Larger companies often have someone in HR dedicated to helping staff settle when posted overseas, or in the very largest companies there might be a whole department dedicated to it. However, most companies fail to give the matter anything like the time it deserves.
“Too many companies fail to develop effective relocation policies for their employees,” said Frances Wilson, international manager at the CIPD.
As Meriel Schindler, head of employment at law firm Withers LLP, testified, the implications of this can be severe: ÒI have seen many horror stories. One client ended up with criminal liability in Russia after he had run a subsidiary, which he was to discover had been inappropriately set up.
“Another was left stranded in Jordan when her employer refused to pay her removal costs back to the UK.”
Not only can these scenarios be financially damaging for your company but they can also impede the development of your best staff, and, in many cases, result in you losing those valued employees.
Detailed advice is available from the CIPD, and the Foreign & Commonwealth Office, but by giving due consideration to each of the following areas you will increase your chances of it working out well:
Ranjit Dhindsa, head of employment at international law firm Reed Smith Midlands, said: “However broad the initial agreement, individual circumstances must be born in mind when proposing a drastic change, such as a move to a far away location. Failure to consult an employee could lead to breach of contract and potential constructive dismissal claims.”
The first legal aspect, which should be considered when sending any employees abroad, is the tax implications, said Sarah Whitemore, employment partner at law firm Warner Goodman Commercial.
“Careful advice needs to be taken to assess whether they are subject to UK or local tax regimes. This will vary depending on the time period and local laws relating to income.”
Ceri Roderick, a partner at psychology specialist Pearn Kandola, said: “All too often out-of-sight becomes out-of-mind. There needs to be a clear line of reporting, with mutually agreed objectives.”
4. Cultural differences
Business cultures differ throughout the world, and even within Europe there are ample opportunities for ill-prepared employees to make mistakes. It is essential to provide proper training on the customs, and language, of the new country.
If employees are paid a UK salary in a developing country they will enjoy a much higher standard of living and this might cause tension with envious colleagues.
However, a cut in salary might be a significant demotivation to an employee being posted abroad. Whichever route you take, the key is to be consistent and clear about your reasoning.
In the view of Greg Campbell, partner at law firm, Faegre & Benson LLP: “The most common reason that a foreign posting fails is because the posted employee’s home life is unsatisfactory.”
You should help employees’ families settle in by arranging education for children and perhaps professional training for a spouse who may have to put his or her career on hold.
7. How to end it
James Carmody, solicitor at Sprecher Grier & Halberstam LLP commented: “Particularly with fixed-term secondments, the employer should give serious thought to what employees will do when their secondments finish.
“Will their positions back in the UK have been filled? Will they have to be made redundant, or can you slot employees back into the organisation?” he said.