relocation policies.

They can either be your best friend, like this puppy

Or your worst enemy, like this tiger.

we’ll help make sure that you’re in

the first group.

we’ll help make sure that you’re in

the first group. (tigers aside.)

“But how!?”

so glad you asked.

we’re going to show you how to build core/flex relocation policies for 4 different types of

transferees:

- entry level employees

-  entry level employees -  mid-level employees

-  entry level employees -  mid-level employees -  senior executives

-  entry level employees -  mid-level employees -  senior executives -  the c-suite

first, how about some background?

Core/flex policies have been around for a while, but it’s the implementation of them that’s becoming much more prevalent

similar to the growth we saw with

lump sum, we’ll see that same

sort of traction with core/flex

why?

because there’s

so much to consider when

creating relocation policies.

what’s the new cost of living?

what’s the new cost of living? is there a gross-up?

what’s the new cost of living? is there a gross-up?

what benefits do they need?

what’s the new cost of living? is there a gross-up?

what benefits do they need? what about an expense allowance?

Creating relocation policies is time consuming, even before all the

exceptions start coming into play

These are the areas that typically see the most

exceptions:

they also happen to be the cities that companies

relocate to the most

Core/flex alleviates these problems by encouraging a

build-it-yourself approach

complex

It does this by allowing transferees to pull in the pieces of a relocation

policy that they need, and then build upon them as those needs

become more

let’s take a look at our first tier,

shall we?

this is what a sample policy for this level might

look like:

entry-level policy

“What are flex benefits?”

pet assistance

spousal support

temporary living

homefinding trip

in-transit storage

pet assistance

spousal support

temporary living

homefinding trip

in-transit storage

It’s a list of anything from pet assistance, to spousal support, to temporary living, to homefinding trips, to

storage—the options endless. A company would have a detailed list of benefits (along with what coverage is included in those benefits) and then

based on the level of the transferee, allow them to choose more or fewer options.

Note: These benefits aren’t paid to

the transferee, but rather something they use through

the tool being used to facilitate the relocation

(such as a relocation management software)

Get it?

Get it?

Money goes from the employer, through the

RMS, and is used on behalf of the transferee

Get it?

Money goes from the employer, through the

RMS, and is used on behalf of the transferee

This person  

you’re probably wondering how you

decide on the amount of flex benefits

you offer.

well… there are two different ways.

offer a set numerical amount

of flex benefits (up to 3 benefits)

SET A MAX dollar amount

of flex benefits (up to $2,500)

numerical amount

it’s cut and dry

numerical amount

it’s cut and dry

the transferee gets 3 flex benefits to choose from,

and that’s it.

numerical amount

benefits are not equal

numerical amount

benefits are not equal

one transferee’s 3 benefits might not equate to another

transferee’s 3 benefits.

3 flex benefits =

$2,500

3 flex benefits =

$8,000

This is why specific guidelines are

so important.

Here’s an example of how detailed a flex benefit should be:

homefinding trip Expenses related to the homefinding trip

for you and one other adult member

The trip must not exceed 3 days/2 nights

Round trip transportation

Reasonable lodging – arranged through the company’s service provider

A per diem for meals, not to exceed $55

per day per person

dollar amount

cost effective

dollar amount

cost effective

ensures that everyone stays within the allocated budget.

dollar amount

requires more monitoring

dollar amount

requires more monitoring

have to be much more on top of making sure that the transferee is staying within their budget.

Here’s an example of how that

homefinding trip might change using

a numerical-cap:

Expenses related to the homefinding trip for 1 person

Trip duration of 2 days/1 night

Round trip transportation

Reasonable lodging – arranged through the

company’s service provider

A per diem for meals of $45 per day

homefinding trip

As you can see, the transferee can manipulate the benefit a little bit more.

Make sense?

let’s dive into the next policy!

here’s an example of what this policy might look like:

mid-level policy

“How would I incorporate lease

cancellation?”

“How would I incorporate lease

cancellation?”

Wow, really great questions today!

“If you are renting a home or apartment, you should understand the conditions for

terminating your lease. You should obtain a copy of the lease to review your options and understand what the transfer clause is that

you would have to break. You may be required to pay a lease cancellation fee, which

is reimbursable for up to one month’s rent. You should provide the employer a copy of

the lease agreement in regards to cancelling, along with proof of payment.”

see what we mean?

see what we mean?

DETAILED.

Another big difference here is the van line.

Going from a rental truck to a vanline might be expensive…  …but it can make a big difference

having a van line can take a way a lot of the stresses that come with relocation

which improves the

overall experience

Now let’s talk about taxes.

it’s the responsibility to educate employees on tax ramifications associated with relocation

it’s the responsibility to educate employees on tax ramifications associated with relocation

non-deductible lump sum/mea temporary living car rental return trips etc.

it’s the responsibility to educate employees on tax ramifications associated with relocation

non-deductible lump sum/mea temporary living car rental return trips etc.

tax-deductible shipment of household goods, vehicles, and pets first 30 days of in-transit storage the final move

paying attention to this can save you a

lot of money.

this is why:

Acme relocation policy Lump sum = $12,000

     With lump sum With core/flex

•  $12,000 becomes $7,800 (Assuming a 35% tax)

•  Must gross-up lump sum

to $16,200 for transferee to receive $12,000

Loss of $4,200

•  Lump sum is used for less, so amount can be reduced

•  To provide a $3,000 lump sum, employer only has to gross-up to $4,050

Loss of $1,050

Back to those non-deductible expenses.

Let’s see what the final move entails.

the final move includes costs incurred between the last night in current

location to first night in new location    

Requirements

-  route taken must be the most direct -  must be driving 350 miles per day -  if distance is less than 500 miles,

employee must drive -  if distance is over 500 miles, flight

must be purchased 2 weeks in advance

-  all mileage is reimbursed at current mileage rate provided by the IRS

on to the next!

here is where it can

get a little tricky. let’s look at a sample policy:

senior-executive policy

You might be confused with MEA, lump sum, flex benefits, signing

bonuses, etc.

Here’s the thing.

You need to ask yourself a question.

“what do i intend my transferee to use this

money for?”

Once you decide, you can then choose which option is best for you.

sum of money for untracked expenses  

sum of money for tracked, relocation-related expenses

=MEA

complete control, providing the most structure

=lump sum

=flex benefit

this will help you

decide which form the money should

come in.

believe it or not, these policies can span your

highest levels to your

Lowest levels.

let’s take a look at the final tier

let’s take a look at the final tier

yay!

this is your most complex policy. here’s what it looks like:

c-suite policy

While you should always offer assistance with homesale, this is where

it becomes

critical.

here is how renters and homeowners

differ in terms of benefits:

Renter

-  lease cancellation

-  lease acquisition

-  finder’s fees

-  guided tours

or: flex benefits for renting-related costs for up to $1,000

Homeowner

-  closing costs

-  home inspection

-  loss-on-sale

-  loan fees or: flex benefits for homesale-related costs for up to $5,000

you can also offer more extensive

flexible benefits, such as…

lifestyle transition assistance

what’s included

- Career assessment and coaching - Resume preparation and production - Cover & reference letters preparation - Interview training and networking strategies - Internet job postings and community research

what it is

Lifestyle transition assistance is available to you and your family during and after your relocation. You’ll be paired with a consultant to assist you, along with a career relocation service that will give help to anyone facing a career or job change.

this is expensive and can be difficult to administer, so it doesn’t need to be

given to everyone.

Lastly…

“how do i know if core/flex is working?”

you should have some sort of

system in place for tracking the effectiveness of

each policy

this way, you can be sure you are

spending your money in the most useful way possible for your

transferees

That’s it! Now you’re an expert!

Well…almost.

Check out our webinar & eBook

to complete the lesson!