Not yet a Member?
HR Magazine is highlighting the next generation of HR leaders.
Is your employee handbook ready for the New Year? With SHRM’s Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Attend a comprehensive, instructor-led review before you sit for your SHRM exam.
Learn to implement the complex changes and ensure compliance with the FLSA. 2-Week Virtual Seminar, Nov 29-Dec 8.
Be prepared to handle the unexpected challenges -- some amusing, others more serious--that can crop up when employees make a move.
When David Barlow oversaw relocation activities for a major oil company, his policy was always “no surprises.” But there were surprises anyway, and he not only had to expect them but also had to be prepared to deal with them. And so he did.
One case that stands out was the employee who was moving from Saudi Arabia to the United States and needed help in purchasing five houses upon arrival—“one house for each of his wives.”
Barlow, now senior vice president of consulting for SIRVA Inc., a full-service relocation company based in Westmont, Ill., says the oil company agreed to cover the costs, such as real estate agency fees, associated with one house—not five.
Surprise is and always will be part and parcel of the relocation business, Barlow says. It’s virtually inevitable that some requests will come out of the blue in an industry as large as relocation. There were about 450,000 employer-assisted relocations within the United States in 2003, according to the most recent figures available from Worldwide ERC (Employee Relocation Council), and there were about 394,000 employer-assisted moves between the United States and another country.
Moreover, relocation can be one of the most stressful events in a person’s life, experts say, and it can amplify underlying problems in a family.
A relocation involves up to about 20 different tasks, from selling one’s home to finding another place to live in another town, moving household goods and possibly setting up temporary living arrangements. Each circumstance, Barlow notes, is an opportunity for things to go wrong and for employees to become unhappy.
Among the most important tools and tactics for managing relocations and minimizing the unexpected are a clear relocation policy, a good relocation services provider and strong communication practices among all the parties involved.
First, the Framework
While it’s crucial to pick a vendor—a firm that implements the details of an employer-sponsored relocation—the employer should first determine its relocation needs and put into writing a policy that will serve those needs.
A key pitfall for employers, experts say, is neglecting to decide in advance how much relocation assistance to offer employees. Paul O’Leary, vice president of the Move Management Center, a relocation services provider in Burlingame, Calif., says a number of his firm’s customers sign on without having taken that step, perhaps because they’re new to the relocation process. Often they don’t know at the outset exactly what they are looking for, he says, and if they try to offer everything, it could turn into a very expensive program.
A core program typically includes certain types of assistance, says Kathy Cohn, business process leader for Hewitt Associates, a worldwide HR consulting firm based in Lincolnshire, Ill. The basic ingredients, she says, include:
Other elements of a corporate relocation that a company should consider include:
In some instances the company will buy the house (with the intention of selling it later) so the employee can proceed with purchasing in the new location.
“That can end up being terribly expensive for a company,” O’Leary says. He advises those employers new to relocating to stay away from taking houses off relocating employees’ hands until they have gained more experience with what relocations can cost.
Moreover, acquiring a relocating employee’s house can prove to be a major surprise if the property is in such disrepair that it is unmarketable as is.
Then there’s the need to deal with exceptions—the surprises that can surface during even the best-planned relocations. Consultant Barlow says: “If a policy doesn’t address how exceptions are going to be handled, the implication is—and the watercooler talk becomes—‘Oh, that’s the policy, but I happen to know that if you ask for this, you get it.’ We call that a policy by negotiation, and that can be expensive.”
An example of an unaddressed exception is offered by Kathy Thompson, director of global mobility for financial services company Citigroup in New York. What happens, she says, if your policy says you will pay for 30 days of temporary living in the new location but a relocating employee still hasn’t found a new house at the end of 30 days? Do you make employees start paying on Day 31? Or do you provide for another 30 days of temporary quarters?
When It’s Time To Choose
In looking for a vendor, Thompson says, look for balance. The financial aspect is important, but so is customer service, he says. “On the financial side, you want assurances that they know how to audit all of the different ancillary services they are contracting with, and they also need to demonstrate to you that you’re getting great value for what you are spending.”
The full-service providers will come up with an estimate that will include everything, based on your policy. The company may have choices, such as which of three moving companies or which real estate firm it wants to work with, but the relocation company will collect bids from all the potential providers. It will also take care of how much “allowance” is to be given to employees and will track hotel and personal transportation costs for the relocation.
Worldwide ERC also found that in the past decade, more companies have been providing tiered relocation policies for both current employees and new hires. There can often be as many as four tiers: one for executives that is the complete package, one with fewer benefits for middle managers, one with fewer benefits still for exempt employees, and the least generous policy—often a lump sum—for new hires just out of college.
Picking a vendor on “price alone is a big pitfall,” says Brad Estrin, executive vice president of sales and marketing for The Suddath Cos., a full-service relocation firm in Jacksonville, Fla. “You need to make it about the processes, services and innovation. And … once you determine what you really want and need, then negotiate with the company you want to do business with.”
Cohn describes three principal types of relocation vendors:
Both the relocation management and total HR solutions companies handle all the aspects of a relocation, while the employer who enlists single-source vendors must manage each vendor.
The Third Leg of the Stool
No matter how good the policy or how capable the vendor, it won’t matter much if there isn’t clear communication among all involved. “Universally, it’s the biggest problem we deal with,” Estrin says. “It’s a matter of what are the specific expectations of the individual being relocated, and are those the same as the company’s expectations. A lot of times they aren’t.”
Moreover, Estrin says, if a vendor doesn’t fully understand the employer’s expectations, it could mean that providers who are teamed up with the vendor may not understand the expectations either.
To shore up communication, the company’s relocation specialists should meet with the vendor’s representatives to spell out the company’s limits and explain how the policy is to be applied, Thompson advises. The vendor representatives will be interpreting the policy and forwarding their interpretations on to the other parties involved in the relocation. “We spend a lot of time talking with them,” Thompson says. “We want to help them understand our culture and what goes on in our business. We show them videos and give them information about our employee population.”
Such conversations are also opportunities to discuss employees’ special needs. An employee who has allergies and needs temporary housing, for example, may require a place without carpets. Or there may be a need to arrange for VIP treatment for a senior executive who expects it. Or there may be considerations for handling an employee known to be “difficult.”
“I would definitely tell the relocation company to put their best person on these particular employees because they are very demanding,” says Clete McGinty, vice president of HR for Arby’s Restaurant Group Inc. “The more information you can provide, the better it is for the [vendors].”
But be careful about what kind of employee information you share with vendors, Cohn says, reflecting the vendors’ perspective. “We all have boundary conditions in our work and are all sensitive to protection of personal data,” she says. “So companies have to be very cautious about what they tell us. They shouldn’t share information that goes beyond what we need to know to do our jobs effectively.”
There are various methods of communicating with employees, but a basic approach involves the employer first discussing the relocation and the policy with employees to make sure they understand everything.
Then the vendor takes over. Usually, they will get in touch with the employees and assign them counselors. The counselors in turn will work with the relocating employees from start to finish and be their main point of contact. If questions or difficulties come up, the counselor will contact the employer about any exceptions or interpretations of the policy that need to be made.
But if an employee gets out of hand with expectations or demands, the employer may have to step in and handle the situation. Citigroup says that if the need were to arise, it would have no qualms reminding employees that they serve as representatives of the company.
Checking on the Progress
Don’t wait until the relocation is over to start evaluating the process. Begin at the middle of the move while there is still time to correct problems or address issues that have arisen unexpectedly. Usually, such feedback is obtained by a personal call from the relocation counselor to the employee. A more formal assessment can be conducted at the end. There are questions, though, as to who should conduct the assessment and who should get the results.
“There are a lot of different philosophies about who should survey,” Cohn says. “Should it be the corporation, the provider or all the service vendors who were used? You don’t want to over- survey, but if you look at the fact that there are multiple parties in the chain providing service, it can get burdensome to the employee.” Hewitt tries to touch on all of the services provided and then share the information with its partners, including the employer.
Finally, keep in mind that no matter how good the relocation service may have been, there will always be some employees who are unhappy with the outcome. Sometimes the dissatisfaction has little or nothing to do with how the move went; it may be that the employee is unhappy about being transferred.
Now You Tell Me!
Strong policies, capable vendors, clear communication and proactive monitoring can help head off—but will never rule out—unexpected turns of events in a relocation. In some instances the most helpful preparation is to be aware of, and to learn from, surprises that other employers have encountered. Citigroup, for example, once had to decide what to do when a relocating employee expected a wine collection to be moved. (Citigroup paid the tab.) Hewitt encountered a situation in which an employee wanted more than 100 birds transported. (The company had the employee pay the transportation costs out of his miscellaneous account.)
The Move Management Center had to book an extra seat on an airplane so an employee could bring a friend; the employee had three pets, but the airline would ship only two per passenger, so the friend made the trip so the third animal could also be on board.
Companies have had to decide whether to pay the costs of transporting horses, or fish while they swam in their regular tank, or, in at least one instance, a collection of more than two dozen mounted animal heads.
In some instances, though, a relocation surprise is a major setback. For example, a move already in progress may have to be halted because the person being relocated has taken a job with another company, O’Leary says.
Improvising For The Unexpected
Even with the best planning and organizing, the unforeseeable can happen—and HR has to improvise. When fast-food retailer Arby’s relocated its headquarters from Fort Lauderdale, Fla., to Atlanta in 2005, the company moved the bulk of its employees in July, and some didn’t put their homes on the market right away. Then Florida was hit by two hurricanes, and suddenly there were homes that needed to be repaired while their relocated owners were 700 miles away. “We hadn’t factored something like that in,” says Arby’s McGinty. “We had to make decisions about who was going to be responsible for the repairs and, because some of the homes lost value, who was going to cover that loss.”
Arby’s decided to leave the costs of repairs to employees’ insurance carriers. The company also decided against covering loss of value on houses, but it did give employees more time to move, which was particularly helpful for those whose families had stayed behind and planned to move later. Arby’s also extended temporary living arrangements for employees who needed it.
Citigroup once had to inform a transferee and spouse that their moving truck had been in an accident and almost all of their goods were damaged. “Luckily,” says Diane Owen, relocation service manager for the company, “no one was injured, and we were able to come to terms with all parties that made everyone happy.”
Nancy Hatch Woodward is a freelance writer based in Tennessee and a frequent contributor to HR Magazine.
SHRM toolkit: Relocation
SHRM article: Sample Relocation Operating Procedure
SHRM white paper: Relocation Assistance Programs
Web site: Employee Relocation Council
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Become a SHRM Member
SHRM’s HR Vendor Directory contains over 3,200 companies