Most multi-location employers realize they need relocation policies to maintain their ability to attract and retain talented employees. Unfortunately, some relocation programs are incorrectly designed. This situation often causes two problems:
The policy does not address the primary concerns of relocating employees and new hires.
The employer incurs costs without getting full value for money spent.
However, there are ways you can modify ineffective relocation policies to make them more transferee and employer friendly. Fortunately, it is not too difficult to accomplish these vital goals. Using forethought, understanding and some logical thought, you can create a budget-friendly, competitive relocation policy that will give you the talent attraction and retention levels you want.
How to Modify Your Relocation Program:
Eliminate single-tier and combined-benefit policies.
One-size-fits-all policies often result in cost control but transferee dissatisfaction. There is little point in having outstanding cost control with non-competitive policies. Combined-benefit policies, offering lump sums to cover numerous relocation expenses, are equally confusing to transferees and your HR department. Keep your eye on the prize: Attracting and retaining talented employees.
Carefully plan and budget for home finding trips.
Should you not practice pre-planning for home finding trips, your transferees often waste valuable time and your company wastes money. However, careful planning of home finding trips maximizes transferee time, while minimizing your costs.
Clearly state and cap your temporary living allowances.
Temporary living expenses are an important component of relocation policies, but can become a "runaway train" of cost when not managed properly. Open-ended policies are expensive and offer little incentive for the transferee to accelerate the availability of the permanent home. For example, 60 to 90 days should be sufficient for transferees and control your costs.
Control and manage the transferee's efforts.
Transferees can sometimes be overly conscientious, trying to solve too many relocation issues, costing them and the company money without achieving desired results. Clearly state both transferee and company responsibilities to minimize confusion and waste.
Be consistent with written policy exceptions.
Relocation policy exceptions are inevitable. However, inconsistencies can damage an otherwise solid program. Not only might you face bloated relocation expenses, but you might create employee relations issues. Being consistent, with reasonable exceptions to published policies, will earn the respect of future transferees and new hires.
Clearly define loss-on-sale benefits.
Executing quick sales of personal residences can be difficult. Incorporating reasonable loss-on-sale allowances in relocation policies are important components. To avoid employee confusion and unmanageable employer cost, be clear and complete in defining your policy's loss-on-sale benefits. Design fair and equitable benefits, with appropriate caps, to make your relocation policy more competitive and budget-friendly.
Choose third-party relocation firms carefully.
Professional relocation firms accomplish three goals. First, they reduce administrative responsibilities of your HR department personnel. Second, they create smooth employee relocations. Third, they help employers manage and control relocation costs. Select your firm carefully to ensure an efficient, budget-friendly experience. Your accounting department, HR staff and transferees will thank you.
Relocation policies can help or hurt your staff and company budget. Use these suggestions to eliminate potential downsides and risks to the employer and employee. These tips will turn a questionable policy from a less-than-optimal feature into a competitive, cost-controlled and attractive program.