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Making Relocation Easier with Discretionary Allowances 03.15.2019 | Jennifer Connell

relocation allowance

Relocation policies are written as specific guidelines for mobile employees to follow. But in this one-size-doesn’t-necessarily-fit-all world where people personalize everything from ringtones to license plates, there will always be employee requests for exceptions to policy–no matter how comprehensive the policy may be.

How your company chooses to deal with these requests can streamline or drag down your program.

Exceptions aren’t necessarily a bad thing. In fact, they can be valuable “red flags.” Recurring requests may indicate that certain aspects of your policy are too lean. On the other hand, if there are no exception requests, your policy may be too generous!

I recommend that companies make it a point to regularly review their process for requesting and authorizing exceptions. There should be a documented procedure in place, full knowledge of the cost impact and some consideration given to using a discretionary allowance.

A discretionary allowance is typically a nominal amount (i.e., $500–$1,000) that covers exception requests that don’t warrant going through a formal review process. The relocation provider is empowered to approve these “smaller” exceptions to ease the burden of administration.

This makes sense when you consider the average number of exception requests per employee, then multiply it by your population, then by the amount of time you spend coordinating approvals, then by the number of follow-up emails you send to the employee as well as managers and your provider. Suddenly these minor exceptions have added hours to your workload.

Chuck Langley, Client Service Director in our Boston office, notes that one of his clients proactively offers a $1,000 discretionary allowance. This allowance is managed with a common sense perspective; with each request, says Chuck, you have to ask yourself, does the request make sense and fit within the bounds of a normal exception?

Pamela Matson, Client Service Director in our Chicago office, offered a recent example of what she considers an excellent use of a discretionary allowance — disassembling bunk-beds that weren’t accounted for in a HHG survey.

“This made sense because it addressed an immediate need at a nominal cost and didn’t require lengthy emails and cost considerations,” said Pam. “It was simply approved under the client’s pre-approved allowance.”

Pam and Chuck agreed that in addition to creating efficiency, discretionary allowances also “empower” Relocation Counselors to do what’s best for the transferee, within reason, and provide a positive experience.

The discretionary allowance should not be confused with a miscellaneous allowance, which is a formal policy benefit that employees know is there.

The discretionary amount works “behind the scenes,” lurking in the shadows like a mobility crimefighter, ready to save the day if and when it’s needed to supplement the current benefits offered—a few extra nights of temp living, a few days of extra HHG storage, or things like the aforementioned bunkbeds disassembly, for example.

Other reasons why a discretionary allowance makes sense, in my experience:

— You can redeploy time spent on reviewing exceptions for non-essential items towards more strategic initiatives.

— You can tailor the amount by tier or move type.

— You can customize how the allowance is administered; establish the amount and rely on a seasoned Counselor to manage this part of the process for you or you can have a pre-determined list of specific items allowed for approval.

— The Counselor is empowered to expedite the request on the spot, improving the employee experience.

— Lastly, for Weichert clients, your exceptions will be captured in MyWIN, our relocation management platform, where you can periodically review the data (and any emerging patterns] to fine-tune the allowance.

It’s true, among your mobile workforce, that one size rarely fits all. With a discretionary allowance, it never has to!

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Written by Jennifer Connell

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Jennifer Connell, SCRP, SGMS-T, is Practice Leader with Weichert’s Advisory Services group. She has over 23 years of experience in the workforce mobility and employee benefits industries and received Worldwide ERC’s Distinguished Service Award in 2017. She has also spoken on workforce mobility topics at industry conferences throughout North America.

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