Updated April 18, 2023

How to Develop a Company Relocation Policy

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When you need to build or update a company relocation policy, sometimes it’s hard to know where to start.

After all, there’s a lot to think about when creating policies that make sense for your organization. From business objectives to organizational culture to employee experience and more, there are so many factors you need to consider — all within a defined budget.

To help you with this process, we’ll take you through our six-step, best-practice approach for policy development.

Relocation policy vs. relocation package

Before we explain how to develop a policy for your mobile employees, let’s make sure we have a shared understanding of what this means. Even though the terms relocation policy and relocation package have different definitions, it’s common to see them used interchangeably. That’s why it’s important we’re clear right from the beginning.

What is a relocation policy?

A relocation policy outlines the benefits an organization can offer mobile employees and their families to assist them during a move.

Companies may create different workforce mobility policies to reflect specific types of moves (e.g., domestic vs. international relocations). They may also develop policies that reflect specific organizational philosophies, including:

  • Level of choice granted to employees (e.g. one-size-fits-all vs. core-flex vs. lump sum)
  • Value assigned to employee roles or seniority levels (e.g. executive vs. new hire)
  • Degree of service the organization is able to offer (e.g. self-serve vs. managed)

Although a relocation policy can include legal agreements, it is typically not written as a legal document. That said, it must comply with tax, immigration, equity and duty of care requirements. Otherwise, there can be legal implications.

What is a relocation package?

A relocation package is a selection of benefits a company pulls from the relocation policy and offers to an employee to support a move. The value of the relocation package varies, depending on each company’s budget. It can also be customized to meet business objectives as well as specific employee needs and preferences.

When determining the relocation benefits to include in a workforce mobility package, organizations often consider various factors, including:

  • Family Member Needs: Does the employee have a family and require spousal support or pet accommodations?
  • Living Requirements: Does the employee need to end a lease or sell a home?
  • Geographic Location: Will the employee be moving within their country or internationally? Will language training be necessary?
  • Support Level: Will the company coordinate the move? Or, will the employee do most of the work?

6 best practices for developing a relocation policy

A company’s relocation policy can have a significant impact on the success of the global mobility program. That’s why it’s critical to address both business and employee needs before creating any documentation. Here are six relocation policy development best practices we recommend including in your process:

1. Document your corporate relocation strategy

A prerequisite to developing any relocation policy is an understanding of why your organization needs to move employees in the first place. It is only when you have clarity around key business priorities that you can create a relocation strategy that aligns with these goals and, in turn, design the policy you require.

For example, your organization may need to boost revenue in a struggling market. Your strategy might include relocating senior leaders to help solve this challenge. To execute successfully, you’ll need an executive or VIP policy that makes sense for this type of employee.

Alternatively, perhaps your company wants to differentiate its current software offering through artificial intelligence. Your relocation strategy might include recruiting data scientists from across the globe to fuel this initiative. In turn, you’ll require an international relocation policy to attract individuals from outside your intra-country talent pool.

The point is that policies should not be created in a vacuum. They must support your workforce mobility strategy to help achieve your objectives. This means you may require several types of relocation policies to meet your company’s needs, including:

  • Commuter Relocation Policy
  • Core-Flex Relocation Policy
  • Lump Sum Relocation Policy
  • Domestic Relocation Policy
  • Short-Term International Relocation Policy
  • Long-Term International Relocation Policy
  • Permanent Move Policy

2. Outline global mobility duty of care provisions

All employers have an obligation to look out for the safety and well-being of their employees. For this reason, you need to ensure policies for your global mobility program meet these provisions.

For example, if you have employees who travel internationally, it will be essential to arrange temporary housing upon their arrival. That way, they’ll have a place to stay instead of being left to find their own accommodations. Similarly, if there’s a crisis like a pandemic, you’ll need to ensure employees can return home quickly and safely.

That said, duty of care should be more than a legal obligation. If you want your corporate relocation program to succeed, your focus should be on creating a workforce mobility policy that exceeds minimum standards.

Policy documentation should also go beyond basic physical safety requirements to account for your employees’ emotional and mental well-being as well as diversity, equity, and inclusion principles. This type of support will not only help mobile employees (and their families) acclimate more quickly to their new location but increase the likelihood of a successful assignment. Providing exceptional service and care to your employees encourages them to stay with your organization long term, which will maximize your relocation investment.

3. Consider the employee relocation experience

Providing an exceptional employee relocation experience is becoming more critical for maximizing workforce mobility success. In fact, our survey indicates 21% of global mobility leaders plan to adjust their policies to elevate the experience they provide to their mobile employees.

However, before making changes, you need to have a good understanding of your corporate culture. You also need to know your company’s definition of employee experience to craft a workforce mobility policy that fits with organizational values.

There are three cultural dimensions that make a big difference in the way your company approaches its relocation policy development:

  1. Egalitarian vs. Tiered

    You will need to determine the level of relocation support your organization would like to provide. Will all employees receive the same amount of support? Or, will they receive varying degrees of support based on their role, seniority or other factors?

  2. Fixed vs. Flexible

    You will need to understand how much choice your organization would like to offer employees. Will all employees be provided with a standard, one-size-fits-all policy? Or, will employees have the flexibility to make changes that fit their specific situation or preferences?

  3. Self-serve vs. Managed

    You will need to identify the level of support your organization would like to provide. Will you leave it up to employees to manage their own move? Or, will you offer relocation services to assist them?

4. Research the competitive talent landscape

Attracting top talent is one of the biggest challenges companies face. This means it’s essential to have workforce mobility policies that win over skilled individuals.

To do this, try to find out what companies with similar recruiting needs offer their employees. Since this information likely isn’t public, ask prospective talent about the types of relocation policies and packages they’ve been offered. You can also follow up with employees who turn down your offers to find out what made a particular relocation policy more appealing.

Additionally, examine your own data. For example, survey internal employees to find out what benefits are most important to them. Then conduct deeper analysis to identify correlations between employee satisfaction and various policy offerings.

By doing this type of research, you’ll be more informed about what employees value. This, in turn, will help you revise your policy to make it more attractive to both existing and future employees.

5. Determine your relocation budget requirements

The way you think about your policy will impact relocation costs. However, before you can assign an appropriate budget, you must determine whether your relocation policy is considered compensation or a benefit.

If your organization views a policy as compensation, it will be treated as a monetary payment, and employees will have the option to exchange unused services for cash. In contrast, if your organization sees the policy as a benefit, employees will receive services as-needed (similar to vision or dental care). If employees do not use the benefit, they’ll lose it.

Once you identify if your policy is considered compensation or a benefit, you can better determine the amount of relocation assistance required. For example, a compensation approach may require setting aside funds for employees who choose to exchange unused benefits for cash. Alternatively, a benefit focus may mean you allocate a lump sum amount for employees to spend on relocation expenses as they see fit and then absorb the unused benefits back into the organization.

6. Identify the best relocation policy metrics to measure success

Before developing your policy, it’s essential to determine how you’ll measure its success. By keeping the desired outcome in mind, you’ll be able to craft policies that are set up to achieve your goals right from the start.

To do this, reexamine your corporate relocation objectives. Then, select metrics that will map to the targets you’ve defined. This will allow you to:

  • Measure policy performance against specific goals
  • Provide key stakeholders with metrics that matter to them, rather than reporting general mobility data that isn’t relevant to business needs
  • Evaluate your policy more objectively to determine if changes are required

Sample relocation policy metrics

The chart below includes some metrics you can use to measure the effectiveness of your policy. However, there may be others that align better with your organization. Just remember to keep your measurement simple. Reporting on metrics that don’t matter will only cause confusion.

Expense by Policy Assignment Completion Rates Satisfaction Scores by Assignee/Transferee Volume by Policy
Expense by Policy Provision Relocation Cancellation Rates # of Exceptions Volume/Usage by Policy Provision

Must-have components in your corporate relocation policy

While no two policy documents are the same, there are elements each policy should include.

We’ve categorized these components according to what’s most common in international and domestic (intra-country) relocations. However, there can be additional variances if, for example, an employee needs to rent or lease a residence versus purchase a home.

Common relocation policy components International
Policy Counseling & Coordination
Allowance Administration
Cost of Living Allowance/Estimates/Allocation
Renters Services/Lease Cancellation
Temporary Housing
Home Finding Assistance
Home Marketing/Sale Services
Packing, Shipping, Delivery and Unpacking of Household Goods
Education Services/School Placement
Spouse/Partner Assistance
Language/Cross-cultural Training
Tax/Compensation Planning
Visa & Immigration
Extended Relief Services [i.e COVID-19 support]
Repatriation Services
Lump Sum Relocation Allowance/Misc. Expenses

How to maximize workforce mobility policy success

Your policy will be more likely to succeed if you can optimize it to deliver the best employee relocation experience while also controlling costs. However, to do this, you need to follow four critical steps:

  • Set clear expectations with your mobile employees

    Communication is key to relocation policy success. Every mobile employee needs to understand the policy clearly to know what is and isn’t included in their relocation package and the rationale behind this. That’s why working with knowledgeable and experienced relocation specialists cannot be overlooked. If information is not communicated clearly and consistently, employees can have a poor mobility experience that can jeopardize the relocation investment.

  • Revisit your workforce mobility policy regularly

    Companies often get so buried in executing policies that they forget why they exist. It’s essential to revisit your policies every two to three years. That way, you can assess if they still meet defined business objectives or need to be revised. Additionally, you can analyze whether or not you’re allocating funds to the right benefits or find efficiencies that don’t compromise employee experience.

  • Proactively capture mobile employee feedback

    Instead of surveying employees at the end of their mobility journey, solicit feedback during the relocation process. This will allow you to identify and mitigate issues early. Also, make sure to analyze survey responses to find correlations that identify what impacts employee satisfaction and happiness. This will help you invest in things that matter most to your employees instead of spending on items they don’t value.

  • Examine relocation policy exceptions

    Look at the policy exceptions that happen most frequently and determine if you need to make adjustments. For example, perhaps your company currently offers 60 days of temporary living accommodations but employees typically only use 30 days. Think about how you might revise the policy to add more value for your employees.

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