Understanding Relocation Policies: What are the types of policies

In this article, we explore the different types of relocation policies and how they play a crucial role in facilitating the seamless transition of employees to new locations.

Relocating employees, whether domestically or internationally, is a strategic move for companies aiming to expand their reach, develop existing talent, or achieve specific corporate goals. A well-crafted company relocation policy plays a pivotal role in ensuring a smooth and successful transition for both employees and the company. In this blog post, we’ll explain what a relocation policy is, their significance, and list the different types.

What is a Relocation Policy?

A relocation policy is a structured set of guidelines and provisions that outline the benefits and support offered by a company to its employees who are relocating for a company need, whether it’s across cities, states, or even countries. A relocation policy serves as a roadmap, detailing the financial assistance, services, and resources available to employees and their families during the move.

Importance of a Relocation Policy

A well-designed relocation policy serves multiple critical purposes for both the organization and its employees:

1. Consistency and Clarity: A clear relocation policy provides employees with a transparent understanding of what support they can expect during their move. This ensures benefits are communicated clearly to all employees, fostering trust and stability.
2. Talent Attraction and Retention: An attractive relocation policy is a powerful tool in attracting top-tier talent, as candidates may be more likely to accept a position in a new location if they are provided a clear policy of benefits.  Additionally, a comprehensive policy can enhance employee satisfaction and retention by demonstrating the organization’s commitment to their well-being.
3. Cost Management: By outlining a structured budget and guidelines, a relocation policy helps the organization manage costs effectively. Cost estimates can be produced for each policy with example cases to assist with budgeting and anticipating expenses.
4. Compliance: A well-structured policy takes into consideration legal, tax, and immigration requirements, helping the company avoid legal pitfalls and compliant mobility program.

Types of Relocation Policies

There are numerous types of policies, usually categorized by assignment type, such as short term assignment, long term assignment, permanent move and internships. They may also be categorized by Domestic vs. International moves, as well as type of support such as full service, managed budget, core/flex or lump sums. Lastly, many companies also have tiered policies based on employee levels. These all aim to be as tailored as possible to meet the unique needs and objectives of both the employees and the business. Here is a breakdown of these policy types:

• Short-Term and Long-Term Assignment Policies: These policies are for employees relocating temporarily or for an extended period, respectively, and include provisions for housing, family support, and repatriation.
• Internship Policies: As the name suggests, internship policies outline relocation benefits for interns required to relocate for the duration of their program. This policy is designed to facilitate a smooth transition while keeping costs low and supporting them during their new experience.
• Permanent Move Policy: This policy is for employees making a permanent move to a new location, with a focus on assistance with home finding, household goods shipping, visa/immigration (for global moves), and destination services.
• Managed Move/Full Service: Under a Full-Service/Managed Move relocation policy the Relocation Management Company (RMC) is responsible for managing nearly all aspects of the relocation process and booking all necessary services. Services may include household goods shipping, temporary accommodation, home finding, spousal/support and any other service needed by the assignee. This approach aims to alleviate the burden on employees by handling the logistical and administrative challenges associated with moving, ensuring a smoother and stress-free move to the new location.
• Traditional/Cafeteria-Style: A cafeteria-style relocation policy offers relocating employees a set of benefits and services based on their individual needs and preferences. Similar to choosing items from a cafeteria menu, employees can customize their relocation package by selecting the benefits that best suit their circumstances. These benefits might include any combination of relocation services. This approach recognizes that different employees have varying needs when it comes to relocation, allowing the benefit package to be tailored accordingly. All striking a balance between company support and personal choice.
• Managed Cap/Budget: With a Managed Cap policy the RMC coordinates the relocation process up to a predetermined budget amount. Under this policy, the company sets a budget or monetary limit for each employee’s relocation expenses. The RMC then coordinates the relocation services, ensuring costs are kept within this capped amount. This budget can be calculated on a few factors such as the employee’s job level, destination location, and specific needs.
• Core-Flex Relocation Policy: This policy offers a balance between standardized benefits and personalized options. It allows employees to choose from a set of predefined benefits based on their needs. Some Core benefits may include visa/immigration, destination services, temporary accommodation, and household goods shipment. While some Flex benefits may be spousal/partner support, language and cultural training, pet transportation, or schooling support.
• Lump Sum Relocation Policy: Under Lump Sums, employees receive a fixed amount of money to cover relocation expenses. The amount may be dispersed by the company or RMC. It provides flexibility but requires careful financial management by the employees as they are responsible for all expense payments.
• Domestic Relocation Policy: Geared towards employees moving within the same country, this policy outlines support for housing, transportation, and other essential aspects of the move.
• International Relocation Policy: This policy caters to employees moving across international borders. It covers aspects related to global moves such as visa and immigration support, cultural training, and language assistance.

Developing a company relocation policy is a strategic endeavour that requires careful consideration of corporate goals, employee needs, and budget constraints. It also requires industry knowledge and experience. We recommend leaning on your RMC’s expertise to develop the policies. This ensures that your policies follow best practices and are compliant with legal and regional regulations. As a trusted RMC, MovePlus Mobility guarantees a well-structured policy that aligns with these factors.

By implementing best practices, organizations can create a positive and seamless relocation experience for their employees, contributing to talent attraction, retention, and overall business success. Remember, a successful relocation policy isn’t just about getting from point A to point B; it’s about supporting employees throughout their journey toward a brighter future.

Stay tuned as we continue our Relocation Policies 101 Series and discuss how to create a relocation policy. If you have any questions about relocation policies or would like a complimentary policy review, contact us at info@moveplusmobility.com