Often, the decision to reach out to a relocation management company (RMC) stems from an immediate need to move an employee. Still, it is worth giving some thought to the bigger talent mobility picture as well. Consider your company’s culture and the type of employee relocation experience you want to provide. Is a happy employee and a seamless experience most important? Is cost-control paramount? Companies typically try to align their relocation support with the level of employee benefits they provide overall.

If you have an existing company relocation policy, written or not, the RMC will review it and make recommendations for improvements. The RMC might be able to structure your relocation policy in a more tax-advantaged way or there might be opportunities for changes that reduce costs or enhance the relocating employee’s experience. If you do not have a corporate relocation policy, or even an idea where to begin, the RMC can help you develop one quickly. It is generally advisable to have consistent, written relocation policies to ensure fair, equitable treatment of employees and program integrity.

Tiered Company Relocation Policies

In many cases today, employee relocation benefits are tiered, with different levels of benefits provided for different job levels, or for homeowners and renters. For example, a company might offer an executive package, a middle-management package, a professional package and an entry-level, college grad package. The employee’s level and the competitive marketplace determine the level of benefits contained in these packages. Executives might receive a full suite of benefits while college grads more often would receive a lump sum or a simple benefits package.

Some companies include a set of core benefits in all tiers, with enhancements to this core for the upper tiers. Higher tiers might also have a more generous scope of benefits, such as additional days of temporary living and a larger miscellaneous allowance.

Some companies simply offer a homeowner tier and a renter tier, with no distinctions for job level. Others distinguish between renters and homeowners in each professional tier. Homeowners usually receive more generous benefits due to the added costs and complexity of selling a home and buying a new one, versus terminating a lease and finding a new rental property.

Core-Flex and Lump Sum Policies

Other companies are using or considering core-flex programs or fixed lump sums programs. These programs have pros and cons, but they do give employees more choice in selecting benefits that meet their needs.

As the name indicates, core-flex policies include a core relocation benefit and a menu of flexible benefits to round out the package. The employee (or program owner) can select flex benefits that most closely meet the employee’s needs, within a defined budget. These programs allow more choice, but they are more demanding to administer. For more information, see the TRC ebook Core-Flex Relocation Programs.

Lump sum programs are straightforward. The employer provides the relocating employee with a fixed payment to defray the cost of the relocation. The lump sum will not necessarily cover 100 percent of the employee’s relocation costs. If the move costs exceed the lump sum, the additional costs are the employee’s responsibility. If the employee has money left over, most employers allow him or her to keep it.

Lump sum programs are a popular entry-level benefit. The cost is predictable and controlled and administration is simple. Some companies are extending lump sum payments (in larger amounts) to higher-level employees as well. While simple, lump sum programs have some disadvantages. Employees receive less support and might make choices that lengthen the process and result in a less satisfactory experience. For more information, see the TRC ebook Lump Sum Policies Best Practices.

Clearly Written Relocation Policies

Any relocation program should have written policies clearly spelling out the eligibility, available benefits, terms and conditions. This is important for the company and the employee alike, as it fosters consistency and equity.

Start with defining what is included in your employee relocation package, and what is included in each individual service within the package, such as household goods transportation.

Vendor or Partner?

The top relocation companies will function as service partners, not as vendors. Good service should be a given. The more effective partners will help you to develop a corporate relocation policy and incorporate employee relocation into your talent management strategy, and in so doing, help you to advance your company’s business strategy.

When you assess relocation management companies to help you create a company relocation policy, you will consider many factors: services, coverage, technology, price and more. However, the most important consideration of all might be how well the RMC’s culture aligns with your company’s culture and whether you can form a productive, durable partnership.




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