Top Five Reasons You Should Re-Examine Your Household Goods Policy
By Bobbi Maniglia
Dec 13, 2018
When it comes to moving employees, handling the details of the move ahead of time - what's included in the policy, common exceptions and how to handle - can save headaches later. Read on for five tips on ensuring your company's relocation policy is clear and on track.
HR and Procurement specialists have so much to consider and address throughout the year that dealing with detail-centric items may feel overwhelming. However, when it comes to moving employees, especially in companies that relocate staff frequently, handling the details ahead of time can save headaches later. Once such facet that may be overlooked is the household goods (HHG) policy. Thoughtfully created household goods policies not only provide clear-cut guidelines for HR Pros and procurement specialists to communicate to their firm’s employees, but they also provide for a more seamless move for all stakeholders. While it may seem like some of the items couldn’t possibly ever cross your desk as an exception request, by investing time in reevaluating how the line items ought to be categorized in your HHG policy, you ensure that you will cut down on surprises. By reviewing your HHG policy, your HR team and global relocation provider will be able to commence a busy year on the same footing, with verified and transparent policies per each line item.
Sample Household Goods policy:
Click for HHG Domestic Move Matrix.
Click for HHG International Move Matrix.
Times change and so does policy. Reevaluating the framework on which relocation policy is built is essential in forming the strategy for how your company moves your employees and creates realistic, more predictable budgets. Ironing out the details of each item that your company will be willing to cover and for whom, will serve all those impacted by employee moves. Whether it’s the manager from accounting with a penchant for exotic animals or the marketing associate with two playhouses and an oversized trampoline, addressing your household goods policy ahead of time can help cut down on uncomfortable one-off exception requests.
Beyond preparedness, there are other major reasons to re-examine your household goods policy this year. Here are our top 5:
1. Alignment with Company Culture:
It should come as no surprise that company culture is a major focus for today’s companies. Now more than ever, top talent is focused on finding the right company to which they belong and identify. Even after talent is acquired, retaining talent can be influenced by the continuity of the company culture throughout its many facets and functions. Even small decisions can have a butterfly effect on how employees perceive the veracity of their company’s culture. When it comes to the household goods policy and its line items, we encourage those in charge of their company’s relocation program to evaluate it through a cultural lens in addition to a fiscal one.
Are we unapologetically egalitarian? If so, should our approved covered items be the same across all levels of the company? Are we incentivizing advancement and want that to be seen and felt throughout our culture? Do we offer more covered items for more senior talent as a result? Taking an even wider view, the location and demographics of our employees are important as it may influence what types of items need to be moved. If we have a lot of coastal employees and are big on work-life balance, we may need to consider how boats and jet skis are categorized in our HHG policy. If many of our executives have large families and we are a family-centric company, we may need to be prepared to move outdoor play equipment. These are the types of discussions and considerations that should be had to ensure policy lines up with culture.
2. Reformed by Taxes:
As accounting departments are grappling with how the new tax reforms will impact their company’s financial practices, so too are HR professionals and procurement departments, especially when it comes to corporate relocation. Despite intensive lobbying by the relocation industry, work-related moving expenses are no longer deductible under the new tax law. As such, keeping the budget in check when it comes to employee relocation may be more important than ever. It is also important to be mindful of the fact that under the new reform, there are many changes that can impact the employee’s bottom-line as well. Whether they are moving to a state with higher taxes that can no longer be written off or if your current HHG policy would cause them too much non-deductible personal expenses, companies concerned with maintaining viable and competitive relocation packages will have new factors to consider as a result of the new tax law.
For more on how the new tax laws may impact your relocation program, download our 2018 Tax Reform white paper.
3. In Control of Costs:
Moving is one of the most expensive parts of relocating employees. HHG policies can be an important tool for companies when it comes to controlling costs. While it may seem like some line items are inconsequential, if your company is moving large volumes of employees, seemingly inexpensive items can add up quickly. If you are a culture-centric organization, paring down items based on cultural significance may provide a good starting point in getting your relocation budget under control. If you have plans to move more of a certain level of employee this year, it may help to focus in more closely on the particular HHG policy for that seniority level or pay grade. Doing so may help create more defined allotments for the other seniority levels of which you may be moving fewer that year. However you and your team decide to approach your relocation budget, reviewing HHG policies will help to keep costs down while also ensuring you are covering what your firm deems essential to employee moves. Your relocation provider also holds insights and recommendations that may be useful in determining if your company is striking the right balance between competitiveness and budget consciousness.
4. Keeping it Simple:
People avoid moving for a reason. Moving is complex, stressful and exhausting. When it comes to moving employees, it can feel this way not only for the employee but for all the stakeholders involved in the move as well. This is especially true if not all the bases get covered ahead of time. A clearly defined and thoroughly reviewed HHG policy helps minimize the chaos and inconvenience when the day of the move comes. Certain line items, in particular, can cause a good amount of grief if not ironed out ahead of time. Trust us, we see it too often.
Take for example the need for a shuttle. A shuttle is used to move items from the home to the truck should the trailer be unable to fit on or access the property. If this is discovered to be the case the day of the move, knowing if the shuttle will be covered at that moment is crucial. If it’s left undecided or unknown, the employee is left in limbo while a game of telephone tag happens amongst the moving company, relocation provider and the HR or procurement professional at the employee’s company. Assuming you can get ahold of all necessary parties right away, this still causes confusion, stress and adds extra time and cost to the move itself. As is common, however, at least one party will be unavailable, leaving the employee stranded along with a moving team, unable to get items loaded in the truck.
The same applies to items that will be covered in the move as well; if there is a lack of clarity around these on the day of the move, employees and movers may find themselves in a quagmire about what to do with that princess playhouse or that farm equipment (It turns out Jake from engineering is farming wheat in his spare time, who knew?). In addition to carefully assessing your HHG policy, avoiding these pitfalls also depends on solid communication amongst all the stakeholders involved in a given relocation to cut down on potential surprises in advance of the move date.
5. Time is of the Essence:
We know how busy you are and how valuable your time is. Household goods policies with too much in the “exception” category may lead to too many exception requests. While it may be tough to agree on a simple, “yes” or “no” for every line item in your HHG policies, attempting to do so as much as possible streamlines the move and saves you time. This is especially true in organizations that move employees in volume. By following some of the above recommendations, you can become more specific and budget-friendly in the firming up of your HHG policy. This is not to say that you should be decisive to the point of rigidity, however, creating clear determinations for the line items that you would likely encounter within your employee pool will save you time by reducing pesky exception requests magically appearing in your inbox.
We understand how much goes into creating a relocation policy that works for your company. By working closely with relocation providers who know the business inside and out, you will have the benefit of valuable partners throughout the process. While there are many fundamental elements that make up an effective relocation program, household goods policies provide a good starting point when looking to align relocation with company culture, adapt to changing tax policy, control costs, streamline the moving process or save time in your HR and procurement departments.
Moving household goods is the second most expensive part of employee relocation. As a result, your household goods policy is crucial to your bottom line. That is why we recommend that household goods policies be reviewed every two years to ensure that they are aligned with your company’s goals. For a free review of your household goods policy click here.