Home-finding trips are a common part of many relocation programs, enabling employees to visit their new location to find permanent housing before they start their new job. This typically covers the cost of one trip including travel to and from the destination, temporary accommodations for the duration of the trip, transportation and meals, and sometimes a local resource such as a rental or real estate agent.
Having housing sorted out before the actual relocation means your employee can get settled and be ready to work on day 1, rather than worrying about where they'll live, living out of a suitcase, or being distracted with apartment/house hunting appointments after they move.
The problem is that home-finding trips are often rushed and confusing, and most benefits only cover 1 home-finding trip that's typically limited to 4 or 5 days. It's very difficult for anyone to find a place to live in such a short time - especially in an area they're not familiar with.
As a result, one of the most common exception requests for relocation policies is for an extension of the short-term housing and storage of household goods components due to not being able to secure permanent housing before the move. This is becoming even more common with the current supply shortage for housing. With an average of two months to buy and sell a home, it's pretty unlikely your employee will be able to successfully find housing in one trip. This means they'll need longer short-term housing and household goods storage.
While the best thing to do is approve these exceptions (otherwise you risk a stressed, frustrated employee who feels unappreciated by the company), it can cause your relocation budget to quickly spiral out of control. As many of our clients have realized, you can minimize this impact by adjusting your policy coverage, specifically the number of home-finding trips.
Household goods storage and short-term housing are two of the most expensive pieces of a relocation package. Let's take a look at the costs of each:
Average Relocation Costs
| Flight (employee + spouse) | $800 |
| Transportation (ex: rental car) | $200 |
| Accommodations (5 days) | $650 |
| Meals | $500 |
| Short-term Housing (1 month) | $4000 |
| Household Goods Storage (1 month) | $200 |
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Home-finding Trips
Let's say your relocation package includes 1 home-finding trip of 5 days/4 nights, and 30 days of household goods storage to cover any gap in timing. That would cost approximately $2150.
Short-term housing
Temporary housing is typically offered for up to 30 days at a national average of $4000 per month, and the employee also has to put their stuff somewhere while they wait to move into their new home. On average, the cost of 1 month of storage is $200. This means for just one month, you're looking at around $4200 - potentially more depending on the location, and how much storage space is needed.
Storage $200/mo
Corporate housing $4000/mo
The average time to sell a house is around 2 months, and buying a house these days can take even longer due to the competitive housing market. The timeline for moving household goods is also backlogged with at least 8 weeks being the current standard.
Comparing the cost of short-term housing vs home-finding trips, means that just 1 extra month would cost $4200 just for housing and storage. You could provide an additional home-finding trip for half that. Or, you could extend the length of the trip for even more cost savings. Even better, if your employee is savvy and finds permanent housing faster than expected, you'll save the extra money but still look like a hero for offering it as part of their relocation package.
By increasing either the number or duration of home-finding trips you can significantly reduce the amount of short-term housing and goods storage needed, which helps cut relocation costs overall.
