Corporate Moving: What to Know About Employee Relocations

In competing for the talent to run your business, moving employees to the right role for them to succeed can drive efficiency and retention.  Sometimes this requires transferring an employee’s location. When business needs require the employee to move, it’s common to present them with employee relocation benefits. This makes the moving process more affordable and streamlined for the employee while allowing your company to retain and reward talent.

This process is called “employee relocation” or “corporate relocation.” If the move will be international, the process may be termed “global mobility.” No matter what name is used, the process of corporate moving is intricate, involving the creation of a corporate relocation benefits package and, once the offer is accepted, the transfer of household belongings to the new location along with other package benefits provided.

This post will provide high level guidance about types of corporate relocation packages, addressing employee concerns, and partnering with a relocation company. To talk about your specific needs, please contact us online or call (888) 903-7695.

Types of Corporate Relocation Packages

Companies typically define a corporate policy to govern the benefits offered for employee relocation.  This gives structure to the program and supports equitable treatment of employees.  Here are four commonly used formats:

  • Lump sum packages: As the name implies, the company will give the employee a lump sum payment to cover all or part of their relocation expenses. If the costs go over, the employee must cover the difference. If the move can be executed for less than the lump sum provided, the employee keeps the difference. For the company, this simplifies the program and provides predictable expenses, and employees enjoy the autonomy of choosing how to spend the funds. The downside is that some employees feel compelled to find relocation shortcuts to maximize what they keep—with unintended consequences of stressful, less-than-ideal moving experiences that don’t get them off to a great start in the new role.
  • Capped allowance packages: With this kind of employee relocation package, the company sets a limit on what they’re willing to spend on the move. In a sense, the employee is given a budget that they can work within. In this type of corporate moving package, the employee may submit receipts for their actual expenses, and only be reimbursed up to the cap. Or the program may be managed by a relocation management company that arranges services for the employee, managing to the available budget.
  • Tiered benefits packages: Under this scenario, the amount of money budgeted for an employee’s move may depend upon the seniority of the employee and the specifics of the move. An executive, for example, could receive a more comprehensive package than an entry level employee. The company could also take into account whether the employee is a renter or homeowner with a mortgage (and the need to sell their home). Other considerations could include whether the move is within the same country or international in scope, and whether or not the employee must move a family. Tiered benefits packages can be popular with companies because of their flexibility.  Tiers introduce complexity, but there’s a compelling case for equitable treatment of the whole person rather than the simpler, equal dollar disbursement.
  • Full relocation coverage benefits packages: These are appreciated by the employees who will relocate and so companies can use them to recruit star employees and to retain them in today’s employee-centric job market. Even these programs are structured by policies of what is covered, but there will be tolerance of exceptions. Because this provides less cost predictability for the company, some businesses may decide to reserve the VIP treatment for senior-level employees only.

It’s important to weigh the pros and cons of each package type and to develop one that’s attractive and equitable to employees while being reasonable and beneficial for the company. You may decide to review this policy annually to take inflation, what your competitors are offering, and other factors into account.

What a Corporate Moving Policy Includes

Common elements to include are as follows:

  • Household goods moving expenses: These include relocation services like securely packing employee belongings and loading the truck, costs of transporting the goods, then unloading, and unpacking. Costs can vary based on how much an employee owns, how many fragile or especially large items they have, the number of stories in a home, and so forth. This also includes the dollars needed to insure goods during transit.
  • Costs of buying and selling a home: If the employee owns a home, then there will be costs associated with putting the home on the market, closing costs when selling, and so forth. The employee may need to put belongings into storage to stage the home. On the other end, there are costs associated with finding and buying a home, including mortgage closing costs. The employee may need to rent an apartment or home before moving into a new house, and this can involve storage costs.
  • Employee (and family) traveling costs: Expenses can include plane or train tickets or a gasoline stipend if the family will travel to their new home by car or truck.

Additional components to consider include the following:

  • Spousal employment help: If the employee’s spouse will need to seek employment in the new location, a company may offer support.
  • School finding or registration assistance: This would come into play if the employee’s children are still in school.
  • Cultural assistance: With international moves, companies may pay for language lessons, provide training sessions about cultural differences, discuss differences in currency and banking, and so forth.

As a final consideration, the Tax Cuts and Jobs Act of 2017 largely removed tax exemptions and deductions associated with employee relocation costs. This made relocation relatively more expensive for employees.

Employee Concerns You Can Address

Do I have an employee relocation package and, if so, what’s included?

Share information about corporate moving benefits with your recruiting team and human resources (HR) business partners so that they can provide this upon request. You may decide to include this information in recruiting/onboarding materials and employee manuals, updating the information as you make changes.

How much money will I get for my specific move and how will the expenses get paid?

Written employee relocation policies will only include high level information because each situation is unique. Expect employees to ask you how this translates into a budget for them and answer any questions they have about how it will work.

If, for example, you’ll transfer a certain amount of money to their bank account and then require receipts for payments made, then explain that process. If you pay invoices directly for an employee, describe how that works. If you require employees to pay expenses and then you reimburse receipts, explain that process and let them know how long it may take for them to receive funds and how they’ll get them (bank deposit or check, for example).

Setting expectations for employees goes a long way in feeling satisfied with a move.

What if the employee relocation package isn’t enough to cover my expenses?

If your company doesn’t offer a full package to employees (or if the employee who asks this question doesn’t qualify for a full one), make sure your HR team is prepared to answer questions like this.

When an employee is being asked to take on a business-critical role, you want to be ready in advance with an offer that makes it easy for them to say yes.

How much time do I have to relocate?

This answer can vary, based on how quickly you’ll need the employee at the new location. It isn’t unusual for companies to have a general policy (say, one month) and then offer flexibility, as needed. What’s important: be clear about your policies and fair in how you treat each employee.

At the end of the conversation with an employee, it can help to ask them if they have any outstanding questions. The more fully they’re answered at this point in the process, the more smoothly the move is likely to go with the employee feeling less stressed and more confident.

Comparing Corporate Moving Companies

Because the moving process is at the heart and soul of relocating employees, it’s important to choose carefully among relocation companies. So, make a list of possibilities, asking fellow professionals which companies they’ve used and how happy they’ve been with the relocation services provided. Did they have any concerns you should know about?

Browse the sites of the relocation companies on your list. Do they offer the relocation services you need? Do they move employees from and to the geographies you’ll require?

Check to see how long they’ve been in business. This allows you to gauge their financial stability and ability to sustain their corporate moving services. Suddath, for example, has been in business for more than 100 years and we’ll be here for your company today, tomorrow, and into the future.

As you narrow down your list, ask how the corporate moving companies will communicate with your HR team and with the employees being located. Do they use a single point of contact to help prevent miscommunications and confusion? How do they leverage technology? How much of a personal touch will your employees receive?

Plus, in today’s data-driven world, it’s important to choose movers who take strategic steps to ensure client and employee information is protected on every level.

Choosing Suddath for Corporate Relocation

When you select Suddath for your corporate relocation company, you’ll benefit in numerous key ways, including our broad menu of quality relocation services. We have thirty-plus locations and regional headquarters around the world with top-notch global partnerships.

Suddath provides moving services you can count on, something we’ve done for more than a century, and we’re here to stay. Our pricing is competitive and transparent, and there are no hidden fees. To get started with your employee relocation services, please contact us online or call (888) 903-7695.