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Category: Relocation Policy

Relocating Employees: Temporary Living

| March 24, 2016

Relocating employees are happiest, and costs are lowest, when they are settled into permanent housing as rapidly as possible.

Relocating Employees - Temporary LivingWhen this is not possible, providing good temporary living services to employees becomes an important part of a successful relocation process. First impressions make a lasting impact, and for employees who are moving their whole lives to a new location, temporary housing will be their first foray into an unknown environment. Seamless planning and execution is crucial to ensure happy and productive employees.

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Tips for making your corporate relocation easier on you – and your family

| November 4, 2015

HiResYou’re still processing the fact that your company is moving its headquarters to another city….along with you and possibly your partner, children, and pets!

Many corporations look to corporate relocation companies like TRC Global Mobility to smooth the transition for its employees. But there are still things to think about outside of the services that your relocation company offers. And those considerations can grow exponentially with the size of your family. You may still have to oversee the movers, transfer bank accounts and utilities and even more importantly—take care of your family. They’re feeling the stress of moving as much or more than you are.

It’s time to make a list. Use the following relocation checklist that we have put together, based on our knowledge of the relocation process and feedback we have received over the years from the employees we have relocated. Read More

Ask the Global Relocation Expert: Establishing and Updating an FX Rate

| March 13, 2015

We are trying to determine an effective currency exchange (FX) rate for our upcoming expat assignment. Specifically, we were wondering what FX rate we should use when setting and updating COLA and other assignment allowances? Should we use the rate from the day the assignment starts? Or rather a 3 month/6 month/12 month average?

Dear Global Mobility Manager,

I can understand your company’s and your assignee’s nervousness around exchange rates lately, especially given the recent burst of global currency volatility. Based on what I have seen, the most common practice is for companies to set somewhat frequent update periods (quarterly is best but semi-annually is ok too) and use the most up-to-date rate available on that day.

I have asked one of my industry colleagues who is a subject matter expert in this area to provide a more meaningful explanation of why it is best to use the most current rate possible when determining the FX exchange rates for international assignments. Jordan Blue is a Senior Associate at Mercer and has this to say:

For FX rates we typically recommend that you use the most current rate possible. At first thought, it would make a lot of sense to use an average, right? But when we consider which approach would get closest to truly equalizing the salary the average doesn’t work out so well. Essentially, using an average means you include a lot of data points that simply aren’t relevant to our purpose.

If you think about it, our purpose is to set the COLA for the next quarter or 6 months based on what we believe the FX rate will be. In other words we want to try and predict the FX rate moving forward. If I want to know what the FX rate will be tomorrow my best reference point is today’s FX rate. Using an average would likely put me way off (consider the graph below). The average FX over the past year would be somewhere around 1.25 but the FX rate tomorrow is likely to be somewhere around 1.35 which is a big shift. Even if we used a 3 month average we would still be around 1.3 which is again, pretty far from where we want to be. So while using an average seems like a great idea, it actually means the assignee won’t be equalized due to the difference in the FX rate we use to calculate the COLA and the FX rate they actually experience when they transfer money.

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Employee Relocation: Talent mobility takes flight

| December 30, 2014

Employee Relocation: Talent mobility takes flightOver the past decade corporate relocation policies have become increasingly sophisticated, balancing the needs of the company with those of the relocating employee. As the global economy struggled, companies formulated relocation policies that empowered them to realize their talent management objectives while managing costs and minimizing the stress and inconvenience for relocating employees.

Today we look at the recently released 2014 Worldwide ERC® (Employee Relocation Council) survey, which reported that U.S. companies experienced a 10 percent increase in domestic employee transfer volume in 2013 over 2012, and employee reluctance to relocate dropped a significant 16 percent from the previous year’s survey. Read More

Part 2: Making the Most of Core-Flex Relocation Programs

| December 5, 2013

by Jerry Funaro, CRP, GMS
Vice President, Global Marketing, TRC Global Mobility, Inc.

With so many impediments to relocation today, from traditional issues such as spouse/partner career concerns to real estate complications and unique family needs, companies, employers and relocation management companies are all seeking creative ways in which to move the process forward. Economic recovery is helping to overcome some of today’s obstacles. In the meantime, a core-flex approach (explained in part 1 of this blog ) can help control overall program costs, meet employees’ needs for flexibility, and enable companies to achieve their business objectives. In this installment I’ll go over some of the advantages of core-flex programs and – so you can anticipate and minimize their impact – some of the potential disadvantages.

Advantages of core-flex programs

A carefully considered core-flex program can help companies to:

  • Tailor relocation benefits more closely to employee or candidate needs
  • Empower hiring managers, business units, regional locations, etc.
  • Gain a recruiting edge
  • Make employees feel more valued and invested in the process
  • Control costs, offering only those benefits that are meaningful to the employee
  • Eliminate or dramatically reduce exceptions

Flexibility is key

For most companies using a core-flex approach, flexibility is the most compelling advantage. As employees’ real estate and family needs become more complex, corporate relocation managers administering a traditional tiered program can find themselves inundated with exception requests.

The core-flex approach allows a more direct and personalized alignment of benefits and needs. In some cases, it allows relocations and international assignments that otherwise might be stalled to proceed. Moreover, incorporating a flex element is faster and more efficient than a bureaucratic exception process. A core relocation benefit can also help ensure that there is parity and predictability among relocating employees and that all employees receive the basic benefits needed to get the transfer done.

The potential for cost savings

Cost containment can be another powerful motivation to use a core-flex program. In a typical relocation program, companies actually might be providing some “one-size-fits-all” benefits that employees neither want nor use. In a core-flex program, benefits are better aligned with actual needs, and in many cases, companies impose a cap on the total benefit amount.

According to the Worldwide ERC® survey, Relocation Assistance: Transferred Employees, 45 percent of surveyed companies using a menu approach place a ceiling on the value of the selections made. This figure has increased from 39 percent in 2004.

For companies more focused on cost containment, the core-flex menu items would be tied more directly to the core move processes, with more limited menu options. An example is a self-move package for a domestic new hire, or an “assignment-lite” package of travel, household goods transportation, immigration and tax services for a global assignee.

Disadvantages of core-flex programs

Core-flex programs have some potential pitfalls:

  • Program/policy administration is more complex than for strictly defined, tiered policies
  • Budgeting can be more challenging due to variable policy elements
  • Continuing management involvement is crucial to ensure that the package includes all of the elements essential to a successful relocation/assignment
  • Employees communicate with each other, and there is always the possibility that an employee will feel entitled to a benefit another employee has received

Parting thoughts on managing a core-flex program

Core-flex programs undoubtedly require more administrative attention and care than more rigidly defined tiered programs. An overarching goal is always to ensure that the program remains as fair as possible. Menu options must be carefully considered relative to employee needs, and should be revisited regularly to ensure that they are still relevant. The costs of these provisions must be estimated with some care as well, to ensure that menu items are interchangeable from a budget standpoint.

Particularly where managers negotiate specific provisions with employees, it is critical that they are well-versed on the program rationale, options and costs. They should be armed with modular communications pieces, such as one-page descriptions of available services, which allow them to present only the applicable benefits to the employee.

About TRC

Since 1987, TRC has delivered creative, cost-effective relocation and international assignment services across the United States and in more than 150 other countries around the world. TRC partners with its clients to develop competitive, best-practice relocation programs, drawing from a comprehensive range of relocation services, including U.S. home selling, home finding and consulting services and complete international relocation services. TRC’s client base represents a wide variety of products and services and ranges from startup firms to Global 1000 companies.

Part 1: What are Core-Flex Relocation Programs?

| November 7, 2013

by Jerry Funaro, CRP, GMS
Vice President, Global Marketing, TRC Global Mobility, Inc.

The last 10 years have been pretty challenging for companies that relocate employees. Companies that relocate employee s have had to contend with collapsing home values, a more stringent mortgage approval process, and employees who are “upside-down” (they owe more on their mortgage than their home is worth). Increased costs have made international assignments difficult to manage. And more recently, companies and their relocating employees have had to adjust to rapidly increasing home values and even a return to bidding wars. In the meantime, traditional relocation concerns such as spouse/partner career issues and schools are as important as ever.

These difficult circumstances have demanded a great deal of flexibility and creativity from management and potential transferees alike. Today’s employees, especially “millennials” — those who were born between the early 1980s and the early 2000s — are skeptical of one-size-fits-all solutions. They expect their employer to appreciate their unique circumstances and to offer flexible solutions that address their needs. Without this flexibility, many relocations simply will not get off the ground.

Evolution of tiered relocation programs

Today, companies are more likely to increase their number of policy tiers, to better align relocation policies with job or salary level, homeowner/renter status and other criteria. Tiered relocation programs are used by 73 percent of surveyed companies, according to the Worldwide ERC® survey, Relocation Assistance: Transferred Employees. And 60 percent of surveyed organizations are now using three or more policy tiers.

Yet even the most carefully considered, best-practice tiered policies will not necessarily meet the needs of today’s diverse workforce: A single policy tier based on job level might include a younger, single employee who rents an apartment; an employee with a working spouse, young children and an “upside down” home; a single mother; and an empty-nest, middle-aged employee with elder care responsibilities.

A company that holds rigidly to the benefits as defined in the tiers will better control costs, but it also runs the risk of alienating its existing talent pool and potential new hires. On the other hand, if a company is too flexible in its tiered policy administration, exceptions become the rule, benefits become inequitable, and costs increase.

Enter core-flex programs

As the name suggests, core-flex programs typically include a core relocation benefit for which all of the employees within a tier are eligible and also a menu of flexible, a la carte options to round out the benefit and meet the specific needs of the employee and hiring manager. Like a pure tiered policy, a core-flex program allows companies to segment overall benefit levels and expenses by job description, salary range and other internal factors. However, by allowing some element of choice and personalization within those tiers, the core-flex program builds in flexibility and minimizes costly exceptions. Such a model can increase employee satisfaction and acceptance rates and give the company a leg up in recruiting and retaining talent.

Recent Worldwide ERC data indicate that 20 percent of surveyed companies have a core-flex policy in whole or in part, and an additional 11 percent are considering implementing a core-flex policy in the near future.

Core and flexible relocation benefits – domestic and global

For the other 69 percent of companies, here’s what core and flex benefits look like. But keep in mind that specific menu options should reflect your company’s culture and objectives. For example, companies that use a core-flex approach to better meet employee needs might include not only home sale and home purchase assistance, but also a selection of services to meet the needs of spouses//partners, children and elderly family members.

For domestic moves, core benefits might include:

  • Relocation counseling
  • Travel to the destination
  • Shipment of household goods
  • Rental or homefinding assistance

Flexible elements that could be matched to the employee’s requirements could include:

  • Homefinding trips
  • Temporary living
  • Home purchase assistance
  • Homesale assistance
  • Spouse/partner career transition assistance
  • Mortgage assistance
  • Child/elder care assistance
  • Miscellaneous allowance

Traditional global assignments almost always include a more complete benefits package: Global core components typically include:

  • Visa/immigration services
  • Travel to the destination
  • Shipment of household goods/storage
  • Tax equalization
  • Lease services
  • Miscellaneous allowance

Flexible options for global assignments might include:

  • Look-see trip
  • Cross-cultural training
  • Language training
  • Temporary living
  • Spouse/partner career services
  • Additional allowances (hardship, housing)
  • School search assistance
  • Home leaveProperty management

Who selects the benefits?

A core-flex approach does not necessarily mean that the employee has a direct say, or even any say, in the specific policy elements chosen. In many cases, the business unit or division selects the specific benefits, based on the employee’s needs and the competitive environment. In other cases, the manager negotiates the specific policy items with the employee or new hire, within the limits of the overall budget; though occasionally, the policy items are already pre-determined and tailored for everyone within the division or work group.

The manager/employee collaboration is truer to the spirit of a core-flex approach: it involves the employee in the decision-making process, demonstrates that the company is concerned about his or her unique needs, and facilitates employee buy-in to the resulting package.

Part two of this blog will go over the benefits and potential drawbacks of core-flex programs.

About TRC

Since 1987, TRC has delivered creative, cost-effective relocation and international assignment services across the United States and in more than 150 other countries around the world. TRC partners with its clients to develop competitive, best-practice relocation programs, drawing from a comprehensive range of relocation services, including U.S. home selling, home finding and consulting services and complete international relocation services. TRC’s client base represents a wide variety of products and services and ranges from startup firms to Global 1000 companies.

United States: USCIS to Begin Reviewing Same-Sex Petitions Immediately, DHS Confirms

| July 3, 2013

U.S. citizens and lawful permanent residents can begin to file cases on behalf of their foreign same-sex spouses without delay. Same-sex cases are to be reviewed in the same manner as those filed on behalf of opposite-sex spouses.

 

United States: USCIS to Begin Reviewing Same Sex Petitions Immediately, DHS Confirms

U.S. Citizenship and Immigration Services will immediately begin to review family-based green card cases filed on behalf of same-sex spouses, the Department of Homeland Security has confirmed. In the wake of the Supreme Court’s decision to strike down Section 3 of the Defense of Marriage Act(DOMA), U.S. citizens and lawful permanent residents can begin to file petitions for their same-sex spouses without delay.

USCIS will also reopen same-sex marriage cases denied since February 2011, according to an announcement last week from USCIS Director Alejandro Mayorkas. Petitioners whose filings were denied before that time can move to have their cases reopened.

The agency is to review same-sex marriage cases in the same way that petitions filed on behalf of opposite-sex spouses are treated, though further agency guidance is expected. It has long been DHS policy to recognize marriages as long as they are valid at their place of inception, though DOMA and earlier decisions restricted that recognition to opposite-sex marriages. In the past, the agency has sometimes considered whether a marriage is recognized in the state where a couple resides, but this is very rare and limited to specific factual circumstances. Section 2 of DOMA – which was not affected by the Supreme Court’s decision – permits a U.S. state to decline to recognize same-sex marriages solemnized in other states.

Media reports indicate that USCIS has already approved at least one same-sex marriage petition for a couple married in New York but residing in Florida, where same-sex marriage is not recognized.

Source: Fragomen

Involuntary Renters, Part 3: Possible Policy Adjustments For Reluctant Renters

| February 7, 2012

In parts one and two of this blog series we discussed homeowner transferees who are able to sell their home but cannot afford to buy another one. Since so many of these “reluctant renters” have needs that go well beyond the basic renter package, companies can find themselves with numerous exceptions and the possibility of inequitable treatment and unintended precedents. To fully address the varied needs of today’s renter population, it’s worth considering several tiers of renter benefits.

For today’s reluctant renters, potential benefits could include: Read More

Involuntary Renters: A Growing Trend in the Domestic Relocation Industry Part 2: How To Handle Your Reluctant Renters

| January 21, 2012

Classic domestic relocation policies clearly distinguish between renters and homeowners. Renters are assumed to be younger, more junior employees, often single or married without children. Since the classic renter has no home to sell at the departure location, no home to purchase at the destination and significantly less in the way of household goods and other encumbrances, he or she typically received a modest package of benefits relative to homeowner transferees.

In part one of this series we discussed a new type of employee relocation situation: homeowners who are able to sell their home but cannot afford to buy another one. Read More

Why Cafeteria Relocation Benefits Are Making a Comeback

| November 20, 2011

Part 2: Cafeteria Relocation Benefits – Cost Savings

The Potential for Relocation Cost Savings

As we mentioned in the prior blog, a desire for flexibility is the most common reason for companies to embrace a cafeteria approach. However, the potential for cost containment can be another powerful motivator.

In a typical relocation program, companies might be providing “one-size-fits-all” benefits that employees neither want nor use. In a cafeteria program or a hybrid tiered/cafeteria program, benefits tend to be better aligned with actual needs, frequently with a cap on the total benefit amount. According to the Worldwide ERC® survey, Relocation Assistance: Transferred Employees, 45 percent of companies using a cafeteria approach place a ceiling on the value of the selections made. That figure has increased from 39 percent in 2004; the ceiling typically depends on the job level of the employee.

For companies more focused on cost containment, cafeteria menu items often are tied to the core home selling and home finding processes, with limited “soft service” options. An example would be a self-move package for a new hire.

Who Selects the Benefits?

A cafeteria approach does not necessarily mean that the transferee has the deciding vote. In fact, the Worldwide ERC survey, Relocation Assistance: Transferred Employees reports that in 84 percent of organizations with cafeteria plans, the business unit or division selects the specific benefits. This helps balance the employee’s wishes with the competitive environment and allows the company to tailor benefits to attract the best candidates for the position.

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