London business leaders visited Brussels last week in a bid to push for a financial services deal following Brexit.
If the EU pursues plans to move Euro Clearing services back into the EU zone, then London may potentially lose its status as the European financial hub.
In light of this threat, London based financial businesses are engaged in relocation contingency planning, enabling them to relocate both their operations and staff to the EU, should Brexodus occur.
This is a challenge that HR teams within these businesses probably hadn’t envisaged prior to the Brexit referendum.
Brexodus - Movement of the People: HR Relocation Challenges
Although most HR teams will appreciate the demands of single, straightforward relocation exercises, relocating whole teams takes the demands on the international mobility team to a dramatically new level.
To give you an idea of the challenges involved in relocating whole teams / functions, let’s take a look at the challenges faced when relocating single staff members.
Bear in mind that many of these individuals will be carrying out some of the companies most valuable roles and that, as such, ensuring the incumbent is given a seamless experience and is retained within the role will be essential:
1. Cost Management
Effective management of the extensive transactions generated by international relocation assignments is essential. International HR Mobility staff must ensure that international assignment costs are kept to budget and that everything is mapped and recorded.
Mapping and capturing costs is not the only headache for HR staff, they must also deal with ‘grey area’ expense claims. Take for example, a business which compensates school fees for expat children. Some expats may argue that after school clubs, packed lunches, school uniforms etc. also constitute ‘school fees’ and should hence be something they can draw on. These discussions can be prolonged, challenging and – at times – emotional.
2. Selling up!
Depending on company policy, relocating staff members may also be eligible for settlements on goods such as their car or on sale of their home. Agreeing these settlements typically becomes the responsibility of members of the HR team.
If for example, an expat needs to sell their car quickly pre-move, but receives a lower value than the perceived value, HR staff may need to agree and fund the differential. Staff who have a mortgage may be eligible for both the mortgage costs coupled with target destination rental costs. HR staff must work with the individual to establish a ‘like for like’ rental allowance for their new host location.
Where the relocating expat decides to sell their home, then legal, moving and storage fees may also become company costs. These arrangements take considerable time, negotiation and administrative processing.
3. Expat Preparation
Typical multinational investment in expat relocation packages is significant. As such, protecting the investment and ensuring it is ‘money well spent’ is essential. The best way to protect investment is to ensure that the relocating expat and family undergo cultural awareness training.
Cultural awareness training prepares the expat for culture and life in the new target location. The training process equips them with an understanding of what to expect in the target location and the cultural dynamics of the location, it also gives them strategies for dealing with ‘Culture Shock’ which describes a period of confusion and uncertainty when moving to a different culture. If left unmanaged, companies face their relocating expats quitting their role and returning home.
4. Support Tools
Relocation can be an incredibly isolating experience. Although relocation and cultural training can help an individual to adapt more quickly, these interventions cannot entirely reduce the social loss that some may feel. Being in a foreign country with no family or friends around is not easy and nor is missing large events such as weddings or birthday celebrations.
HR / International Mobility staff have an important role to playing in ensuring that the individual is as well cared for as possible. This may be, for example, in the form of membership to local expat groups / events, regular trips home or perhaps subscriptions to home location television services.
With an understanding of the very basic processes that must be applied by HR / International Mobility staff for single relocation assignments, then it becomes very clear as to the rather daunting task that many HR departments may now be facing. It’s all too easy to talk about companies ‘relocating their business’ but the realities and demands of this venture are huge and all encompassing.