CapRelo Blog

What Are the Benefits of a Tiered Relocation Policy?

Posted by George Herriage on Tue, Mar 26, 2013

person-pyramid.jpgMost corporate relocation policies come in one of two overall primary designs: Single or tiered programs. One, the single policy, is the easiest to administer and implement. Another, the tiered policy, is typically more attractive to employees, whether new hires or transferred current staff.

Depending on your industry, competition for talent and relocation "volume," either a single or tiered policy may be the best option for your company. For example, if you have only one or two locations in addition to your home office base of operations, a single policy may be effective. However, if you have numerous diverse locations, particularly if some are outside US borders, a tiered relocation policy may prove to be the best choice for cost control, along with attracting and keeping more talented employees.

Learn how you can save time and money using tiered relocation packages in our free article.

Single Policy Characteristics

If you hope to make life easier on your HR personnel, single policy programs achieve that goal. There are benefits to single policy programs that proponents happily cite. A "one size fits all" relocation policy delivers the following benefits.

  • Applies to all employees, regardless of title, compensation amount or organization chart position.
  • All current employees and new hires are treated equally.
  • Lower administrative costs.
  • Relocation costs are manageable and predictable.
  • Employees, particularly those not at the top of the organization chart, believe this to be a fair, equitable and team-focused policy.

Whether you opt to take advantage of one of the top third-party professional relocation firms or use your internal HR department to manage employee relocation, there remains only a single policy for all transfers. This makes it easier to understand, revise when necessary and update for changing competitive market conditions.

Tiered Relocation Policy Characteristics

Although more complex to manage and administer, tiered relocation policies offer benefits unavailable with single policy programs. Your choice of options often depends on the programs offered by your competition for talent, your perception of "one size fits all" programs and how you value attracting and keeping the most talented employees available. Among the benefits delivered by tiered relocation policies, the following are prominent.

  • New hires appreciate your company's recognition of their education and professional achievements, along with demonstrated rewards for their expertise level.
  • Tiers can lower relocation costs, with fewer monetary benefits offered to transferees below senior-level compensation and authority.
  • Helps reduce turnover and attracts more talented candidates, particularly at higher levels of authority.
  • Recognizes that homeowners typically need more help in relocating than those transferees who rent their current residence.
  • Exhibits the philosophy that treating everyone equally (as in single policy programs) can be a disservice to those with higher levels of authority, considerable proven expertise and more complex job descriptions.

You must accept that tiered programs need more administrative attention to work properly. Tiered programs are also a bit more complex to revise and update, since they have multiple policies within the master policy. Proven third-party relocation firms typically excel with tiered policy management and cost control.

As always, the overriding influence of your choice of a single or tiered policy is the strategy of your executive management team. Their goals, assessment of the relocation programs of their major competition for talent and the value senior management places on happy transferees contributing to operational efficiency, are important considerations for the choice of relocation program components.

Many companies believe that the numerous benefits offered by tiered relocation policies are more valuable than the simplicity of having a single policy.. Employee turnover is expensive, with many hidden and indirect costs. Losing talented candidates to your competition also generates potentially significant costs.

Senior management should objectively assess their industry standing and goals in relation to their choice of relocation policies. Both policy options permit cost control. However, if executive management foresees the need for recruiting or transferring higher-level staff in the near future, a tiered relocation policy may prove more valuable to the company.

Save Time & Money Using Tiered Relocation Packages

Topics: Tiered relocation packages, Single Policy Characteristics

Single Policy Characteristics vs. Tiered Policy Characteristics

Posted by Mickey Williams on Tue, Jul 10, 2012

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.
Understanding the components of single and tiered policies help employers design the relocation programs that work best for them. Compare and contrast the characteristics of each relocation policy type.

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.

Free Article:  A Guide to Developing  Relocation Policies

Topics: Tiered relocation packages, Single Policy Characteristics

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