Localization & Local Plus

Streamlined Localization and Local Plus Relocation Policies: Tailoring Your Global Policies for Success

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Localization of an expatriate is the transition to local employment status immediately following an international assignment.

Localization approaches vary and some challenges must be thought through, so the localization process can be successful.

Typically, Localization Policies consist of a few paragraphs at the end of a Long-term International Assignment Policy which describes how the assignment allowances and benefits will be phased out or ease and information regarding other services that may be authorized since the employee is not returning to their home country.

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From Expatriate to Local Employee

Localization

Compensation packages for international assignees are becoming more complex and challenging due to exchange rate fluctuations, inflation, variable income tax rates along with compensation practices.

Creating experiences comparable to locally hired employees: The localization process takes the employee from an assignee status to a local employment status for pay and benefits; comprised of a compensation package (base salary, incentives, allowances, perks, social security, benefits, and retirement plans) that is comparable to what is offered to locally hired employees. This is an area with the most challenge to overcome any disparity between the expatriate and those working beside them who were locally hired.

Cost effectiveness: A question asked by Clients is, “How can we cost-effectively localize our expatriates and still make it a positive experience?” InterLink’s team of global experts works with Companies to answer this question.

Overcoming the challenges of disparity for expatriate employees

One approach is to provide a broad localization policy that describes in a general sense what localization benefit categories can be included if the decision to localize is made and agreed upon. The individual’s benefits would be governed by a local offer letter that describes the specific terms and benefits that will be offered to ease the transition from assignee or local employee status.

Delayed Localization is another approach that is determined at the onset of the assignment. This is where the employee knows that after a specific period of time, 2 years for example, the assignment benefits will be phased out so that they soft-land into the location and ease the transition to a local employment status with local compensation and benefits, relieving the Company from on-going assignment-related expenses and obligation to repatriate the employee to their home country.

InterLink assists in developing the policies that meet the Client’s culture and specific needs.

Common benefits covered by a localization policy can include

  • Shipment of household goods retained in home country long-term storage
  • End of tenancy management (host housing)
  • Children education tuition
  • Localization home finding assistanc
  • Change in status for immigratio
  • End of assignment tax services
  • Return trip to close out anything in their home countr

Competitive Compensation to Secure Sought-After Talent

Local Plus Relocation

A Local Plus is another relocation method for Companies to localize employees with flexibility. This type of policy seeks to provide a competitive compensation package that is not typically offered to local hires to secure the sought-after talent needed. A Local Plus policy can be used for localization or instead of a standard cross-border relocation package. It allows for the flexibility needed to highly personalize a package for the individual and location.

Packages typically includes additional assistance such as: 

  • Cost of living allowances or adjustments (COLA),
  • Cash-in-kind benefits such as leased housing or education tuition payment
  • In some countries, there are tax optimization opportunities allowing employers to reimburse certain expenses

InterLink recognizes technology-enabled support is a key expectation in a full-service mobility management suite GlobalLink® is not only a web-based client tool to activate a move but is a safe and secure system with robust reporting capabilities

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The Implications of Social Security for International Assignments

International assignments must not overlook the significant impact of social security obligations to avoid issues with employer contributions and compensation. Addressing these obligations carefully is essential for a smooth and compliant assignment experience for employers and employees.

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Relocation Doesn’t Have to Be Stressful

Relocation is complex and stressful, but it doesn’t have to be! Reach out and we’ll be in touch to schedule a 15 min, no-obligation conversation to hear more about your company relocation needs.

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