Re-evaluating Relocation:  A Year into COVID-19

For multinational companies with mobility programs, it has been an ever-changing year of reevaluating their relocation policy, while dealing with real time transferees and their issues with border closings, destinations shutdowns and financial issues.

This has brought a new perspective to mobility experts into their programs.

A relocation management company recently hosted a virtual roundtable of global mobility including leaders from 20 multinational companies.  The main takeaways from this meeting were:

Flexibility is the Key to Relocation

Even though most of the companies have not revised their relocation policies, they need to make case by case exceptions to their programs like:

• Delayed start dates.
• Reviewing different options for traveling into destination city/country.
• Asking employees to work remotely for the time being (with adjustments in tax, salary and compliance this brings).

Love or Hate Lump Sum Policies

This continues to be a hot topic.  As they give employees the freedom to spend their relocation the way they see fit, it often leaves them unsupported.  Some of the most important opinions about lump sum policies were:

• They aren’t cost-effective for employers, since employees keep all leftover funds.
• Motivate employees to move more affordably and find permanent housing more quickly.
• Make the employee responsible for their choices, cutting down the need for exceptions.
• Seem to work better for entry level employees but provide a poor experience for executives.
• Are “never quite enough”.
• Managed budget policies are preferable, because they are also flexible, but employers keep the unused funds.

In our experience lump sum policies often result overspending, with high possibilities of having a poor employee experience, and not generating saving for companies.  94% of moves come in under budget under differently structured policies.  Relocation companies are usually looking for ways to generate cost savings, understanding that this is key for the continued business of their clients.

Cost Cuts in Relocation Programs

Although there is a need to cut costs where possible, the priority remains ensuring a positive employee experience.  This might end up modifying benefits to be more flexible and/or reducing the number of moves sponsored during a given period.

Some companies are working closely with talent acquisition partners to reserve relocation funds for truly exceptional candidates.

Most companies expressed not making changes until it is clear what their company’s “new normal” will look after the immediate crisis period.

Employees Are Eager to Relocate

In general, employees who were relieved to postpone their relocations are now eager to move.

Safety Remains Priority #1

This is true for all companies.  The ones that started to move employees are taking the following precautions:

• Monitoring the progression of the outbreak and advise when and how to proceed.
• Providing relocating employees with detailed travel safety guidelines.
• Providing employees with care kits, which include masks, hand sanitizer and cleaning products.
• Allowing relocations to move forward but requiring quarantine for two weeks before coming into the office.

Remote Work Won’t Replace Relocation

Even though remote work offered advantages during the shutdown, it is not believed to permanently replace relocations.  Onsite team collaborations have too much value and contributes to build the work culture developed by the company.

Interestingly, one of the participants expressed that while company turnover is very low, they were mostly new hires who expressed lacking the emotional connection or failed to develop the expertise to work effectively from home.  If remote work continues, managers will need to be trained, at additional costs, on the art of managing effectively from a distance.  Also, many employees have expressed the desire to be onsite, where they can collaborate in person and be seen.

COVID-19 Will Spark Changes to Relocation Programs

The top 3 changes that are being implemented are:

• Create more flexibility – reducing the need for the exceptions.
• Lower costs without compromising service. Reviewing employee feedback to find ways to provide a better experience.
• Provide better emergency policies/benefits. This includes addressing emergency travel protocols and health insurance needs for employees held up in foreign countries.

We are always looking for the new mobility trends to keep our clients and friends informed and help them make their relocation programs more efficient.  If you are having doubts about the management of your mobility program, contact us!  We would love to share our insights with you.

Larissa de Brostella

Executive Vice President