May 1, 2011:
An increasing number of employees are declining relocations. This reality is driving a recent trend in relocation; more companies are providing employees with pre-decision services. While this has been an accepted practice for global assignments for some time, a growing number of companies are offering these services for all employee relocation, whether domestic, cross-border or international.
According to the Atlas World Group’s 2010 Corporate Relocation Survey, More than half (56%) of firms saw employees decline the opportunity to relocate. The survey found that the top reasons for declining an offer to relocate were housing/mortgage concerns and family issues/ties. Frequently though, these decisions are not being made from an informed position. Employees may fear a home sale loss or an excessive cost of replacing a current home but the reality may not substantiate those fears.
To improve the relocation acceptance rate some companies are providing services and tools to enable employees to make an informed decision. On the surface this may seem a bit odd spending money to save money. However, at a cost of approximately $1,000 to $5,000 for these services, it is money well spent, when you consider the implication of an employee refusing a relocation offer. Whether it is the cost of lost opportunity when the talent you need refuses to accept your offer to relocate, or a failed international assignment, it can be costly.
To make this a win/win process for both the company and the employee it must be made clear that it is not a career breaker for the employee to refuse the relocation. By doing this there is a reduced risk that the company will lose key talent because a candidate chooses to look for alternate employment in his or her current location instead of accepting a relocation.
Pre-decision services focus on a variety of issues that a relocation candidate and his/her family need to consider when deciding to accept the offer. Such issues can range from: can we afford to sell our house to, will we be able to recreate our lifestyle in the new location. Pre-decision services can also uncover whether the children will be able to receive a comparable education or a spouse will be able to find meaningful employment.
Pre-decision services use the following tools, either individually or in combination, to assist the relocation candidate and family:
- pre-move counselling to explain all of the elements provided to the candidate and family
- a candidate and family self assessment that enables them to take an inventory of the things that are important for them to replicate in the new location, from a personal, financial, educational, recreational and lifestyle perspective
- a preview trip to allow the candidate and family the opportunity to explore the new location, and see for themselves how they can or cannot fit their needs
- financial assessments such as two city-comparisons, origin home valuation to provide realistic understanding of the value of the existing home, costing of equivalent homes in the new location and cost of living studies between the two locations.
Individually these services can help with the decision process but, when combined, provide the employee and family the best information with which to make their decision. Pre-decision services are best when they are tailored to meet each prospective transferee and family’s unique questions, concerns and requirements. The employee and family are then able to direct their focus on those areas that concern them the most.
The advantage to the company is that the financial information provides them with realistic data with which managers can budget for the cost of the relocation up front. Companies are also able to make informed decisions about policy exceptions and/or adjust relocation offers appropriately.