Human resources

The responsibility for international transfers and relocation management may be structured as a stand alone function reporting into global human resources or as a section under compensation & benefits which reports into global human resources. Its structuring as part of compensation and benefits is related to the need for international transfer management policies to be integrated with general compensation and benefits practices of the overall organization such as performance based pay, frequency and timing of salary reviews, short-term and long-term incentives and recognition programs. This integration is critical to ensure that there is consistency, transparency, competitively positioned, cost efficient and enables smooth repatriation or movement to the next location.

International transfer policies established by organizations need to cover a range of issues such as, purpose of transfer, duration of assignments, employing organization (Host, Home or Combination), salary and benefits structure and components, pension and social security, medical and hospitalization provisions, taxation issues, insurance, relocation, repatriation and severance of employment. Over the duration of long term transfer, the issue of localization of salary and benefits, expenses sharing, payment currency, family related issues such as working spouse, children education, home visits and policies relating to currency fluctuation, need to be also addressed. Typically organizations establish separate policies for short term and long term transfer assignments.

Compensation is a key issue relating to international transfers. The most common approach is the build up method. Under this approach the employee's home base salary is broken into two portions, spent and saved. The spent portion of the salary is broken into major components of spending and a comparison is done of what the employee spends on each component in their base country and what would be required in the foreign country. Adjustments and additional allowances are added to the base compensation. Factors considered include differences in cost of living, quality of living and international assignment premiums. Some organizations with small numbers of international transfers may engage in a one to one negotiation process and provide a lump sum benefit to the employee. Whatever the process used to arrive at an appropriate compensation level, the primary objective is to motivate the employee to take up the role and to manage cost at a level that is justifiable and fair to both the employee and the organization.

The entire process of managing international transfers may be described as comprising five sub-processes:

1. Candidate identification and assessment - this requires an assessment of both potential candidates technical competence, cross cultural sensitivity and adaptability.
2. Motivating the transfer - designing and communicating an attractive incentive and development opportunity for the selected candidate thus motivating them to undertake the international transfer assignment.
3. Relocation management - this covers all activities such as pre-departure briefings, site visits, selection of accommodation, packing and physical movement of assets, etc.
4. Managing employee development, performance and success - this involves consideration of support required in terms of training, on-site-orientation, clear performance expectations, etc. that need to be communicated for success.