While we’re all hopeful that the pandemic will soon be behind us, it’s increasingly clear that remote work is here to stay. Research from Willis Towers Watson suggests that employers expect almost 40% of their employees to work remotely by the end of this year, and Robert Half found that more than one-third of professionals would sooner find another job than return to the office full time.
Soon, an unprecedented portion of the workforce will no longer be tied to a physical office location. The relocation industry was already a $25 billion market before the pandemic, with the average company spending more than $16 million per year on typical relocation expenses. As many workers move from major city centers like New York and Los Angeles to less crowded and less expensive parts of the country, the relocation market is likely to explode.
Plenty of companies offer a company relocation policy to their workforce as part of a benefits package, and these services can add up. Moving companies, insurance coverage, packing services and temporary living expenses are just a few of the typical relocation expenses. Other less apparent expenses might be spousal employment assistance, compensation when employees are forced to break their lease agreements, and even real estate expenses as employees look for permanent homes.
To prevent the cost of relocating employees from hurting your bottom line, it’s important to put the right relocation strategy in place. Whether you’re dealing with individual moves or an entire office relocation, your strategy must align with your company’s broader goals—from cutting real estate expenses and attracting more young talent to simply offering a better quality of life and more amenities for employees.
4 Must-Haves in a Company Relocation Policy
To remove the opportunity for miscommunication between employees and managers or prospective candidates and recruiters, follow these four steps to firm up your relocation strategy.
- Establish a clear company relocation policy in writing. An official company relocation policy outlining the level and type of employees who are offered a relocation package will help clear up confusion before it can cause resentment. Delineate precisely what will be included in the package, and consider using a dollar amount instead of simply reimbursing typical relocation expenses. That might mean individuals in the C-suite have $15,000 for relocation, while a vice president is allocated $10,000. If your company is large enough to process many relocations, identify specific individuals in HR who will help manage these needs. These employees can work on contracting partners with an eye toward parlaying volume into reduced costs and better, more consistent onboarding experiences.
- Address salary arbitrage. Regardless of who prompts the relocation, you’ll want to make salary arbitrage a standard part of any permanent move. Make sure you communicate the thought process behind this practice and offer examples to illustrate your points. When an employee moves from Hawaii, with a cost of living index of 192.9, to Mississippi, whose index is 86.1, it’s unrealistic for them to expect they’ll be pocketing the savings. Most employees will have no trouble grasping the nature of this shift.
- Outline reimbursement requirements for trips back to the office. After an employee relocates, be specific about the types of return trips that will be reimbursed. It’s fairly common for employees to cite “traveling back to the office” when they’re really returning to a city to visit family or friends, and these expenses will quickly spiral out of control if you let them. Make sure that employees who are applying for travel reimbursements present management with actual business imperatives before their requests are granted.
- Hire professionals to help with large relocations. When a company I worked for decided to follow the open office trend on a whim, the resulting noise began overwhelming the phone conversations in client services and technical support areas. The company erected Plexiglas walls to manage the sound, but the employees immediately dubbed those areas “the fishbowls,” and they were cemented as undesirable offices. All that’s to say, it’s easy to get caught up in the latest office design ideas. Consider working with a professional who can help you select a location and amenities that fit your company culture and optimize employee satisfaction and performance.
Surprise costs are never good, and consequences can range from a tense conversation with the board to lower-than-expected profits that impact the share price of a public company’s stock. By establishing a firm company relocation policy, you’re able to more accurately predict the costs of conducting business, and you can forecast the broader financial impacts of both individual employee moves and large office relocations.