The term “corporate relocation” is one that conjures multiple definitions, depending who you ask. It’s a standard business practice. A specialized employee benefit. A $25 billion industry. At its most basic level, corporate relocation is when an employer facilitates an employee’s work-related move by subsidizing the cost and/or providing related services.
The goal of corporate relocation is to physically move an employee, his/her family and their belongings from Point A to Point B as quickly, painlessly and affordably as possible—so that employee can become productive in his or her new role as quickly as possible.
To put it another way, corporate relocation is a talent acquisition and management tool used by employers to optimize their workforce. Employers offer corporate relocation benefits to new hires, existing employees, and occasionally, interns. It’s both a hiring tool and a method of filling positions internally by transferring proven employees.
There are two sub-categories of corporate relocation: domestic (i.e., moves that take place within the U.S.) and international (i.e., those that involve moving from one country to another).
The 5 Key Components of Corporate Relocation
While there are infinite ways for employers to structure corporate relocation policies/packages, most are organized around these five components:
- Moving employees and their family to the new location
- Moving their household goods
- Helping employees find permanent housing, whether selling/buying a home or renting
- Helping employees arrange short-term housing until their permanent housing is finalized (this typically also involves the temporary storage of household goods)
- Helping employees and their family acclimate to their new area
Some relocation policies are rigid in terms of how they define the benefits associated with each of these activities. However, modern, competitive relocation programs are flexible in how employees can use their benefits, allowing them to tailor their relocation to their situation.
This is likely to result in a positive relocation experience for employees—a key goal of corporate relocation programs, since happy employees are more productive and more likely to stick around.
3 Main Types of Relocation Packages
While corporate relocation packages continue to evolve, these are the most common types we see:
- The lump sum package – A basic relocation package, where employees receive a flat sum of money to use as they like, but no support services.
- The fully-covered relocation – The richest package, reserved for high-level executives. Here the employer pays all related relocation costs, while providing the services of relocation consultants.
- The managed budget package – A practical, increasingly-popular alternative, where employees receive a fixed amount of funds, plus the support of relocation specialists to help them manage it.
Many employers use tiered relocation programs—a cost-management strategy that involves offering different relocation benefits to different level employees, potentially mixing and matching the above packages.
Obviously, each package has its own pros and cons in terms of ease, expense and employee experience.
Stay up to date
Subscribe to the blog for the latest updates
The Corporate Relocation Industry
Although some employers handle relocations internally, many employ third-party relocation management companies—RMCs—instead. Because relocations are labor intensive, this frees their staff to focus on larger priorities.
There are two types of RMCs: traditional and tech-based.
Traditional RMCs run on paper and people. Employees are assigned a relocation specialist to help arrange their move, generating a flurry of forms, receipts, emails and phone calls. Traditional RMCs are expensive—partly due to the many labor hours involved and partly due to an unfortunate industry practice of marking up vendor invoices.
For this reason, a growing number of employers are turning to more affordable, modern, tech-based relocation companies.
Under this model, relocating employees gain access to a personalized portal, where they arrange the details of their move online. Forms and receipts are managed digitally. Because the software operates in real time, employers and employees can monitor the status of the move—and their accumulating expenses—in real time.
The best tech-based relocation companies also offer employees access to experienced relocation specialists. And instead of marking-up vendor invoices, they build relationships with vendors that result in discounted pricing—translating to much lower costs for employers.
UrbanBound is a tech-based relocation company; in fact, we pioneered the industry. So, what’s our redefinition of corporate relocation? It’s a solution—one that’s easy, affordable and that results in great experiences for both employers and employees.
