We’ve all been there—the moment when we’re handed a task that’s not that important...until it is.
Relocation can sometimes fall into this same trap. If your company isn’t currently hiring new employees from outside your local area, or doesn’t have multiple offices to transfer employees between, then having a relocation program in place probably isn’t at the top of your priority list.
However, when left unattended, some of these “non-urgent” tasks can become a high priority quickly, and possibly end up taking more of your time than they would have if you had completed the work ahead of time. Relocation also falls into this category. Without proper planning, relocations can become an enormous task with enormous impacts—for both you and your company.
Let’s say you are tasked with handling the first relocation at the company. This person is relocating from San Francisco to Los Angeles. They are a campus who is going to drive their belongings. They have simply requested some financial assistance to cover their enroute expenses. To keep things easy, you’ve decided to just provide them with a lump sum of money.
As you grow your campus recruiting program, you’ve decided to expand recruitment and are now relocating a few hires a year from across the country. Your latest group of campus hires are coming from New York, Dallas, Chicago, and San Francisco. These campus hires need more help moving their belongings and have expressed need for more funds than originally allotted because their distance is longer. You’ve decided to provide them with a larger lump sum to cover their household goods expenses, but you are also allowing them to book travel through your internal department.
Fast forward a few years, you are now relocating various positions across your company. You are offering lump sums to cover expenses, travel is booked through internal teams, and all questions from relocating employees are coming to you. Your relocation program is now supporting several relocations, you feel like you need more resources to support company moves, and on top of all that your manager has just asked you to reduce relocation costs as part of a larger company initiative to control spending.
This isn’t a situation anyone wants to be in, but unfortunately, it’s an easy trap to fall into. As soon as your start offering ad hoc relocation benefits, it can be a slippery slope to a program where you’re unclear of what your spending is or what type of experience your relocating employees are receiving compared to others in your industry.
As you can see, the impacts of not having a solid relocation program in place before you start relocating employees affects more than just that first relocation. It can actually affect all your subsequent relocations as well.
However, this can be avoided if you’re willing to put in a little upfront work to properly build out your relocation policies. It can be difficult to anticipate your needs 2, 5, and 10 years out, but there are some tactics you can use to help you provide appropriate benefits for your initial relocations and beyond.
First of all, start early.
Creating a relocation policy is key, even if you’re just relocating a few employees a year. If you’re not ready to draft a detailed policy, start with guidelines that state who is eligible for relocation benefits and what those benefits include.
Putting this in writing helps set proper expectations for internal stakeholders and your employees. It also ensures that your relocation program is equitable to employees. If you don’t put these guidelines in writing, it’s easy to give employees ad hoc benefits that may or may not be equitable.
Second, consider including direct bill benefits in your relocation policy or guidelines.
Direct bill benefits are scalable, provide a proven process for employees, and help you take advantage of tax savings via IRS guidelines. Utilizing direct bill benefits means that your company, usually with help from a third party who specializes in this process, pays suppliers directly for employee relocation services.
Companies often allow employees to choose which relocation categories (shipment of household goods, final travel, temporary housing, etc.) can be booked via direct bill and provides a cap for the total amount. This allows the employees to choose how they want to use their benefits, while also helping you contain costs. As you start to scale your relocation program, you can set different caps for different populations or tiers.
Lastly, make sure you get buy-in from all relevant stakeholders.
Setting expectations internally can be just as important as setting expectations with your relocating employees. In addition to your HR team, be sure to talk to your payroll team. Some relocation expenses are considered taxable, so you’ll want to make sure your payroll team has a plan for how to handle any tax implications. If you want to instate a repayment agreement, you may want to also reach out to your legal team to help you draft or approve the agreement.
Depending on how your company uses relocation, you should also familiarize employees who are helping administer the relocation policy. For example, if you typically relocate new hires, you may want to talk to your recruiting team and make sure they understand the relocation program you’ve put in place.
With some proper preparation, you can avoid the pitfalls of creating a relocation program on the fly. Putting together a program “last minute” or right before a move will undoubtedly results in unwanted consequences for you and your relocating employees. Consider leveraging these tips to make sure your team is prepped and ready to go for your next influx of relocations!