A well-crafted domestic employee relocation policy will improve the transferee experience, control costs, meet your employees’ needs, and help you win and retain new talent. Improving the employee experience means reducing stress so that employees can focus on work roles in their new locations.
Offering a comprehensive suite of relocation services is crucial in crafting a relocation policy that effectively benefits both the company and the employee. A holistic approach not only supports employees in managing the complexities of relocating but also streamlines the process for the company, helping to maintain productivity and reduce the administrative burden.
Regularly reviewing and updating the policy to reflect current market trends and cost-of-living adjustments contributes to overall employee satisfaction and ensures competitiveness.
The 8 essential relocation benefits should be a part of your policy strategy:
1) Home Sale Programs
2) Rental Assistance
3) Destination Services
4) Household Goods
5) Lump Sum
6) Cost of Living Assistance (COLA)
7) Policy Exceptions
8) Policy Tiers vs Core Flex Benefits
8.5) Compliance
1) Home Sale Programs
Offering a competitive home sale benefit can provide significant advantages to both the company and the relocating employee. By offering a standardized home sale process, companies can ensure a consistent and controlled relocation experience, reducing the risk of dissatisfaction or failed relocations.
Option de rachat garanti (GBO) ou option de valeur d'achat (BVO)
- Offering a GBO can be risky for your organization since it guarantees employees a home sale based on appraisal value,
but if the home is not sold then your company takes the home into inventory and must resell it. - Un BVO, en revanche, minimise considérablement les risques organisationnels liés à un GBO, puisque votre entreprise n'achète le logement de l'employé qu'après que celui-ci ait trouvé un acheteur extérieur.
- Certaines entreprises offrent un GBO à leurs cadres et un BVO aux non-cadres.
GBO
Some policies offer a Guaranteed Buyout Program (GBO), where the company or a third-party relocation service purchases the home if it does not sell within a certain period. This ensures the employee can move without financial strain.
Pour
- Tax advantage for your company and the employee.
- Employees are not required to attend closing.
- Professional appraisers ensure your company is offering a competitive market price.
- L'offre garantie accélère le processus de relocalisation afin que la personne transférée puisse déménager plus rapidement.
Cons
- The company carries the risk of owning and maintaining the home until it is sold.
BVO
With the Buyer Value Option (BVO) program, the employee is responsible for marketing and selling their home on the open market, but once they secure a bona fide offer from a buyer, the company or a third-party relocation service steps in to purchase the home at the agreed-upon price. This approach allows the employee to sell their home at fair market value, while the company handles the closing and resale, streamlining the process and minimizing the employee’s involvement in the transaction after the offer is secured.
Pour
- Avantage fiscal pour votre entreprise et le bénéficiaire du transfert.
- Employees are not required to attend closing.
- Minimise les coûts de l'entreprise puisque l'acheteur est assuré par l'employé.
- Analyse de marché du courtier réalisée par deux agents immobiliers afin d'établir un paramètre de commercialisation approprié.
Cons
- If home sale falls through, homes go into corporate owned inventory.
- Employees remain financially responsible for their home until an outside offer is accepted which might delay their move to the new work location.
DR
A Direct Reimbursement (DR) home sale benefit offers a flexible, cost-effective alternative to BVO and GBO programs, providing employees with the opportunity to sell their home independently while receiving financial support for key expenses such as real estate agent commissions, closing costs, and legal fees.
Pour
- Lower financial risk since your company does not have to bring unsold homes into inventory and employees are responsible for selling their home and paying closing costs/commission fees up front.
Cons
- Aucun avantage fiscal pour votre entreprise ou pour le salarié.
- Votre entreprise devra supporter des frais supplémentaires de majoration (en supposant que vous proposiez la majoration).
- L'employé est responsable de tous les coûts initiaux (frais de clôture, commissions, inspections, etc.).
Inspections de maisons
Most companies require a full home inspection for a GBO and BVO program. The home inspection is ordered by the Relocation Management Company (RMC).
An inspection helps reduce risks of the company purchasing a home with unknown significant defects.
The transferee is required to complete all necessary repairs before moving forward in a BVO or GBO program.
Some companies want to avoid being too picky about required repairs, so an alternative to a full home inspection would be a major component inspection.
- Bien
- Septique
- Radon
- Termite
- Stucco
- HVAC
- Toit
- Plomberie et/ou électricité intérieures
- Structures/fondations
Prime de vente de maison
Une prime à la vente de maison peut inciter les employés à vendre leur maison rapidement.
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- Avantageux pour votre entreprise si vous offrez un GBO ; moins offert dans un programme BVO.
- Décidez du plafond de cet avantage, et si ce plafond variera en fonction du rôle de l'employé. De nombreuses entreprises le basent sur un pourcentage de la vente et/ou offrent une prime plus élevée à ceux qui parviennent à vendre leur maison dans un délai donné.
- Ce n'est pas nécessaire sur le marché immobilier actuel, car les maisons se vendent rapidement, la demande étant largement supérieure à l'offre de l'inventaire disponible.
Perte sur la vente
Some companies offer a loss on sale, whereby the company provides an additional benefit to employees selling their homes for less than the original purchase price.
This benefit is more prevalent with executives versus non-executives (usually at a capped amount).
2) Rental Assistance
Employees at different life stages have varied housing needs. Rental assistance benefits ensure that the company’s relocation policy is inclusive and supportive of diverse situations, such as younger employees or those relocating to urban areas where renting is more common.
Additionally, providing rental assistance helps minimize the stress of moving and eases the transition into the new work role. An essential component of this benefit is helping transferees with early lease termination.
If you choose to offer rental assistance, consider the following:
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- How many days of rental search you want to provide.
- Placing caps on rental assistance ensures your company is containing costs. If an employee exceeds the cap, decide whether to provide an exception benefit on an individual basis.
- Encourage employees to negotiate with landlords to insert a diplomatic clause into the lease that reduces future lease break fees.
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3) Destination Services
Relocating to a new location can be an overwhelming experience for employees. Destination services play a crucial role in easing this transition by providing support that helps employees settle in more quickly and comfortably. Essential destination services include temporary housing, home-finding assistance, settling in services, among others.
By offering comprehensive destination services, companies can significantly reduce the stress associated with relocation, allowing employees to focus on their new role and become productive sooner. A well-supported transition not only enhances the employee’s experience but also contributes to their overall satisfaction and success in their new position.
Essential destination services for a US Domestic relocation include: Home Finding including temporary housing or house hunting trips and destination closing costs.
Logement temporaire
Relocating to a new location can be an overwhelming experience for employees. Destination services play a crucial role in easing this transition by providing support that helps employees settle in more quickly and comfortably. Essential destination services include temporary housing, home-finding assistance, settling in services, among others.
By offering comprehensive destination services, companies can significantly reduce the stress associated with relocation, allowing employees to focus on their new role and become productive sooner.
A well-supported transition not only enhances the employee’s experience but also contributes to their overall satisfaction and success in their new position.
Home Finding/ House Hunting Trip
L'octroi d'une somme forfaitaire pour les voyages simplifiera le processus et permettra aux employés de réserver et de payer des voyages de recherche de logement.
See below for more details on lump sums
Frais de clôture de la destination
De nombreuses entreprises offrent ce remboursement aux cadres et non aux non-cadres.
- Le plafonnement de l'aide est un moyen de contrôler les coûts de cet avantage imposable, en particulier si votre entreprise verse des montants bruts. Cette mesure pourrait être particulièrement utile lorsque les employés déménagent vers des destinations où le coût du logement est élevé.
- Il est recommandé de n'autoriser que le remboursement des frais de clôture habituels afin de s'assurer que votre société ne rembourse pas des éléments non standard.
Certains employeurs offrent une aide pour les frais de clôture aux locataires actuels qui achètent une maison dans leur nouveau lieu de résidence.
- Si vous décidez d'offrir cet avantage, déterminez qui sera admissible. Seulement les nouveaux employés ou les employés existants, seulement les cadres ou en fonction du niveau d'emploi ?
- Although it is not the most commonly offered benefit, an incentive to rent can provide your company with potential cost savings on future relocations.
- C'est une bonne option pour les employés qui déménagent souvent. Votre entreprise peut ainsi éviter de payer les frais de clôture et de vente future de la maison de façon répétitive pour le même employé.
4) Household Goods
The HHG move is one of the most stressful stages of a relocation. Covering the cost and logistics of household goods shipping significantly reduces this stress, helping employees focus on transitioning to their new role.
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- Make sure your RMC is proactive in their communications and provides opportunities for employees to give live feedback so that any issues can be addressed immediately.
- Verify that the RMC provides transparent pricing, detailed tracking of expenses, and comprehensive insurance coverage to mitigate risks.
- Most companies will provide tax assistance with HHG moves, especially since the Tax Cuts and Jobs Act (TCJA) of 2018 was passed.
Expédition de véhicules
Réalisez des économies en basant le nombre de véhicules autorisés sur la distance du déménagement. Il est courant que les entreprises proposent au moins un véhicule à expédier si la distance est supérieure à 500 miles, et jusqu'à deux si la distance est supérieure à 1000 miles. Cela permet de réduire le stress lié au fait que l'employé et sa famille doivent parcourir de longues distances dans des véhicules séparés.
Stockage temporaire
La plupart des entreprises offrent un stockage temporaire des biens ménagers de l'employé jusqu'à ce qu'il trouve un logement permanent.
- A well-defined policy that includes temporary storage provides clear guidelines for both the employee and the company, reducing ambiguity and potential disputes over what is covered during the relocation process.
- Pour économiser des coûts, n'offrez pas cet avantage pour des raisons personnelles, par exemple, pendant la rénovation d'une maison, lorsque l'employé peut vouloir entreposer des articles jusqu'à ce que les travaux soient terminés, ou si l'employé part en vacances et ne peut pas être présent pour la livraison des biens de consommation courante.
5) Lump Sum
Decide if you want to offer a partial or full lump sum policy to transferees. Some employees may enjoy the freedom of being able to use their relocation money as they see fit.
Pros for providing lump sums include the following:
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- Cost containment
- Easy budgeting and administration
- Market competitiveness
- Great for employees with less to move
- Internship programs
There are three main types of lump sums discussed below:
lump sum only (no counseling); managed lump sum (with counseling); and lump sum (in addition to other benefits).
Lump Sum Only Benefit
(no counseling)
Le bénéficiaire du transfert reçoit une somme forfaitaire. L'employé décide de la façon dont il compte dépenser ces fonds.
- Couramment utilisé avec les non-cadres, y compris les employés débutants et les employés dans les programmes de développement qui changent fréquemment de lieu.
- En général, il n'est pas utilisé avec les déménagements de niveau supérieur.
- La majorité des sommes forfaitaires sont inférieures à 5 000 $.
Managed Lump Sum
(with counseling)
Permet à votre entreprise de conserver un contrôle partiel sur l'utilisation de l'argent par l'employé tout en offrant une certaine souplesse. Le CMR conseille l'employé sur les façons approuvées d'utiliser la somme forfaitaire qu'il a gérée, et les fonds sont fournis sous forme de remboursement après que l'employé a engagé le coût ou est facturé directement à l'un des fournisseurs partenaires de votre CMR.
- Les sommes forfaitaires gérées sont plus souvent utilisées comme seul avantage pour les cadres ou les employés de niveau supérieur, par opposition à une somme forfaitaire seule (sans conseil), utilisée plus souvent avec les employés de niveau débutant.
Lump Sum
(in addition other benefits)
Il s'agit du type d'indemnité forfaitaire le plus fréquemment utilisé. Il fonctionne bien parce que les entreprises peuvent offrir d'autres avantages - adaptés aux besoins spécifiques de l'individu en matière de réinstallation - tout en fournissant une somme forfaitaire que l'employé peut dépenser comme il le souhaite.
This type of benefit will also allow your company to control costs, and it adds some additional flexibility for the employee.
Cost of Living Adjustment (COLA)
Certains de vos employés peuvent déménager dans une région où le coût de la vie est moins élevé et d'autres dans une destination où il est beaucoup plus élevé. Si le coût de la vie est plus élevé, certaines entreprises offrent une indemnité de coût de la vie à durée limitée pour combler l'écart financier. Les options de paiement peuvent être mensuelles, trimestrielles, annuelles ou une somme forfaitaire unique.
- Fixez une période de fin pour cet avantage et décidez si l'avantage diminuera lentement pendant cette période.
- Companies should also consider the tax implications of COLA payments and ensure clear communication with employees about how the adjustment is determined.
Il est préférable de n'offrir cet avantage qu'aux employés qui déménagent vers des destinations où le coût de la vie est plus élevé. Si votre employé déménage d'une région où le coût de la vie est élevé à une autre, envisagez de ne pas offrir cet avantage. Souvent, les employeurs fixent un seuil (généralement un pourcentage) pour offrir cet avantage. D'autres identifieront des zones/villes spécifiques et n'offriront cet avantage qu'aux employés qui déménagent dans ces endroits prédéterminés.
7) Policy Exceptions
Decide how you want to handle policy exceptions and make sure you and your RMC are in sync. Develop a well-defined process for requesting and evaluating exceptions, including who is authorized to approve them and under what circumstances exceptions will be considered. Even though you may have a great employee relocation policy, it is not always one-size-fits-all! Individual cultures, specific needs and family dynamics may create the need for exceptions. Make sure your RMC is tracking all requests/outcomes. Regularly review the types and frequency of exceptions requested to identify patterns or gaps in the current policy, which may indicate the need for policy adjustments.
Voici quelques exemples de demandes d'exception de politique courantes :
- Extended temporary housing or household goods storage
- Additional crating of items, vehicles to be shipped or other services for a household goods move
- Home listing parameters / Qualifying home requirements
- Additional reimbursements for travel
- Repair Requirements
- Benefit extensions
8) Policy Tiers vs Core Benefits
Policy Tiers
With policy tiers, the company selects which employees receive specific benefit packages. Often, policy tiers categorize employees into different levels (tiers) based on factors like job level, seniority, or relocation distance, with each tier offering a predefined set of benefits.
For example, relocation benefits provided to an executive might be different than benefits provided to an entry-level employee. While a tiered policy allows a company to be selective regarding which benefits are offered to each level of employee, some benefits may be offered in all packages.
In other words, a HHG move could be offered to all relocating employees, but the cost of the move could have caps for lower-level employees. Some companies will only offer home sale assistance to higher level employees, but all other benefits may be the same regardless of role/job level of the employee.
Outre le niveau de poste de l'employé, d'autres facteurs peuvent influer sur le niveau auquel se situe un employé, notamment le fait qu'il soit propriétaire ou locataire, ou qu'il soit un nouvel employé ou un employé existant.
Core Benefits
Core Flex benefits offer a more tailored solution by providing a core set of essential relocation benefits to all employees while allowing additional flexible benefits that employees can choose based on their specific circumstances.
While Core Flex offers greater customization and can enhance employee satisfaction, it requires more complex administration and careful communication to ensure employees understand their options.
8.5) Compliance
Compliance is an essential consideration when developing a U.S. domestic relocation policy, as it ensures that the company adheres to all relevant laws and regulations. This includes understanding tax implications, employment laws, and real estate practices that vary by state. Creating a policy that prioritizes compliance helps mitigate risks, avoid potential legal issues, and ensures that both the company and the transferee are protected.
En conclusion
In crafting an effective US domestic relocation policy, it is crucial to consider a variety of best practices that address both employee needs and organizational goals. Regularly compare your policy with industry standards and competitors to ensure it remains competitive and effective.
Consider partnering with a good RMC who can help write your policy, benchmark it regularly, and administer it cost-effectively.
For more best practices, get our 2024 Global Mobility Benchmark Report.
