Are you looking for a quick win for your global mobility program? A small change with a positive impact on your mobility program? This is the first of many posts in our “Quick Wins” series. Each quick-win blog will offer ideas of straightforward changes that can be made to support your organization’s mobility principles. No one solution is going to fit everyone’s purposes, so in each post of the series, we hope you find at least one thing that can be a quick win for you. And if these quick wins are already part of your program, we hope you already see the benefits.
This month we look at changes you can make to your U.S. domestic policies to improve the employee experience and reduce costs.
Enhance the Employee Experience
Do you provide destination services (e.g., settling-in services, rental assistance, school search)? If you don’t, you should know this is one of the most frequently added or expanded benefits over the past two years. Destination services support a well-planned, timely transition that ensures the employee is familiar with their new location, long-term housing is located and secured, and the adjustment period in the new location is reduced. Plus, the cost is minimal when compared to overall relocation cost.
Do you provide tax gross-up with a year-end true-up? If you don’t, you may be able to better protect the employee from out-of-pocket expenses. A true-up process helps ensure you are grossing-up the necessary amount to cover the additional tax liability created by the relocation — not more, not less. A true-up may also protect the company from over grossing-up lower tax bracket employees but may increase your costs for employees in higher tax brackets.
Do you give employees time off for relocation-related activities? If you do, is it standardized? Some companies prefer to handle this on a case-by-case basis, while others take a more objective approach. The average number of days provided range from one to five (with two to three days as the average), while some companies offer more. The days should be like any other relocation benefit and have an expiration date (usually within one year).
Do you ship a lot of household goods? If you do, consider discard-and-donate services to reduce the size and cost of your shipments. This environmentally responsible program is a “win-win-win-win.” It is a win for the mobility program because it reduces costs, a win for the employee with a more organized move, a win for the moving company by using fewer packing materials, and a win for those fortunate to benefit from donated items.
Do you reimburse normal and customary home sale closing costs and gross-up the expense? If you do and that is your primary method of covering home sale expenses, now could be the time to consider a Buyer Value Option (BVO) home sale program. There is only a small amount of inventory risk with a BVO. Many companies are willing to bear that risk for the thousands realized in cost savings by not grossing-up the expense.
Do you offer a guaranteed buyout home sale program (e.g., GBO, AVO)? If you do, consider reducing, suspending, or removing any incentive or bonus payment. This could be considered controversial by some; however, in the current real estate market, almost all homes sell within a few days or weeks. The historical purpose of a bonus benefit is to incentivize the buyer to accept a reasonable offer to avoid a home going into inventory. Incentives are very common in GBO programs, but over the past decade, their prevalence has fallen a few percentage points while utilization of the GBO has remained steady. Since some organizations pay incentives up to $10,000, many may not feel comfortable removing such a long-standing benefit. For those looking for ways to cut costs while still providing a top-notch benefit like a GBO, modifying the bonus payment could save thousands.
If you are interested in implementing any of these quick wins, please reach out to your Aires representative.