Human resource management is a function that is present in many organisations and is designed to optimise the performance of employees towards the delivery of products and services that are instrumental for the company’s achievement of its objectives. Human resource is basically managing people within an organisation by primarily emphasizing on systems and policies. There have been a variety of events associated with human resource management. Many of these events have been reported by the media, both the electronic and online media. This article will focus on one key human resource management event reported by the Society for Human Resource Management, a reputable newspaper.
On 15th January this year, Roy Maurer did a story titled, ‘Controlling Cost Biggest Challenge Relocation Challenge in 2016’, where he detailed the challengers that managers are facing in trying to relocate their most treasured experts. His main countries of interest were the United States, China and the United Kingdom. International mobility managers are struggling to save money even as they move their employees around the globe. Apparently, ways of saving money for purposes of relocating employees across the United States, china and the United Kingdom are diminishing by the day. This has been a cause of great concern within the relocation industry ( Bonacheb, Langiniera, & Zárraga-Oberty, 2016).
Cartus Corps, which is an international provider of relocation services, released a survey report titled, 2015 Trends in Global Relocations. The company which has its headquarters in Danbury, Conn. produced the report that illustrated that out of the 148 global mobility managers, 78 percent of them mentioned assignment and relocation costs as the biggest challenge in the industry. This was followed with compliance with laws and regulations at 62 percent and then dealing with issues related to compensation at 44 percent. Additionally, the United Kingdom emerged as the country with the highest number of challenges in terms of expenses rein. This is followed by the United States and then China. The executive vice president of the company, Matt Spinolo actually confirmed that the list of challenges has been topped by controlling the costs assignment and relocations.
Cost control indeed remains the greatest concern for the mobility managers. However, this challenge has been easing lately. 54 percent of respondents supported the idea of controlling costs just as last year while 45 percent view the concern as bigger than last year’s. This is compared to 57 percent in 2014 and 76 percent in the year 2010. Spinolo attributes this trend to measures associated with cost control that are already in place. Improved economy has also played a significant role in cost determination.
A detailed review of policies can help in the elimination of duplicate allowances when conducted effectively. This move can also help in yielding savings and adjusting of services. Tim O’Shea, Aurora, Colo. vice president argues that coming up with the right policies can go a long way in saving the relocation industry. Some recruiters and hiring managers resort to nudging clients so as to provide cheaper solutions to their employees. Some of the proposed cheaper solutions include scrapping of relocation benefits like trips for housing scouting, and spouse assistance trailing. Provision of cheaper benefits tiers for particular employee groups is also proposed to be eliminated. These proposals are however only quick fix solutions since they cannot offer long term alternatives that will impact on the overall productivity and experiences of employees ( Bowen, 2016).
The main concerns for employers are how to deal with costs that stem from requests exception from employees, decision making outside the policy by mangers, housing budgets that are not accurate, too rich policies, policy applications that are not consistent and too generous allowances. 62 percent of the respondents who were surveyed attributed their greatest concerns to be the exception requests from employees, 52 percent were for the decision making by mangers outside policy while 21 percent were for housing budgets that are inaccurate. On the other hand too rich policy received 20 percent response from the respondents; policy application inconsistency received 19 percent while too generous allowances received 18 percent (Maurer, 2016).
When the exception requests are large in numbers then employees will most likely to ask for financial reimbursement in order to cover for longer duration of stay in houses that are temporary. This is most commonly driven by anticipatory circumstances. This is an indication that the needs of the population that is transferring are not being met by the policy in place ( Bonacheb, Langiniera, & Zárraga-Oberty, 2016). This implies that a program that heavily relies on exceptions can be interpreted to lack of support from senior leaders for the mobility team in successfully pushing for the aforementioned requests. However much policies benchmarked can be good, it requires disciplined adherents for them to produce fruits. This calls for aligning the goals mobility team with those of the company. Therefore the mobility team must be empowered with powers to decline exceptions or make up of obsolete policies through use of exceptions ( Bonacheb, Langiniera, & Zárraga-Oberty, 2016).
Pitfalls associated with policy exceptions can be avoided. The vice president for the Graebal Relocation suggests that it is great to identify all the front end’s needs with each employee who is relocating. Therefore, they set expectations that are predictable and clear with regards financial and support costs. However, cost exception reduction begins with tracking that is robust. O’Shea argues that it is important to track the number, frequency and the identity of the person making the exception request. It is from this data that one will be able to tell if there is need to review the policies or if there is need to bring up advocates at the senior positions to quell the urge to find the solution for every wish with expensive exception ( Bonacheb, Langiniera, & Zárraga-Oberty, 2016).
Tiered relocation policies cover various segments of the population of employees and this is what many experts recommend. These are universal when it comes to job type, salary and grade. Tiered policies related with mobility can assist in setting expectations and controlling costs ( Bowen, 2016).
Challenges of compliance and compensation
Compliance with the laws and regulations has been a major concern. As a matter of fact, difficulty in compliance with laws and regulations shot up by 17 percent as compared with 2014. 63 percent of the respondents named times for vista wait as the compliance challenge number one. Spinolo argues that relocation managers need to meet with business leaders and human resources managers at least once in three months so as to fix proper expectations for complexity and visa timing. Most organisations ranked visa complexity, requirements for immigration and tax compliance as the top most problems for them. This was closely followed tracking individuals who are on assignments that are not permanent ( Bonacheb, Langiniera, & Zárraga-Oberty, 2016).
As a temporary assignment, tax compliance has remained a troublesome venture. This is more pronounced on short term employees or business people on extended travels. Apparently, many companies use temporary assignments on employees. Additionally, 51 percent of the respondents named currency fluctuations for assignees and companies as the top most compensation issue facing them. Some of the factors that were listed by managers as responsible for currency value fluctuations include political instability, payroll flexibility complications in some countries and different approaches of payment in both the home country and host country. These are the problems that are most common (Maurer, 2016).
49 percent of the respondents named North America to be in the number one slot in terms of the most favoured region for future success in business. This was followed by Europe at 44 percent and china at 34 percent. Apparently, this was a swap from the last year’s survey. The region that has recorded the biggest increased in terms of volumes for relocation is North America at 48 percent in 2015. This was followed by Europe at 42 percent and the Middle East at 27 percent and china at 23 percent (Maurer, 2016).
The dynamics of doing business are fast changing in the 21st century. Globalization has brought with it fresh bunch of challenges. While globalization has significantly contributed to expansion of business organizations to international markets, it has also brought challenges in terms of human resources. Businesses that are expanding in other countries face unique set of challenges of obtaining employees with the right expertise in the host countries to help them achieve their organizational goals. This forces most of them to relocate their employees to overseas countries. However, such relocations are full of challenges such as conflicting policies and employees’ compensations. The Society for Human Resource Management newspaper has comprehensively detailed this event.
Bonacheb, J., Langiniera, H., & Zárraga-Oberty, C. (2016). Antecedents and effects of host country nationals negative stereotyping of corporate expatriates. A social identity analysis. Human Resource Management Review, 26(1), 59–68.
Bowen, D. E. (2016). The changing role of employees in service theory and practice: An interdisciplinary view. Human Resource Management Review, 26.1, 4–13.
Maurer, R. (2016). Controlling Cost Biggest Relocation Challenge in 2016. Retrieved Feb 09, 2016, from Soceity for Human Resource Management : http://www.shrm.org/hrdisciplines/staffingmanagement/articles/pages/controlling-cost-relocation-challenge-2016.aspx