April 14, 2016

How to Structure a Flexible Relocation Policy

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How to Structure a Flexible Relocation Policy

Companies have a growing need to provide different levels of benefits to relocating employees based on business objectives or employee level. A common way to achieve this is to develop a flexible policy, which allows one policy to be adapted to meet a variety of needs. Company strategy, business reasons for employee mobility, company culture, move patterns, and more, all need to be addressed when developing a relocation policy. When these factors are taken into account, along with different employee levels and move types, either multiple policies or a flexible policy may be required.

Different Types of Flexible Relocation Policies

We’ve taken a look at three different types of flexible policies—tiered, core-flex, and menu driven—and how they differ.

Tiered policy

This is the most traditional flexible policy approach. Many companies tier their policy based on level of employee (e.g., executive vs. professional), homeowner vs. renter, or relocation rationale (e.g., leadership vs. self-initiated move). A tiered policy generally addresses the same elements for each move of a specific type and provides two or more levels of benefit for certain elements. In essence, the elements that are the same for all tiers are core, and those that differ by tier can be considered flex.

Tiering is most often cost driven, targeted to a certain population, and based on employee level or business objective. One benefit of tiering is ease of administration—a manager can present the appropriate tier with little opportunity for interpretation. On the other hand, in companies where managers want to provide more variability, a tiered policy may not meet their needs.

Core-flex policy

This policy type contains a set of core provisions which are provided to all employees with a consistent application, just as the tiered policy does, and a set of optional provisions which can be varied as needed. It is most often used when business lines call for flexibility, when assignee level is a factor, or when there are significant cultural differences between the home and the relocation or assignment location.

A key benefit of the core-flex approach is the ability to provide a level of support that more closely reflects the value the company places on a given assignment type. This approach also supports cost management objectives more keenly than some other policy structures. Unlike the tiered program, where there is little choice to be made by a manager, the core-flex policy may look straightforward, but in fact many companies find that managers actually do make choices or changes, particularly if they are charged with cost management. Relocation professionals need to watch closely to ensure that core elements are provided to all, and that optional or flex elements are provided as prescribed.

Menu driven

A menu driven approach is a policy with a set of provisions that the company, employee, or both will choose from to determine the provisions the employee will receive. In this growing policy trend, employees may be given a set amount of funds (which may vary by employment level, making this a tiered policy as well) to allocate based on their personal preferences or needs. In most cases, the funds provided are not actually given to the employee; rather, they are allocated as a spending account maintained by the company from which the employee may choose various options.

One of the key factors of using a menu driven policy successfully is adequate counseling. Employees may or may not have relocation or assignment experience, and may or may not be aware of the trade-offs they need to make. It is up to the relocation professional to provide the counsel needed to help the employee make good decisions.

How Do You Know Which Policy Approach Is Right For You?

When deciding which policy approach may be right for you, you need to identify what level of flexibility you want in your policy. If you organization is focused more on consistency, you would weight your policy more towards the core policy elements. What is important to pay close attention to when building flexibility into your program, is making sure that it does not come at the expense, and risk, of compliance and duty of care.

You also want to strike the right balance between need and entitlement and make sure your policy aligns with your company’s culture and mobility objectives. Analyzing your organization’s tolerance for flexibility, cost tolerance, and the locations that your company relocates employees, will go a long way towards choosing the right policy approach for you.

If you would like to request our full guide to flexible relocation policies, please contact your Cartus representative, or email us at trustedguidance@cartus.com. You may also be interested in our other policy guides, including domestic U.S. temporary assignment, localization, permanent relocation, and more. These guides explore the various assignment benefits and how and why they may vary. You can also download our policy guide, Unlocking U.S. Policy Design, which offers four easy, holistic steps to designing your U.S. relocation policy.

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Posted By

Cindy Madden

About Cindy

Cindy Madden is Director of the Cartus Consulting Solutions practice, which supports clients and prospects in the areas of Global Policy and Program Design, Group Moves, Destination Location Research, and the development of customized mobility websites. Cindy has more than 25 years’ experience in the relocation industry in a variety of roles, including account management and sales.

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