6 reasons why you need an employee relocation policy

The purpose of an employee relocation policy 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 required 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 should be able to figure out the basics of relocation for themselves, but do you really want to do that?

Moving home and job is difficult, stressful and time-consuming to organise, especially when it involves relocating to another country, so you want to ensure that the whole relocation process is as streamlined as possible to ensure that there are as few inconveniences as possible for the relocating employee, their family, and the HR team managing the relocation.

The simplest way to do this is to have a material 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 for an employee relocation policy?

1. To attract the right talent

Depending on 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. We hear constantly about the skills gap and the recruitment difficulties organisations are experiencing in finding qualified talent. This challenge can be alleviated by the implementation of a relocation policy.

Imagine you've identified the right candidate and made them a job offer. 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 organisation doesn't have a relocation policy or even a budget for that kind of thing. The candidate, therefore, 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 don't have an employee relocation policy that provides an adequate level of support for corporate transfers, 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 on the employee's productivity, which may take some months to reveal itself. Ultimately, this may affect your organisation with reduced productivity and success and even wasted time resolving performance issues.

"Bob's made some unfortunate gaffes this week. Is he OK? He looks exhausted?"

"Yeah, he still lives in Hereford; takes him an hour and a half each way."

A relocation policy offering the right level of relocation support will help avoid such issues.

3. To ensure your employees get the right support from HR and suppliers

Using the example above, Bob eventually 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 home in Birmingham, instruct solicitors on his sale and purchase, arrange a HomeBuyer survey, secure school places for the children, 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, the organisation does not have an employee relocation policy so there is nobody within the business that has the knowledge or experience to support Bob and his family at this difficult time. 

If an organisation has a relocation policy there will usually be somebody within the organisation 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 organisation, a relocation management company can be engaged to support with expert advice and a panel of tried, tested and trusted suppliers.

4. To ensure fairness

One thing that is exceptionally difficult to manage is when line managers and business units provide employees on the same grade with different relocation 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 and hence offers what they need to in order to keep the employee happy.

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 having 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. 

5. To ensure consistency

If you are offering employee relocation support on a reasonably regular basis, your organisation should have established what level of support is appropriate, both in terms of the cost to the organisation, and the relocation benefits made available to the employees. If you have not considered this then you are probably not serving your organisation or your relocating employees appropriately and should consider taking some time out to get heads together and create a relocation policy.

Why? 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 relocating 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.

The crucial factor here is to help your employees transition as smoothly as possible into the new environment so that they can be productive at the earliest opportunity.

6. To control costs

Relocation cost is important 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. Ultimately, the organisation doesn't want to provide blank cheques for unlimited relocation costs.

Consider Bob's colleague, Nadia. She had her removals, estate agency and legal fees paid for by the company. Her line manager has now authorised four weekend visits for her to explore 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 suitable to purchase.

The relocation package appears very generous now, but did the organisation really want or need to offer that level of support? Unless suitable controls and caps are applied to these allowances, the cost of relocation can increase significantly, more so if tax 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.

This advice 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.

Stuart Beaty

Celsium, Birmingham, UK