The Pros and Cons of Single vs. Multi-Tiered Relocation Policies
April 8, 2016 | Household Relocation, International Relocation
As your company expands and begins to grow to additional locations, you’ll be faced with the decision of whether to pick a single vs. multi-tiered relocation policy. Here are the pros and cons of each to help you make the best decision for your company.
Single Tier Relocation Policies
A Single-tiered relocation policy means that the single relocation policy applies to all employee levels regardless of position, salary, authority, location, etc.
- Ease of administration – providing the same relocation benefits to all transferees and new hires making it easier for your HR team to explain and maintain the policy and answer questions
- Equitable benefits to employees – Everyone gets the same policy meaning there is no special treatment
- Ability to control and forecast costs consistently– Because everyone is getting the same thing, all you have to do to calculate the overall cost is multiply the policy by the number of transfers.
- Seen as “Fair” – Employees often distinguish single tiered policy programs as fair and team-oriented, placing equal value on all individuals as important contributors to the employer’s goals.
- Things never stay that simple -Because a single policy approach means giving the same benefits to all relocating employees, things can get tricky when you begin to relocate employees across different positions.
- High chance of overspending– If you are offering the same policy to everyone regardless of their position, it’s likely that your lower tiered employees are getting more assistance than they need, bypassing an opportunity to save on costs.
Multi-Tiered Relocation Policies
A Multi-tiered policy program offers different benefits related to the employee’s authority, compensation, education, experience, and homeowner status level.
- You can specify the benefits that best meet the needs of different employee groups – These groups may be based on position, location, or even homeowner status.
- You can allocate your budget more effectively – knowing which employees need more than others means that you can divide your budget and make it go further.
- Attractive Personal Offers – because it is specific to them, relocation package may be more attractive to employees and new hires that are considering whether to take a new position or not.
- More difficult to create and maintain – tiered policies need to have clear requirements that dictate which employees are eligible.
- It’s easy to create too many policies– if you build too many tiers it can become overwhelming for both transferees and your internal teams to maintain.
- There is no formula – because it is so specified, there is no “right” or “wrong” way to create tiers, which can be difficult and overwhelming for those new to the process.