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SUMMARY
With today's expanding global market and fluid workforce, employee relocations are on the rise. Your organization will likely require a relocation program to recruit new hires and facilitate employee transfers. These moves will include selling and buying homes, transportation of household goods and family members, and settling-in costs such as temporary housing.
Making the Decision to Relocate
For the employee and their family to decide whether to accept a transfer, they'll need to have an idea of what the new location will be like. There are two ways to go about this: collecting data and taking a trip to the new location
Selling the Home
Relocating means selling a home or breaking a lease and making arrangements for new housing. Selling a home takes time and energy and incurs costs such as real estate broker commissions. Depending on the present condition of the real estate market and the length of time the employee has been in the current home, there may be a considerable investment on the line. Employers have developed a number of programs to make the selling process easier on the employee, including direct reimbursement, guarantee-against-loss programs, appraisals, and loss-on-sale programs.
Moving
Once the relocation process is initiated, the family must travel to the new site. Their personal effects must also make the move. A number of issues must be clear in order to keep the cost of moving within limits. The company can provide this clarity by maintaining a policy on moving household goods, including information about weight limits, excluded items, pets, automobiles, storage, and special handling. Movers will provide the employee and company with an estimate of the weight and cost of the move. It is usually necessary to insure household goods for loss or breakage during transport. The minimum protection, released value, required by the moving company is typically inadequate. Instead, the employee should select an additional coverage option, full value. The employee and family will probably move to the new location by car or plane. Depending on the method of transport and the distance involved, this may take a single day or an entire week.
Buying a Home
The employee must have a new home to begin settling into the new community. When looking for a new home, the employee needs to know exactly what he or she can afford to buy. This can be accomplished by obtaining a pre-approval from a mortgage broker.
The company can assist the employee in several ways during the home-buying process, including pre-purchase appraisals, mortgage assistance, closing cost assistance, and family assistance.
Policy Development
There are many possible relocation policy options. While most companies would not opt for all of these options, those chosen can enable business objectives by accounting for different employee demographics and job roles. Here are some methods to simplify the policies relating to relocation: cafeteria approach to relocation, lump-sum relocation plans, and tiered relocation plans.
New Hires
Companies use some, though usually not all, relocation programs for new hires. The most typical relocation program used for new hires is payment for household goods to be transported to the new work site. Recruitment has become progressively more difficult. As such, companies have begun to include more programs to attract the talent they require.
Keeping the Employee Whole
Sometimes the cost of living is substantially higher in the area to which the employee is relocating. Companies adjust for this difference in a number of ways, including the use of separate salary structures, relocation bonuses, and a cost-of-living allowance.