Employer relocation policies, whether single or tiered, must be thoughtfully planned by senior management, in cooperation with HR, finance and tax departments. Corporate policies will determine the success, acceptance and attractiveness of employee relocation strategies. The best way to ensure employer policies are successful is to make them IRS compliant, mirror the company's corporate culture, align with corporate strategic goals and meet the needs of both employer and transferred employee.
Single Policy and Components
- Only one corporate policy to learn, manage, update or revise. This saves time, reduces human errors, is easier to understand and explain, and curtails misinterpretations of features.
- Single employer relocation policy applies to all employee levels. One size fits all, as all transferees are treated equally.
- Management may have to document more exceptions, limitations and/or amendments than tiered policy programs.
- All employees, regardless of salary or authority level, are subject to the same rules and processes.
- Employees often perceive single policy programs as highly democratic and team-oriented, placing equal value on all individuals as important contributors to the employer's goals.
Tiered Policy Components and Characteristics
- These programs offer different benefits related to the employee's authority and compensation level.
- Tiered policies outline programs for new hires based on education, experience and status levels.
- Tiered employee relo policies differ based on authority and compensation level, along with the employee's status as a homeowner or renter.
- Require policy confidentiality, as transferees should become familiar with relocation program components that apply to them, not the features available to other employee groups.
- Often controls or reduces program costs, as expenses lower with fewer benefits payable to some transferees.
- More knowledge and administrative work required to implement and manage multiple relo policies.
There is no "silver bullet" to define the best policy approach for all employers. Determining which policy is most appropriate and effective typically depends on senior management philosophy and the company's sphere of operations. For example, a company with locations only in one or two regions of the U.S. may decide that a single policy relocation program fits their needs and achieves their goals.
Contrast that case with a company with locations throughout the U.S. and with offices in London, Paris, Brussels, and Rome. Many organizations that fit similar profiles often decide that a tiered policy is equally effective in attracting and keeping talent, while offering better budgetary control and delivering significant relocation cost savings.
In both examples, however, it is important for employer and employee to be aware of what chief competitors offer. It is dangerous to assume that any employer is immune to a corporate "tug of war" to hire identical candidates or offering current valuable employees solid reasons for accepting intra-company transfers. Design and implement a relocation policy, whether single or tiered, that offers the competitive advantage you need to succeed.