As companies shrink and compact and reorganise in response to economic demands, their employees are having to adjust accordingly. In a variety of ways the issue of employee relocation comes up regularly, and companies that have proactive developed policies to deal with the issue are a step ahead. However, some companies are dropping benefits intended to cover relocation costs, with ramifications both for affected employees and the given company.
A variety of laws and ethical expectations exist when it comes to the issue of employee relocation. The application of these guidelines or requirements fluctuates depending on the type of employer (private or public), the type of employment (at-will, contractual, temporary, partnership, or salaried, and the jurisdiction.
Relocation occurs irregularly and frequently enough that it demands companies have personnel policies to address the issue as well. The need for relocations can include changes in business strategy, movement to better physical locations, adjustment for market flexibility, or contraction of operations. And the question of relocation coverage tends to come up more when economic times are hard and employees are expected to move as companies shrink in size. That doesn't mean that the benefit is always provided.
The Employee's Challenge to Relocation
While a business may view relocation as a simple matter of relocating a labour resource, for the affected employee the issue is much more personal. It can and does include the uprooting of homes, school attendance, care for dependents, community and social commitments and more. And with personal finances being challenged as well during hard times, relocation can also sometimes require the physical splitting of relationships and families.
For contracted employees who are employed under specific terms and conditions, the question of whether relocation costs are covered directly depends on whether the expense was specifically covered in the contract terms. The issue frequently comes up when the employer requires a move but refuses to cover the cost. When the employee finds himself unable to move due to the expense, he is threatened with termination for insubordination. Suddenly the terms of the contract become critical to determine who is legally correct in the employment relationship.
Companies and employers of larger size utilise professional consultants and assistance when they need to relocate a number of employees or entire units/divisions. These outsource vendors have unique expertise in processing staff relocations so that employers can avoid rookie mistakes that cause problems. In the meantime, the business' personnel can focus on their regular business rather than the temporary disruption of movements.
Relocation Handled Badly Has Ramifications
Many companies that only think about costs ignore the potential problems with badly handled relocations. Particularly with employees who contribute significant human skill, bad morale can lead to major loss of human capital assets. People don't leave companies, they leave bad management (at least what they perceive to be bad in their own terms). Those that stay but are upset can have lower levels of productivity or, in worst case scenarios, perform passive resistance or sabotage of business projects to get revenge for the forced move.
In some jurisdictions, companies should be aware that they can be held to their word if they commit to a relocation for an employee. Some states have very specific laws that the courts have interpreted as binding on employers. If an employer is found to have convinced an employee to relocate with promises of expense coverage and then reneges on the agreement in bad faith and fraud, the court will punish that employer.