Going local

Oct 20 2011 by Emma Murray Print This Article

When times are hard, global firms tend to batten down the hatches and relocate their brightest employees from offices all over the world to their headquarters. Head office is the home of the top brass – the place where decisions are made the quickest and change is implemented more swiftly.

In these recessionary times, companies need their global talent to help make changes in order to put the business back on an even keel. But relocating employees is an expensive business, involving sacrifices from both sides.

With many of the global banking firms, the 'mothership' tends to be based in the US. This means that many senior employees from all the global offices are being recalled to head office, in a combined effort to coordinate initiatives, lead global teams, and ultimately make money.

During the glory days, employees were chomping at the bit to be relocated. But, of course, those were the days of lucrative ex-pat deals. With housing, schools, club memberships, health and every aspect of a dream lifestyle financed by the firm, plus a salary paid in the employee's home currency (with a cost-of-living-adjustment, or COLA), an extended ex-pat deal could set you up for life. Hong Kong in particular was a favourite destination – low tax rates made the deal even sweeter.

Once a major incentive to relocate, ex-pat deals are now a thing of the past for the majority of employees. So, what kind of carrot are these firms using in order to tempt their employees to up sticks to move abroad for a few years? In short, what's in it for the average worker?

Well, there is the opportunity to live in a different country. However, the price you pay for uprooting your family and leaving your house, relatives, and lifestyle behind is far higher than the deals being offered in return by many firms today. Why? Because the once-lucrative ex-pat deal has been replaced by a 'local deal' which is nowhere near good enough.

A local deal is where the employee is paid in the local salary of the country where they relocate. They are expected to pay for accommodation, schools, healthcare, travel, clubs, and everything else themselves.

In return, the firm covers the cost of moving the employee plus family from one country to another, in addition to one month's corporate accommodation while you find a place to live. To assist in finding that house or apartment, the firm sometimes assigns you a relocation consultant. That's it. They do not prepare you for the cultural differences, the amount of money you will pay just setting up house, or tell you about all those hidden extras.

But what happens when the firm blatently lies?

One employee told me: "I was excited when I was asked to relocate from London to New York. Even though it was on a local deal, I felt the experience would be worthwhile. When I submitted my personal budget for rent, HR told me I had more than enough to cover a four-bed house in the suburbs of New York."

When the employee started to house-hunt, he realised that accommodation was far more expensive in New York than London. He also found out that healthcare costs three times as much, leasing a car was more expensive, commuting the same distance cost as much as in London, and the general cost of living (groceries etc.) was crippling his budget.

"I got a raise to move over to New York, and the ironic thing is I am less well-off and have a poorer quality of life than I did at home. I have lost faith in my firm for being so unsupportive, and for refusing to advise me on the extras that I would need to pay out. The role of HR should be about more than just getting you from A to B, they need to advise you of what lies ahead. Now, I am interviewing for jobs back in London."

So, international moves are indeed stressful, especially when your firm is decidedly unappreciative of the sacrifices you have made in order to drop everything on their behalf. But even local moves can be just as stressful.

In the UK, many businesses are relocating their employees from the south to the north. Office space is generally cheaper up north, and these days it is all about the bottom line. Moving from one part of the country to the other has many of the same headaches as a global relocation, but there is a certain expectation that where the company leads, the employees will follow.

Why? Because in these recession-led times, they have no choice.

"My company shifted my department from London to Scotland," another acquaintance told me. "They asked me to go and head up the Scottish operation. My whole life is in London – kids in school, family around the corner, a good network of friends. When I declined, they told me that I either take the job in Scotland or go find another one.

"I have been with my company fifteen years and they were willing to boot me out, just like that. With a job-freeze on in London, I can't afford to walk out, so I am forced against my will to tear my family away from their home and set up life elsewhere."

If businesses these days treat their employees so casually, how do they expect them to be motivated and act within the best interests of the firm?

"I am so angry and frustrated with my management," says the recently-relocated London to New York employee.

"Nobody warned me about the changes I would face here, how expensive it is, and how my quality of life would suffer. The firms need to take responsibility for the adjustment process, and show some measure of appreciation for what the employee has given up for them. Clearly loyalty counts for nothing these days."

So it would appear that in order to lure employees away from the comfort of their own homes, companies need to take responsibility and adequately prepare them for the big move, warts and all. Otherwise, they are going to have a whole group of frustrated, dissatisfied employees on their hands, which rather defeats the purpose of what they are trying to achieve.

Of course, if firms simply told the truth, their star attractions might refuse to relocate altogether. But then, they already know that.


About The Author

Emma Murray
Emma Murray

Emma Murray is a freelance writer with a background in investment banking. She is the author of 'The Unauthorized Guide to Doing Business the Alan Sugar Way' and 'How to Succeed as a Freelancer in Publishing' – a guide for graduates, career-changers and retired professionals.