What a Strong Economy Means for Employee Relocation

Posted by Abby Baumann on Feb 22, 2018 8:00:00 AM

booming-job-market.pngThe Great Recession had huge impact on the relocation industry. Between 2008 and 2010, there was a dip in the number of relocations, and an overall reduction in relocation benefits altogether. In the rarity that a relocation benefit was provided, it was often times given in the form of a lump sum or a small cash allowance. However, all that has changed in the last 5 years, and more specifically in the last year.

In fact, the economy is the strongest it’s been in a very long time—even with the sporadic dips in the stock market. Plus, 2018 tax law reduced the corporate tax rate which could contribute to further economic expansion. With a strong economy, comes a strong job market, and here are some signs of this:

Signs of a Strong Job Market

It’s a great time to be an American worker. However, what does the booming job market mean for American businesses?

As the job market continues to grow, the fight for qualified talent will become increasingly more competitive. And employers will have to get creative in their recruiting efforts. Employers will adapt to candidates rather than asking candidates to adapt to them, and offering employees a relocation benefit is one way companies can adapt to their candidates.

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How Relocation Benefits Fit into the Growing Economy

As the unemployment rate dwindles, the pool of available talent gets tighter and tighter, and hiring managers have to get realistic. What’s the likelihood that the quantity of talent needed, lives in the city where a company operates?

Despite what some universities or cities will lead one to believe, there’s not one central epicenter for the best candidates—skilled professionals, technicians, and students can be found across the globe. If a company only recruits within their city, state, or country, they are limiting their candidate pool even further!

Branching outside a geographical comfort zone to recruit talent, will ensure that a company will find the right person for the job. What’s more, when a company offers a relocation benefit to all of their relocating employees, from C-Suite executives to campus recruits, it shows candidates that the company values all of its employees, and further distinguishes the company in the fight for top talent.

How Employee Relocation Technology Can Help

A healthy job market requires a strong relocation benefit as one way to distinguish a company as an employer of choice. It shows prospective employees that a company cares about the individual. 

Utilizing technology to power your relocation program creates efficiency that can’t be achieved or replicated by people. Plus, companies don’t need to sacrifice employee experience to achieve efficiency through technology. Many employees today want access to online, self-service tools to manage their relocations. In fact, they often time expect it. Find out how Urbanbound can help distinguish your company and attract top talent.

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Topics: Relocation, Recruiting

2018 Tax Reform: What You Need to Know

Posted by Abby Baumann on Dec 18, 2017 5:35:27 PM

2018 tax reformOver the last few weeks, the headlines have been filled with coverage about the “TaxCuts and Jobs Act” bill. Discussion has focused on issues ranging from the number of tax brackets to the child tax credit and the alternative minimum tax. The final bill is expected to pass this week, and there are a number of impacts to businesses in America—including changes to how relocation benefits are taxed.

Here is what you need to know about how relocation taxes will change.

The Moving Deduction

For the past 20 years, certain moving expenses associated with relocating for a new job have been considered deductible for individuals, given they meet the time and distance tests. These qualifying expenses (household good moves, storage, auto shipments and final travel) have also been considered excludable, if paid for directly by the employer.

Tax Reform 2018: Eliminating the Moving Deduction

The proposed tax bill will eliminate the moving expense deduction (with the exception of military moves) which would make the following moving expenses taxable: household goods moves, storage, auto shipments and final travel. This means there will be significant tax liability for you or your relocating employees starting January 1, 2018.  

As we wait for the final bill to pass, there are a few things you can do to prepare.

Pay Outstanding Relocation Invoices By the End of the Year

If you are currently offering direct bill benefits to take advantage of tax exclusions, we recommend that you pay any outstanding household goods, final travel, in-transit storage and auto-shipment invoices before the end of the year. If the invoice is paid in 2017, it will follow 2017 tax laws, and will be considered excludable. The IRS does not consider services to be a relocation benefit to the employee until the employer pays for the service on the employee’s behalf. That is why any expenses incurred in 2017 but paid in 2018 may be subject to 2018 tax laws.

Decide How to Help In-Progress Relocations

If the tax bill passes, companies will need to reevaluate their current relocation policies, especially ones that only cover current deductible expenses. Because the bill will make formerly deductible relocation expenses taxable, there will be a new tax liability with your relocation policies. You’ll want to start reviewing your policies to decide how you want to handle this tax liability—especially for your ongoing relocations.

relocation for tech companies

Grossing up the tax liability will provide the best experience for your relocating employees. Grossing up means that the company estimates the tax liability and pays the IRS for the estimated amount on behalf of their relocating employee. If the tax bill passes, it will go into effect January 1st, so you will need to decide what to do with employees who are already in the process of relocating. For employees who were expecting to receive a tax deductible benefit, you should strongly consider grossing the tax liability up, in order to avoid unexpected taxes for these individuals.

Revisit Your Current Policies and Reallocate Money to Your Relocation Budget

Just like you need to reevaluate your policies for ongoing relocations, you also want to begin evaluating long term changes to relocation. The first decision you'll need to make will be if you will gross-up or withhold on taxable relocation benefits. As mentioned above, grossing up provides a better experience for the employee. If you're asking employees to relocate and take on all tax liability for their relocation, you may find it harder to attract and retain top talent.

In addition to deciding to gross-up or withhold, you may also revisit your current benefit structure. Many companies have structured policies to maximize tax excludable benefits by offering direct bill. With these benefits becoming taxable, it may be tempting to switch to a lump sum. However, a lump sum offers no insight to employers about how much an employee is spending or on what it is they are spending. With direct bill benefits in place, companies can control costs by paying only for the services the employee uses. It also helps employers budget for future relocation. For employees, direct bill mitigates out-of-pocket costs and connects them with high-quality, vetted service providers.

Looking Ahead: 2018 Tax Reform

In the changing landscape of relocation, empowering companies with the solutions to manage, track, and control relocation costs will become increasingly important. There are many variables that come with this new tax reform, but one thing we know for sure is that technology is only going to become more important for the relocation industry. Remember to keep technology at the top of mind as you prepare for the upcoming changes.

UrbanBound will continue to follow this bill closely and will keep you updated once the final bill is passed. Please continue to check back for more advice on how to prepare for 2018 tax reform.

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Topics: Relocation, Relocation Taxes

How Technology Can Simplify Relocation

Posted by Lauren Decker on Dec 5, 2017 8:25:00 AM

Technology Simplifies RelocationWhen someone finds out they are moving to a new location, they’re typically filled with a sense of excitement and anticipation. New city, new job, new experiences, and a new chapter in someone’s life.

Yet, when it comes time to start diving into the logistics, those feelings of excitement and anticipation can quickly morph into feelings of anxiety and uncertainty. All the work that goes into moving starts to add up quickly and the relocation transforms from an exciting adventure to an overwhelming, tiring journey.

This can lead to your company’s relocating employees feeling overwhelmed with their relocation and underprepared for their first day—a situation that is detrimental to both the employee and the company.

The Complex Landscape of Employee Relocation

One of the reasons relocations can feel overwhelming is the sheer number of activities that need to get done, combined with the fact that the employee usually has to work with numerous people to accomplish those activities. Just a few tasks that have to happen for every move include: packing up your current home, finding a new home, moving all of your belongings, and travelling to the new location. This doesn’t include preparing for the new job or position.

Let’s take a look at one area of this: moving belongings. This alone requires the employee to obtain a estimates from a few suppliers. If they are exploring three different van lines, that means they need to collect and evaluate three different estimates from three different people.

Now, multiply this by all the other services that might need estimates, like auto shipment, pet shipment, storage, and so on. If the employee receives three estimates for each category, they’re managing a total of 12 different quotes from 12 different people.

This is just one example of how employees are required to juggle multiple communications throughout their move. Add in communication around other relocation activities, like selling a home, finding a home, receiving new hire paperwork and booking travel, and you can see how the moving process might seem overly complex (and overwhelming) to the individual moving.

How Relocation Management Technology Can Help

Fortunately, there are opportunities for you, as the employer, to simplify the relocation experience for your relocating employees. While it’s impossible to take all the stress out of the relocation process, there are opportunities along the way to reduce stress. One of the most impactful ways to simplify the process is to manage relocations in a centralized, online location.

relocation technology

This means bringing the relocation experience online not just for the individuals relocating, but for everyone involved, including suppliers, company administrators, and the third party company helping to manage the relocation. Bringing all of these parties into one online, centralized location streamlines communication, allows stakeholders to complete tasks more efficiently, and ultimately helps the relocating employee feel like they are in-control of their relocation.

Let’s take a look at the scenario above (moving household belongings) and consider what it might look like if managed on a centralized technology platform. Once the supplier receives a request for an estimate, they can upload the estimate into the online platform. Instead of the employee trying to manage the influx of supplier estimates via email, they are able to access all quotes from all suppliers in a single place. The employee can then evaluate all estimates side by side inside their online account. As a result, the employees are armed with information that helps them make an educated decision efficiently.

Similarly, an online platform can help reduce stress in other areas. For instance, the HR or Mobility team administering the relocation can share new hire paperwork via the platform. This not only results in a smoother process for the relocating employee, but it also frees up time from the HR or Mobility team to focus on activities that drive more value.

With an online platform at the center of your relocation program, you enable all parties involved to do their job more efficiently, resulting in a more seamless, simplified experience for the individuals relocating. Bringing all aspects of a move online cuts down the confusion and complexity of the relocation process and empowers your relocating employee to take control of their move.

Streamline employee relocation today. Request a demo!

Topics: Technology, Relocation

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