There is no denying that a company’s greatest asset is its employees. Having the right person in the right position – and in today’s global economy, the right place – is a major key to success. However, employee relocation can be a pricy and complicated endeavor the company needs to be well prepared for. Here are a few tips for lowering costs and reducing obstacles, while keeping your future employee satisfied with the decision to relocate for the job:
The first step every company needs to take in order to reduce relocation costs is to research and become aware of all the costs involved in the relocation. From travel expenses to moving and storage expenses, from tuition for the employee’s children to loss of equity on the candidate’s home and their spouse’s income; every cost should be calculated ahead of time to make sure the relocation program is feasible and worthwhile.
When the decision has been made to relocate a specific employee, it’s time to start thinking in terms of company policy. It should be considered that accommodating the needs of individual employees on a case by case basis could possibly lead to complaints of discrimination and damage to company-wide morale. A relocation policy based on research and thought is key to long term profit, stability, and employee satisfaction.
Capping certain expenses is a must for companies establishing a relocation policy who wish to avoid over-payment. Capping loss-on-sale for homes is highly recommended as it addresses one of the costlier aspects of relocation and allows the company to treat all employees with consistency. The company may implement a cap equal to a percentage of the loss, a percentage of the original purchase price of the home, or a flat amount. Whichever cap the company chooses, it needs to be clearly stated in the relocation policy and leave little room for interpretation. Companies should also make clear their expectations from an employee who has been reimbursed for loss-on-sale and cite a minimum length of time the employee is expected to remain in the company.
Rethink Expense Reporting
Another way to cut down expenses is to change the way employees are reimbursed for necessary expenses. An expense reporting system has a way of running expenses way higher than using a lump-sum system. One of the reasons for this is that the company’s money is perceived as “cheaper” by its employees than their own money. A lump-sum package usually includes all the expenses of travel, meals, and lodging for the time it takes to find a new home and move into it, as well as temporary living benefits. This system also saves both relocating employees and HR personnel a lot of red tape and headaches- relocation is complicated enough as it is!
Research Regional Movers
When it comes to the actual moving, a lot of money can be saved using regional moving companies as opposed to a major national van line, whenever possible. Not only are regional movers usually cheaper, but they are also more personable and flexible, making the experience of relocation less stressful for the employee and their family. Less red tape is involved while insurance coverage remains the same, and the items are delivered directly to their destination which leaves less room for errors, damage, or mix-ups.
The Bigger Picture
As important as it is for companies to reduce relocation costs, it is imperative that they don’t lose sight of the bigger picture. The relocating employee’s well-being should be of utmost importance to the company, as it affects their own productivity and contentment, as well as the company’s performance and bottom line. An employee moving across the country (or farther) for a job will experience a significant amount of stress. Their family will face trials and challenges. It is in the company’s interest to ease this transition and aid the employee and their family until everybody has settled in to their new home and normal life has resumed. A fine balance is needed between reducing costs and looking out for the relocating employee’s interests. Their job performance is vital to the company’s success, and the hidden costs of an over-stressed worker can run high. Sick days, personal days, and a plunge in productivity do not serve the interests of the company and can even lead to the employee’s resignation or termination. This of course entails more costs as a new employee needs to be recruited and trained to fill the position.
Do you have any more ideas on how to achieve this balance? We would love to read about them in the comments, below!