Choosing an appropriate relocation program can be tricky.
We have seen the results from many different relocation models over the past close to a quarter century. (Who said that? Who is that old anyway?… ) Let’s keep that time frame a secret and go to the findings instead!
Tiered Relocation Packages?
Many companies have tiers of employees based on criteria: skill level, seniority, how crucial they are to the company, did they ask to be relocated or are they hand-picked for the task and so on. Family size also tends to be influential when deciding what level of relocation support your new hire should receive. But some companies do not tier their relocation packages.
One really good example is a global Swedish company with daughter companies across the globe. This company employs all age groups, new graduates, and more seasoned management profiles and... guess what? All their staff receive a large relocation package whether they are trainees or C-suite, and whether they are new hires or intra-company transfers.
The results are in. Here is why you need to give all your staff, no matter what their age or experience, a generous relocation package:
- Easy to manage for HR
- 100% fair to everyone and comparison discussions are void
- Everyone feels valued
Why is this a good idea apart from the three points above?
The Case for a Single, Standard Relocation Package
The key personnel that you need to get on the ground quickly tend to be well paid and well taken care of so the scene is set for their success. This includes:
- High salary offered
- Corporate lease (that is essential in Sweden) is given without discussion. Ample time is given to let the relocation company facilitate the move fully without part of the program being do it yourself if you can.
- Comforting and full support is given to family members so the employee can fully execute wonders at work while all is calm on the home front.
- Happy family, Happy transferee
This all makes perfect sense, doesn’t it?
So why would a younger employee need as much or even more support you ask?
Aren't Millennials savvy and resourceful all on their own? Perhaps, and we certainly see that some of them can handle things on their own. However, we also see less experienced employees struggle and this can cause dire consequences for both the employee and the hiring company.
Remember that a lower rental budget will also mean less safe areas, or longer walks from public transport. Employers need to consider safety for their employees, especially if they have to travel far to and from work or if they work off-peak hours.
One example is store personnel who open the store and have to be at work around 5 AM and close late as well. If this is the case, then the safety of young women should be considered and the travel time shouldn't be too long. A higher rental budget will allow employees to live in safer neighborhoods near the store.
The most challenging relocations often befall the youngest recruits. Here is why:
- Lower salaries mean fewer options for housing.
- Sweden is not a market where traditional flat-sharing is common, nor are landlords willing to rent out studios or one bedroom flats to families while that may be common elsewhere. Hence, the home-finding process is very cumbersome and can’t be done on small programs.
- The employer sometimes neglects the essential corporate lease thus leaving the new hire to fend alone in a very difficult market. This can be counterproductive and sets up your new, young recruit for a rocky start and often, disappointment. While this may be global policy, we have seen thousands of very disgruntled recruits either get stuck in costly hotels (at the company’s expense) or need a policy exception. This is usually perceived as “too little too late” thereby not giving your company the credit that you should receive in the eyes of the new hire. In addition, global policy exceptions are hard to get and require extra work on the part of HR.
- We often find that younger staff are unable to handle tough circumstances and have less negotiating experience.
- Sweden is a fairly expensive country when it comes to renting a place to live and for food. We also sport high taxes so a net paycheck is lower than in most other countries when the tax is deducted. It’s often a surprise for relocated employees when the margins on the net salary are lower than anticipated and it can cause some real worries. We are not surprised to see an already low rental budget decrease after the first few visits to a Swedish grocery store.
We can’t change the rental market, we can’t change the lack of efficiency of the local authorities or the price of foods, but we can make the start in Sweden more pleasurable to those that come here to make a difference with their wish and their plan to contribute to your company.
Offering a relocation program that allows for a very difficult home finding will most certainly help this group of younger and less-experienced recruits.
Here are some things you may want to consider for your relocation package:
- Be clear on what is permanent and what is a long-term assignment without frills. A permanent transfer is not 2 or 3 years with an end date in the contract. That used to be an expat contract and now we often see that it’s called a permanent transfer instead and the program is far less generous. An expat program is what is needed here since the duration is so long.
- Long-term assignment transferees whether they are locally hired (increasingly popular) or sent from the host country have all the same needs as an expat transfer.
- If you have a commuter assignment but the housing needs to be able to fit an entire family in case they visit, this should be known upfront. Better to know which foot to stand on here. Some companies solve this by offering hotel stays or hotel apartments for those few days rather than looking for bigger housing on slim budgets where the need for that larger housing size can be covered for a few days.
- Not offering a corporate lease to permanent hires is tricky and will need to be offset by a more generous relocation program. We encourage offering a corporate lease whenever possible.
A standard generous relocation program will enable a good start for your new employee while your long-term costs can be maintained at a lower level.
Here are some examples of items to add in your relocation program that will benefit both your company and your new hire as well as save time and money in the long run.
- Sign a corporate lease. Companies that sign leases have more stable situations and relocation companies can be involved. Lower rents tend to mean that the sublet is illegal. Professional firms can’t be involved in such situations and the damage control falls onto the company.
- Give the relocation enough time. Finding a needle in a haystack takes time and slim programs may prove that it’s impossible to find housing under serious time constraints.
- Offer assistance to your new hire’s spouse. Helping the spouse find gainful employment as soon as possible is key to alleviate the burden of being a one-income household in a country where both adults are expected to work in order to support themselves and any children. This help should be offered even before the recruit signs the contract so it is, in fact, doable to move here. There are companies that specialize in spousal career support, which is very helpful.
- Offer a stipend for initial deposits that are needed. Helping out with initial payments of deposits and the first month's rent is helpful not only when someone comes from a low-cost country and the deposit alone can be bigger than their yearly salary. Many countries have very archaic payment systems, even the US, and not only is it difficult to carry out it can also be very slow and expensive. Money laundry rules also make it quite suspicious and the bank personnel will have to ask where the money comes from before accepting it. We have had clients get a lot of questions and raised eyebrows when they brought cash in three currencies when the US bank wouldn’t allow them to make an international transfer. This is a good opportunity to help out with this administrative task until the first salary has been deposited.
- Do your due diligence. Before hiring a person it may be a good idea to holistically review their personal situation. Can one salary support a family in Stockholm? Is the spouse at all ready to secure employment here? If yes, are the language skills up to speed with English (which is for many professions enough) to actually get a job offer? Think beyond solving the immediate skills gap problem so you don't have to recruit for the same position again.
As you can see there are several reasons why your youngest recruits may need the most generous relocation program.
No matter what level your employee is, their home search needs will be the same as a potentially higher paid and more experienced employee.
We would not recommend skimping on this portion of their relocation costs. If your new hire has nowhere to live or is unhappy with their housing, you will have a problem on your hands.
To learn more about immigration to Sweden for your new hire of any age or skill level, we have a wonderful resource page. Click the link below..
Here are some links to films that you may find interesting that are on related topics regarding relocating to Sweden.
If you are Global HR, go here: https://www.nimmersion.com/for-global-hr
If you are Swedish HR, go here: https://www.nimmersion.com/for-swedish-hr
If you would like to discuss any of these issues with us in person, feel free to set up a complimentary consultation with us.