As corporate relocation strategists, we know that moving to a new location can be costly for employees. Corporate relocation packages allow employees to relocate for work without feeling the financial strain that often comes with relocation. With the right thought and consideration, employee relocation packages can benefit both the employer and the employee.
What is a moving package?
Companies typically offer relocation packages to their employees when they offer their employees long-term employment that is over 50 miles away from where they currently work. A relocation package usually covers work-related and relocation expenses to make the employee and their family feel relieved during the relocation process.
Companies that offer decent moving packages can attract applicants for jobs from all over the country because of this advantage. However, the decision of many job seekers largely depends on where they are going and where they would have to relocate. Essentially, a moving package helps make the move easier.
What is relocation assistance?
Relocation assistance occurs when a company assists current or newly hired employees to change jobs.relocation assistanceoccurs regardless of whether the employee moves from one location to another, e.g. B. in a new federal state, a new city or even a new country.
The relocation assistance is intended to help reduce the financial burden associated with relocation and to enable your employees to start at the new location as quickly as possible. Relocation assistance can help with many factors, such as:
- Packing and unpacking services
- Transportation costs
- moving expenses
- disposal of an apartment
- Temporary accommodation
- mortgage help
- Acquisition of a new apartment
- language training
- cultural education
What is the average moving package in 2023?
There are many options to consider when creating a 2023 employee relocation package. The unique benefits that the package offers determine how attractive the relocation package is to your employees or future job applicants.It can be difficult to understand your employees' needs before they begin the move. If you're putting a moving package on hold in 2023, it's important to consider these components.
A flexible start date
New hires typically start work about two weeks after accepting the job offer. If these employees need to relocate, the process can take longer.
When creating a good moving package, it's important to keep in mind and ask your employees how much time they think they'll need to get on their feet. By communicating openly with your employees, you can set a realistic time frame for the move and take the necessary stepscreate a good working environment.
Moving is expensive, so companies can help their employees by offering financial reimbursementmoving expenses. These expenses may include transportation, removal services, and removal insurance.
Your company can either choose to provide only the required funds after themoving employeesubmits the necessary expense reports, or you can choose a single flat rate in advance.
Temporary forms of housing
If your employee has to start work by a certain date, consider helping them to do sotemporary accommodationarrangements. You can either place your employee in a hotel or on Airbnb until your employee has found a house to buy or until they have finished building their new home.
Your employee may not want to buy or build a house and instead rent it. If your employee prefers to rent, you can arrange temporary housing for them until they find an apartment to rent. In addition to the costs for the temporary accommodation, the companies usually also cover the ancillary costs.
Many companies offer their employees free tours of the new location before the move. Allow your employees to visit the area they are relocating to. They may feel less overwhelmed when moving because they have a chance to get to know their new location.
Companies usually offer employees some free rides to learn more about the area and start looking for their new home.
Real Estate Cost Aid
Typically, companies support their relocating employees by covering the cost of buying or selling a home. Businesses usually help by marketing their employees' old homes or by buying the property to sell later. If your employee is currently renting on a lease, you can cover the cost of terminating the lease.
If you ask your employee to relocate, you may be asking their family to relocate as well. In most cases, your employee has a family that also has to move with them.
Your company can help the family by helping the relocating employee's family adjust to their new location. You can support their spouse, find employment, help find a school for your employee's children, or help your employees find childcare for their children.
The cost of living varies depending on where you live; Some companies offer relocation bonuses to cover the difference in living expenses. This can be helpful in states with high tax rates.
Set a payback clause
Businesses need to get a return on investment from the relocation process. To do this, companies should arepayment clause. A payback clause states that if the transferred employee retires before a certain time, he must do soreimburse the company for the moving costs.
Typical moving package options
If you're wondering, "What is an appropriate moving package?" There are many affordable moving packages that you can offer your employees.
Moving flat rate
AFlat-rate moving feeis a standard relocation package as many employees opt for this package.A package dealis when a set amount of money is paid directly to your moving employee to enable them to pay for the costs associated with the move. The government considers this income and makes it taxable.
In order to offset the tax liability, many companies reimburse their employees in the form of a gross amount, freeing up the entire cash amount for the move.
Another factor to consider with all-inclusive moving packages is that it might be difficult to accurately estimate the total cost in advance. If the estimate is underestimated, the employee must cover the difference with his own money.
Relocation package for executives
InRelocation packages for executives, all moving costs will be covered. Moving costs include packing andShipping of household goodsup to £18,000, short term or long term storage, vehicle shipping, transportation costs, home visits for the employee and temporary accommodation costs.
A goodRelocation of the ExecutiveThe strategy is designed in such a way that the relocating employee may encounter problems along the way, especially for your employees with families. You should be able to help find childcare or school for your employees' children.
Spousal support should also be part of the executive relocation packageAssisting the employee's spouse in finding a new job.
Employees often give relocation bonuses to compensate for the difference in the cost of living in the new area. Your company provides each relocating employee with a fixed amount of money based on several factors. These factors include higher living expenses, terminating a lease, moving costs, and house hunting costs.
Amoving feeRequires the relocating employee to pay all relocation expenses out of pocket, knowing that their employer will reimburse them a fixed amount of money once the move is complete.
Usually one company covers all of thatcost of moving, but it is up to you and the employee to agree on what a fair compensation package will include. The employee must keep all receipts to ensure your company does not overpay them when refunding the money.
A common problem with this package is that the employee may not have enough of their own money to pay for the move up front without financial support. This puts the employee in a difficult position as they will likely want to relocate but cannot because they cannot afford to pay for the relocation costs upfront.
What is a generous moving package?
Because there are a few different types of moving packages to choose from, it can be difficult for your employee to choose one that suits them best. When you offer generous moving packages, your employees will appreciate their company's support with their move and will feel less overwhelmed by the whole process.A generous moving package covers all moving costs and gives employees enough time to find their new home.ARC movecan help with various factors related to a move. This includes finding moving companies to assist you with moving your employees, packing and unpacking, and vehicle shipping.Contact ustoday to arrange a free call.
What is usually included in a relocation package? ›
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.What is an average relocation package? ›
An average relocation package costs between $21,327-$24,913 for a transferee who is a renter and $61,622-$79,429 for a transferee who is a homeowner. Of course, this number is just an average of what larger corporations are spending on employee relocation – the relocation amount can be anywhere from $2,000 - $100,000.How much relocation assistance should I ask for? ›
Relocation packages can range in worth from $2,000 to $100,000. What services and the amount of money you decide to cover is entirely up to you and your company. However, keep in mind that the more you are willing to give, the harder it may be for a candidate to refuse your offer when you negotiate moving expenses!What is a reasonable relocation allowance? ›
How much are you given in a relocation package? The full costs and figures can vary depending on the individual and their package however, as an example, payments are typically between $2,000 and $100,000.Does relocation package include new furniture? ›
Furniture Allowance: Not every company will offer relocation packages that provide an allowance to buy new furniture. If you aren't shipping large pieces of furniture or if you want to start from scratch, you'll have to buy new furniture in your new city.How do you answer a relocation question? ›
“I'm happy to consider relocating if the job's a good fit. If there's also an opportunity to work remotely or out of the office in [current location] I'd love to discuss that as well, as that would work best for my current situation because [reason].”Can I negotiate my relocation package? ›
When it comes to relocation, negotiating a better deal is good for all parties. It'll keep you and your family happy if there's less for you to do, and it'll give your employer a new team member who's ready to work sooner than later.What is a good lump sum relocation package? ›
Of those companies, most companies are providing anywhere from $2,500 to $4,999. If the company was going to cover the entire relocation, they'd offer anywhere from $10,000 - $14,999. So if your company is going to offer you a lump sum, you should expect to see somewhere within that range.Do you have to pay back relocation assistance? ›
The most common relocation repayment requires repayment in full if termination of employment is within 12 months after relocation or a prorated amount for up to 2 years. If a move is in process when employment ends, unused benefits typically cease immediately.What should I ask for in a relocation package? ›
Typical relocation packages usually include temporary lodging expenses, the cost of moving, job assistance for your spouse, traveling costs, and assistance in selling your home.
What is a generous relocation package? ›
A generous relocation package covers all moving expenses and will give employees ample time to find their new home. ARC Relocation can help with various factors associated with relocation. This includes finding movers to assist with your employee's relocation, packing and unpacking services, and vehicle shipping.How much is a typical lump sum relocation package? ›
Of those companies, most companies are providing anywhere from $2,500 to $4,999. If the company was going to cover the entire relocation, they'd offer anywhere from $10,000 - $14,999. So if your company is going to offer you a lump sum, you should expect to see somewhere within that range.Is a 5000 relocation package good? ›
While $5,000 upfront might seem like a generous amount, when you consider everything that goes into the cost of relocating, it may fall short and leave your employees frustrated and paying out of pocket.