What to Include in a Relocation Policy
Just like any other HR policy, a relocation policy ensures consistency, reduces unexpected costs and guarantees that transferees understand the terms and benefits of their relocation package. The policy should include submission of expenses and any time limits your company may have in place.
You may prefer to have two separate policies, covering domestic and international moves separately, but both can be included within a single policy.
As well as explaining the benefits, and how taxable benefits will be treated, it should clearly describe the services being offered along with how payroll, income tax, social security and pension will be managed for the relocation.
A good policy should clearly indicate the scope of the financial and administrative support being offered, starting with the qualifying criteria through to the process for ending the assignment. It’s good practice to cover early termination in case transferees and their families do not adapt to a new country.
If you provide assistance from a specialist relocation company you will need to outline the services provided by them.
Allow for meals, accommodation, inclusion of family members and the number of trips allowable.
To include packing, unpacking, insurance fees, customs fees, provision for sea and air shipment, including the weight and volume, allowances for any storage required and shipment of pets or vehicles.
Sales of Residence
For the home country do not forget to include a budget for agent and legal fees, surveyors, conveyancing and taxes. For rental properties, reimbursement for an early break in the tenancy may need to be considered. Purchase assistance in the destination country would incur similar fees as above.
Setting a time limit will help focus your transferee to arrange the home search promptly and reach a decision on a property. This brings us to the rental budget; will you set an amount and allow the transferee to decide how it is spent or pay only the monthly rental due? Allowing a transferee to spend an allocated budget however they wish, allows them to offset against utility bills and the unexpected Council Tax bill which many are not familiar with.
This may be required for part of, or the full term of the assignment and costs vary greatly with monthly rental costs decreasing the longer the rental term.
Example: 1 bedroom property furnished with mid-range furniture, housewares and linen for a period of 1 month only is approximately £1,200pcm, over 6 months it would be £500pcm and 24 months £225pcm.
When including the provision for these fees you will need to consider non-refundable application fees, the deposit and busing fees, in addition to the tuition fees. For International school fees you can expect to pay £26,000+ per year per child with additional language support being £2,000-£4,000 per year.
Frequently overlooked for inclusion within a policy, are driving familiarisation lessons, and job finding support for the spouse /partner. Very often it is the spouse/partner who feels the most anxious about a move and providing them the support they need helps give a smooth transition into their new environment.
Cost of Living Allowances
These are increasingly included in relocation policies as well as tax assistance support. Incentives to relocate are paid in the form of a relocation bonus, commonly paid for over the first 12 months, or as a lump sum given at the beginning of the assignment.
The Final Move
Expenses incurred for need to include airfares, overnight hotel expenses and airport transfer fees.
The End of the Assignment
Finally, don’t forget to include the processes and assistance the company will provide at the end of the assignment including responsibility for any dilapidation claims that could be made.
If you would like assistance in putting together a flexible, sensible and practical relocation policy, please get in touch with us.Enquire