Relocation (Signing) Bonus vs. Relocation Package

Sourcing and hiring top talent can be challenging across all industries, and today’s hot job market is making it more difficult than ever. This is why strategic companies will seek talent outside of the local pool and provide relocation benefits to candidates willing to move. 

At UrbanBound, we tend to see two types of benefits:

• A signing bonus. Also known as a lump sum, cash, or relocation allowance
• A relocation package with covered services. Often comes with the support of a relocation management company

Both of these benefits are attractive options to employees joining a new company; however, they both have their downsides, too. There are several important differences that everyone needs to keep in mind because they could play a role in any negotiation process.

What are the differences between a relocation package and a signing bonus?

The Relocation Package

The objective of a relocation package is admirable: to smooth and simplify the relocation experience, so new employees can show up on their first day ready to work. While relocation packages come in all shapes and sizes, the main goal is to provide relocation assistance for employees.

They do this by providing: 

• A list of pre-determined services that are covered or partially paid for by the company. This could include but is not limited to: assistance with the sale and purchase of a home, final destination travel, the transport of household goods, and temporary housing.
• A list of pre-determined vendors: Under many traditional relocation packages, employees are required to choose from a group of pre-approved vendors.
• Orchestration of the move: Often, these services are provided by a third-party relocation management company (RMC); sometimes they’re provided by in-house mobility units. Either way, the work is conducted primarily via phone and email by live specialists.

Not every company is able to offer a comprehensive relocation package. The costs are incredibly unpredictable and depend on the employee’s specific situation, family size, and the extent of possessions. Additionally, relocation packages can be limiting for the employee. There may be some services not covered in the relocation package. Therefore, some companies will instead offer a signing bonus.

The Relocation Bonus

Some employers have turned to the opposite approach of a relocation package: awarding cash benefits, also called relocation bonus, lump sum or cash allowance, without accompanying services.

Under this arrangement, employees are given a fixed sum and directed to make their own arrangements. The employee is left to decide how to use the relocation sign on bonus to manage their entire relocation process. While this may sound like a dream come true, it can become a nightmare for employees who aren’t experienced movers or skilled planners and often leads to a less-than optimal relocation experience for the employee.