Expatriate Assignment Checklist Part 2 – Assignment Planning

Warren Heaps – Birches Group LLC

This is the second part of a five-part series, where we present checklists to help international HR professionals plan and manage long-term international assignments. There are five stages we identified for long-term assignment management:

International Assignment Stages

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In part one of this series, we looked at candidate assessment, selection and approval. In this installment, we will examine Assignment Planning.

Assignment Planning includes the key steps you must follow after your candidate is selected for assignment and management has approved the move. Now you can delve into the specifics and develop a more detailed budget, along with strategic planning for tax savings and ensuring compliance with immigration requirements.   Here is a checklist for this stage:

IA checklist - Assignment Planning

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We’ll look at each of these steps more closely.

Gather Employee and Family Information
There is a lot of information that is needed to move forward with assignment planning, and sometimes it may not be in your HR system.  The biggest task is to gather complete family information, in order to provide inputs into the draft compensation calculation, and to those coordinating relocation, immigration and visas, and benefits.  You’ll need to make sure the assignee and family members have proper immunizations and valid passports.  If you have multiple policies, select the one that applies to the move, and gather the necessary data from your expatriate data provider on COLA and housing differentials, hardship pay, etc.  You’ll need to schedule a tax consultation, too, using the assignee and family information, plus additional details from the assignee which remain confidential between the assignee and the provider.

Draft Compensation Calculation
A draft compensation calculation (usually a balance sheet) is a key element, as it’s used to communicate the details of the assignment package to the assignee as well as for tax planning and budgeting purposes.  This is the time to assess any adjustments needed to benefits coverage and identify any shortfalls.  Your tax provider will need the comp calc to make the proper estimates for hypothetical tax and for tax planning.  Of course, the compensation calculation is the one piece of information the assignee really wants to review and understand, and probably negotiate, too.

Prepare for Relocation
Not only is the assignee taking a new position in a new country, the family is relocating, too.  It is a complex and hectic time.  Most companies enlist the help of a relocation firm to work closely with the assignee and the family to ensure a smooth transition.  In this step, the relocation firm might review policies, take stock of the household goods situation, and explain options for shipment and storage.  On the assignment side, this is also the time to explain housing options in the new location, and the budget.  Many companies provide medical exams, security briefings and cultural training.  Finally, a pre-assignment trip is often provided, to find housing, enroll children in school, and generally get a good orientation to the new location.  Don’t forget about pets!

Assignment Approval
The last step in this stage is Assignment Approval.  This means obtaining the final sign-off on budgets and cost projections, normally prepared by your tax provider.  Tax planning – a proactive approach to minimize tax costs of the assignment, should also be considered.  There are many techniques to reduce tax costs by making simple changes to contract language, payroll arrangements or social security coverage.  Sometimes changing the timing of an assignment by 30 days or less can result in huge first year tax savings.  In my personal experience, tax planning, if applied consistently for every assignment, will generate significant savings, far in excess of the costs you may incur from your provider, but it does require a disciplined approach and some flexibility from your company with regard to timing of assignments and allocation of costs.

What’s Next
In the next installment, we will take a look at international relocation.  In the meantime, please add your ideas and questions in the comments section below.

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