Any employee knows that traveling or relocating to other countries for business is no simple matter. In addition to the pressure and deadlines at work, many aspects of daily life need to be dealt with, which could be physically and emotionally demanding. As an employer, you can support employees with settling their lives in their new country and use additional benefits to motivate them to accept relocating to the Netherlands. Having a strong relocation package helps to negotiate and facilitate the relocation of an employee.
When setting up a strategy for relocating your staff, there are multiple factors that influence the approach the HR team could take. A few questions you should ask:
- What is the expected number of employees relocating to the Netherlands? Is it a consistent number, or is it a one-time event?
- Does your office receive business travelers regularly? Do they come for short-term or long-term assignments?
- Which areas of your relocation package consume the biggest part of the budget? Is it accommodation, transport, meals…? How can it be optimised?
- Is there already a global policy? Can it be implemented in compliance with Dutch regulations?
- What are the business needs? Do your employees need to be on-site? Do they have to travel to visit customers often?
There is no one-rule-fits-all solution to these questions. If you are just starting your journey in the Netherlands, it is always helpful to discuss the common practices with HR partners and consider involving a relocation company. This article will present standard solutions implemented in the Dutch market covering three aspects of relocation: housing, meals, and transportation.
Where to start?
As a business owner, you can determine to which extent you are willing to support in regards to the relocation of your employees. In order to support international talent, the Dutch government has issued a 30% ruling tax benefit. It allows the employer to provide a tax-free relocation allowance of up to €7,750 (excluding travel expenses) for entering and exiting the country. It is an incentive, and considerable help, to the employee when arranging their new life.
The immediate and guided support provided to the employees once they arrive in the Netherlands can significantly improve the productivity and performance of staff. It is possible to either collaborate with a third party (relocation company) or arrange the facilities in-house. Furthermore, having a developed infrastructure and support system in place could also enhance the performance of the whole office, including business travelers long term.
How to arrange accommodation for the employees
The basic need of any person is to have a safe place to stay. From the business side, there are multiple ways to provide the benefit:
Reimbursement of costs
The most common and straightforward way to arrange accommodation is to allow employees to reimburse the incurred expenses. In this case, employees need to arrange their own hotel/apartment. This setup gives a lot of flexible, but flexibility also brings certain disadvantages, such as uncontrollable expenses for employees, relatively high costs, and extensive workload for the financial department and internal audit in the later stage of the process.
- Flexible arrangement
- Unpredictable and difficult to control expenses
- Employees spend time arranging accommodation
Cooperation with hotels
It is common for businesses to participate in loyalty/business programs of global hotel chains. However, sometimes it is worth looking into local hotels next to the company’s or client’s office. The proximity and convenience of the hotel location can make the adjustment process much easier for the employee who has just arrived in the country and save the commute time, consequently reducing the cost of travel expenses. The company can negotiate the room rate, the number of rooms, and the length of time with the hotel. It is a valuable incentive for high season to keep the costs low.
- Reduced price
- Ideal for short-term stays and client visits
- High-quality accommodation
- Cannot guarantee room availability
Lease with an apartment hotel/real estate agency
In the Netherlands, some companies rent rooms, or a whole building, for short-term business travelers as well as employees at the beginning stage of their relocation. Alternatively, various aparthotel’s in the Netherlands can provide long-term rental services for companies.
For example, The Student Hotel has branches in many of the major cities in the Netherlands and EU countries. This option is most suitable for multinational companies who need to find widespread, and standardised partners.
Moreover, the services for this type of accommodation are more practical than standard hotels. For example, the Student hotel provides a shared kitchen, a public laundry room, a gym, and other facilities. It also offers temporary address services for long-term tenants to help residents receive letters and parcels. This feature is essential for employees in the transition period because they need a temporary address to register in the city hall, complete the immigration procedure, and receive a banking account successfully.
- Predictable expenses, fixed rent
- Full-spectrum of facilities to meet daily needs
- If there are no employees on business trips or dispatch, there is a risk of a low occupancy rate
- The maximum length of stay applies
In addition to providing accommodation for employees, companies can also consider providing housing allowance. Housing allowance applies to employees who are sent to the Netherlands for a long time and are renting their own house. Not only can employees find a comfortable space for themselves by renting a place on their own, but the company does not need to commit to renting a house for a long time and does not need to manage contracts related to it. Furthermore, housing allowance will be paid to employees as a fixed amount, and the company can establish a baseline for subsidies based on the average price of the rental market in the city. For employees, it is an attractive benefit since the housing allowance is tax-free.
How to arrange meals for the employees
It is not mandatory to provide meals during work hours. However, it is commonly used to create a better working environment for existing employees, improve employer branding, and attract new talent. A standard practice in the Netherlands is that the HR team/office manager is responsible for ordering meals in advance. Some companies will even set up their own canteens for their offices. The built-in canteen entails setting up a kitchen inside the office and hiring chefs to prepare employees’ meals. The management of the operation is rather time-consuming and requires specific expertise. Canteen outsourcing means outsourcing the office dining hall and kitchen to a third-party (catering company). In this case, the supplier will manage the whole operation of the canteen.
In addition, some companies collaborate with local supermarkets to provide employees with benefits such as gift cards or vouchers.
Regardless of whether the company provides employees with meals or catering benefits, the majority of offices provide coffee, tea, water, and some snacks like fruits and bread.
How to arrange transportation for the employees
When traveling to the Netherlands, the tickets can either be provided by the company or purchased by the employee and then reimbursed. The amount will be tax-free if the total amount reimbursed does not exceed 1,7% of the total annual salary. See the regulation here.
Once in the Netherlands, the company can provide employees with temporary cards (Anonymous OV-chipkaart) for public transportation. Employees can top-up the balance of the cards and use them to take trams, buses, subways, trains, and even bikes in big cities.
How can Octagon Professional help you create a compensation package strategy for your business?
As an experienced human resource solution provider, Octagon Professionals has a deep insight into the process of establishing an employee remuneration package for international companies. We can help you develop a package of benefits for your company’s employees that fits your business. Contact our HR consultants and let them help you attract quality talent.
In the next article, we will explain the commuting benefits in the Netherlands and provide you with more insights into common compensation packages allowing you to retain company talents with comprehensive and innovative benefits.
Nine Innovative Employee Benefit Ideas for a Competitive Compensation Package
It’s tough to stand out as an employer in today’s crowded talent market. Everyone is competing for the best talent available, but separating yourself from other employers has never been more difficult. It’s no longer enough for employers to offer ...
EXPLAINED: Sick leave policies for companies in the Netherlands
Burnout, personal injury, the flu, or the common cold – these are all examples of legitimate reasons employees in the Netherlands call in to work to take a sick day. The Dutch are renowned for their progressive approach to labour ...