Glossary of Relocation Terms

Relocation Terms You Should Know

Assignee: An employee who is living and working at the request of their employer on a temporary basis (usually longer than 3 months) in a location other than their home employment location.

BMA: (Broker’s Market Analysis) Developed by Worldwide ERC^®️, the Broker’s Market Analysis and Strategy Report is a form used by real estate brokers and agents that enables them to conduct a diligent analysis of a subject property’s condition and future marketability. Based on the analysis, the broker is to estimate the property’s most likely sales price.

BPO: (Broker’s Price Opinion) It is the estimated value of a property as determined by a real estate broker or agent based on the characteristics of that property.

BVO: (Buyer Value Option) This is a home sale program that allows the employee to list and market the home until an offer is received on the property. Then, the Relocation Management Company (RMC) purchases the property from the employee based on the sales contract amount, and then sells the property to the ultimate buyer. There are two distinct sales that take place for the property in the BVO program.

COLA: (Cost of Living Allowance) This is an allowance or payment differential paid to an employee. It is intended to address the differences in purchasing power when an employee is moving to a higher cost-of-living area to cover those higher expenses for a specified time.

Core Flex Relocation Policy: It is a relocation policy that includes relocation benefits that are needed by all transferring employees, as well as flexible components that can be added based on an employee’s specific needs.

CRP: (Certified Relocation Professional) This is a competency-based designation that was developed by Worldwide ERC^®️. Recipients of the CRP designation are recognized for demonstrating a comprehensive knowledge of the principles and practices of U.S. employee relocation across all facets of the industry, and for their dedication to continued education in this specialized field.

Cultural Training: Also known as intercultural training and cross-cultural training, it is a training program that is intended to narrow the communication gap and increase understanding between employees and clients when working within a multinational/multicultural organization.

Direct Reimbursement Program: This is a home sale program in which the employee is responsible for the sale of his or her home and is then reimbursed for the costs associated with that sale.

Destination Services: This is assistance provided to an employee and family in their new location. It is designed to assist with a host of services that typically include temporary housing assistance, securing permanent housing, school assistance, area orientation tours, driver’s license, social security, banking, etc.

Diplomatic Clause: This clause provides lease contract verbiage that alerts a landlord to the possibility of a lease interruption/early termination and establishes equitable terms up front.

DSP: (Destination Services Provider) This is the service provider who provides the Destination Services. They are sometimes referred to as a Destination Agent.

Duty of Care: Duty of care is a company’s obligation to ensure the safety and well-being of their employees. This includes actively protecting employees from foreseeable harm or injury. When it comes to global mobility, businesses take on this responsibility for the employee as well as their family, if the family is included in the relocation.

EE: (Employee) This is typically used in reference to a transferring employee.

ERC: Known as Worldwide ERC^® (Employee Relocation Council), the organization is a relocation services industry trade group. With more than 12,000 relocation professionals listed as members, the group focuses on industry issues and management practices for the movement of employees within the United States and between all other countries.

EuRA: The European Relocation Council, commonly known as EuRA, is a professional industry organization for relocation providers and associated services in Europe. The non-profit is committed to promoting the benefits of a professionally managed relocation to companies moving employees around the world.

FIDI: stands for Fédération Internationale des Déménageurs Internationaux, or International Federation of International Movers. It is a global organization of professional international moving and relocation companies. FIDI has more than 600 affiliates in 100 countries, and each affiliate must comply with rigorous FIDI-FAIM quality standards.

Expat: (Expatriate) This a person who lives outside of his or her native country.

Global Compensation: Global compensation is the compiling, management and reporting of compensation data to the appropriate country authorities for global assignments. This is a complex and often complicated process depending on a variety of factors, including country of origin, host country and assignment length.

GMS: (Global Mobility Specialist) This is an industry designation offered by Worldwide ERC^®️. It was designed to provide relocation professionals with a deep understanding of global workforce mobility issues.

GMS-T: This is an industry designation offered by Worldwide ERC^®️ that is focused on strategic talent mobility. Relocation industry professionals who have already earned their GMS designation can elevate it to GMS-T upon the successful completion of the Strategic Talent program.

Gross-up: This is a company-provided tax allowance that is added to an employee’s reportable wages. It is meant to offset in part or in whole the tax burden of specific payments made to the employee for certain taxable, nondeductible reimbursement or allowances.

Guaranteed Buyout (GBO): This is a home sale program whereby an offer is extended to the homeowner based on the appraised value and is typically valid for 60 – 90 days; if the offer is accepted by the employee, the RMC will purchase the home on behalf of the employer and will resell.

HHG: (Household Goods) This refers to the transportation and shipment of an employee’s household goods and personal belongings from their current location to their new location.

Home finding Trip: This is a trip to the location where an employee is being transferred that allows them to search for a home or apartment in advance of their move.

Hypothetical Tax: This is the approximate amount of tax, calculated on home country base salary and bonus, where applicable, that the expatriate would have paid if they remained in the home country.

Inpat: (Inpatriate) An employee of a multinational company who is from a foreign country but is transferred from a foreign subsidiary to the corporation’s headquarters.

Inventory Property: This typically refers to a property that has been acquired by an RMC and has been taken into their inventory prior to the selling of the property to the ultimate buyer.

Localization: This is how the employer transitions an employee off an expatriate assignment and related benefits when the job becomes permanent in the host country and the employee is placed on local compensation, benefits, etc. The process is typically phased in over two to three years or can be done immediately.

Lump Sum: This is a relocation package in which the employer gives a set amount of money to an employee to assist with their relocation costs.

Managed Cap Lump Sum: This is a relocation package in which the employer provides a set budget for a relocation that is administered by the RMC to assist the employee in managing the amount effectively and efficiently.

MEA: (Miscellaneous Expense Allowance) This is an allowance paid to the employee by their employer meant to cover miscellaneous out-of-pocket expenses that are not otherwise covered by their relocation policy.

Per Diem: This is a daily rate that an employer will pay to an employee to cover certain out-of-pocket expenses and other incidentals, such as meals, hotels, etc. and may be utilized during temporary living, or to assist with additional costs, such as meals, that an employee may incur during a short-term assignment.

Permanent Establishment: A permanent establishment (PE) is a fixed place of business that generally gives rise to income or value-added tax liability in a particular jurisdiction. The term is defined in many income tax treaties and in most European Union Value Added Tax systems.

Property Management: This is a service often utilized by an employee who is going on an assignment and wishes to have their home maintained and well-looked after while they are away. The services provided by a property management company typically include procurement of a tenant, collection of security deposits and rental checks, coordination of regular home maintenance (such as yard and pool services) and overseeing any repairs or issues that might arise and need attention while the homeowner is away.

Relocation Appraisal: This type of appraisal is used to determine an anticipated sales price of a relocating employee’s property.

Repat: (Repatriation): The return of an employee to their home country at the conclusion of an employment-based assignment in another country.

RMC: (Relocation Management Company) These are companies that provide a full array of relocation services for companies and corporations that relocate their employees domestically and/or internationally.

RES Forum: The RES Forum is considered the largest and most active network for international human resources and global mobility survey data, modelling and analytics. Founded in 2006, members receive access to exclusive data to keep a progressive pulse on industry trends. Sterling Lexicon^® Relocation is The RES Forum’s sole technical partner for global relocation.

Rotational Assignment: This is a temporary assignment across national borders in which an employee works for a specified number of days in the host country, and then comes back to their home country for a specified number of days.

SCRP: (Senior Certified Relocation Professional) This is a designation for relocation professionals who have already earned their CRP designation from Worldwide ERC^®️ and have taken further steps in their professional development.

SGMS: (Senior Global Mobility Specialist) This is a designation for relocation professionals who have already earned their GMS designation from Worldwide ERC^®️ and have taken further steps in their professional development.

Shadow Payroll: Shadow payroll describes the report compensation data that is paid from another country. If you have an employee on assignment in a foreign country, their wages may need to be reported in both the home and host countries via a shadow payroll.

Short-term Assignment: This is a temporary assignment of an employee that is typically projected to last for more than three months, but less than a year, and can be domestic or internationally based.

Small Shipment Program: Also referred to as crate and freight and containerized shipments, a small shipment program uses containerized shipments to move an employee’s household goods to their destination faster than traditional moving methods. This type of program is gaining popularity for shipments under 5,000 pounds because of the reduced cost and time-saving benefits.

Temporary Housing: Also referred to as corporate housing, it is the short-term living arrangement for an employee. This can be based on the need for short-term housing only or is often utilized prior to the employee securing permanent housing. Accommodations are typically a fully furnished apartment with a short lease term.

Tenancy Management: This is a service that provides lease support to the employee on expatriate assignment and the employer throughout an employee’s lease term. Tenancy management services typically include assistance with lease negotiations and renewals, management and coordination of any repair or maintenance issues, as well as acting as a liaison between the tenant and the landlord.

Tax Equalization: This is a system intended to ensure that an employee on an international assignment pays no more or no less tax that what they would pay in their home country.

Totalization Agreement: This refers to arrangements between countries intended to protect the social security benefits of employees who move between countries and ensures single country social security coverages and obligations for employees on assignment. A Certificate of Coverage is issued by the home country social security authority as evidence the employee on temporary assignment in the host country meets requirements of the Totalization Agreement, exempting the employee from paying local social security.

Virtual Assignment: This is a job assignment the employee performs while living in a location other than where the job is located.

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