The importance of reviewing your employee relocation policy
Sometimes, a company needs to look outside its normal borders to find the right talent, and other times it’s important to relocate experienced employees to fill crucial roles. If your company relocates its employees domestically or internationally, you’ll want to make sure your global employee relocation policy is being reviewed and updated on a regular basis. The reasons for this very critical review process are outlined below.
Reviewing Your Employee Relocation Policy Will Solve the Following Challenges:
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Control Organizational Costs
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Attract and Retain Talent
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Meet Employee Needs
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Benchmark Your Policy Against Competition
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Control Organizational Costs
Are you allocating the right amount of dollars to both transferees and organizational needs? It is important that your organization is not paying for unnecessary or outdated benefits which could be costly.
A client company was giving transferees a standard $5K-$10K relocation lump sum to assist with extra expenses. They were also giving executives a lump sum equal to six weeks’ salary, plus the $5K-$10K lump sum. Since some executives had large salaries, this allowance sometimes equated to $50K per executive!
o Policy Review Results
After a policy review, WHR Global (WHR) recommended the company cut back on that practice for executives. The company is now saving hundreds of thousands of dollars.
A client company was paying cost-of-living differentials if employees were relocating to higher-cost areas. They were paying this out for 3-4 years, plus they were also providing a large lump sum benefit.
o Policy Review Results
After a policy review, WHR recommended a minimum 5% cost of living threshold so that they were not paying transferees moving to only slightly higher cost of living areas. The client saved millions.
A client company was giving out non-promotional bonuses to current employees willing to relocate for a lateral role that equated to 5% of the employees’ salaries.
o Policy Review Results
Since this practice is not common, WHR recommended they eliminate this from their relocation policy. This saved them significant costs without lowering the value of their program.
A client company was paying unnecessary loan origination fees.
o Policy Review Results
Some lenders don’t even charge this fee but if they know the client will pay, they will charge the fee anyway. Once we alerted the client, the client stopped paying the fee unless it was necessary. This saved costs.
Attract and Retain Talent
Relocation policies should be incorporated into an organization’s total rewards and talent management strategies. The right relocation policy can help your organization, while a weak policy – or none at all – could have a negative impact on the candidate recruiting and retention success rate. Employee relocation policies need to include a choice of offerings since these benefits are wrapped into job offers.
Meet Employees’ Needs (present & future employees)
Is your employee relocation policy meeting your employees’ needs? The right policy helps to reduce transferee stress so that employees can focus on working in their new location. Giving employees time off to assimilate in their new location, providing support to transferees’ families, and gathering post-relocation feedback to make future policy decisions will all help to address your transferees’ needs.
A client company was offering a lump sum benefit for all international relocations.
o Policy Review Results
WHR’s post-relocation survey feedback revealed that transferees were trying to coordinate their international household goods (HHG) shipments on their own and were not spending the full lump sum, in the hopes of keeping some of the money. Survey feedback also showed that giving employees that level of choice was adding more stress on them, and it was making the relocation process take longer. Transferees were trying to do everything themselves, plus pinch pennies.
WHR recommended that the organization shift from a lump sum benefit to a core flex benefit. This meant the organization would cover HHG shipments, destination service providers, and temporary housing, but they still gave transferees a lump sum amount to be used at the employees’ discretion. Not only did this help reduce transferee stress but it also helped control business costs.
A client company was not offering destination services to the spouses/partners and families of intra-European transferees. They assumed that if a transferee/family were relocating from Romania to the UK, for example, destination services were not needed.
o Policy Review Results
Through WHR’s post-relocation survey feedback, it was determined that spouses/partners needed career assistance, language training, and help with school searches for their children. The employee had office workers to help them assimilate in the new locations, but the transferees’ partners were struggling with the new language, and even struggling to find necessities like grocery stores. Recognizing the needs of the entire family unit, and not just the transferee is crucial to ensuring a successful move and assimilation. The client started offering destination services to spouses/partners too which ultimately helped ease employee stress, plus attract and retain talent.
Benchmark Your Policy Against the Competition
By benchmarking your policy against other companies, your organization can stay competitive in the war for talent. If you don’t benchmark against your competitors, you won’t know if your offerings are good or not. Are they subpar to what everyone else is offering? If you are hiring high-level scientists, for example, and the talent is very specific and not easy to come by, you’ll want to make sure you’re competitive with salary, benefits, and your relocation policy.
Imagine losing a potential candidate because your relocation policy is missing benefits your competitors are including. For example, if your candidate is an executive expecting a full house buyout, but your policy only includes an HHG move and lump sum payout, then you must go back and forth negotiating with your superiors and the candidate. This can waste a lot of time. In the interim, the candidate might receive a better job offer, including more relocation benefits. A relocation policy can be a factor for candidates deciding whether to take one job over another. If you’ve benchmarked your policy against your competition, you’ll already know what their policies include.
At the same time, benchmarking will ensure you’re not giving away too much when none of your competitors are doing that. Benchmarking your policy against others shows you are in line with the industry. It’s also important to look at your industry and other industries you compete with for talent.
A company was getting feedback from its talent acquisition team that it was difficult filling certain positions.
o Policy Review Results
After reviewing the client’s policy and benchmarking it against the client’s competitors, WHR discovered that the competition was offering far richer relocation benefits. As a result, the company decided to expand its range of jobs eligible for full relocation benefits. This helped their recruitment efforts.
How often should you review your policy?
WHR recommends that your Relocation Management Company reviews your employee relocation policy annually, or every couple of years at the very longest. It does not have to be a huge overhaul, but it’s a chance for you to pause and look at employee feedback, plus confirm any changes in your company culture, driving principles, core values, talent strategy, the industry, and your competition. This is a time to make sure your policy is aligned with all those pieces and your key stakeholders (talent acquisition teams, recruiting teams, and HR business partners).
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