What Is an Employee Transfer?

An employee transfer is the process of transferring an employee from one position, department, or location to another within the same organization.

An employee transfer represents an individual’s horizontal or vertical move within the same company. It can be temporary or permanent, and either the employer or employee can initiate a transfer.

Reasons why companies transfer employees

Employee transfers often help fill a vacancy, provide the employee with new opportunities and experiences, or meet the changing needs of the business. Some common reasons why companies transfer employees include the following:

Help employees relocate for personal reasons
Resolve workplace conflicts
Improve employee performance
Fill a vacancy in a different department or location
Open an office in a new location
Help employees develop new skills and gain experience
Break up monotony and provide employees with new challenges
Improve team performance and engagement
Promote diversity and inclusion
Consolidate operations and reduce costs
Improve team dynamics with fresh perspectives and ideas
Balance department sizes and team workloads

Disadvantages of employee transfers

Although there are many benefits, transferring employees can also negatively impact team dynamics, productivity, and employee satisfaction if not done correctly. Some disadvantages of employee transfers include the following:

Disruptions to team workflow and dynamics
Disturbance to the employee's personal life, community, and career
Financial burdens, such as training, relocation costs, moving expenses, and cost of living
Low productivity while the employee spends time learning new responsibilities, procedures, and systems
Cultural barriers, different languages, and unfamiliar customs in another country
Low morale if the employee disagrees with the transfer
Employee dissatisfaction with the new role or location
Employee resignation if they are not willing to leave their current role or location

Common types of employee transfers

There are various types of employee transfers. The common types of transfers that a company may use to move employees include:

Location transfer. An employee moves to a different location, branch, or office.
Department transfer. An employee moves from one department to another.
Job transfer. An employee's job responsibilities or position change.
Replacement transfer. An employee changes roles to fill a vacant position or relieve another staffer’s workload.
Versatility transfer. An employee moves into a different role to gain new skills.
Shift transfer. An employee changes shifts as per regular rotation or to address staffing needs.
Promotion transfer. An employee moves to a higher-level position and gains more responsibility and a higher salary.
Personnel or remedial transfer. An employee is moved to another position to address performance mistakes, poor conduct, or issues within a team.

Best practices for transferring employees

While there are many types of employee transfers and reasons for moving employees from one position or location to another, employers can ensure a smooth transition by following some best practices:

Create a clear employee transfer policy

HR should create an employee transfer policy that provides clear guidelines for how employees and managers handle transfers within the organization.

The policy should help employees understand the transfer process, eligibility criteria, types of available transfers, timeline for the transfer, and support provided during the transfer. A clear employee transfer policy ensures that transfers are fair and consistent company-wide.

Communicate the transfer request with all stakeholders

Whether an employee or employer requests an employee transfer, both parties should discuss the purpose and impact of the transfer.

The employer and employee should consult with their HR team and communicate the move to all stakeholders to ensure everyone is on board with the decision and understands their roles and responsibilities within the transfer process.

Ensure compliance with tax, payroll, and employment laws

Employers may transfer employees as part of a global mobility strategy. Global mobility is a function within a company that enables employees to relocate and work from anywhere in the world.

However, because laws regulating employment, entitlements, and payroll vary worldwide, employers must understand and comply with the local laws of the jurisdiction they plan to transfer employees.

For example, the U.S. offers no federal compensation guarantees for maternity leave and instead entitles qualified employees to 12 weeks of unpaid leave. In contrast, German employment law entitles employees who give birth to six weeks of paid leave before their due date and eight weeks after birth.

Many companies choose to partner with an employer of record (EOR) to ensure compliance with foreign employment, entitlement, and payroll laws.

Offer relocation assistance if applicable

If the employee transfer involves moving to another location, employers should provide relocation assistance to ensure a smooth transfer process for the employee.

Relocation assistance could include securing relevant visas and work permits, covering moving costs, providing new office equipment, or offering stipends for housing or childcare.

Evaluate employee performance post-transfer

An employer should set clear expectations and goals for the employee in their new role and allow them time to adjust to their new role and responsibilities.

Once an employee transfer is complete, the employer should check in on the employee's performance and well-being to ensure everything is going well. The employer could schedule regular meetings with the transferred employee to discuss their progress, receive feedback, and offer guidance.

Velocity Global helps global organizations navigate the ins and outs of talent relocation in more than 185 countries. Learn more about our Global Immigration solution.