Localisations and permanent transfers
Localisation is the changing of an employee’s expatriate status -- in whole or in part -- to host location employment terms and conditions, including compensation and benefits. A permanent transfer in this sense is similar since the employee will also end his employment relationship with the home country's company and become "fully local" in the host country's company.
Over the last years, there has been an increase in localisations and permanent transfers for various reasons. In principle, a localisation or permanent transfer is seen as a cost-saving option for the company. This however frequently results in lost income for the employee and, thus, creates challenges for HR professionals.
Yet again, there have been many companies that are choosing to localise also because the employee has expressed a desire to remain in the host location or that the employee had a skill set that was needed long term in the assignment location.
Depending on the home-host country combination, other reasons can add to this choice e.g. the host country or company offers better benefits, has a stronger currency, generally better earnings, or private reasons such as better schooling are just a few to mention.
So, once you are faced with a permanent transfer or localisation in your company, are you faced with questions such as
what is the local salary plus incentives for the position?
what is the net value of the home compensation in the host country?
what is the net value of the host compensation and how does it compare to compensation in the home country?
is the cost of living or housing higher or lower?
what are the social security regulations?
what are the typical local benefits
Most companies deal with permanent transfers or employee localisation cases individually, although some companies even have a policy for this. So, what is it that this is still done individually? If you already have a policy in place, is it maybe outdated or not fitting to your company's needs anymore? You might want to consider a policy re-design or review of the process associated with it.
We will happily support you with this, especially if this topic concerns you on a larger scale. We will also help you determine whether or not a localisation or permanent transfer is an option for your company in general or for a specific case only. We will support you in the timing when to enter into, the content of the discussions and do the coordination of this move or change.
Call us to find out what is best for you and your employees!