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Takeaway #4: 2017 Tax Reform Continues to Sting
Our group was unanimous in expressing that The Tax Cuts and Jobs Act of 2017—which eliminated the individual moving expense deduction for the transport of household goods, storage and final travel—came as an expensive, unwelcome surprise. Nevertheless, all their companies absorbed the additional costs, grossing up benefits to cover employees’ tax liability.
At the same time, their companies are developing new ways to help offset or limit mobility program costs. Some have instituted payback requirements for employees who leave within a year of relocating. Others are limiting relocations for entry-level employees, who are easier to find than professionals with specific expertise. And still others are rethinking the travel expenses incurred by remote employees who commute long distances.
Panel members also confirmed the necessity of educating their peers on the financial side of the business, so they understand why relocation costs are what they are.
Takeaway #5: Avoid Lump Sum Only Benefit Plans
While lump sum relocation benefits—where employees are given a pot of money to move themselves, but no support or preferred vendor network—remain popular with some employers for their affordability, our experts felt they were asking for trouble, noting “things always go wrong.”
The panel’s collective experience has been that most employees need some level of specialized support to orchestrate a smooth move. Under lump sum policies, employees have no recourse for vetting the quality of the vendors or for shepherding the planning process. Furthermore, often the lump sum falls short of what is needed to complete the move, creating additional headaches for employers and employees.
Takeaway #6: Many Moves Are Shrinking
One trend our panelists noted is that employees are not moving the same volume of household goods as they did in the past. Many are taking advantage of discard and donate programs, which allows employees to recycle or repurpose their furniture and belongings responsibly before they relocate, then replace it once they arrive at their new location.
One panel member observed that this is economically and environmentally sound, although it creates greater reliance on temporary housing until freshly-relocated employees can sort themselves out.
Takeaway #7: Changes Ahead
Our panelists expected the relocation industry to continue evolving in the years ahead. Several speculated that some traditional Relocation Management Companies (RMCs)—wounded by the changes in tax code and falling behind technologically—won’t be able to cut it.
Another noted that candidates don’t generally ask in-demand employers many questions about their relocation programs—they take for granted that benefits are first class, raising expectations across the board.
Others noted that some employers will continue to develop more formal benchmarking processes for their relocation programs, based on internal challenges and priorities.
Employers will seek out relocation companies that offer high-touch service but are geared to smaller budgets—choosing relocation partners who match their company’s flexible, forward-thinking culture.
We’re grateful to our guests for sharing their time and insights with us. Our panel was moderated by UrbanBound's Co-Founder, Jeff Ellman, and included:
- Helena Aten, Sr. Manager, Talent Acquisition, Ultimate Software
- May Caffi, Sr. Director, Relocation Services & Immigration, Marriott International
- Rebecca Stephens, Director of Global Mobility, Indeed
- Natacha Sittner, Talent Mobility & People Operations, Illumina
We also want to thank MiniMoves for sponsoring the event!