Managing Mobility Policy Exceptions By Olivier Meier Policy exceptions can help remove barriers to mobility for specific individuals and facilitate difficult relocation cases. Used too frequently, they can destroy the consistency of your mobility policy, lead to inequity among international assignees, and create employee retention problems as well as cost issues. Most Common Requests for Exception Below are the most prevalent categories of policy exception requests: Host housing allowances 71.9% Home leave / number of trips 61.7% Temporary accommodation 50.0% Dependent education 48.8% Cost of living allowances 36.8% Home leave / class of airfare 36.1% Transportation allowance/benefit 30.8% Incentive premiums 25.1% Tax equalization 24.9% Source: 2015 Worldwide Survey of International Assignment Policies and Practices Top Tips to Manage Exceptions Keep Exceptions in Line with Your Policy If your policy is about equalizing costs for the assignee and ensuring there is no gain and no loss between the home and the host location, you could pay for items that were not covered by your policy but would impact the assignee’s purchasing power. However, it would be questionable to pay for items that are not related to the move and that the employees would have had to pay anyway. Mobility Package Composition A mobility package is composed of different types of allowances, premiums, and benefits. Some of the items are protection or equalization tools such as the cost of living allowance or the tax equalization scheme which should ideally not be subject to negotiation. On the other hand, the provision of incentives such as mobility premiums could be more flexible. It is important to assess whether an exception request is truly linked to the mobility package and the relocation process or if the employee is looking to receive an extra cash amount. In that case, the discussion should be focused on base pay and bonus instead of the mobility package itself. Negotiables vs. Non-Negotiables within Mobility Policy It is worth checking and considering the option to split your policy in two parts: non-negotiable items and a flexible part reflecting local conditions. This is important for companies using a local or local plus approach that are influenced by the local conditions in the host locations. In that case, the focus is more on implementing flexibility by geography as opposed to multiply ad-hoc deals. Policy Segmentation If you have a segmented policy, it is advisable to check if moving the employee from an assignment category to the other would solve the problem. More generally, it is better to offer pre-defined options as part of a segmented approach as opposed to make ad-hoc deals where everything is open for discussion. An increase in the number of exceptions requested, especially from a specific group such as critical talent and top managers, could be a sign that further policy segmentation is needed. Exception Request Awareness and Justification Hardship, security issues, and duty of care can lead companies to make exceptions. These types of exceptions could be justified provided that the risks have been evaluated objectively. All exceptions should be documented and costs calculated whenever possible. These should be validated by top management and reviewed at least annually by a mobility steering committee. This helps create awareness about the number and costs of exceptions, while discouraging unjustified claims. When dealing with exceptions, it is useful to be proactive and anticipate future issues by assessing early on which items are likely to be the source of exceptions within your company and what solutions could implemented to replace individuals deals threatening your policy by flexible options and a degree of segmentation that respect your core mobility principles. Contact the author: Olivier Meier For more on planning for policy exceptions, see our guide to Developing a New Mobility Policy.