Relocating an Employee Within the United States

POLICY DEVELOPMENT

We’ve discussed a number of possible relocation policy options. Most employers would not select all of these options, but whichever ones they choose should be integrated into an easy-to-communicate policy.

This section presents some methods to simplify the policies relating to relocation. It also offers ways that will allow employees to be more engaged and make informed decisions.

Cafeteria Plans

A cafeteria approach requires 2 components:

1. A statement of the total amount of money the company is willing to allocate to the relocation. This may be a standard amount based on a company policy, or it may be a variable amount (depending on the employee and the need for that person in another place).
2. A list or menu of possible relocation assistance services, along with the associated cost. It's then up to the employee to decide which combination of services he or she desires.

The company can control the total relocation bill by setting a cap on the total cost allowable, and by establishing the options included.

An alternative is to provide a core set of relocation services, and then add a shorter list of optional services from which the employee may choose. The amount allocated to this shortened list would be less than that under a plan in which the employee could choose from all options.

A cafeteria approach provides good cost control, and simultaneously allows maximum flexibility for the employee.