The Ultimate Guide to Employee Transfer

An employee transfer is typically the movement of a worker from one position, department, or location to another within the same company. 

Throughout their careers, employees often experience such transfers due to job advancements, personal milestones, or company needs. That’s why it’s vital that employers must have processes in place to ensure these transfers are seamless and beneficial for all parties involved. A well-defined employee transfer process is essential for achieving this. 

There are some variations to the typical definition of an employee transfer. 

For example, while most types of employee transfers involve moving staff within the same company for operational reasons, TUPE transfers act as legal protection designed to safeguard employees' rights when their business or job is transferred to a new employer. TUPE transfers are triggered by a change in business ownership or service provider. 

This is in contrast with internal transfers that are managed at the employer's discretion.

Below, we’ll provide insights into the different employee transfer processes, with a focus on implications for international transfers. We’ll walk through how they work, why they happen, what forms they take, considerations and challenges they pose, and best practices for executing them effectively.

Overview of the Employee Transfer Process

Employee transfer processes vary across borders. Generally speaking, the transfer process is either initiated by the employer or the employee. Reasons for the transfer may be provided—especially if the employee is requesting the move—and employee consent may or may not be required to proceed.

While regional or national variations may apply, a typical employee transfer process usually includes the following steps:

• Setting the transfer in motion with the necessary documentation.
• The HR department manages training for the employee, briefing new teammates, and recruiting a replacement if needed.
• Coordinating travel or relocation arrangements if required.

It should be noted that the specific processes differ widely according to the countries and provinces in which they occur and the laws that apply, the industry a company is in (and the conventions and expectations within it), and the kind of employee transfer). Adhering to an internal transfer policy ensures consistency and compliance across different scenarios. 

Reasons for Employee Transfer

Transfers can be initiated by employees or employers for a wide variety of reasons or motivations. Some of the most common reasons employees are transferred include:

• Companies move to or open new locations and transfer existing employees to them.

• Employees themselves move or change residences and apply to a different branch.

• Leaders offer a transfer to better utilise an employee’s skill set in a different context.

• Managers suggest or impose a move to resolve a conflict or improve engagement.

• Leaders transfer workers to distribute talent more equitably between departments.

• Employees seek out different roles or departments to build on or acquire new skills.

• Leaders transfer employees to fill vacancies opened by dismissals or resignations.

• Employees are required to move after a merger and acquisition (M&A) or takeover.

As with process, the reason for a transfer depends on the type of employee transfer it is.

The Different Types of Employee Transfer Explained 

The way employee transfers are defined, or what counts as a transfer, differs across national and legal contexts as well as company cultures. 

For example, one company might consider changes to scheduling or taking on different shifts a kind of transfer, whereas others might have a more concrete definition that necessitates a change in title, location, reporting, or other factors.

For our purposes, there are nine categories that most kinds of employee transfers fall into. 

Location Transfer

This is when an employee moves from working in one location to another, which might require moving their residence within or across national borders. 

This type of transfer may be necessary when a company expands its operations, opens new locations, or restructuring its workforce. Location transfers can also be initiated at the employee's request, such as when they need to relocate for personal reasons or seek new opportunities within the company.

There are a number of things to consider when organising a location transfer for one of your employees. Will they or their family require any assistance or support with the transfer? Will they need advice or support in relocating their children to a new school? 

In certain scenarios, it might be necessary to offer relocation packages or some form of transitional support to ensure employee retention.

Vertical or Lateral Transfer  

This is when an employee is placed in a different position or department, either with the same, greater, or lesser responsibilities (and compensation). Vertical or lateral transfers can take on a number of forms.

Department transfer

A department transfer involves relocating an employee to another department within the same organisation. This transfer is often initiated when an employee's skills are better suited to a different department or when there is a need for additional staff in a particular area.

Role transfer

A role transfer involves changing an employee's job responsibilities or position within the company, without necessarily moving them to a different department. This transfer can be initiated when an employee's skills and interests align better with a different role or when there is a need for additional staff in a specific position.

Replacement transfer

A replacement transfer occurs when an employee moves into a new position vacated by another employee. This transfer is often initiated when an employee leaves the company, retires, or is promoted to a different role.

Versatility transfer

A versatility transfer is designed to provide employees with the opportunity to gain new skills and competencies by moving into different roles within the organisation. This transfer promotes employee development and career progression by exposing them to different areas of the business.

Shift transfer

A shift transfer involves moving an employee from one shift to another to address staffing needs. This transfer is often initiated when there is a shortage of staff on a particular shift or when there is a need to balance workload and ensure adequate coverage.

Promotion transfer

A promotion transfer involves moving an employee to a higher-level position within the company, which typically comes with increased remuneration and responsibilities. This transfer recognises and rewards high-performing employees and provides them with opportunities for career advancement.

 Merger and Acquisition Employee Transfer

Employers need to be fully aware of workers’ rights and entitlements and how the departments and locations they work in might change them across all types of employee transfers.

More specifically, there are a number of different types of employee transfer that fall within these three categories. 

Legal Considerations in Employee Transfers

Employee transfers, especially those that involve moving workers across borders, are subject to scrutiny, potentially across multiple jurisdictions. In the case of international transfers, the original and target countries’ laws may both apply to some or all parts of the process.

Differences in labour laws across distant countries are easy enough to assume; any employer with locations in both the EU and the US is well aware of this. But there are subtle differences that might be harder to anticipate. While many business practices are governed and enforced similarly across the EU, individual member states’ labour laws differ. For example, underlying economic conditions and cultural approaches to work, among other factors, amount to Spain and Germany having radically different labour markets, regulations, and employment contexts.¹

Companies engaging in cross-national worker transfers need to prioritise seamless compliance, ideally by working with a legal team or service provider fluent in the target country’s laws. 

Contractual Changes

Most issues and considerations with employee transfers stem from contractual obligations and the way they interact with laws, regulations, and conventions in a new context. Contracts for employees in a given location are generally negotiated and finalised with that location’s laws in mind; employees are offered direct and indirect compensation in line with what is required per applicable national and local laws. Business norms in the location also impact these calculations.

However, when an employee is moved, new minimums or other standards might now apply.

For example, consider the scenario of moving employees within the same country but across provincial lines, which is a fairly common practice in Canada. Per one HR expert, these kinds of moves might result in surprises about the transferred employee’s overtime eligibility (or exemption), their entitlement to severance and/or certain dismissal proceedings, and workers’ compensation.²

It’s imperative to stay on top of the specifics of employees’ contracts before a transfer happens.

Employee Rights

In addition to contractual terms, there are also employee rights that need to be upheld, which might be different in a new context. This is especially pressing in international employee moves, since laws and regulations differ greatly across countries. Companies need to ensure that their employee agreements uphold and protect the rights that employees enjoy in their new location.

In fact, employees’ rights may extend to whether and how they can be transferred.

For example, in the UK, employees have certain rights with respect to relocation in the event that their employer moves. Some of this comes down to their contract, as a “mobility clause” might mandate them to move if their company does, assuming the logistics are reasonable (i.e., not requiring a move overnight). However, whether or not the employee must move, or does, they may be entitled to redundancy pay or other related benefits (e.g., paid time off to seek another job) if the relocation or refusal results in them no longer working for the company.³

The Key Obstacles to Employee Transfer & How to Overcome Them

Communication and Transparency

Whether the transfer is instigated by the employee or the employer, any kind of transfer is a significant moment of transition in your employee’s life.  Failure to provide adequate information about the reasons for the transfer, changes to job roles or responsibilities, and the potential impact on employees can lead to uncertainty, anxiety, and resistance among your workforce. 

This of course means that clear and timely communication is essential during any employee transfer. It’s vital that your employees understand what is happening, why it’s happening and who is affected. As such, it’s vital that your organisation provides 

• Clear and consistent written communications at every step of the process
• The ability for the employee to raise/ask questions via 1-1s, team meetings and written correspondences. 
• A clear roadmap for what life will look like after the transfer has taken place. 

Adaptability and Skills Mismatch

Employees may face challenges adapting to new roles, responsibilities, or work environments during a transfer. Skills mismatches can occur when transferred employees lack the necessary competencies or experience for their new positions, leading to performance issues and job dissatisfaction. 

This means that it’s never been more essential for employees to receive the necessary upskilling or reskilling in the aftermath of a transfer. Here’s how your company can avoid this outcome 

• Conduct thorough skills assessments to identify and address skills gaps.
• Assign mentors or coaches to offer guidance and assistance to transferred employees during the transition period. 
• Clearly communicate expectations, responsibilities, and performance targets associated with the new role to ensure transparency and alignment.
• Implement a gradual transition process with phased responsibilities to help employees adapt to new roles and minimise the impact of skills gaps.
• Foster a culture of continuous learning and development, encouraging regular skill acquisition, and schedule frequent check-ins to provide feedback and address concerns.

Cultural Integration

In the case of M&A transfers or location transfers, employees may need to adjust to a new organisational culture, management style, or working practices. Cultural differences between the merging companies or between different offices can create friction and hinder effective collaboration.

Here’s how companies can prevent these transfer issues post M&A. 

• Conduct cultural assessments to identify potential differences and commonalities and develop strategies to bridge gaps.
• Provide cross-cultural training and workshops to help employees understand and appreciate different working styles, values, and practices.
• Establish a clear vision and set of shared values for the newly merged or transferred organisation, and communicate these effectively to all employees.
• Encourage open communication and feedback channels to address concerns, share best practices, and foster a sense of unity and collaboration.
• Organise team-building activities and social events to promote interaction and build relationships in your workforce. 

Legal Compliance

TUPE transfers and M&A transfers are subject to specific legal requirements, such as preserving employees' terms and conditions of employment and consulting with employee representatives. Failure to comply with these regulations can result in legal disputes and financial penalties for the employer. 

There are three key things that organisations can do to ensure compliance during every step of an employee transfer. 

Firstly, work closely with legal employment experts who can help you review your employees’ terms and conditions. Assess whether you need to preserve or amend terms and conditions in compliance with relevant employment legislation. 

Secondly, engage in meaningful consultation with employee representatives and develop a comprehensive communication plan to keep employees informed about any changes in terms and conditions of employment.

Employee Morale and Retention

Employee transfers can have a significant impact on morale and retention. Uncertainty about job security, changes in work relationships, or perceived lack of career progression opportunities can lead to increased stress, disengagement, and turnover among transferred employees.

So here’s where you bring it all together. Here’s where it becomes really important to provide that support and transparent communication to help your employees adapt to the change. Make sure you’re open and honest with employees about what the future looks like after the transfer. Seek feedback every step of the way and make affected employees feel valued to ensure turnover stays low.