important among those potential surprises are taxes. The employee needs to be aware of how the move will impact their taxes, and understand what tax support their employer is providing so that their taxes owed are in line with what they would have paid at home.

Aside from taxes, what other costs should be evaluated?

We work with our clients’ employees to make sure they also understand variations is living expenses in their new location. The cost of housing, insurance, health care and education can vary significantly from one part of the world to another. For instance, in some countries, health care is provided at no cost. But if you are moving from Canada, let’s say, to the US, you need to consider the health care costs.

Similarly, transferees moving with their families should consider the cost of education. If moving from a country with good public schools, be sure to evaluate school options and factor in private school tuition if needed.

How do companies determine international relocation benefits?

While many factors go into determining relocation benefits, in the end, cost is the biggest driver. International moves are expensive, and HR mobility teams are tasked with getting the right talent and skills into the locations needed, but doing it cost efficiently.

It is common, though, to see companies differentiate international relocation benefits packages based on employee levels as another way to manage costs. The benefits that Jackie, the senior manager, receives might be different than what a junior-level transferee is offered.

How negotiable are relocation benefits packages?

Our team is sometimes asked if there is any flexibility in the benefits options, and the answer is – usually yes! Employees have spoken loud and clear in recent years that they want and need benefits flexibility, and our clients are responding in creative ways.

Two approaches we see quite often are Core Policies with Manager Options, and Core-Flex Policies. The former is a set package of core benefits that every transferee receives; the manager then has extra room in the budget to offer discretionary additional customized benefits. While these do provide flexibility, they can require more negotiation.

Core-Flex Policies also offer a set package of core benefits, but give the employee a budget (in either points or dollars) to choose other benefits at their discretion. Core-Flex Policies give employees more control over how they use their relocation dollars, while ensuring overall costs remain within the company’s budget.

What questions should HR ask to best structure relocation packages?

Your HR team will ask lots of questions to help them put together the best relocation benefits package for you. The more insight you can provide into your personal situation and unique needs, the better able they will be to structure benefits to address them. Some questions you can expect early in your relocation conversations include:

1. Have you ever lived in another country?
2. Who is moving with you – ages, interests, any special needs?
3. How much familiarity do you have with the new location?
4. Do you speak the language of the new location?
5. Do you currently own your home? And do you plan to sell it?

Preparing for your relocation: questions employees should ask

Make sure you address all facets of your relocation early on with your HR team. The time to ask questions is in those early upfront conversations, not after you’ve signed your relocation agreement! While each transferee/assignee likely will have unique situations and related questions, here are a few standard ones we suggest:

• What will be covered as part of my relocation package?
• Will it cover immigration for myself and my family members?
• Will the immigration support include both advice as well as handling immigration logistics to ensure we are compliant with laws and regulations?
• Will the package be enough to cover health care?
• Will there be any family support to help my family acclimate to the new location?
• Is there an opportunity to visit the location prior to moving and if so, what specifically is offered?
• Is there any tax support for the year of transfer, both advice and financial support?
• What assistance is provided for selling my current home, and finding temporary housing?
• If this is a temporary assignment, what are the terms? And what if my family and I are not happy, can I end my assignment early?

CapRelo: Your Partner in Navigating Global Relocations

At CapRelo, our relocation consultants know that every company and every relocation is unique. That’s why we are passionate about delivering the highest level of customer care and personal attention to every employee. Whether your move is a one-way transfer, or a short-term assignment, we consult at each step of your international relocation. Learn more.