Amway (www.amway.com), which manufactures, markets, and distributes over 450 consumer products worldwide, offers a “robust” relocation package to new hires, transferring employees, and college interns who live a certain distance away from—and who agree to move within a 25-mile radius of—headquarters in Ada, Michigan, or the company’s other main facility in California.
According to Marc Branca, manager, Amway Talent Acquisition and Staffing, relocation assistance is a popular benefit and has been effective in helping Amway recruit talent from across the country and retain existing employees, who are promoted or transferred for development opportunities. “Our attrition is about 5 percent. It’s an industry low.”
How It Works
Amway provides initial information about its relocation policy and then puts the individuals in touch with a relocation company, explains Branca. Amway used to manage the program internally, but 2 years ago, it contracted with an outside vendor to improve candidates’ experience and enhance and deliver a consistent relocation program.
When a new hire requiring relocation accepts a job offer, he or she is immediately eligible for a lump-sum payment of up to $11,500 to cover miscellaneous expenses related to the move, (long-distance phone calls, driver’s license fees, childcare expenses related to the move, meals and lodging during house hunting trips, temporary living expenses, transportation, rental deposit fees, cable hookup, etc.), Branca says.
Those receiving benefits under the relocation policy are asked to submit receipts, showing that they used the allocation for appropriate expenses, but they do not have to return any unused money, he says.
The relocation company provides assistance to new hires who need to sell their home, purchase a new home, and/or find an apartment to rent. Employees at the managerial level or above who want to sell a primary residence due to relocation are eligible for a Guaranteed Home Buyout Program in which the company will take ownership of the home, if it does not sell at agreed-upon prices within 5 months. These employees may also request an equity advance of up to $100,000.
Those below the managerial level may take advantage of a Buyer Value Option Home Sale Program, which provides services to facilitate the sale of the individual’s home. If the employee’s house sells for less than the original purchase price, Amway will reimburse the employee up to $20,000.
No matter which of these programs an employee participates in, Amway pays for a home inspection, and the owner is responsible for making any necessary repairs, Branca says. “We want to make sure the home is in sound condition.”
A company-paid broker market analysis also is done to determine the value of the home and at what price the property will be listed. With the collapse of the housing market, Branca says it has been helpful to use an outside vendor, because the relocation company—not Amway itself—sets the list and target selling prices, which are sometimes less than what an individual owes.
In addition to the lump-sum payment, Amway pays most expenses associated with selling an existing home and purchasing a new one; the cost of moving household goods; the cost to transport two motor vehicles (for distances that exceed 1,000 miles); costs for the final move to the new location; and up to $1,200 for shipping unique items (boats, LCD TVs, grandfather clocks, golf carts, hot tubs, pets, etc.).
When a new hire or transferring employee purchases a new home within 12 months, the company also will pay 2 percent of the mortgage amount “to help offset closing costs,” Branca says.
Amway pays the taxes on the relocation benefits, so employees do not incur an additional tax burden, according to Branca.
Getting Started
Branca offers the following advice for implementing a relocation program:
- Identify your goals. “The first place to start is to look at what your goals are” with a relocation policy, he says. Determine what your talent needs are, where that talent resides, and what challenges you face in trying to bring in that talent.
- Adopt a relocation policy. “It’s essential to have a policy and to administer that policy consistently across the company,” Branca says.
- Work with an outside vendor. A relocation company can help you put a relocation program together, guide new hires and transferring employees through the relocation process, help you comply with applicable laws related to the taxability of relocation benefits, and deal with “sensitive” issues that may arise when a discrepancy exists between what an appraiser and the individual think a home is worth.