Developing relocation policies and programs for a growing organization can be a tricky proposition. That’s because you need to ensure that your policies and programs meet your organization’s current needs, as well as your anticipated future needs. So, to do this successfully, there are several important factors that you need to consider, and key questions that you should ask.
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).
Top Relocation Policy Considerations For Organizations
It is important to note that whether you are developing your relocation policies and programs from scratch, or making changes to existing ones, that every decision you make will have a significant impact on your mobile employees. Naturally, you want that impact to be a positive one. In today’s competitive business environment, it is more important than ever before for your organization to be able to not just attract talent, but be able to retain that talent.
For an organization with a mobile workforce, one of the most critical elements in the successful attraction and retention of key talent is having a robust relocation program with policies that are truly designed around the unique needs and desires of your employees. Likewise, it should keep the employee experience at the very center of that policy development.
Thus, a good place to start is by conducting a review of your current employee population, and the types of relocation benefits and incentives that will be most favorable to them. At the end of the day, you want to be able to encourage talent mobility by offering the most enticing benefits.
In the same vein, much has been written about the Millennial generation and their desire and expectations for global assignments and experiences. They consider this an important aspect of their career development. So, this also needs to be one of the top considerations in developing the relocation policies and programs for organizations of every size.
Of course, cost is always a key consideration when developing your relocation program and policies. So, it’s best to look at which elements should be included, versus those elements that might not be cost-effective or relevant to your employees or organization. Since relocation represents a significant cost for your organization, you want to make sure that the relocation expenditures are wisely and efficiently spent.
Key Questions for Growing Organizations to Ask
Perhaps one of the most important questions for a growing organization to ask, is whether your current relocation policies and programs are sustainable and scalable. Again, this goes back to the evaluation of the needs of your mobile workforce, and whether existing policies are still viable, and whether you can build on them as your company continues to grow. As such, there could be relocation policies that need to be added or amended based on the growing and/or changing needs of your company.
Here are some key questions you might want to ask:
- Has our organization outgrown our current relocation policies and programs?
- Are there additional relocation benefits that we should consider?
- How competitive are our relocation policies and programs in the marketplace?
- Are we following industry best practices when it comes to our relocation policies and programs?
- Could our employees benefit from a core-flex relocation policy?
- Should we consider a lump-sum policy?
- What percentage of our employees are homeowners versus renters?
- How do we create a better employee relocation experience?
- Are our employees more likely to stay with the company following a relocation?
The Importance of Flexible Relocation Policies
Relocation policies and programs should not be developed based on a one-size-fits-all scenario. History has shown that this is not the best approach, because each employee and family have its own unique needs and desires when it comes to relocating. This has led to the adoption of more flexible relocation policies and programs.
In fact, many growing organizations have opted to incorporate core-flex relocation policies, whereby there is a standard core offering of relocation benefits, along with other flexible elements that can be included based on the specific needs of an employee and/or family.
Knowing the Needs of Your Employees and Your Organization
At the same time, the needs of every organization are also different, based on the overall business goals of the company, as well as its strategic talent management and talent mobility goals. It is a consensus among global mobility leaders that these factors need to be closely aligned in order to be successful.
So, it’s about knowing what your organization needs during times of growth, and the optimal way to develop and deliver your relocation policies and programs in a way that best reflects your company’s goals today, tomorrow, and into the future.
With Relocation, Change is Inevitable
We all know that change is inevitable. So, being open and receptive to change and evolving your relocation programs and policies accordingly can go a long way in the continued success of your organization.
At VERSA, we believe that growth brings both challenges and opportunities. So, if your organization is experiencing exponential growth, let us help you address those challenges head-on, and assist you in capitalizing on the many opportunities that come with it.
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.