Addressing Cost and Talent Through Relocation Policy
Posted by: Cindy Madden, Director, Consulting Solutions
The challenge of managing costs has been a persistent area of focus for relocation managers over the years. In fact, cost containment claimed the number one spot on Cartus’ Biggest Challenges survey in 2015, outranking the other top two issues—compliance and compensation challenges—by 16 percentage points and 34 percentage points respectively. (For more insight into companies biggest relocation challenges, download our white paper, Industry Trends: What Cartus Clients Are Saying.)
Cost control challenges are only intensifying as relocation managers are further tasked with recruiting, retaining, and incenting talent, charging these managers with the task of proving the tie between relocation and the bottom line. One real way to achieve this is to be strategic in policy development and application.
One of the toughest considerations of policy development is applicability. With many different locations, situations, and assignees to suit, the traditional approach has been multiple policies. Yet, the administration of such an approach is cumbersome. Flexible policy approaches offer the opportunity of delivering on both needs. Among several different flexible policy types, client attendees at recent Cartus meetings have identified core-flex policy as a preferred way to go about keeping costs low while keeping talent happy, engaged, and successful.
Core-Flex Relocation Policy
Core-flex policies accommodate a greater range of needs and situations by including a core offering, plus flexible components to be added as warranted. Roughly 40% of client attendees at a recent meeting said that their companies utilize core-flex policies, with corporate culture dictating design.
Core-flex policy construction, while it offers the ability to target benefits and therefore maximize their value, does require decisions. Companies must determine what core benefits are offered to all, and on what basis the flex benefits will be determined (function, level, location, assignment type, cost, need, etc.) Cartus clients, while acknowledging the potential complexity, see a number of benefits for a core-flex policy, including:
- Reduced exceptions
- The ability to offer a higher relocation allowance, utilizing tactics such as:
- Premium paid via payroll
- Ongoing assignment allowance (not a one-time, lump-sum payment)
- Benefits being determined by the value of assignee to the organization, with an HR business partner making the decision.
To learn more about Cartus clients’ thoughts, advice, and insights into their biggest challenges, download our white paper.
For the latest on global relocation trends, be sure to register for Cartus’ Worldwide ERC® webinar: What’s New in Global Relocation: A Look at Trends, Challenges, and Solutions, being held on September 21, 2016. In this webinar, Cartus experts will share the results of our seventh Global Mobility Policy & Practices report and provide “real life” examples of how some companies are responding to the ever-evolving changes in markets, relocation pressures, and company demands.
For more tips and best practices for structuring a flexible policy and managing your talent, read our blog posts: