When you’re relocating senior-level executives, the expectations are high, and the stakes are even higher! These executives often have complex needs — beyond that of the typical employee — and are bound by tighter timelines as the organization depends on them to get up to speed in their new location quickly. To make these moves happen to their satisfaction, these leaders also expect a certain level of benefits and attention.
It’s a tall order demanding a dedicated policy and service delivery model, but the value of an Executive Move Program goes beyond the relocation itself; they can be powerful recruitment and development tools for the top talent in your organization.
Companies have discovered that it is necessary to offer attractive executive-level packages to ensure they are recruiting the right talent. In addition, they want to safeguard against losing the critical skills of experienced employees to their competition; skills which are needed to meet long-term organization objectives. While, according to a recent Mercer survey, only 9% of domestic relocations are executives, they are often the most visible relocations within the company.
As companies continue to fight to attract and retain top talent, they are growing to recognize that providing a career path that includes relocation opportunities can satisfy the employee’s desire to acquire new skills. Mercer reports that future leadership development accounts for 41% of the reason for relocation. These current and future leaders are often firmly entrenched in their community, with families and property, which needs to be taken into account when considering relocation. A clearly defined, consistent, and robust executive relocation policy is key to meeting these objectives (and more).
The current mortgage rate environment makes the home sale process considerably less appetizing, affecting a relocating employee’s decision to move. The recent historically low rates have more than doubled, lessening their buying power in a new location. Companies can help offset this differential by offering Mortgage Interest Deferral Assistance (MIDA) or a mortgage subsidy.
The days of multiple offers and homes snatched off the market in less than a day seem to be behind us as well (at least for now). That fast-moving market meant there was no need to provide a home sale incentive bonus. With longer days on market, incentivizing executives with a home sale bonus may help “sweeten” the offer when an executive is considering a relocation.
As rents and property values climb, there is a growing demand to support employees with a cost-of-living allowance (COLA). Weichert’s portfolio reveals that close to half (49%) of companies offer cost of living assistance either formally or on a case-by-case basis, with the vast majority providing it to both homeowners and renters over a three-year period.
The average number of tiers that most companies utilize has increased to four or more tiers. This reflects an added focus on targeting employee groups, including executive-level employees.
Executive policies typically offer full-service benefits, with some companies offering lump sums for select elements of the relocation, such as a home-finding trip or en-route trip. Executives have come to expect such benefits as a Guaranteed Buy Out (GBO), loss on sale, home sale incentive, and home marketing allowances. Going beyond more robust benefits, executives also expect such perks as VIP area tours, car service, upgraded temporary living furniture, and access to services needed to set up their new home (such as cleaning, unpacking, and repair person services).
We know that recruiting executive-level employees to accept a job and move with the organization demands an effective, competitive mobility program. Developing the right balance of benefits will require careful assessment of the demographics of the employee population, the critical needs of this group, and budgets.
Studies indicate that companies focused on talent management enjoy better bottom-line performance. After all, these VIPs of your workforce possess some of the most valuable skills in your organization; holding on to them is critical to your success and financial growth. The extra support and developmental opportunities made possible through a dedicated Executive-Level mobility program will not only guarantee that you’re consistently providing the appropriate level of support to this unique demographic, but it’ll help you tap into material cost savings for your organization.