If the transferee can travel by auto, reimbursing for mileage expenses is common. These are commonly included features of typical relocation packages, which we outline in our guide.
Depending on your industry and facility locations, there may be additional features to consider. Your typical relocation package may or may not include these noted features. However, in all cases, you should regularly compare your package with those of your competition. Benefit structures and policies vary across companies. In years past, relocation assistance was offered almost exclusively to higher-level employees or specialized contractors.
Today, with a more global economy and better-educated workforce, the competition for talent is stronger than ever; consequently, smart companies are jumping on the relocation benefits bandwagon. A survey by DSJ Global indicated an upward trend around relocating employees. Relocation packages are increasingly becoming used not only as a way to keep in-house talent happy in the event of a transfer, but as an effective recruiting tool, particularly for globe-trotting millennials who often relish the chance to broaden their business and personal horizons.
There are nearly as many types of job relocation packages as there are employees needing relocation assistance and the companies that hire them. A typical relocation package usually covers the costs of moving and storing furnishings, household goods, assistance with selling an existing home, costs incurred with house-hunting, temporary housing, and all travel costs by the employee and family to the new location.
Job candidates and new hires may have a bit more power when negotiating relocation packages, as it usually costs much less to move an employee than to pay a higher salary. The transferring company hires and directly pays for a moving company as well as costs involved in selling a current home and all other services needed to help relocate the employee and family.
A set amount of money is given directly to the employee to pay for moving and related expenses. For tax purposes, the government considers this as income and therefore taxable, so to offset tax liabilities, companies often reimburse for those in the form of a gross up, which frees the full amount of cash for the move.
Another possible drawback is that it may be difficult to correctly estimate the total costs up front, due to unexpected out-of-pocket expenditures. The employee pays for everything up from and is reimbursed by the company after the move. This requires careful record keeping by the employee, including tracking all receipts for expenses.
Additionally, employers will likely set a limit above which they will not reimburse. In this scenario, all logistics related to moving, including real estate or rental expenses, are outsourced to a third-party that coordinates a comprehensive array of services.
Some of these may include marketing and sale of an existing residence, spousal employment assistance, storage of household goods, and rental assistance. The third component is supply chain revenue. When you agree to use suppliers under contract with the relocation company they will earn revenue from these suppliers such as household goods movers and temporary living providers based on licenses and agreements.
This additional revenue will further lower the fees charged by the relocation company. And finally, real estate referral fees. Relocation companies earn additional revenue when they refer your employees to highly qualified real estate professionals that help them buy and sell homes. When these referrals are received the relocation company is able to lower your service fee and more importantly deliver a higher level of service to your relocating employees.
Hopefully this has helped you understand some of the factors effecting pricing by relocation companies to manage your mobility program. You don't want to get stuck with expenses for items that you thought would be covered but aren't. Some employers frequently deal with relocating new employees and may connect you with their sub-contracted companies.
Others may give you a lump sum to pay for relocation, or ask you to keep all receipts for reimbursement. Ask for specifics beforehand. Because relocation expenses are a one-time cost for a company, negotiating a relocation package is sometimes easier than negotiating a higher salary. For companies, covering relocation services can be a smart, cost-effective recruitment tactic — employers may try to attract candidates by mentioning in job listings that relocation services are available.
Paying moving expenses may also help employers retain internal candidates, which is often cheaper than paying the costs of hiring and training a new employee. Ask Questions. Begin the process by asking if the company provides relocation services and what the company typically provides. Even if the company does not provide full moving expenses, they may be willing to reimburse some costs.
Know Your Numbers. If the company typically offers relocation packages, they may have a sense of the costs. Otherwise, it's up to you to provide the employer with a sense of how the move will affect you in terms of time and money spent. As well, review the various relocation services that employers provide above. This will help you know what you want, and make a specific, detailed request. Get the Details in Writing. As with any job-related benefit , it's important to have all the details in writing.
That way, both you and your employer will be clear on expectations and coverage. Employers may offer it as a perk at their discretion. When Offered, Job Relocation Packages Vary: Some will offer a lump sum, while others will ask you to track your receipts for reimbursement.
Always Get the Offer in Writing: The exact terms of the job relocation package should be spelled out. Actively scan device characteristics for identification.
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