Relocation Policy For Employees With Sample Template

Purpose of a relocation policy

Any organization recognizes the need for occasionally relocating employees to different locations or branches to meet business needs. This employee relocation policy outlines the guidelines and procedures for employee relocation, aiming to optimize skill utilization across various locations.

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Scope of an employee relocation policy

This employee relocation policy is universally applicable to all employees of the organization without exception. It governs situations where employees, due to company directives or personal requests, are required to relocate from their existing work location to another, irrespective of whether the move is within the same city/town or involves a transition to a completely different geographical area. 

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This policy meticulously details the processes and entitlements related to such relocations, ensuring a transparent and equitable approach.

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Standard definitions in an employee relocation policy

1. Relocation: The process of moving an employee from one work location to another work location.

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2. Company-Initiated Relocation: A transfer required by the company for business needs.

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3. Employee-Requested Relocation: A transfer initiated by the employee, subject to company approval.

Type of employee relocation 

Primarily there are five types of relocation and they are:

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Relocation due to Promotion

Employees, upon elevation to higher roles, may be relocated to different locations where their newfound responsibilities and skills are required.

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Adaptability Relocation 

Focused on creating a robust, adaptable workforce, this involves assigning employees to roles that significantly differ from their current ones, enhancing their skills and broadening their experience.

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Cross-function/cross-team Relocations

Employees may be transferred across different functions or teams based on their academic qualifications, expertise, and the strategic needs of the organization.

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On-request Relocations

Employee-initiated relocation requests are considered based on the alignment of the employee’s skills with the needs of the desired location.

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On-Deputation

Employees may be relocated for specific, time-bound projects or assignments, after which they are expected to return to their original location.

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Relocation allowance and benefits

A relocation allowance, which is often part of a company's relocation policy, is a financial support package provided to employees to cover the expenses associated with moving to a new location for work purposes. 

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This allowance is designed to ease the financial burden of relocation and can include various components, depending on the company's policy and the specific circumstances of the move. 

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Common elements of a relocation allowance may include:

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1. Moving and transportation costs which cover expenses for packing, shipping, and transporting personal belongings and household items from the old location to the new one. This might also include the cost of moving vehicles.

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2. Reimbursement for travel costs incurred by the employee and their family to reach the new location, which can include airfare, train tickets, or fuel costs for driving.

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3. Financial support for temporary housing if the employee needs to stay in a hotel or a short-term rental upon arrival in the new location until permanent housing is secured.

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4. In cases where the cost of living is higher in the new location, companies may offer a cost-of-living adjustment to help employees manage the increased expenses.

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5. For international relocations, the allowance may cover the cost of obtaining visas, work permits, and other legal documentation.

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The exact components and the amount of a relocation allowance can vary widely based on the company's policy, the level of the employee within the organization, the distance of the relocation, and whether the move is domestic or international. 

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Companies typically outline these details in their relocation policy or the individual relocation agreement with the employee.

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Standard procedure for employee relocation

• The procedure begins with a discussion between the Hiring Manager and HR to identify the need for relocation.

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• HR identifies suitable internal candidates and initiates discussions with the Hiring Manager.

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• The selected employee is approached for a detailed discussion about the new role, the business rationale for the relocation, and to obtain their formal consent.

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• A comprehensive transition plan is devised, involving both the current and future Reporting Managers, detailing the work nature, transition dates, training requirements, and handover processes.

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• Proper documentation and knowledge transfer are mandated for a smooth transition.

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• Issuance of necessary certificates to ensure seamless service continuity.

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• Special provisions, such as transit leave and accommodation, are provided for inter-city relocations.

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• Assistance in settling in the new location, including house-hunting and educational arrangements for dependents.

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• Immediate reporting is required for relocations within the same city.

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• The policy mandates adherence to company-initiated relocations, barring exceptional circumstances like medical issues.

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• A formal relocation order is issued, with clear communication to all involved parties in both the current and future units.

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• For inter-entity relocations within the Group, HR departments ensure continuity of service and benefits.

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Violation of this policy is subject to disciplinary action, up to and including termination.