• Global Mobility: Positioning on the Spectrum of Exceptions Management


    Policy design is a tricky business. Creating a relocation policy that addresses every individual or family situation or anticipates the wide range of hiccups that invariably occur during a move is impossible. Having to deal with exception requests will always feature into the administration of a mobility program; the challenge is how best to deal with them. There is a wide spectrum of approaches to exceptions management.

    Tightly defined policies are too rigid. A seemingly comprehensive policy can only address the most common issues that arise. Imposing a strict non-flexible administration of that policy, albeit grounded in the principles of fairness and cost control, often leads to a frustrated and angry transferee, if the relocation occurs at all.

    An ad hoc approach (or the equivalent to not having a formal policy) is no more effective as it is cumbersome to manage, and its costs are difficult to predict. Each case requires many time-consuming discussions with management and the employee before preparing a customized letter of offer. This approach leads to uneven treatment of transferees (and likely a higher perception of unfairness), an atmosphere of constant negotiation (the squeaky wheel syndrome), unintended precedents, and skyrocketing costs.

    Effective policy design should be driven by the true measures of a successful and efficient relocation: reasonable costs and satisfied employees. What works best when it comes to exceptions management? Most would say somewhere in between the rigid and ad hoc approaches, and it is what we see most often, i.e., a well-defined policy, with a certain level of flexibility to deal with exceptions. The problem is that any margin of discretion awarded means there is a need to carefully manage fairness, precedent setting and costs.

    Lump sum programs were developed as a way to manage costs by providing a fixed allowance and freedom to employees to structure their relocation as they see fit. Sounds like a win-win approach! It may be on the cost side but is still precarious on the employee satisfaction side. By providing a lump sum with little or no structure, an inexperienced transferee may poorly plan the move or misuse the funds, increasing the risks of a disaster. In addition, the entire amount is taxable to the employee, further reducing the effectiveness of the amount allocated.

    The best approach may be to offer greater flexibility within a fixed budget, as proposed with lump sum programs, but with more structure to protect both the transferee and the organization. The approach consists of providing a CORE set of services (e.g., home sale expenses, move of household goods, travel to destination) which are there for transferees no matter what they feel they need. A variety of other services can be accessed with an assigned budget, the value of which is based on pre-set assumptions such as destination, family size, job level and reasonable values for services. The transferee is then free to top up the CORE services by choosing the services most appropriate to his/her situation. The value of unused services is available to help pay for or enhance the ones selected. As an example, because a family will be requiring a minimal amount of temporary accommodation under the FLEX portion of the program, they are able to apply that value to fly business class with their baby to the destination rather than economy as is provided by the CORE portion.

    These CORE/FLEX programs have proven very successful in providing predictability to relocation costs and significantly reducing the number of exception requests. The CORE portion addresses the organization’s “duty of care” responsibilities, and the FLEX portion gives the transferees much more control over their relocation experience.

    The uncertainties of life are such that we can never structure a program to completely eliminate the possibility of exceptions being requested. Organizations can choose to deny any requests or to operate on the basis of these requests, but they will eventually have to deal with the fallout. CORE/FLEX programs have been around long enough to have demonstrated their effectiveness in managing costs, reducing exceptions and improving employee satisfaction.