With cost savings and a consumer-like experience, a customized à la carte approach to relocation is empowering organizations and employees alike.
By Debbie Bolla
Perhaps an unexpected outcome of the COVID-19 pandemic is a recent uptick in relocation in some areas. Highly dense and expensive cities like San Francisco and New York City have experienced residents moving to locales with greener pastures. In fact, according to moveBuddha, searches in NYC suburbs have increased nearly 250% compared to the same period last year. This type of data shows that employees have not ruled out relocation -and neither have organizations.
“In spite of historic unemployment levels due to the coronavirus pandemic, many industries still find themselves in a war for talent,” says Steven John, president and CEO of HomeServices Relocation. “For these employers, a comprehensive and robust relocation benefit package can help seal the deal when recruiting or transferring employees from another city. Home sale, home purchase, household goods shipment, and final move expense benefits are minimum requirements for competitive situations.”
For organizations looking to fill a gap through mobility, additional precautions are recommended during this unique time. “In reaction to COVID-19, many programs are being pushed to accommodate special circumstances,” explains Mark Woelfel, vice president of global client services for CapRelo. Woelfel recommends that organizations track exceptions that help ensure the safety and well-being of transferees. It’s also important to keep an eye on repayment agreements due to pandemic-based delays and ensure they align with actual relocation dates.
“The recession is hitting many businesses and putting an increased focus on cost reduction despite a short-term increase in costs -shipping costs are escalating, complexity of moves is increasing, and special circumstances are requiring extra benefits,” he says. “Policies should remain consistent and the focus should remain on the driver of the relocation. Just as business travel is undergoing scrutiny, both from a cost and risk perspective, the ROI on relocations should be scrutinized. In the short- to medium-term, relocations will need a higher level of requirement.”
There are certain strategies and approaches that can help curb some of the extra expenses incurred during this uncertain time. One recommendation is a needs assessment, which allows organizations to gauge the interest level and needs of the potential transferee.
“It gives the employee the opportunity to express to their relocation counsellor what events they are most concerned about and what support and resources they feel they need,” explains Bill Mulholland, director of business development for ARC Relocation.
Organizations also have the opportunity to custom build their offerings. “Of the myriad HR benefits available to employees, relocation is unique in that it is not regulated and benefit levels are not proscribed by law,” says John. “This allows relocation professionals to craft programs that best balance the needs of the employee and the organization.”
John, Woelfel, and Mulholland all agree that core-flex programs allow organizations to support transferees while providing the flexibility and customized, consumer-like experience today’s employees crave.
“In such programs, core benefits are specified with optional flex benefits allowed as a choice for the employee,” says John. “Generally, core benefits include those items that most transferees will need and the flex benefits might include items that are more individually-oriented.”
- relocation counseling;
- final move expenses;
- shipment of household goods; and
- travel costs.
A few examples of flex benefits include:
- family or spousal counseling;
- home purchase;
- pet care;
- administrative and tax support;
- immigration services; and
- miscellaneous allowance benefits.
Woelfel says that today’s on-demand preference is mirrored in a flexible approach. “Core-flex programs are becoming increasingly popular based upon the perception of better meeting the needs of relocating employees and their families and involving them more in the process. This should be balanced with the net impact of the benefit suite,” he says.
Mulholland says a core-flex relocation policy can meet company goals while staying within the target budget. But with an à la carte approach, he warns that organizations should ensure employees have enough budget to cover their options. “If the employee is not provided the financial support needed to relocate, this will create stress and increase the attrition rate of relocated employees due of failed assignments,” he says.
Another issue that may cause employees grief is the perceived notion of unfairness among transferees’ benefits, Woelfel says. “With a growing focus on diversity, equity, and inclusion, mobility professionals will need to ensure their programs don’t offer so much flexibility in their policy design that it creates unintended consequences,” he says. “For instance, if polices allow add-ons at a manager’s discretion, the overall program needs to be sure the demographics continue to show fairness throughout. Equally, recruitment strategies may have to more closely track benefit distribution -adding to the importance of reportable data trends.”
With the global landscape changing every day, it’s uncertain what the future of relocation will look like. But the events of the past year have given a few clues: an increase in the remote workforce and a greater reliance on technology.
“Because COVID-19 has shown many industries and companies that remote employment is an option, employees will have many more employment options to choose from that will not require relocation,” says Mulholland. “In turn, if a job does require relocation, it will be imperative that all support and options are provided to employees in order to attract the top candidates. The volume of employee relocation will decrease, but the breadth of services and support offered must increase.”
He also says that the pandemic has caused organizations to innovate, providing employees with virtual services instead of in-person approaches for language training, cultural training, and household goods move surveys, all driven by technology. “We have even seen ‘brochures’ in homes for sale decrease and QR codes appear offering the house info on the buyer’s cell phone,” he says. “All of the change is good and helps to evolve the relocation industry.”