Are you thinking of establishing a tiered business relocation policy in order to better meet the needs of your relocating employees? Many companies who have switched to a tiered lump-sum program have reduced administrative costs, managed their business relocation budget better, and even improved their recruiting and retention efforts when it comes to top talent.
But even a tiered business relocation policy may have hidden costs that need to be considered. Establish the answers to these questions as you set your new relocation policy.
- Will you offer exceptions in a business relocation package? Under what circumstances?
- How many tiers will cover your different levels of employees?
- What factors will you take into consideration when determining the tiers? (i.e., homeowner or renter? Will the employee be relocating with a spouse, kids, or elderly parents?)
- Do you know what other companies in your industry are offering in regard to their executive relocation packages?
Tiered relocation packages provide a good balance between flexibility for employee's needs without having to renegotiate the business relocation package every time you are relocating an employee. A lump-sum program means less administrative hassles, paperwork and management for your HR staff, and financial issues like tax gross-up are simplified when you're issuing a lump-sum package.
However, your tiered packages should provide enough flexibility to keep employees happy, which will aid your recruiting and retention efforts. They should also be competitive with other the business relocation policy of other companies in your industry. Finally, you may want to create tiers that address today's primary relocation concerns, especially the challenges involved in selling real estate in today's market.
If you need help creating your company's tiered business relocation policy, CapRelo can help with benchmarking studies and our years of knowledge to help you create a policy that takes advantage of the many benefits of a tiered business relocation package while helping your company recruit or retain top talent.