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Exception management – The unexpected costs (and benefits) of exceptions – Re:Locate Magazine

This piece was originally featured on Re:Locate by Chantel Rowe.

Companies generally have relocation and assignment policies to govern what an employee will and will not receive during their assignment, amongst other aspects.


However, exceptions to policy happen inevitably when we are dealing with real people. For example, additional support may be needed for an employee struggling to get settled, unavoidable circumstances may arise triggering additional costs or an additional cash allowance may be all that’s standing in the way of a new top talent signing their name on the dotted line.

Exceptions to policy can be difficult to manage, requiring negotiations between the vendors, the employee and the business line for approval. They can also be costly, triggering unaccounted for spend and largely untracked ‘budget creep’, and the impact of which is not often reviewed and consolidated across the program.

Whilst exception management has traditionally been a negative experience for the employee and HR, which entailed scrutinizing every request and ‘tightening the purse-strings’, are we really missing the point and the benefits that can be derived from this process?

Today, with some simple tools and techniques, managers can better manage exceptions and leverage data and experience to improve their overall mobility program.

Spot the exception

Exceptions are basically any deviation from the standard relocation or assignment policy, in terms of benefits offered or levels of benefits provided (i.e. number of days service provided), and may cause unplanned spend. We generally see exceptions broken down into the following types:

1.     Those that may be provided up front, as part of the package negotiation process before any vendors have been contacted, and are generally not tracked.

2.     Those that arise during the relocation or assignment, where for example an employee requires an additional few days of temporary accommodation, and these are generally tracked by either the HR team or the relocation vendors.

3.     Those that are largely ‘pre-approved’ across the program. For example always extending accommodation check out dates to the date of shipping delivery, and these may or may not be tracked depending on processes agreed.

We often see those in categories one and three fly under the radar, not tracked through the formal processes in place, as they do not require approval from HR or the business. However, they are equally an additional and potentially unbudgeted cost and should be tracked for the purposes discussed below.

Hidden value in your exceptions

More than just tracking costs, exceptions give us a unique way to gut-check the health of our mobility program. A consistent need to deviate from the level of support outlined in your mobility policies may suggest: 

  • Regional nuances, where your support package is not sufficient to meet certain local demands, such as challenging housing markets or competitive schooling systems.
  • Employee demographic challenges, where policies are failing to support a bracket of employee types, such as families with young children or same-sex couples.

Exceptions also can help us identify important employee behaviors and trends. For example, are employees relocating to certain locations always requesting extension of temporary housing? This could indicate a consistent difficulty in finding a permanent place to live or not starting the process with the correct information or expectations. Do assignees consistently have to register their children with multiple schools in the host location? This shows a difficulty in obtaining school places in the appropriate schooling system, and therefore undoubtedly a large amount of stress being placed on assignee families.

By failing to track all types of exceptions, or not capture certain key details surrounding the exception request – such as type of policy type, date, location and family size of the employee – you could be ignoring one of the easiest litmus tests for your mobility program and missing opportunities to iterate your policies for a better employee experience.

Hidden costs of exceptions

The first thing we generally look at when considering the cost of exceptions to policy is the hard cost. How much will that extra day of school search consultancy cost the business, and do we have budget for this? But we need to consider the full cost of approving or denying exceptions to take a more strategic view:

  • Cost of employee productivity – if I deny the exception request, how much additional time will the employee need to spend on their move, for example personally searching for additional properties if their lease falls through?
  • Internal business time cost – we know that the process of managing exceptions is time consuming, between bouncing around the business through levels of approval and liaising between the employee and the vendors. But how much is this time costing, and what would be the impact of returning this capacity to the business?
  • Cost of employee experience – the employee spends their first month of assignment having to request additional support and argue with HR over the cost of additional services, which would greatly ease the transition of them and their family. What will be the downstream cost of the employee’s experience with the company, and the impact on retention?

Exceptions as a driver for change

Proper exception tracking and management means data, and data provides us with the cold, hard facts to drive change. A business case for modifying policies and presenting cost benefit analysis can be produced. 

For example, where a policy is seeing a high rate of temporary housing extension requests, the right data allows you to calculate the fully burdened cost of that request as follows: 

  • Seven-day temporary housing extension = $3,500
  • Seven-day short term storage extension = $500
  • Tax on additional benefits = $2,600
  • Two days vacation time taken by employee to search for housing = $2,000
  • Two hours across all necessary business stakeholders managing request = $3,000
  • TOTAL of exception request: $11,600

If you multiply that across the number of requests for a given population you could easily make the case that it is much more time and cost effective to introduce a two-day home search service at a cost of $2,000, whilst also significantly increasing the employee experience and their sense of being ‘taken care of’ by the company.

Controlling exceptions with technology

With a proper platform in place, tracking not only the exception requests themselves but overlaying this with the underlying assignee and program data to track trends and provide analysis, managing exceptions moves from a manual process on excel spreadsheets (if at all) to an automated process performed by the system and instantly delivering value.

Technology is also able to track every variation to the policy, whether it is pre-agreed, arises during the move of is pre-approved as standard, so you’re not missing key data points.

With the system doing the work it is very easy to identify trends. For example, one of our customers saw 737 exception requests submitted for approval in a given year, but found that 84% were approved. Those that weren’t always fell above a certain cost within a given benefit category. Meanwhile, the team was spending roughly 40 minutes managing each exception, meaning that the cost of approving $1.2M in exceptions was an additional $90,000 – another full time employee.

Using the system to collect and track the data, this customer was able to setup automatic approval thresholds and make tweaks to policy, dramatically reducing the time spent managing the exceptions while improving the overall employee experience.

Empower the employee to do what’s right

Taking a more holistic and strategic approach to exception management ties in with the wider HR trend we are seeing in the market – empowering employees to take ownership of their own situation and trusting them to do the right thing. We’re seeing companies introducing unlimited vacation time and parental leave, and building ‘employee experience’ departments in the place of HR departments. This acknowledges the power of removing the layers of administration around managing the employee population and focusing on hiring people with the right behaviors and ensuring a positive experience that is going to drive retention.

By pivoting the focus of the exception management process towards experience improvement rather than cost control, we move towards a place where mobility experiences will equally be more successful and the right kinds of employees will stay with your company for longer.

Bringing it all together

Are you fully capturing all policy exceptions?

Items such as pre-negotiated changes and pre-approved exceptions should be included in your tracking and analysis.

Are you utilizing the information to its maximum value? 

More than just showing cost containment, exception management should impact policy, location and personnel considerations.

Do you have a system in place to enable proper tracking and management?

Let a technology platform do the work of tracking and collecting exception data so you can focus on the analysis and driving change.

To watch our webinar on this topic in its entirety click here, or learn more about MOVE Guides by visiting

Chantel Rowe is a Solutions Consultant at MOVE Guides, where she helps customers across sectors deliver and optimize their global mobility programs. She has 11 years of experience in global mobility, including managing the mobility, tax and payroll function at Societe Generale, and consulting financial service.

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