A best-in-class policy allocates relocation dollars where they are needed most while keeping in mind company culture, best practices, and the relocation budget. For companies that are just beginning to build out their employee relocation programs, developing a policy on what and how much is covered can be challenging. It can be difficult to know what to include, how much to offer, and which factors will impact the cost. Below is an outline that breaks down the various services, allowances, and possible expenses a company should consider for their employees who need to relocate for work-related reasons and that are typically included in a relocation policy.
Traditional Benefit Approach
A Traditional Benefit usually includes either 3 to 4 tiers of benefits with the primary difference between the tiers being the home sale program. The relocating employee uses the services or benefits needed for their move offered within the policy. Should additional services/costs be required, an exception must be requested and approved by the company. Usually, there is no cost for benefits or services not used. (Full example of the northAmerican van line sample policy download is avalable.)
Typical Components included in a Traditional Policy include:
- Tax Liability Assistance
- Lump Sum Allowance
- Finding Home to Rent
- Finding Home to Purchase
- Temporary Housing
- Lease Cancellation
- Home Marketing/Home Sale Assistance
- Equity Advance
- Movement of Household Goods
- Final Travel
- Miscellaneous Allowance
Core/Flex Benefit Approach
The Core/Flex Benefit Approach also offers 3 to 4 tiers of benefits, but provides more flexibility to accommodate the fact that no two employee relocations are the same. You pay for the actual benefits and services that are typically needed for each move (for example, movement of household goods and final trip) and a home sale program through a relocation management company (available for certain position levels). Rental assistance and home finding assistance for homeowners can also be provided. The company determines which benefits are offered as Core. Flex benefits include anything else the company would like to offer. Flex benefits costs are typically controlled by providing a lump sum allowance where the relocating employee can use the funds as he or she wishes (lump sum amounts are typically reduced per tier).
Typical Components included in a Core benefit include:
- Tax Liability Assistance
- Finding a Home to Rent
- Finding a Home to Purchase
- Home Marketing/Home Sale Assistance
- Equity Advance
- Movement of Household Goods
Typical Components of a Flex benefit program usually paid via a Lump Sum Payment include:
- Rental expenses (guided rental tour, lease acquisition, finder’s fees and lease cancellation)
- Home finding trip
- New home purchase closing cost
- General home inspection
- Temporary housing including return trips to departure location
- Home sale closing cost
- Storage of household goods
- Shipment of additional automobile(s)
- Pet transportation
- Miscellaneous expenses
- Family/spouse reemployment assistance
- Tax preparation fees
(Note: Some consider lease cancellation fees to two months’ rent as a Core benefit.)
To download the complete Sample Relocation Policy, please complete the form on this page and a sample will be emailed to you. And for assistance creating a relocation policy, contact Bobbi Maniglia (bobbi.maniglia@northamerican.com).
