A well-designed relocation policy is crucial for companies looking to transfer or hire employees from out of town. Relocating employees involves significant costs and coordination, so having clear guidelines and procedures in place is key to ensuring a smooth process. As a relocation professional advising a company, here are my tips for creating an effective relocation policy:
Define the Scope
First, outline who exactly is eligible for relocation assistance. Typically this includes:
- New hires moving to work at your location.
- Existing employees transferring to a new office/location.
- Employees returning from an international assignment.
You’ll also want to define any limiting factors like:
- Minimum distance required for relocation support (e.g. 50+ miles from current residence).
- Maximum relocation allowance for each employee tier/level.
- Timeframe when relocation expenses must be incurred.
Clearly setting eligibility parameters upfront prevents confusion down the line.
Choose the Relocation Package Type
There are a few main options for structuring relocation packages:
Lump Sum Allowance: The company provides a fixed dollar amount based on factors like employee level and family size. The employee manages the funds directly.
Reimbursement: Employees pay for relocation costs initially, then submit receipts for reimbursement by the company up to a maximum.
Managed Relocation: The company works with a relocation management firm to coordinate and pay for qualified expenses directly.
A managed program offers the most oversight and flexibility, but costs more to administer. Lump sums or reimbursement plans place more responsibility on the employee. Evaluate your budget and needs to decide which approach works best.
Determine Covered Expenses
The relocation policy should spell out every expense that the company will pay or reimburse for eligible employees.
Typical categories include:
- House hunting trips – Temporary housing – Home sale assistance
- Moving household goods – Final travel to new location – Car shipping – Pet relocation
- Utility installation – Mortgage assistance – Temporary storage – Miscellaneous allowances
Also indicate what isn’t covered, like luxury items or upgrades. Establishing clear guidelines on expenses will streamline administration and prevent misunderstandings.
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Outline the Process
Provide a step-by-step overview of the relocation process for employees. Key steps often include:
- Employee submits relocation request form.
- HR reviews request and confirms eligibility.
- Relocation package details are communicated to employee.
- House hunting trips and temporary housing arranged.
- Movers and real estate agents selected.
- Travel to new location booked.
- Reimbursement forms and receipts submitted.
- Resettlement allowance provided.
Having a defined roadmap sets consistent expectations and ensures nothing falls through the cracks.
Set Repayment Requirements
To prevent abuse of relocation packages, many companies require full or partial repayment if the employee leaves shortly after relocating. Typical clauses include:
- 100% repayment if employee resigns within 12 months.
- 50% repayment if employee resigns within 12-24 months.
- Pro-rated repayment schedules work too.
Seek legal guidance on developing a repayment agreement that protects the company without being overly punitive.
Communicate the Policy
Once finalized, distribute the written relocation policy to hiring managers, your relocation management firm, and current employees. Make sure the policy is easily accessible on the company intranet or HR site.
Providing clear communication upfront prevents confusion and ensures equitable support for all transferring staff.
Track Metrics
Analyze metrics like:
- Number of transfers/new hires utilizing relocation annually.
- Average spend per relocation.
- Employee retention rates post-transfer.
This helps spot trends and fine-tune the program to keep costs under control while offering the support employees need.
Allow Flexibility
While consistency is important, retaining some flexibility is wise too. For example, discretionary exceptions for cases like highly sought-after executive hires. Or additional temporary housing for employees with children changing schools mid-year.
Having options to handle unique situations helps attract top talent and support employee needs. Just be sure to document any exceptions approved.
Creating and optimizing a relocation policy takes time. Following this guidance will help craft an effective program tailored to your company’s specific requirements and budget. Please reach out with any other questions!
Define Policy for International Relocation
For employees relocating internationally, there are additional factors to consider:
- Will you cover the costs for obtaining visas and work permits?
- How will you handle tax equalization and preparation?
- Will you pay for language and cultural training?
- What about shipment of household pets?
Ensuring foreign transferees integrate smoothly requires more support. Outline all special allowances and benefits clearly in the policy.
Consider Group Relocation
When relocating multiple employees, you may be able to negotiate group rates on some expenses like corporate housing and household moves. This can help maximize your relocation budget.
Just be sure group moves don’t cause delays or limit personalization for individual employee needs. Maintain flexibility even within group relocations.
In summary, a well-designed relocation policy aligns with your corporate culture and values. It provides the right mix of structure and flexibility for your organization. With strategic planning, you can create an effective program that attracts talent while keeping costs contained.
Contact us today for more information and assistance with your corporate relocation!