So, what does all of that mean for your relocating employees, and how do you determine what works best for your organization? This is indeed a complex topic, and one that requires a great deal of understanding about the elements that are typically included in employee relocation packages, and how those benefits can differ based on the level of the employee and his or her unique situation.
Then, you have to cultivate that knowledge so that you are able to structure and develop relocation policies for your organization that are not only attractive to your employees, but that also align with your overall talent management goals. Additionally, those policies need to truly reflect the individual needs of your mobile workforce, and the impact that mobility has for your organization, as well as for your employees both professionally and personally.
Relocation Policies, Packages, and Benefits…Oh My!
Since each of your employees will have different needs and circumstances, a one-size-fits-all approach to policy development is not the way to go. Instead, most organizations take more of a flexible approach when designing their policies, whereby they offer different relocation packages based on the level of the employee, while taking other pertinent aspects into considerations.
Today, best practices within the relocation industry point to the adoption of relocation policies and benefits that are aimed at talent recruitment and retention. This is because of the competitive nature of the global business environment, and the shift towards a mobility culture that focuses on the employee experience.
Considerations For Developing Your Relocation Policy
When developing your relocation policy, a great place to start is by looking at the different types of employees that make up your employee population. Generally speaking, they will tend to fall into one of three categories:
- New hires: These could be recent college graduates or new employees with limited experience.
- Experienced, mid-level employees: These are employees that have been working for a while and have accumulated various experience levels.
- Executives/VIPs: These are high-level employees that tend to have significant experience within their field and/or your organization.
Further evaluation of your workforce will necessitate other considerations that will help you determine the relocation benefits that should be provided to different employees within those categories. For example, you should look at elements such as tenure with the company, or a specialized skillset or experience. Along with that, homeownership and familial status of the employee are equally important.
So, certain levels of employees will naturally dictate a greater investment by your organization when it comes to relocation benefits. As such, you wouldn’t expect to provide the same relocation benefits to a new hire as you would a C-suite executive who has been with your company for 20 years. Similarly, a midlevel employee who owns a home might be eligible for homesale benefits, while a midlevel employee who is a renter would not.
Flexible Relocation Policies
Many organizations opt for flexible relocation policies, which have the advantage of containing costs, since not all employees will need or be eligible for every relocation benefit. Two of the most common approaches that allow for flexibility while providing for cost-containment are tiered relocation policies and core-flex policies.
Let’s explore the differences between these two approaches.
Tiered Relocation Policies
Tiered relocation policies typically have two or more levels of benefits that are provided based on the level of the employee, whether they own a home, and other elements that would determine their policy level.
Core-flex Relocation Policies
In contrast, core-flex relocation policies have a standard core offering of relocation benefits, along with other flexible elements that can be included based on the specific needs of the employee and/or his or her family.
Lump Sum Relocation Policies
Another approach that organizations can take is to develop a lump sum relocation policy. In lieu of a robust relocation package, where the employee gets reimbursed by the employer for expenses associated with the move, the employee is given a lump sum of money that is meant to cover their moving related expenses. This gives the ultimate control and flexibility to the employee as to how their relocation dollars are spent.
But, beware, there are significant tax implications associated with lump sum policies, so make sure you know what you are getting into when considering this type of policy. (Click on the following link to read more: Lump Sum Relocation Policies).
Put It In Writing
Regardless of what type of relocation policy your organization adopts, the most important thing is to formalize it by putting it in writing. You want your relocation policies to be clearly defined and outlined for your employees so that there is no mistake as to what is covered and what is not. Written policies also promote an air of fairness, so that your employees feel that they are being treated fairly and that the benefits you are offering them are consistent with that policy.
At VERSA, we believe that in order for a relocation program to be successful, it needs to be designed around the strategic business objectives of our clients. So, we work in partnership with our clients to ensure that their policies and programs are in keeping with current industry and market trends, and that they are best positioned to achieve their talent mobility goals.
Please contact us anytime to learn more.