On the Move

ost federal employees never have to think about relocation allowances. But for approximately 18,000 people a year who go the distance to take federal jobs, travel rules affect every aspect of their moves-right down to the kitchen sink.

The General Services Administration's Federal Travel Regulation details expenses that are covered when moving for a federal job. Need to bring along your small boat or ultra-light vehicle? Want to transport some ammunition for personal use? What about those live animals? And will Uncle Sam pay to have your carpets or drapes cut to fit the new house-or even have the piano tuned? It's all there.

The big-ticket items are temporary quarters, transportation and per diem, shipping and storing household goods, house-hunting trips, and for some, assistance with selling and buying a new home. The bottom line is the bottom line: What will the government pay for, and how much will it pay?

ONE WAY

Companies are smaller than the government and thus more able to tailor their policies to variations in industry, the job market and the types of positions they are trying to fill, says Jan Hatfield-Goldman, vice president for research and education at the Employee Relocation Council, an association of corporate and government members concerned with workforce mobility. This flexibility allows corporations to use relocation as part of an overall recruitment strategy and to be competitive in hot markets.

That's exactly what's missing from the government's one-size-fits-almost-all approach, says one federal travel expert. Federal relocation policies are cast in stone. Instead, he says, agencies should be able to adapt benefits to their needs.

Corporations "can turn on a dime if personnel needs change," the expert says. "They think nothing of having various sets of rules. They'll do what they need to do to get the talent they are looking for. We-the government-are very egalitarian. The biggest thing missing is the link to the human capital issue."

Jakob Evans, a traffic manager for the FBI, sees the need for such adaptability. The agency moves some 1,200 employees a year. Recruiters could be more effective if they could offer cafeteria-style benefits, especially for hard-to-fill positions. It's not uncommon, says Evans, "to hire someone, and they find out what their benefits are not, and they back out."

BIG BUCKS

Some think agencies may be exercising too much flexibility. In fact, Sen. Charles Grassley, R-Iowa, received a tip that the IRS was paying mucho money to move employees and asked agencies to provide data on their spending.

From fiscal 1999 through fiscal 2001, the IRS reported spending $18.8 million on relocation. More than one-third, $4.9 million, was spent on 40 moves that exceeded $100,000 each. The FBI reported even heftier price tags. In those three years, the agency spent $115.9 million moving 3,364 workers. More than $16 million went to 133 transfers that topped $100,000 each.

No agency came close to the FBI, but a handful paid for more than 10 moves topping $100,000 each, including the Agriculture and Health and Human Services departments, the Bureau of Prisons, the Immigration and Naturalization Service, the Federal Aviation Administration, the Bureau of Alcohol Tobacco and Firearms, and Social Security.

"It's not reasonable to pay six figures to move one government employee," says Grassley. Several agencies spend tens of thousands of dollars apiece on temporary housing in the new job location, he says. "In a lot of parts of the country, $40,000 toward temporary housing would go a long way toward buying an actual house. It's hard to see how anyone could justify spending that much.

"It's also hard to imagine," Grassley says, "how dozens of employees at multiple agencies could spend $30,000 or more just to move their household goods. That's more than a lot of people's annual salary."

"These expenditures worry me, and the poor management that allow those expenditures worries me even more," the senator says. "I don't expect government employees to pay for their moves out of pocket. The government should provide reasonable compensation for employer-directed relocation, just as private companies do for their employees."

Actually, $100,000 is close to what the private sector spends, says Julie Blanford, a government services consultant at Runzheimer International, a Rochester, Wis.-based relocation consulting firm. But data collected by Grassley's office, while not comprehensive, indicates that the average federal move costs only about $30,000.

TRACKING COSTS

Even more worrisome than the big spenders, says Blanford, are the agencies that don't know how much they spend moving their people, or how many they move. "The folks who can identify their costs can at least begin to manage them," she points out.

The federal government as a whole doesn't track relocation expenses or related data. GSA did not respond to repeated calls seeking relocation data. The agency has attempted to collect that information for the past couple of years, but got no answers from many agencies, and poor data from others. "The government has no idea what they are actually spending, so how can they control those costs?" Blanford says.

Last fall, GSA formed a committee to look at best practices in the private sector and research "every entitlement under the sun," as Richard Trent, travel and relocation chief at ATF, put it. The committee was due to release guidance for agencies at the end of February. The committee's next task is to examine possible legislative and regulatory changes, and it plans to make its recommendations public this spring.

The committee's guidelines had not been released by press time. Issues on the table include spousal assistance and lump-sum relocation payments.

FAMILY AFFAIRS

Federal workers get some expenses reimbursed for family members when they move for a job. But their spouses don't get any financial help in their job search. Some employees find that an obstacle to making a move. It costs the government money, says ATF's Trent, because the loss of family income can make it harder to find a place to live, which in turn increases spending on temporary quarters, storage of household goods, and the like.

The private sector is ahead of government on this issue. About half the companies surveyed in a 2001 study by the Employee Relocation Council reported they have formal employment assistance programs for "trailing spouses," as they're known. Another 20 percent have informal programs. The most common benefits include covering the costs of job placement firms and of printing resumes. The companies that do provide benefits spend an average of $1,203 for a spouse of a relocating employee.

The federal government has a strict definition of "family" when determining eligibility for benefits, which puts some workers in a bind-including those with unmarried partners, adult children or, in some cases, elderly parents at home. "Some companies are very broad with their definitions. Your family is whoever lives with you," says the relocation council's Hatfield-Goldman "Companies can define these things according to their own culture," she says, and for many, "their culture is to be inclusive."

LUMP SUM AND LIABILITY

Another private sector strategy is to pay a fixed amount for moving costs, especially for temporary quarters. This approach reduces the administrative burden for both employers and employees, sparing them the hassle of tracking receipts, filling out expense sheets and processing reimbursements. Lump-sum payments allow employees flexibility in managing their moves. Because the amount a worker will get is clear, the result is less discussion and fewer requests for exceptions, says Hatfield-Goldman.

"Employees have been happy with it," she says, especially if they can save themselves money.

The Employee Relocation Council reported that 26 percent of companies surveyed used a lump-sum method for every relocation in 2001, up from 4 percent in 1988.

GSA's committee might consider revamping the government's lump-sum allowance scheme. An employee can get a fixed-amount reimbursement for temporary living expenses, but the maximum time allowance and per diem for family members are significantly more restricted than they are under the traditional reimbursement scheme. The goal would be to make the lump sum a more attractive option for employees.

If lump sums were used more often, they would alleviate another problem for the government: its open-ended time frame to file for reimbursement.

According to the travel regulation, employees have two years in which to incur move-related costs, and they can request an additional two years. "We are still on the hook financially for all that time," says ATF's Trent, whose agency moves about 225 workers a year. "Why do they need two years?" he says. Add on the two-year extension, and "that's insane," he says. "No one in private industry would keep an open obligation on the books that long."

SMOOTHER MOVES

Everyone agrees that moving is stressful, ranking right up there with death and divorce. And stress on employees and their families can cost an employer money. If you have relocated an employee, and he is not happy, you risk losing him, says Trent, which means hiring and training someone new. "The cost of that is so high-it is five to 10 times what the relocation ran." So it behooves everyone to make the process go smoothly.

So, stay tuned for changes in relocation rules and policy.