Employers with multiple global locations need effective employee relocation policies to attract and keep the most talented staff available. Relocation policies can be designed in any fashion the company chooses, but many employers make some common mistakes that hurt the effectiveness of their programs.
Avoiding the most "popular" errors increase the competitiveness of relocation programs while also delivering employers better cost control. Senior management, HR personnel and others having input in relocation policy decisions should regularly evaluate their programs for cost management, attractiveness and administration issues to keep policies current and competitive.
During evaluation periods avoid these mistakes, at a minimum, to keep your relocation policy under control and effective in reaching your goals.
Common Costly Mistakes
Lack of coordinated and assisted home finding trips and allowances.
Although necessary components of a competitive relocation policy, house hunting trips generate stress on your HR and accounting departments. Fortunately, careful planning and clear definitions of your home finding trip policy minimizes, or eliminates, most transferee and employer concerns. Clearly stating all facets of the policy eliminate transferee and HR personnel confusion. Capping the number of home finding trips at two and setting maximum dollar allowance limits get employers and employees on the same page.
Open-ended temporary living arrangements and allowances.
Providing temporary living expense reimbursements is good practice for relocation policies, however, the cost can be severe when program parameters are unclear – seemingly indefinite – for time and allowance limits. Many employers have found that 60 to 90 days is sufficient for most transferees. Employers also often prefer to make temporary housing arrangements for transferees to better control costs. Stating the maximum allowance amounts eliminates confusion and potential future misunderstandings between employee and employer.
Vague policy exception language.
Accepting that exceptions, at some intervals, will be necessary helps understanding of this issue. However, the conditions for potential exceptions should be clearly written and enforced. Employers who neglect to heed this suggestion often regret not doing so. Exceptions must be consistent with explanation of the conditions that trigger any consideration of altering the policy for one or more transferees. While it may be impossible to address every possible situation that opens the discussion of exceptions, covering as many as possible in your policy eliminates the lion's share of potential areas of contention.
Home selling and loss-on-sale assistance not clearly defined.
This mistake is very common to poorly designed relocation policies. This error can be very costly to the employer. To avoid problems, use simple English to define these benefits. It is much easier and less costly to address these issues before the start of a relocation.
Lack of outsourced resources.
Partnering with a proven third-party relocation firm is usually a wise, cost-effective decision. However, unless you have an existing relationship, be sure to obtain a complete list of services they perform and the charges for each. Asking for such information for every relocation provides for cost control and a smooth transferee – and HR – experience.
These are very common mistakes found in many otherwise sound relocation policies. Simply eliminating and correcting these errors in your own policy will save your company money and create happier, more productive transferees.