The borders are open and Europe's labour force is free to move. But HR managers still face a host of challenges when relocating personnel within the European Union.

Line managers tend to view intra-European relocation as a 'no-brainer.'

Disparities in compensation packages as well as pension schemes were cited as the biggest challenges for relocation within Europe, according to the Intra-European Assignment Survey, recently released by Weichert Relocation Resources Inc. (WRRI) and Worldwide ERC. HR professionals from multinational companies in Europe, the Middle East and the Americas made up the respondents.

Cost containment issues also topped the list of key issues for intra-European relocation.

"The considerable challenges posed by differences among European countries may indicate that the goal of many companies to administer one global policy simply isn't feasible," said Ellie Sullivan, director of consulting services for WRRI. "Given the simultaneous pressure to reduce costs, companies may need to address these European-specific issues with regional guidelines that reflect local norms."

With the majority of survey participants relocating less than 25 employees a year within Europe, Sullivan said companies may not have yet reached the critical mass to warrant an intra-regional assignment policy.

Many organisations are opting for guidelines. Though they can cover most situations, guidelines can also lead a number of exceptions. Giving too many exceptions diminishes cost containment, Sullivan points out.

Some corporations are starting to offer 'in lieu of' packages when relocating employees on an intra-European basis, said Sullivan. For example, in lieu of language training, an assignee can opt for spousal career development.

But on the whole, said Sullivan, the survey showed that there are few creative solutions emerging.

"The results echo the more traditional expatriate assignments," she said. "I don't see companies really stepping up to the plate and saying we have this novel approach."

Challenges for HR managers may also be compounded by a sense among line managers that intra-European relocation is 'no-brainer,' said Jane Malecki, WRRI's vice president of international assignment solutions. While HR managers may understand the complex realities of moving even an EU national from Frankfurt to London, "they have an education process they need to go through internally," said Malecki.

Beyond the differences in salary levels and pension schemes, relocating within Europe also means a change in everything from tax rates to grocery bills to school systems.

"Their cost of living and standard of living can change dramatically," said Malecki. "All of that still has to be addressed. That is a big issue." 

Consider one executive with a major consumer electronics company who was re-located from France to the United Kingdom last year. His compensation package for the move included a salary increase (most of which covers the higher cost of living), a relocation bonus and an extra stipend paid during the first two years to cover the expenses related to setting up a new home. After two years, the company will regard him as a local.

"If you do your own business plan, you break even in year one and two and then you start losing money," said the executive, who asked not to be named. "It's the opposite of business."

Malecki said that the popular two-year stipend does go some distance to helping with the initial adjustment. But after that time, the employee may be feeling that the move was a negative from a financial point of view, which could drive them to seek repatriation or opt out of the organisation entirely.

On the other hand, employees who are being re-located from high cost of living countries such as the United Kingdom to lower cost destinations such as the Czech Republic could face some decline in salary. While they still may be enjoying a high standard of living, Malecki said, "the person is going to hear, 'I've got to take a pay cut.'"

For the executive with the electronics corporation, "the question of money and conditions is a question of, 'Is the employee happy?'"

The compensation package is, naturally, only one of many factors an employee faces when relocating. His or her spouse is likely to be looking for work in an entirely new job market – even if they do speak the local language. The children will be enrolled in a new school, in an education system that could be completely different than the home country. Navigating these areas without assistance can be difficult for the assignee and his or her family.

Besides the big adjustment items, there are all the day-to-day changes, such as new grocery stores and traffic laws, that are equally challenging whether one is moving from New York to London or from Paris to Brussels.

If an expatriated employee feels they have gotten a bad deal, they are more likely to be unhappy and become disengaged with their work, which is ultimately bad for business, the executive contends.

"You may accept some frustration but not an increasing degree of frustration," he said.

In terms of navigating the procedures in different EU countries, it is always complex when one is new to a system, said Sébastien Cobut, who heads up recruiting firm Volt Europe in Belgium and the Netherlands. But once one is familiar with the system, he said, it's easy.

"You have free movement of labour in Europe," said Cobut. "The only problem is that people believe free movement of labour means that everything is equal. And that is not the case."

Jennifer Hamm is a freelance journalist based in the Netherlands. She frequently writes about living and working abroad and can be contacted through her website at www.JenniferHamm.com.

Subject: Relocating