While enjoying my traditional Saturday morning latte and muffin, I found myself allotting 2+ hours of my day to grocery shopping, which in the past, took an hour.  After some thought, I concluded that I am scrutinizing prices of every item, looking for sales, and agonizing whether my household really “needs” that extra can of soup, all in an effort to save a few bucks.  

The negative press about the economic environment means many companies are scrutinizing spending and challenging everyone with finding ways to cut cost. Unfortunately, this pressure is compelling companies to make hasty decisions about relocation benefits that are seemingly expendable, like cutting or reducing the tax gross up benefit.

The elimination of critical benefits like gross-ups from a relocation program will have a negative impact on recruiting, retention and the transferring employee. 

There are ways to reduce gross up expenditures.  Begin with an expert review of your relocation program and exceptions and determine which benefits can be modified.

For example:

• Eliminate direct reimbursement of home sale costs and employ the use of a home purchase program 
• Consider  mandatory home sale marketing periods, offering buyer concessions or providing some loss protection. This may encourage the employee to accept an outside offer sooner.   

These benefits are at cost but it may be less than extending the pricey taxable (grossed up) benefits:

• temporary lodging
• return trips to visit family
• duplicate housing assistance 

Remember!  The sooner the old home sells, the sooner the employee and family will settle in their new environment, allowing the employee to focus on their new job.

Thinking about eliminating that extra can of soup from your relocation program to save a few dollars?  Contact Capital Relocation Services first.  Let us review and transform your relocation program.

Are you ready for the next big change in our industry?  Do you ponder what these changes may be and when they may occur?  So do I!  I am certain  that our industry has adjusted to address the current trials in today’s business climate.  My experience also tells me we will cycle back to some of the challenges we dealt with in the past and will be dealing with tomorrow. 

The questions are:

First:  What are you doing to prepare for the next evolution in our business cycle?  Change will likely be gradual rather than rapid like we saw over the past 18 months.  At Capital, we are aggressively managing all elements of our business to reflect today’s business environment being mindful of talent retention.  Capital continues to work with our clients to effectively manage the current environment while preparing rapid responses to guide them to maintain high level of employment centric programs during ameliorating real estate markets.  Anticipating change with an agile response system is a cornerstone to the success we are experiencing now and will have downstream.  Finding the right practice for each client’s business objectives and culture is our focus.

Second: What are you doing to learn from today’s business climate as you did from the past? Becoming a learning organization is pivotal towards building the right company culture to thrive during any business change.  We strongly believe that chronicling stories throughout theses changes are instrumental methods in imprinting the proper DNA into our own culture.  Build and document accounts of what you have done personally and professionally to navigate through today’s turbulent water.  Convey those stories to your team.  Most importantly – continue to tell the stories as time and personnel change.  They will become an important response mechanism when the next bubble bursts.  Leave your organization a legacy and tools to face whatever tomorrow brings.

George H. Herriage, SCRP, GMS

Vice President – Client Development

Capital Relocation Services

703.260.3052

gherriage@caprelo.com

www.caprelo.com