CapRelo Blog

Corporate Relocation Policy: Relocation Tiers vs. Employee Status

Posted by Amy Mergler on Thu, Jul 21, 2016

blocks-tiers.jpgIf you are in the process of creating a corporate relocation policy for the first time or restructuring your current policy, one of the questions you may consider is how to differentiate your employees in a tiered policy.

Find out more about how to save time and money by using tiered relocation packages in our free article.

Designing Tiered Relocation Packages

There are many variables to take into account when developing your company's tiered relocation packages. Start by deciding what kinds of candidates and current employees should receive the most extensive and valuable relocation packages and what types of employees should get the more basic level packages.

Your highest tier may apply to top-level executives. You could then create another tier for middle managers, followed by a base-line tier that applies to everyone else in the company. Examine your hiring practices and trends and decide whether you'd like to have an even more pared down level for new hires, or if you'd prefer to assign tiers to recruits based on the levels of their future positions.

Relocation Tiers vs. Employee Status

As you develop your tiers, it's also important to understand how those tiers differ from an employee's moving status. While a current or prospective employee's moving status can certainly influence which relocation tier they receive, the two are not interchangeable.

Moving status refers to the employee's needs during a relocation. For example, is the employee:

  • single or married?
  • a homeowner or a renter?
  • a new hire or current employee?

It can also address more specific circumstances, including whether the employee has children in school, pets that need transferred or elderly parents who require nursing care.

Relocation tiers are certainly related to an employee's status, but you shouldn't necessarily base them on moving status. Instead, you should base the tiers on the employee's standing, or prospective standing, within the company. Basing the tiers on the seniority, salary, job title – or a combination of all three – ensures that more extensive relocation packages are justified by an employee's current and future contributions to the company.

Whatever policy you put in place, you can prevent resentment among employees by maintaining consistency when determining which employees belong in each tier. While it's important to remain consistent with your initial offerings, make sure your relocation policies include enough flexibility for you to move up a tier as a negotiation tactic or for any special circumstances that may arise.

Save Time & Money Using Tiered Relocation Packages

Topics: Tiered relocation packages, Corporate Relocation Costs, corporate relocation program

The Hidden Cost of Losing Key Talent During a Group Move

Posted by Rick Bruce on Thu, May 05, 2016

Office_Relocation-thumb_.jpgThere are many corporate relocation costs to consider before a group move. Typically, easily quantifiable, up-front corporate relocation expenses are foremost in the minds of management and HR staff. Rarely is the cost of losing key talent considered. 

Find out everything you need to know for an effective, low-stress relocation in our Low-Stress Relocation Guide.

Here are just a few of the added corporate relocation expenses you may face if your key talent refuses to make the group move:

  • Potential loss of intellectual property and human assets

  • Cost of key talent going to a competitor if a non-compete clause was not signed

  • Bad public relations if high-profile company leaders leave

  • Loss of company morale during and following the move when a company already in a state of flux loses well-respected personnel

Tangible Corporate Relocation Costs of Losing Key Executives

In addition to severance pay that has the potential to equal up to a year's salary for a top executive, there are other tangible costs associated with losing company leaders. These costs won't be considered part of your corporate relocation expenses because they'll be incurred after the company has settled into the new location. But if you are unable to keep the desired staff on board, you will find that these hidden expenses will add up. Even worse, these hidden costs are not tax deductible like some corporate relocation expenses.

  • The costs of hiring and training new employees, which can equal up to five times the amount of an executive's salary

  • Loss of productivity during ramp-up time with new employees

  • Potential corporate relocation expenses if you need to look outside your new region for talent

If your company is planning a group move, wouldn't you rather have your top performers make the move with you? 

The Low-Stress  Relocation Guide

Topics: talent retention, Home Selling and Purchase Assistance, Corporate Relocation Costs, corporate relocation program, talent management

The Hidden Costs of Employee Relocation

Posted by Amy Mergler on Wed, Dec 23, 2015

100-dollar-question.jpgHidden costs can surface to cause problems at the worst possible time – often right in the middle of an employee’s relocation – and may even prevent a successful transfer. These hidden costs can be monetary in nature or can be in human terms, and may not be readily apparent.

Monetary costs are what usually come to mind when examining hidden costs, including things like utility reconnections in the new location, extra fees for transporting large items and local fluctuations in real estate values if selling a home or buying a new home. However, there are additional costs that may not be as obvious, but that can impact not only your company, but also your transferee.

Learn more about developing relocation policies with our free guide.

The Human Costs of Relocation

Human costs occur when the employee is forced to focus on the time-consuming logistics of coordinating a move, making them less effective and less productive at work.

While it may seem to make sense to save money by cutting back on relocation services and allowances, on closer examination, cutbacks to relocation or using lump-sum programs can result in increased employee confusion, resentment and stress. This, in turn, will have a negative impact on your company’s bottom line.

Your employee will have to spend time communicating with real estate agents and moving and mortgage companies, as well as doing the house-hunting legwork – much of which will need to be done during regular business hours. The more time your employee spends on moving logistics, and the unexpected expenses that a lump-sum plan may not cover, means they have less time and ability to focus on the work of training and transitioning into the new position.

If your employee has a family, there are many additional concerns that need to be addressed. For example, a move will disrupt a spouse’s career and the family income, and if there are school-age children the employee will need to investigate and locate good schools in the new area.

The stress of tackling all these tasks often leaves employees distracted, exhausted and more apt to miss project deadlines – ultimately costing the company more money due to lost productivity than it would get back from the relocation.

In some cases, an overwhelmed employee may give in to the frustration and expense of trying to juggle so much in a short time and decide to leave your company, which will leave you with the additional cost of hiring and training a replacement.

Developing a thorough and effective relocation program can minimize these stressful issues. Your program can provide for assisting a spouse with finding suitable employment in the new location – boosting morale as well as the family’s income. Additionally, the plan could also include provisions to help your employee find good area schools and deal with other settling-in concerns, keeping your employee’s distractions and stress levels down, which in turn save you time and money.

Relocating Employees with Families

Topics: Corporate Relocation Costs, corporate relocation program

3 Ways to Reduce Your Relocation Costs

Posted by Amy Mergler on Thu, Dec 10, 2015

savings-resized-600.jpgCost cutting has become a way of life in the corporate world. When relocation costs are reduced, the bottom line increases. Relocation expenses can drain other resource spending. Cutting back and controlling these expenses – without compromising the relocating employees’ experience – should be the goal of every human resource department. Unfortunately for many companies, this goal remains an enigma. However, simple changes to the relocation policy can equate to substantial savings without compromising employee morale.

Find out more about developing relocation policies in our free article.

Set Clear Parameters in Your Relocation Policy

Policy ambiguities can result in additional costs for the company. Your relocation policy should be written in easy-to-understand, simple language. Take into consideration what is needed to facilitate a relocation smoothly and efficiently, without allowing wiggle room by the employee.

Put Expense Caps on Some Relocation Benefits

You would be surprised at how many companies ignore capping expenses like loss on sale. Loss on sale clauses for employees who own homes can be a major expense that should be capped. Many homeowners have experienced depreciation of their real estate assets. This makes loss reimbursements a major expense for relocating employees. Your relocation policy should clearly define a maximum amount that will be reimbursed. Additionally, it’s critical to consider capital improvements to the property when calculating its value.

Change the Way Relocation Expenses are Paid Out

If you’re currently using traditional expense reporting to reimburse employee expenses, you may want to consider if a lump sum payout method is best for your company. Numerous expense reports generated by the transferee will result in time and costs to review, approve and issue payment for each report. A lump-sum method may eliminate the headaches and costs involved with multiple expense reports and save your company money. There are a variety of types of lump sum programs. Take the time to research and evaluate if this kind of program would be beneficial to your company.

 

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Topics: Corporate Relocation Costs, corporate relocation program, loss-on-sale relocation policy

Making the Case for a Corporate Relocation Package

Posted by Amy Mergler on Thu, Dec 03, 2015

For some HR professionals and employers, having a corporate relocation package may be a “trial and error” proposition. While this may not be ideal, it is better than the typical results seen if there is no written relocation plan at all. Why?

Learn more about developing relocation policies in our free guide.

Competition for Talent

tiered_relocation_agreements.jpgIf you compete with other employers in your industry for the same talent pool when recruiting new employees or retaining your current staff, having a competitive relocation program can be a strong negotiating point.

Candidates considering a job offer with your company often evaluate your relocation program as a factor in their final decision. Current high-performing employees may also take into account the strength of your relocation package when deciding to stay with your company or seek employment elsewhere.

Financial Considerations

Without a formal corporate relocation program, neither HR nor the employee initially has a reference point to estimate the financial ramifications of a potential relocation. When considering the financial impacts on the employee and employer if the employee owns a home or has a valid lease on his/her residence, for example, every nuance of a move to a new location is fair game for discussion if you don’t have a published relocation policy. The policy will provide direction and guidance to address those details and will eliminate the stress placed on transferees and HR when a relocation is scheduled.

Overloading Your HR Team

Having no relocation policy mandates that HR and your transferee negotiate every detail of a company-sponsored transfer. The workload on HR can be overwhelming, and the results (for both the employer and employee) come with no guarantees of satisfaction. Much of the pressure, anxiety and stress placed on HR is greatly reduced when you have a published relocation package, which impacts not only HR, but your transferees as well.

“The Devil is in the Details”

For every important law, action plan or agreement that failed, the number attributed to issues with the details outweighs those attributed to problems with the major components. Even a corporate relocation package that lacks some primary features can salvage a needed employee transfer if the policy includes some of the details that potential transferees consider important.

For example, providing a transferee with reasonable reimbursement for one or two house-hunting trips with the family is important to employees and rather easily cost-controlled by the employer. It may be considered a detail, but it could make the difference in whether the employee accepts or rejects an otherwise lucrative relocation offer.

 

Having a corporate relocation plan, even if it needs minor (or major) “tweaking,” is far superior to having no policy or package.

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Topics: relocation packages, corporate relocation program

What Do you Need to Know Before Writing a Relocation Letter?

Posted by Rick Bruce on Wed, Aug 05, 2015

writing a relocation offer letterRelocation letters have two primary purposes. Fortunately, you need not spend hours researching data or statistics to get the information you need to create a good relocation letter of understanding. The two major features of relocation letters accomplish these goals.

  • Inform the employee or new hire about the terms of the relocation.
  • Motivate the transferee to have positive feelings about their new position and location.

Our free article can give you more information on how to write an employee relocation offer letter.

A relocation letter essentially is part legal document and part enthusiastic communication. The more formal section states the specific terms of the new position, with expected start dates, along with basic pertinent details. The remainder should display the employer’s enthusiasm for the move and the employee's agreement to it.

What You Need to Know Before Writing the Letter

Know your employee.

While the employer relocation decision is its wish to improve company operations, the employee is the prime component. Treat a relocation letter as a one-to-one chat, not a company advertisement to the general public. By knowing your employees personally, you can communicate in ways more meaningful and effective. Achieving this goal is more challenging with a new hire, because you don’t really know his/her personality yet. However, a gracious and enthusiastic “welcome to the team” message should be well received.

Restate the benefits of the new position and location.

Although the employee has already agreed to take the new position and relocate, reminding the employee of the benefits helps reinforce the employee’s decision and can help eliminate any feelings of “buyer’s remorse.” Make sure to get the details of the transferee’s new duties and responsibilities, you should know all the changes to the current employee's responsibilities. At minimum, you need to know the following:

  • The new job title.
  • New or additional job duties and responsibility levels.
  • Any duties the transferee no longer has.
  • The new compensation and benefits if there are changes.
  • Start date for the new position.

Thoroughly understand the relocation package offered.

You need to reference your policy's standard features and exceptions, if any, in the program offered to the employee. You’ll need to clearly state the following items in the relocation letter.

  • Those costs the employer will directly reimburse and caps or limitations thereto.
  • Describe the procedure for submitting requests for reimbursement.
  • Expand on critical relocation package features, such as home sale assistance.

Gathering this information before creating a relocation letter helps you fulfill the two primary goals. You will have provided a positive message to your transferee about accepting the new assignment. You will have also fulfilled your “legal” responsibility by incorporating the specifics of the relocation and the new job. By getting this information in advance it makes writing the relocation letter fairly simple. Not only will your employee understand the terms of the relocation, but your company will also have a written document that eliminates most potential misunderstandings with the transferee.
How to Write an Employee Relocation Letter

Topics: relocation management services, corporate relocation program, writing relocation offer letter

Meet Heather Hudnall, Director of Global Services

Posted by Shirien Elamawy on Tue, Oct 21, 2014

describe the imageWe recently sat down with Heather to learn more about her role at CapRelo and what she enjoys doing in her spare time.

What are your responsibilities as "Director of Global Services?"

The position was created based on a company need to manage our global business and provide global support to our clients. As the Director of Global Services, I am currently overseeing the domestic operations for the Walmart account, which consists of some global training programs, around 3,200 domestic moves a year, and another thousand or so associates requesting assistance with training programs.

I am also a liaison for our Walmart Canadian operations. CapRelo moves close to 250 associates a year within Canada, overseeing the full range of relocation services for those associates, including travel and expense management. 

How long have you been with CapRelo, and what is your favorite part about your position?

I joined in May 2008, so I have been with CapRelo for six years. With my current position I would have to say that learning new things about global relocation and the industry as a whole is my favorite part;  I love learning and stretching my abilities.

I look forward to assisting in the setup of operations for other programs we initiate.

What is your most memorable experience working for CapRelo?

The training and educational opportunities that CapRelo has afforded me have been outstanding.  From earning my CRP® to my GMS certification, the knowledge I have gained has helped me grow in my career. 

What do you do in your spare time, what are some of your interests?

In my spare time I love watching my children play soccer and swim. I love reading, yard work, going to the movies, and having date nights with my husband.

Topics: corporate relocation program, CapRelo Employees

Meet Our Director of Client Development, Angela Tan - CRP, GMS-T

Posted by Shirien Elamawy on Tue, Sep 23, 2014

describe the imageWe recently sat down with Angela to learn more about her role at CapRelo and how she makes relocation easy for our clients and their transferring employees.


What are your responsibilities as Director of Client Development?

As Director of Client Development, my focus is on the client. My responsibilities include, but certainly are not limited to, program management, service delivery, and client specific policy and process improvement.

What have been some of your biggest challenges?

The challenge is continuing to assist clients in developing and improving their mobility program while preserving each client's unique culture and values.  How can we creatively customize the development process in a way that makes the experience even better for the client company's transferees, relocation team, and financial bottom-line?  I am constantly thinking about which qualities are unique to the client culture and business objectives, and how we can further those goals through the client’s mobility program.  I love that challenge.

How long have you been with CapRelo?

I joined CapRelo in 2008. Transitioning to a position with a new employer is always nerve wracking, but I quickly knew that it was the right fit.  Our value of client relationships goes well beyond contracts and agreements.  Sincere and meaningful commitment to client and transferee service delivery is a personal commitment within every department.  Lots of companies say it, but I actually witness it every day.

You recently received the Worldwide ERC Meritorious Service Award. What does that reward recognize and mean to you?

The Meritorious Service Award was an exciting one for me as it is based on service contributions to the Worldwide ERC - participating as a session panelist at ERC conferences, contributing to Mobility magazine,  serving on Worldwide ERC's YP40 Committee (Young Professionals under 40), and then leading as committee Chair.  These were tremendous opportunities for career development that allowed me to give back to the industry, represent CapRelo, and better service our clients.

When you’re not hard at work counseling relocating employees, what do you do for fun?

I am usually spending time with my husband and our 4 year old.  Like most people, we keep very full schedules. Never a weekend at home.  In fact, we recently began to calendar our “hang out” days.  We try to enjoy at least one day of rest and relaxation per month!  I am a born and raised California girl, so I am especially looking forward to the summer season - pool time and warm weather!

Topics: corporate relocation program, CapRelo Employees

Hidden Relocation Costs

Posted by Jim Retzer on Tue, May 13, 2014

‘Hidden costs’ can be defined as expenses, either monetary or in human terms, that are not readily apparent, but which can surface to cause problems at the worst possible time: often right in the middle of an employee’s relocation – and may even prevent a successful transfer.

Monetary costs are what usually come to mind, such as utility reconnections in the new location, extra fees for transporting large items, such as appliances, and the local fluctuations in real estate values if selling or purchasing a new home. However, there are additional costs that may not be so readily apparent but which can have devastating results for your company as well as to the transferee.

The human cost to employees and their companies occurs when the employee is forced to focus on the time-consuming logistics of coordinating a move; these employees will not be effective on their jobs and productivity will suffer.

At first it may seem to make sense to save money by cutting back on relocation services and allowances. On closer examination, cutbacks to relocation or with ‘lump-sum’ programs can result in increased employee confusion, resentment, and stress – all of which will have a negative impact your company’s bottom line.

The employee will now need to spend hours on the phone interviewing real estate agents, moving and mortgage companies, as well as doing the leg-work of house-hunting – much of which will be on your company’s time and dime. More employee time spent dealing with the moving logistics, as well as the unexpected expenses that a ‘lump sum’ plan may not cover, means the employee has less time and ability to focus on the work of training and transitioning into the new position.

Spousal employment concerns also need to be addressed – especially if he or she has already moved up their own career ladder and the move will disrupt a thriving career as well as family income. If there are school-age children, the employee will need to locate good nearby schools in the new area.

The stress of tackling all of these tasks often leaves employees distracted, exhausted and more apt to miss project deadlines - ultimately costing the company more money from lost productivity than it gets back from the relocation.

In some cases, the frustration and expense of trying to juggle so much in a short time can result in the overwhelmed employee giving up and quitting the company altogether – leaving you with having to hire and train a replacement.

A professional, experienced relocation firm can minimize these stressful issues by assisting a spouse with finding a suitable replacement – boosting morale as well as the family’s income. These firms can also help with finding good area schools and dealing with other settling-in concerns, allowing you and your employee to prepare for the new job by keeping distractions and stress levels down and productivity up, saving you time, money and everyone’s sanity.

Topics: Corporate Relocation Costs, corporate relocation program

Lump-Sum Executive Relocation Package

Posted by Brian D'Orazio on Tue, May 06, 2014

Thinking about revamping your executive relocation policy? Watch our short video to get ideas on how to customize your relocation package. 

 

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Topics: Home Selling and Purchase Assistance, corporate relocation program, executive relocation package, lump sum package

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