Managing Employee Relocation: Compensation and Benefits Plan
Employee relocation is based on many factors including policy development, project enhancement, and economic factors. Many companies offer employee relocation compensation to retain good employees and attract new talent.
Attracting and retaining the best talent is one of the major concerns of organizations nowadays. Employee relocation assistance can help in luring prospective employees and retaining the best current employees too. Employee relocation budget has to be maintained and increased regularly for the economic growth of the company.
Employee relocation program may include relocation agreement, moving expenses, support for family members, job assistance for the spouse, and also housing and real estate issues. A good employee is an asset and best resource for the organization that brings productivity and creativity to the company that ultimately brings profit. Highly rated movingfeedback.com long distance movers state that a smart employer will always make efforts to retain his best employees. Employee relocation is a hard and risky venture for the employer as the employee retention rates decrease after relocation as employees find new opportunities after adapting to the new environment.
Though it is highly recommended to have a uniform relocation policy for all the employees, many companies differentiate their relocation packages according to the position of the employee in the company or the position of the prospective employees. Providing partial relocation benefits is the only way for companies that can’t afford to pay for everyone’s relocation in full. Employee relocation packages are an effective way to communicate to the employees that they are valued. A new employee may not expect a high relocation package but it is highly expected by an existing employee to get full relocation assistance from his employer.
Consider Crafting Your Employee Relocation Policy
As an employer, if you too are thinking of adding a relocation policy to your employee benefits, then it is wise to understand the need for relocation and the sacrifices made by the employees during a move. Understanding employees’ situations will help the employer in creating a better relocation policy and attract more talent to your business.
It is a good idea to consider the actual relocation cost and not tentative amounts. A company can choose to compensate for the full or partial amount of relocation depending upon its policy and budget.
Role of the Human Resources Department
The Human Resources department plays an important role in an employee’s relocation. As the HR department works with all other parts of the organization, it is easier for them to decide how a relocation program can advance the company’s strategy. HR people set and manage policies in association with internal business partners and chief operating officers of the company. They also help the department heads in identifying the right and best-suited employees for relocation. They also solve and mitigate any legal issues if any that may include tax and immigration. HR department works with the legal departments to resolve all legal matters.
A good HR department must work upon the financial and operational strategy of the total relocation program. Some companies provide full employee relocation assistance. It includes everything like relocation agreement, moving expenses, support for family members, job assistance for the spouse, and also housing and real estate issues. HR department arranges every part of this relocation program. For this, they have to deal with moving companies and other organizations to provide the best services.
Employee Relocation Policy Design
Any employee benefits policy or plan should be established in written to ensure fair and consistent treatment of employees. A written relocation policy will help in avoiding favouritism under any pressure and also helps employees in having exact information on all the benefits provided by the company.
A relocation policy can have different levels of coverage including coverage for new employees, coverage for existing and experienced employees, and coverage for executive-level employees.
Though every employer wants to adopt policies that fit their financial circumstances, they face the high costs of these relocation packages. It is highly recommended to consider the financial gain of hiring or transferring an employee. Hr people have tremendous pressure on cutting costs so they try to relocate an employee if it is most needed.
Comprehensive Relocation Program
A relocation package should include a few elements when designing a domestic relocation program.
- Cost-of-living adjustments and relocation bonuses are common elements that organizations may need to use to lure employees to relocate.
- Relocation package should also include the cost of site visits for the employee and his/her spouse so that they can see the new city, office, learn about the community, housing, and other local services.
- Employee relocation program may also include assistance in selling and buying a home if the employee needs to sell a home at the current place and purchase a new home at the new location.
- Organization must offer reimbursement for moving expenses and other expenses associated with moving that may include house-hunting, temporary living cost, and transportation of household goods. Many organizations directly provide services hired by them instead of reimbursement.
- An employee doesn’t relocate alone. He has a family to take care of, organizations that provide family assistance are considered more employee-friendly. An employer can help his employee by helping spouses or partners in job hunting and looking for a new school for their children.
Understanding these related terms is important when shifting a business is important. Hope this article will help you understand how to manage employee relocation.