First Steps to Build a Relocation Policy

You may have started relocating a small number of people at your company, but don’t really have a program in place.  A helpful tip for anyone in this situation is to start building your Relocation Policy early.

But do you know how to start it? We made a checklist so you can choose the best points to explore in your policy first draft.

What can influence your Relocation Policy?

Relocation Allowance

A conventional relocation allowance strategy gives the employee a predetermined, capped sum of money to relocate. We call this a Naked Relocation Allowance, a type of payment that allows the employee to handle their own relocation.

A Managed Relocation Allowance, in contrast, will be cheaper, and a relocation company manages the entire relocation, keeping your employee guided along the way. With a Managed Relocation Allowance, the employee has access to pre-vetted suppliers and has All Points’ guidance as to how to spend their money, saving money for cost categories that they may not foresee without expert aid. And if relocating to Canada, there may be a number of tax advantages available to you and your employee.

Before deciding on a Relocation Allowance amount, you could consider:

  • The employee’s job level;
  • Homeownership vs renter status;
  • Historical averages for comparable types of relocations;
  • Relocation distance and family size;
  • Discretion of the employee’s manager.

Defined Benefits

A defined benefit is a relocation benefit with restrictions but no cap on the amount. For example, if a firm agrees to offer 30 days of temporary housing, they identify the length of the temporary housing but not the cost.

The development of defined benefits and relocation allowances, in general, has shifted away from defined benefits and toward more predictable relocation allowances. However, there are still numerous businesses that provide specified benefits.

This is frequently because companies have had a history with defined benefits, but also can be because companies are moving employees in older demographic brackets or there can be competitive pressures in a company’s industry that leads one to decide upon at least some defined benefits.

Employee’s Job Levels

Those in higher-level work positions on assignment receive generally receive benefits such as housing and goods and services allowances, education allowances, tax equalization, and various defined relocation benefits, including destination services.

Permanent relocations for these same higher-level work positions tend to have either entirely defined benefits or a mix of defined benefits and Relocation Allowance, but this does depend on your industry.  Different industries treat relocation benefits differently. Destination Services are usually provided for those relocating internationally on a permanent basis.

Lower ranks are often awarded Relocation Allowances, virtually exclusively of other benefits, except some Destination Services. Of course, again, this depends on your industry.

Relocation Policy Essentials: the quick checklist

  • Allowance or defined benefits or a mix?
  • Changed practice depending on work positions?
  • Moving expenses – one of the relocation’s highest costs and stressful aspects. How to handle?
  • Destination Services
    • New Home Purchase/Rental
    • Temporary Housing
    • Settling-in Services
  • Spouse and Family Assistance
    • Career and Job Finding
    • Schools
    • Settling-in
  • Tax Assistance

Many of the tips provided in this article can be found in our exclusive e-book, Relocation by Industry. Knowing how your competitors relocate can help you build a strong Policy.

Contact All Points and learn more about how to establish a relocation culture at your company.

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