In very general and simplistic terms, the purpose of a relocation programme is to relocate talented employees for the benefit of both the employee and the organisation. This could be for any of the following reasons:
the need to recruit a new hire when the talent does not reside locally
as part of a development programme
to transfer knowledge to other work sites
to establish control of other work sites
as part of a group move
Your employees are smart people and should be able to figure out the basics of relocation for themselves, but is that really a wise thing to let them do? I've seen relocation policies where the policy is such that there is no real policy and this has caused all sorts of headaches for both HR, the relocation company involved - and probably the employees...
On top of that, will they do it "right"? There are good relocations and there are bad relocations. What makes a good relocation is using the right suppliers and experts in the local area and dedicating a resource to project manage the entire process. Moving home is difficult, stressful and time-consuming to organise, especially when it involves moving to another country.
The most prudent course of action is to have a concrete relocation policy with all the relevant stakeholders pulling together so that any corporate moves can be dealt with efficiently, fairly and in-line with corporate goals.
So what are the 6 reasons?
1. To attract the right talent
Depending upon what industry you are operating in, you may have a fierce battle to entice the best employees into your particular business. Often, that talent does not reside in the local area and the business must cast its net a little wider to seek out those potential employees that are right for the business.
OK, so you've found the right candidate and made them a job offer, but since they live in Grimsby and not Derby they have been bold (or smart) enough to ask for relocation support into Derby. Which is a shame, as the business doesn't have a policy or a budget for that kind of thing. The candidate rejects the offer and takes a role with a competitor whilst you move to the next name on your list.
Do you really want to settle for second best?
2. To ensure your employees relocate
If you do not have a relocation policy that provides the right level of support for your employees, I'd hazard a guess that the business isn't offering much in the way of a relocation package either. If the relocation package is not there, the employee is very unlikely to dig into his or her own pocket to pay for relocation. If the employee does not relocate, this in turn can have a knock-on effect in the employee's productivity, which may take some months to reveal itself.
"Bob's made some daft errors this week. Is he OK? He looks exhausted?"
"Yeah, he still lives in Hereford; takes him an hour and a half each way."
Don't let this happen to your employees.
3. To ensure your employees get the right support from HR and suppliers
Let's assume that Bob did decide to relocate closer to the new work site in Birmingham city centre. He's taking on a fair amount to deal with at a time when the business is demanding so much from his as a result of his management development programme.
He's got to get his house in Hereford on the market, find a new place in Birmingham, instruct solicitors on his sale and purchase, arrange a HomeBuyer survey, secure school places for the kids, arrange removals, etc., etc., etc. He soon gets a little overwhelmed with all the arrangements, so Bob turns to HR to see how they can support him.
Unfortunately, as the business does not have a relocation policy there is nobody within the business that has the knowledge or experience to support Bob at this difficult time.
If an organisation has a relocation policy there will usually be somebody within the company that is experienced and knowledgeable about relocation and can provide advice and perhaps some contact details for suppliers such as a removal company and a solicitor. If such knowledge does not exist within the company, a relocation management company would be engaged to support with expert advice and a panel of tried, tested and trusted suppliers.
4. To ensure fairness
If there is one thing that is exceptionally difficult to manage, it is when line managers and business units provide employees on the same grade with different benefits. Naturally, this is exacerbated in the absence of a clear relocation policy as nobody really knows what a reasonable level of support should be.
So while Bob is suffering the financial hardship of paying for everything himself, a colleague, Nadia, in a different department (but in the same situation as far as relocation is concerned), is getting her removals, estate agency and legal fees paid. Lucky Nadia.
As expected, word of this financial support gets around, as it always does, and rightly so, Bob is somewhat disgruntled. Cue lengthy discussions with HR and line manager...
So not only has precious time been taken up resolving the issue, the company's reputation has been tarnished in Bob's eyes, which may lead to issues such as reduced levels of engagement or his premature departure from the company. You never know.
5. To ensure consistency
If you are offering relocation support on a reasonably regular basis, your organisation should have a pretty good idea of what level of support is appropriate, both in terms of the cost to the company, and the benefits made available to the employees. If you have not considered this then you are probably not serving your company or relocating employees appropriately and should consider taking some time out to get heads together and get something on paper.
Because if you have nothing concrete to refer to, how do you know that all of your relocating employees are receiving the support they need?
If you know that somebody moving from Jamshedpur to Rome is going to need immigration services, home-search, cultural training and language training, to name but a few, you will naturally want to make sure that every employee making the same move can access the same benefits. This also links in with the point about fairness, above.
It's all about helping your employees transition as smoothly as possible into the new environment so they can be productive at the earliest opportunity.
6. To control costs
Relocation is all about cost these days. Corporates used to throw money at relocation programmes like it was Monopoly money. Thankfully, for most organisations, that has changed and the attitude today is one of controlled conservatism - possibly a little too conservative in some cases, but that is a story for another day.
Consider Bob's colleague, Nadia. She had her removals, estate agency and legal fees paid for by the company. Hang on, her line manager has now slapped on four weekend visits to check out the new area, including hotel accommodation and an uncapped meal allowance for Nadia and her husband, as well as a six month rental and utility allowance until they can find somewhere to purchase.
That's a pretty generous looking relocation package now, but is that really what the company wanted or needed to offer? Unless the company applies suitable controls and caps to these allowances, the cost of relocation can increase significantly, especially if gross-up is involved.
For that reason, a relocation policy, a written document that can be referred to and updated as required, is an absolute must if the organisation wishes to exercise any control over the cost of relocation. Without reference to a guiding policy document, you are giving carte blanche to the budget holders to spend whatever they want.
Finance will not be happy.
I get that this will not be relevant to all organisations - predominantly those with a very rare requirement for relocation - but if you are turning over a reasonable number each year then you may want to think about putting a policy in place if you don't already have one.
Are you designing or thinking about creating a relocation policy for your organisation?
Contact us to find out how we can support you with policy development.
Celsium is a relocation management company based in the UK, focusing on domestic and inbound UK relocation services to businesses relocating their employees.
Relocating outside of the UK and need support? Celsium has a global network of qualified and trusted consultants, so it doesn't matter if you are relocating an employee from Cardiff to Birmingham or from Paramaribo to Gaborone - you can trust us to get the job done safely and successfully.
Image by Patrik Nygren