A short-term housing benefit is a key component of most corporate relocation plans.
In a nutshell, short-term housing gives relocating employees a temporary place to live in their new location while they’re waiting to finalize their permanent living arrangements.
Needless to say, providing a short-term housing benefit is a smart way for employers to get new hires and transferees up and running quickly in their new location—even before they sell their old house and close on a new one or take possession of a rental. And right now, that speed is more important than ever.
For one thing, due to the tight labor market, many employers are chronically short-staffed—so the quicker they can get their newbies on the job, the better. In specialized industries, such as healthcare and technology, this is especially true.
For another thing, because the housing market is so competitive, it may take employees longer to find the home they want to buy. Currently, properties are only on the market for a quick 16 days before they go under contract. For buyers—especially long-distance ones—it’s not always easy to move that fast.
Any way you slice it, offering short-term housing gives employers an edge. But how exactly does this benefit work?
Like everything else in the corporate relocation universe, there’s no single answer. When it comes to short-term housing benefits, employers can arrange things any number of ways—and that’s a good thing.
Employer’s Choice: Buy, Rent or Get Creative
Some employers provide relocating employees with a flat relocation benefit or fixed short-term housing allowance—and leave it up to them to make their own arrangements. They may provide a list of recommended properties, or not.
The obvious problem with this approach is that it puts more on the relocating employees’ plates—not to mention, pushes their start dates out. Not only do employees need to find permanent housing, now they need to find short-term housing as well—stat! For this reason, many companies elect to set up their own short-term housing arrangements, which is not only faster and easier for employees, but typically more cost-effective for employers.
So, what does that short-term housing look like? It depends. Employers may choose to:
- Purchase a corporate condo unit or residential property for this purpose
- Contract with an extended-stay hotel and make it their go-to arrangement
- Put employees up in local hotels on an as-needed basis
- Use vacation rental services like Airbnb and Vrbo, an increasingly-popular choice
- Take advantage of unoccupied college dorms—a good choice for housing summer interns
In other words, it’s up to each employer to determine what makes the best sense for them and their employees, financially and practically.
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Managing Short-term Housing Costs
Under most standard relocation policies, short-term housing benefits are offered in 30-day increments. Since it takes an average of 51 days to close on a house, employers frequently end up offering an average of 60 days of short-term housing, depending when the clock starts ticking. And, in certain situations, exceptions are required, so employees can stay longer.
That can be an expensive proposition. By one industry estimate, short-term housing costs an average of $4,000 per month. Obviously, it’s in the employer’s interest to manage its short-term housing arrangements carefully.
One effective way to keep short-term housing costs down is to offer longer house-hunting trips, especially in competitive markets. This way, employees are more likely to find a place to live the first time around, likely saving employers money in the long run.
For employers that outsource their relocation programs to third-party relocation companies, there’s another option as well. Some relocation providers have gone out of their way to find cost-effective short-term housing solutions—such as striking discounted agreements with national hotel chains—so they can offer their clients easy, quality, affordable options.
At the end of the day, short-term housing is one important piece of the complex corporate relocation puzzle. And yes, it is complex indeed—as more employers simultaneously commit to improving the employee relocation experience while keeping a lid on costs. The good news is, there are solutions—and they’re closer than you think.
