Relocation Services: Considerations and Risk Reducers
Moving is generally considered one of the most stressful life events. In fact, according to an article in www.express.co.uk, moving to a new home is more stressful than a relationship breakdown, divorce, or even a new job. Because relocating employees involves moving them to a new location, it can be just as mentally, physically, and emotionally taxing. Many factors come into play, from helping the employee sell their home and buy/rent another one, to ensuring all household goods and pets reach the new destination with as few issues as possible. Following are some relocation services and industry best practices to keep in mind when relocating your employee.
Involving the Spouse from the Beginning
One of the most important things to remember when initiating the relocation process with your employee is that relocation affects the employee’s family just as much as it does the employee. Therefore, including the employee’s spouse or significant other throughout the process, from the initial benefits call through the buying of the new home and moving, can make the process run much more smoothly. One of the main reasons relocations tend to fail, both domestically and internationally, is because an employee’s spouse is unhappy with the move. Involving the spouse from the beginning helps alleviate any questions or concerns that may come up later.
Offering Spousal Job-Finding Assistance
In conjunction with involving the employee’s spouse from the beginning of the relocation process, it is also an industry best practice to offer some type of job-finding assistance to the spouse, who may be traveling with your employee. This helps in a couple of ways:
- It allows the employee’s spouse to continue their career in conjunction with your employee’s move to the new location.
- It lets your employee focus as much as possible on their job while avoiding unnecessary distractions.
Keeping the Relocation Plan Flexible
When choosing the right relocation services and plan for your employee, flexibility is essential. The policy you offer your employee should be flexible enough to accommodate moves from and to all office locations. While this may seem a bit obvious, it is common for employers to offer a set amount of money for a relocation without taking into account factors such as cost-of-living changes, employee level, and lifestyle preferences. To provide maximum versatility, you may consider using a tiered relocation program. In many cases, these range from lump sums to Buyer Value Option (BVO) programs to Guaranteed Buyouts (GBOs). Using a tiered program helps you provide the appropriate relocation benefits to all types of employees, from college graduates to C-levels, and reduces the risks of providing more benefits to one employee versus another in the same tier.
In some cases, implementing a homesale program to a tiered program may not be approved by senior management. Often, companies do not want to be in the business of buying homes because of the risk of taking those homes into inventory. This risk is much greater in an unstable U.S. real estate market. In a healthy market, homes sell, and the risk of homes in inventory is reduced. While senior management may not want to include a formal homesale program in their tiered program, the need and want still do not go away.
Having a homesale program can aid with talent-acquisition goals. If your company is looking to hire or relocate a desired candidate, not having a homesale program in place to offer can deter this goal. When implementing a tiered program and not including a homesale program, you may consider including a homesale program as a supplemental option. This will help address the talent-acquisition goal, especially with higher-level employees that often have to manage selling a home as part of being able to accept a relocation offer.
Knowing Your Relocation Services
Understanding the details of your current relocation program is especially helpful for relocating your employees successfully. A good practice is to be familiar with your program, activity, and when and where there may be an opportunity for change. It is important to be open to updating your program as needed based on current relocation best-practices and benefit trends taking place within your own company’s relocations.
In addition, it is important to stay in tune with the external environment. For example, in a U.S. real estate market where home sales are slowing down, and mortgage rates are rising, you may need to consider offering benefits that are in line with the external conditions. Homesale incentives, loss-on-sale assistance, a staging allowance, or other benefits to assist in marketing a home for sale may be considered, as well as a Mortgage Interest Differential Allowance or assistance with discount points. Ultimately, it is important to be aware to support your objectives for recruiting and retention while also considering your organization’s mobility goals.
Working with a Relocation Professional
There are many moving pieces in the relocation process, and it is essential to make sure they are all handled properly. One of the best ways to ensure that every moving part is handled efficiently is by working with a relocation professional. From the initial benefits call through the closing of the new property and moving of household goods and family pets, or any other relocation services, a Relocation Consultant counsels your employee and their spouse every step of the way. Some important milestones a professional can help with are:
- Scheduling and conducting a detailed benefits call, and going through the entire policy with your employee and their spouse to answer any questions.
- Helping your employee appraise and put their house on the market, and buying a new home at the new location.
- Completing a cost-of-living comparison to account for increases and decreases in home value, salary, and living expenses.
- Providing temporary living arrangements if necessary during the transition. This can help avoid high hotel costs and involves an in-depth needs assessment to determine factors such as space requirements, family needs, commuting issues, and rental requirements.
- Ensuring your employee and their family are settled at the new location comfortably, with minimal hiccups along the way.
Relocating can be incredibly stressful for employees, family members, and employers, especially if specific steps are not followed to ensure all facets work together seamlessly. However, following some industry best practices, and working with a professional who has experience providing relocation services to ensure you follow these, can make the process less risky, and ultimately less costly.