Want A Better Relocation Policy? Move.

Traditional Kampong House

I have to admit I’ve been one of those HR Pros who got to design and develop relocation policies a few times in my career.  I admit this because my philosophy on relocation has changed somewhat over the years – not because of my experience with relocation design and administration – but because I was put in positions – 4 times – in which I went through “professional” relocation for various HR positions in my career.  That fact has more impact on my philosophy of relocation than all other issues combined.

So, Fact #1 on getting a better relocation policy for your company: force those designing the policy to actually relocate, at least once.  If you haven’t relocated, you can’t design the policy – it’s that simple.

People who haven’t relocated to another state for a job have no idea what impact it has on your life – it’s not the same as moving to a new house in another part of the city you live in.  For the most part, if you have a significant other and some kids thrown in the mix, it’s probably one of the most stressful events you’ll go through in life.  You get hired – Yeah!  You have to go show up at new job – without family, belongings, etc. You’re trying out the new position, culture, etc. all the while your spouse is home trying to run life, now without 50% of the support resources (who is now living in a hotel or furnished apartment, eating out each meal, sitting around doing nothing, etc. – you’ll only understand if you’ve been through this!).

You need to find a new house, but not until the old house is sold, find the right schools, etc. etc.  Oh, and by the way, you probably have some HR administrator going over your relocation expense reports like they’re a Zapruder Film. Oh, I’m sorry Mr. Sackett, you seem to have spent $1.32 too much on parking at the airport last week. Really!? I haven’t seen my wife and kids for two straight weeks and we’re talking about $1.32?  DON’T UNDERESTIMATE FACT #1.

I know the talk, lately, about relocation, has been about how difficult it is to get people to relocate because of falling housing values.  Workforce Management’s recent article Recruiters Get Creative with Relocation in Sluggish Housing Market by Leah Shepherd speaks specifically to this dilemma. Clearly, it’s more expensive to get people to relocate, but I will argue that it isn’t more difficult.  HR folks are classic in confusing expensive and more difficult – finance people don’t have this same issue.  It’s not more difficult to get some to relocate, its just more expensive.

Here is where Fact #2 comes in: Never allow your Hiring Managers to get involved with Relocation.

Believe me, they will want to – it’s interesting how people who already work for a company tend to view relocation dollars spent, like the person receiving the relocation is getting a huge bonus!  All of sudden your Hiring Manager believes they are personally responsible for every penny that is spent.  They aren’t, and you the HR Pro understand this, and that’s why we keep our Hiring Managers out of the picture.  We need them to have a great first impression of the new person – so take money out of the picture so they can focus on the fit and skills.

HR/Recruiting Pros are in the business of increasing talent of their organizations and this fact has to be paramount when discussing the finances of corporate relocation.  This brings us to Fact #3 on how to make your relocation policy better: don’t budget relocation as a single annual amount, budget relocation by the percent of hires you anticipate in having to relocate.

Look, it’s way too easy for finance and executives to look at the HR budget and say… wow, $1.5M in relocation budgeted for 2010 – you need to cut that by $500K.  Great, I’ll do that – but tell me which people we won’t be hiring?  Recruiting Pros need to come to the table with market data supporting why relocation is necessary and at which roles and levels.  Cutting relocation isn’t a question about saving money, it’s a question about which talent is less important to the company – because that’s the real cost.  Also, budgeting by hires forces departments and divisions to answer to their talent management strategies, instead of throwing it on HR’s back. Hey, its August and we’ve already spent our Relocation budget for the whole company!  No, Mr. Hiring Manager, it’s August and we’ve spent your department’s relocation budget – you better talk to Mr. CEO and tell him why you couldn’t manage your budget.

Hey, I get it – dropping house prices are killing relocation budgets and making it too expensive to bring in talent that needs to buy and sell houses.  The big questions HR Pros have to answer though is what real value this hire is going to bring to the company, and what’s the ultimate ROI.  If you’re hiring a sales person who realistically is going to bring $250-500K to the bottom-line in one year – paying a house buy-out of $50K and Realtor costs on the new home at $25K all of a sudden doesn’t look like a bad ROI – but HR Pros need to be able to make that business case for top talent.

And lastly, Fact #4 – Don’t come to a Relocation Gun fight with a knife.  Know what the person brings to the table, and be able to show the alternatives – but either way show the impact to the organization.

FOT Background Check

Tim Sackett
Tim Sackett SPHR, is the ultimate Mama’s Boy!  After 15+ years of successfully leading HR and Talent Acquisition departments for Fortune 500s and smaller technical firms, Tim took over running the contingent staffing firm HRU Technical Resources in Lansing, MI. Serving as the Executive Vice President, Tim runs the company his mother started over 30 years ago, and don’t tell Mom, but he thinks he does a better job at it than she did!  Check out his blog at www.timsackett.com. Because he's got A LOT to say, and FOT just isn't enough for him.

28 Comments

  1. fran melmed says:

    yes to fact #1! and have them come back too. many are wary of becoming an expat because they’ll fall off the radar and out of circulation.
    f

    Reply
  2. I have had so many conversations with candidates about 1.32 issues ….. great article.

    Reply
  3. Always love your stuff Tim, but this post is worth printing and framing! Having worked as an HR pro dealing with relocation decisions and budgets and also as an Executive Recruiter assisting clients in getting the right talent, it’s unfortunate that most don’t view the dollars required to uproot a family and move someone in the way you’ve outlined.
    Just last week I was involved in a conversation with a client/candidate over the difference in real estate taxes from one location to another. We were talking less than $5k – for a person who is CRITICAL to the success of the company (as stated by the client). It’s important to focus on the bigger picture. $5k could easily drop to the bottom line in one deal for this new hire. ONE DEAL.
    Maybe I’ll give them a copy of your post to put things in perspective. :)

    Reply
  4. Jenn says:

    What a great article! Relocation is so difficult and the company doing the hiring tends to forget that. My company, Alliance Relocation, is attempting to make it easier on the relocate-ee by creating a list of things to do and when to do them by online, as well as give estimates via email to help with the moving. If the company you’re working for creates stress, at least there are people out there that try and take it away in other areas.

    Reply
  5. Tim says:

    Good perspective and insight.

    Reply
  6. Great post! We handle one of the most important parts of the move — the pets! — and a lot of times have noticed that transferees feel like their HR department only cares about their couches and chairs, while expecting them to pay for their best friend to make the move. Pets are now members of most peoples’ families — it’s a good idea not to forget them in the shuffle!
    Cheers,
    Rachel Farris
    PetRelocation.com

    Reply
  7. An outstanding talent acquisition technique is one good reason for the company’s better productivity. Hiring competent individuals to do the task is one great success to come organizationally speaking. Human resources nowadays must perform their duties using this new recommended innovation.

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  8. Your commentary is dead on! Having just worked with a corporate HR person who moved across country, her comment is fresh in my mind. She expressed that it was an eye-opening experience.
    As Relocation Director for a real estate company, I’ve heard that the best way for an agent to fully comprehend relocation is to move themselves every two years. I was a trailing spouse myself years ago, and I put that memory and knowledge to use every day in my job.

    Reply
  9. William Musser says:

    This is a great article. I will share it with a number of folks. So often the strategic reason that companies transfer people is lost in the management of expenses. I have been through three transfers, one with two daughters in high school. Nothing will melt your heart more than a junior in high school collapsing on the floor and bawling out “I just want to go home.” And she is not a whiney kid, cannot remember the last time I had seen her cry. But we should remember that companies are giving more support than they did in the 60′s or 70′s. That was when the traffic manager handled the move and to him it was just freight. I believe most companies want to do it right and their progress proves it. We need to do like the article says; come prepared, help, explain and be an advocate for those being relocated.

    Reply
  10. We take care of one of the most moving of pets! and time, said the transfer of your human resources department seems to happen only on their sofas and chairs, but are expected to pay his best friend to make a move. Pets are now family members of most nations, we must not lose sight of the confusion!

    Reply
  11. Jason L says:

    I’d like to toss out another idea – work with someone who has designed a relocation policy at least once before.

    There are a lot of details that must be incorporated into a corporate relo policy, not to mention some rare exceptions that can catch you off-guard if you’re not prepared. For example, what’s your policy when you’re relocating someone who just happens to own a family farm? Your policy can put your company in a tricky situation if you don’t differentiate between residential property and residential/commercial property…and this is just one example.

    If you can’t hire someone to help you craft your policy, be sure to start with some good boilerplate. You can find a very good sample policy here (http://www.trcgs.com/spg/sample-policy.php) but you can also troll the Internet and find published policies from large corporations.

    Good luck!

    Reply
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