Benefits and Compensation, HR Management & Compliance

Relocation Benefit Options

Does your organization offer relocation assistance or any form of relocation benefits?

Some organizations opt to do so, as it can mean the employer can expand its geographic scope when looking for a new employee, and perhaps find someone who is not already located in the target area. Finding someone who is not local can be a way to get great talent even when there are not enough qualified individuals nearby.

For employers looking to get started offering relocation benefits, here are some ideas of what could be covered by the employer:

  • Pay for some or all direct moving costs. This could include any or all of these types of expenses:
    • Moving van and/or shipment of personal belongings and home furnishings (and associated insurance);
    • Shipment of vehicle(s);
    • Labor to come to the home and pack and load everything (and unpack on the other end);
    • Selling costs to sell the current home, or fees required to break an apartment lease, or reimbursement for losses that resulted from having to sell a home at an inopportune time in the market;
    • Costs of a trip to the new location, intended to be used to scout out new home;
    • Deposits required to get new services (such as utilities) in new location;
    • Professional relocation assistance (third party) to help find a new home, get new services set up, and help with other relocation tasks;
    • Temporary housing in the new location for X weeks or months until a permanent new home can be secured;
    • Storage of personal belongings and home furnishings if there is a delay in finding a home;
    • Payment of the old home mortgage for X months if it does not sell quickly or payment for property management services if the home is being rented;
    • Flight or other transportation to the new location for the new hire and his or her family;
    • Payment of costs associated with new registrations for vehicles; or
    • In the case of international moves, payment for visas required, plus associated fees such as medical examinations or postage to send in applications.
  • Pay for some or all of the indirect moving costs, such as:
    • Childcare expenses while relocation tasks are being handled; or
    • Miscellaneous relocation assistance, such as help finding specific services needed by the individual or his or her family (i.e., finding things like healthcare options, school options).
  • Assistance for the individual’s significant other to find a new job.
  • Payment for a trip back to the individual’s hometown for a visit during the moving process and/or for an annual visit. This benefit could be continued yearly, which is particularly relevant for a job that is international or has a specified duration, after which the individual will move back.
  • Pay a lump sum designed to offset some of the above fees, with much less administration on the part of the company, or provide reimbursement for such fees rather than payment up front. Bear in mind, however, that paying the employee a simple lump sum may end up being taxable income, which it would not be if the employer paid the relocation company directly—even if the amount paid is the same.

This list is meant to be a primer for organizations who are considering adding relocation benefits. Naturally, those organizations that already have such benefits may have an even more extensive list, or have tiers of relocation coverage options, depending on the tier level of the new employee being brought onboard.

Employers that pay large sums for relocation for employees often fear this money will be wasted if the new employee does not stick around long. As such, some employers opt to include payback agreements as part of the process. These agreements typically put the employee on the hook to pay back some or all of the relocation expenses if they leave the organization within a short time.

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