Relocation, relocation, relocation… How to make the move abroad less painful

John Hunt, 21 March 2019

We’ve been hearing a lot about Brexit’s possible consequences for the UK, ever since the referendum on leaving the European Union was held back in 2016.

One of the main concerns has been what it will mean for business. We’ve heard a lot about the effects of uncertainty on the British economy and we’ve seen multinationals act to reduce their exposure in this country: Nissan, for example, has cancelled its plans to build a new sports utility vehicle in Sunderland and car parts manufacturer Schaeffler is closing two UK factories. Panasonic and Sony have both moved their European headquarters from the UK to mainland Europe. 

The Chartered Institute of Procurement Supply revealed last year that one in seven European companies with UK suppliers had moved part or all of their business out of the country[1].

And as if that wasn’t bad enough, the Institute of Directors warned last month (February 2019) that 29% of 1,200 members it surveyed believed that Brexit posed such a significant risk to their businesses that they had either moved some of their operations to countries within the EU already or were intending to do so.

But it’s not just big corporations that are leaving the UK. Speaking to The Guardian newspaper, the IoD’s interim director general, Edwin Morgan, said its survey showed that smaller companies, with less capital, had also decided to make the expensive and complicated move abroad[2].

This shows just how worried these SMEs are about their future in the UK, because relocating even part of a business to another country takes a great deal of organising – logistical, legal and financial. Should you relocate your existing staff, for instance, or recruit locally? Do you know enough about the new country’s business and employment laws to be able to operate effectively there?

This is a complex matter even for a large corporate entity with comprehensive legal and compliance teams, global mobility experts and global benefits managers: there are numerous parts to keep moving to ensure the business can continue to operate without a noticeable negative impact, complies with a new regulatory landscape, and reflects new cultural and social norms. For the smaller business, perhaps looking at its first steps overseas, the prospect can be overwhelming.

At Capita, we’ve seen a surge recently in the number of clients asking for advice on and support in setting up benefits for workforces abroad – removing a significant hurdle for them as they move towards becoming global employers by providing a range of services that ensure their benefits provision is compliant and fit for purpose.

Within the last six months we’ve seen a definite increase in companies, across a range of industries, looking to open offices within the EU and giving Brexit as their main driver. Companies that may not be small, but have traditionally been UK-focused, have been requesting help in understanding the mandatory requirements and employer norms when it comes to benefit provision in new overseas locations.

Once a company understands benefits in a different country, it has the challenge of placing them. While the internet has become an invaluable resource, its reliability is often brought into question (just ask any celebrity about their Wikipedia page!) so employers finding solutions or support locally off their own back can be making an economic and regulatory gamble.

A safer route, which can avoid increased costs and unscrupulous, unregulated advisers, would be to approach a well-placed UK employee benefits consultancy that has the support of an international benefits network. Using such a network not only ensures an employer’s compliance department is satisfied by the levels of due diligence carried out, but also means that the benefits manager, now tasked with looking after these new benefits, has a single UK point of contact to lean on for this new country and those that may follow in the future.

Brexit doesn’t mean the end of globalisation, it's simply changed how companies need to structure globally.

To find out more about how we can help you to set up benefits for employees abroad, please visit our dedicated page. 

 

 

[1] https://www.ft.com/content/a7acd37a-2b84-11e8-9b4b-bc4b9f08f381

[2] https://www.theguardian.com/politics/2019/feb/01/one-three-uk-firms-activate-plans-move-operations-abroad-no-deal-brexit-iod-survey

About the author

John Hunt Head of Global Benefits

John Hunt

Global benefits

We provide client support, from the broking and placement of employee benefit schemes through to consultancy and guidance in setting a global benefits strategy.

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