Employee relocations or even temporary assignments to a new location can be complicated and stressful for your employees. You’re not just shifting employees from one location to another, you’re uprooting them from their community, friends, extended family, and everything familiar. You’re also moving their partner, children, and pets. As an employer, you have a huge responsibility when moving an employee and family to a new city, state, or even country. It’s very important that the employee’s move experience is as stress-free as possible. Employee relocations handled correctly will help your organization attract and retain valuable top talent.
1. Consider Employees’ Emotional & Mental Health: Meet their Needs
If a relocation is not handled well, the employer risks losing the employee to another company – someone whom your company may have already invested time and money into. If you want to attract and retain top talent, and you consider your employees one of your most valuable assets, remember to address more than just relocation costs and logistics. Taking care of an employee’s emotional health will pay out for years to come. Is your relocation policy meeting your employees’ needs? The right policy helps to reduce transferee stress so that employees can focus on working in their new location.
- Give employees time off to assimilate in their new location. Many organizations give employees 2-3 paid days off.
- Provide support to transferees’ families (spousal assistance, language lessons).
- Gather employee post-relocation feedback to make future policy decisions (WHR Global sends out a 1-year post-relocation survey).
- Have your Relocation Management Company (RMC) help with logistics including visas, shipping, customs fees and clearances, transportation, legal issues, and more.
The stress of moving might impact an employee’s mental health and subsequently, engagement with their employer. Transferees and their families may face a host of potential emotional and mental tolls from a relocation. According to an article in Employee Benefit News, “When it comes to employee relocation, most organizations focus on the nuts and bolts, thinking strategically about the costs associated with the move and what will be the most affordable option to get their people from point A to point B. It makes sense from a business perspective, but it’s not how to make a relocation successful. Employers must remember they are moving people, not just boxes. Any time you deal with people, you need to adopt a human-centered approach. While you’re helping them get their belongings from one place to the next, they’re dealing with switching insurances, licenses, and addresses. If they have a family, they need to enroll their children in new schools, find doctors, and a new job for their spouse or partner. On top of that, they might be dealing with some negative emotions from their family, unhappy with the move. All of this can influence how your employee feels about their new position and how they assimilate into their new role.”
- If one or more family members are unhappy with the move and having trouble settling in, the stress could affect the employee too. The employee might be feeling distracted, disengaged, or unhappy, and they might even consider leaving the new role and moving back to their original location. Uprooting an entire family’s life and acclimating to a new community can be stressful.
- If an employee becomes disengaged, productivity could decline. The transferring employee may be worried about whether the new job will work out. A tired, disengaged, or distracted employee’s attitude may be felt by other team members and affect team dynamics.
- Employee stress associated with moving to a new location might also include concerns about a partner’s career, children’s education, learning new languages, cultural differences, selling their old home, leaving old coworkers behind, or concerns about the new destination’s real estate market or crime rates.
“The Great Resignation is unprecedented; recruiters are competing against talent ready for a change and even talent that has been placed within the last two years. Employers will need to be strategic in their efforts to hire and retain.”
Make sure you have a relocation policy that includes all potential support. The following list includes just some of the possible benefits to consider:
- Immigration & Visa Support
- Tax Assistance
- Household Goods Move
- Help Buying & Selling Homes, Finding Rentals
- Language & Cultural Training
- Medical Options (healthcare coverage, medical evacuation services)
- Education Options (tuition reimbursement, tutoring)
- Transportation Information
- Utility Connections
- Education Assistance
- Site Visits/Area Orientation
- Temporary Storage
- Family Support
- Ongoing Assignment Support
- Destination Services
- Temporary Housing
- Driver’s License and Registration Information
- Spousal/Partner Career Assistance
2. Benchmark Relocation Policy Against the Competition
Hopefully, your relocation policy is already part of your total rewards and talent management strategy. By benchmarking your policy against other companies, you will stay competitive in the war for talent. Make sure your policy provides a choice of offerings since relocation policies are wrapped into job offers. If you don’t benchmark against your competitors, you won’t know if your offerings are good or not. Are they subpar to what everyone else is offering? If you are hiring scientists, for example, and the talent is very specific and not easy to come by, you’ll want to make sure you’re competitive with salary, benefits, and your relocation policy. The right policy will help your company retain current employees and attract top prospective candidates. A weak relocation policy could have a negative impact on your recruiting and retention success rate.
At the same time, benchmarking will ensure you’re not giving away too much when none of your competitors are doing that. Benchmarking your policy against others shows you’re in line with the industry. Maybe you’re offering unnecessary benefits and eliminating those offerings could yield cost savings. It’s also important to look at your industry and other industries you compete with for talent.
3. Compensate for Cost-of-Living Differences
Some of your employees may be moving to an area with a lower cost of living and some may be moving to a much higher-cost destination. If higher costs exist, provide a limited-term cost of living allowance to bridge the financial gap. Options for payout could include monthly, quarterly, annually, or a one-time lump sum. Set an ending time for this benefit and decide whether the benefit will slowly decrease or taper. It is best to only offer this benefit to those employees moving to higher-cost destinations; if your employee is moving from one high-cost of living area to another, consider withholding this benefit. Often, employers will establish a threshold (typically a percentage), for the benefit. Other employers will identify specific areas and only offer the benefit to employees moving to predetermined locations such as Boston, Chicago city limits, New York City, San Francisco, Geneva, Paris, London, Singapore, and Shanghai, for example.
4. Review your Relocation Policy
Review your employee relocation policy annually or every couple of years, at the very longest. It’s an opportunity to pause and look at employee survey feedback, plus confirm any changes in your company culture, driving principles, core values, talent strategy, the industry, and your competition. Make sure you’re allocating the right amount of dollars to both transferees and organizational needs. It’s also important you’re not paying for unneeded or outdated benefits. Lastly, review the purpose of your relocation program. This is a time for you to make sure your policy is aligned with your key stakeholders (talent acquisition teams, recruiting teams, and HR business partners).
To summarize, there are many benefits you’ll want to consider including in your relocation policy (not an all-inclusive list):
- Home Sale (Guaranteed Buyout versus Buyer Value Option)
- Direct Reimbursement
- Policy Tiers vs Core Flex Benefits
- Lump Sums (Lump Sum Only; Managed Lump Sum; Lump Sum in addition to other benefits)
- Cost of Living Assistance (COLA)
- Home Inspections (Major and/or Specialized)
- Home Sale Bonuses
- Loss on Sale
- Rental Assistance/Lease Break Assistance
- Destination Services (Temporary Housing, House Hunting Trips, Destination Closing Costs, Renter Destination Services)
- Household Goods Movement (Vehicle Shipment; Temporary Storage)
- Policy Exceptions
5. Compensate Employees for Their Tax Burdens
Tax Assistance & Tax Equalization
If you’re competing for talent and your competitors are compensating for tax burdens and you are not, you could lose in the war for talent. By offering tax benefits, you can take away some objections you might receive from current or future employees regarding relocation or assignment. Remember, in December 2017, the US government passed legislation that directly impacted taxpayers. Under the 2017 law, known as the Tax Cuts and Jobs Act (TCJA), taxpayers are unable to claim certain deductions, including job-related moving expenses.
Provide Tax Assistance
This alleviates some of the tax burdens on a portion of the employee’s income. Also referred to as gross-up, this is the additional money an employer pays their employee to offset any additional income taxes the employee would owe the IRS when that employee receives a company-provided cash benefit, like relocation expenses.
Tax Assistance Benefits
- Helps your relocation program remain competitive
- Improves employee retention and attraction
- Alleviates some of the employee’s tax burdens
- Lowers employee stress, allowing the transferee to focus on the new role sooner
Provide Tax Equalization
Tax equalization neutralizes an assignee’s tax liability associated with a global assignment. This compensation approach means an assignee pays approximately the same taxes if they remained in their home country. In other words, the assignee is not paying more or less had they not left their home country, regardless of the actual tax burden in the home and host country. WHR estimates that 95% of all global mobility programs offer tax assistance.
Tax Equalization Benefits
- Decreases expatriate stress and allows the assignee to focus on the new role sooner. The less economic stress an employee feels, the more they can focus on the personal and professional development of an international opportunity.
- Improves employee retention and recruiting efforts since the assignee would not have a tax reason to turn down a foreign assignment, transfer from one foreign country to another, or be repatriated.
- Limits tax burden. Maintains a comparable home country tax basis for the assignee while on a foreign assignment. This means the assignee’s tax gain or loss is minimized and equalized as much as possible and remains the same had the assignee stayed in the home country.
- Facilitates positive corporate citizenship for tax compliance in every location the company operates and eliminates the risk of local law non-compliance, tax regulations, and exchange rate controls.
“By providing tax benefits, employers help offset tax burdens for employees, and in doing so, some of the stress typically associated with relocations or international assignments can be decreased. When you consider that these benefits also help companies stay competitive, it’s a win-win for everyone,”
6. Hire a Professional Relocation Management Company (RMC) that Provides 24/7/365 Dedicated Assistance to You and Your Employees
Moving is considered one of the most stressful events in a person’s life. Add in crossing international borders, plus taking care of one’s partner and children, and that stress can be even higher. The right Relocation Management Company (RMC) will partner with your organization to write, implement, and manage a global relocation program that meets your company goals and helps you attract and retain the talent you need for success.
Find helpful relocation resources and guides in our Relocation Toolbox