This is a guest post, written by Darlene Mass, a writer for the apartment rental site, Zumper.com.
When an employee is offered a promotion in another city or the company transfers and the employee needs to relocate, employers will often offer a relocation package. While employers are not obligated to provide relocation packages, it can incentivize a valuable employee to relocate to a new city and help to keep them working at your company.
As an employer, one of your top priorities should be ensuring that your employee has a smooth transition during their relocation. Here are a few tips on how to make your employees’ relocations as stress-free as possible:
Provide an employee relocation package.
Corporate relocation is on the rise, and perhaps your business would benefit from relocating an employee to another city. If so, you need to start thinking about relocation packages for your employees.
There are many surveys out there that try to determine the average cost of a relocation package, including building relocation costs, and they can range anywhere from $20,000 to $100,000. However, your employees will appreciate whatever support you can provide. Smaller companies or companies who relocate a lot of mid-level or recent grads, tend to provide less valuable packages.
What does a typical relocation package include?
While it’s difficult to know the specifics of the relocation package until you know the employee and the assignment, it’s important to have an idea of what you want your relocation package to include. Here are a few examples of things commonly included in company relocation packages.
- Orientation Trip: Some employees, especially expats, will travel to the new location to familiarize themselves with the area and investigate accommodation options. The orientation trip costs generally include hotels, meals, airfare and ground transportation.
- Transportation and Moving Costs: Companies may reimburse travel expenses to the new location including airfare, cost of gas, or train tickets. Cross country movers and other moving-related expenses may also be part of the package. Some companies may even hire professionals to do a full packing and unpacking of the expat’s belongings.
- Home Sale / Lease Break Costs: Any costs associated with either purchasing a new home, selling a current home, or breaking a lease are sometimes included as part of a higher-tier relocation package.
- Spousal Support: Again, in some higher-level employee moves, if the relocating employee is married, a company will provide spousal support. Which can include: helping the spouse find a job or establish their own business.
Benefits included in the package for employee relocation vary greatly depending upon the circumstance, company or employer.
What is the average relocation package bonus?
Additionally, some employers offer a relocation bonus with the average relocation package. These bonuses are typically paid as an incentive for the employee to agree to relocation or if the employer recognizes that the cost of living is higher in the new location compared to the employee’s current area. Relocation bonuses are a one-time deal and oftentimes have to be paid back if the employee leaves the company before a certain period of time.
Even the most well thought out employee relocation package may need a little tweaking. You won’t know exactly what your employee needs until it’s time for them to relocate, so keep an open mind, and be willing to negotiate and adjust the package accordingly. Be willing to negotiate on the employee relocation package.
Most employers choose to negotiate relocation packages instead of salaries. Relocation costs are a one-time expense whereas salaries are recurring.
Know which method of relocation expense reimbursement to use.
There are three primary ways in which corporations disburse money to relocating employees: lump sums, capped allowance plans (also known as direct bill), or a core/flex program. When a company gives a relocating employee a lump sum, they are essentially giving them a signing bonus to use for relocation purposes. If the employee does not use the entire lump sum, they get to pocket the rest.
Capped allowances set a limit as to how much the employee can spend on a relocation. The employer usually pays for these expenses by way of direct bill. If money is left over, the employee does not get to keep it.
A core/flex plan includes a combination of both direct bill and lump sum. This means companies have a policy that has some expenses covered through direct bill, like household good moves or temporary housing, and for things that can’t be direct billed, the employee is either reimbursed or simply given a lump sum.
Enlist help from a relocation technology company.
Looking for a place to live, hiring movers and flying to a new destination are all things that only add to the stress of an employee’s relocation. Technology companies, like UrbanBound, can help streamline this process by automating moving to-dos in one central platform.
Plus, relocation management software can also take the pressure off of your internal HR department.
A lot of behind-the-scenes work goes into successfully relocating an employee from one town or country to another with the average relocation package. If relocation is in the air at your business, it’s time to start thinking about building out a relocation package!