Moving to a new city on your own can be quite the challenge. It’s expensive, time consuming, and for most individuals, stressful. Recognizing that a bad move experience can have a lasting impact on a transferring employee’s productivity and morale, many organizations help with this process by offering a relocation package.
What is a relocation package?
A relocation package is a benefit for new or transferring employees to assist with their move. Common elements include household goods shipment, home-finding assistance, and other miscellaneous expenses. While there are consistent components of a standard relocation package, most organizations tailor their offerings based on their size, budget, and employee base to provide the most value to their team.
Benefits and ROI of a relocation package
Offering a robust relocation package can be a tremendous benefit to both the relocating employee as well as the employer. It’s a great incentive to attract top talent while ensuring a successful transition into a new position. Here are a few benefits of investing in a relocation package.
Attracting top talent
Moving to a new city for a job is typically more enticing to a potential candidate when they don’t have to bear the burden of moving entirely on their own. It also allows new hires to focus on their new position and start things off on a productive note. According to Indeed, relocation has become a key hiring strategy for tech companies. It’s not uncommon for a competitive relocation package to be the deciding factor for a highly sought-after candidate comparing companies.
One of the most prevailing characteristics of professional millennials is the desire to live in different cities (and for some, countries) throughout their career. Especially as unemployment remains low, it’s incredibly important to retain your best and brightest employees. This means giving them opportunities to live out these personal goals without leaving your organization. A well-articulated relocation package that supports such moves can go a long way toward your company’s retention goals.
For companies who have routine long-term, long-distance projects, relocating an employee can be a more cost-effective solution, as it’s a one-time expense, compared to constantly paying for their back-and-forth travel. Relocation also can be cheaper than hiring and training new talent. According to a U.C. Berkeley study, it costs $4,000 above salary and wages to hire a new employee than it does to train within your organization.
Items to include in your relocation package
There’s a lot that goes into relocating to a new city: securing new housing, the physical move itself, family support, adjusting to a new community and more. From financial assistance to offering move-related services, here are some common benefits included in a relocation package.
Full-service moving assistance
For many individuals, transporting their household goods is one of the most overwhelming aspects of the move process. Many relocation packages will reimburse employees for moving services – at least up to a certain amount. Identifying a reputable moving company can be time consuming, not to mention disastrous should they fall victim to a rogue mover. You can help alleviate the effort and stress from this step by pre-selecting a moving partner that understands both your company’s and employees’ needs.
Housing relocation assistance
One of the most important parts of moving is finding a new home. You can enhance your relocation package by covering property transactions like agent fees and providing a list of recommended real estate agents. Often, real estate agents and other professional services will offer a discount to customers when companies partner with them or include them as a preferred vendor.
Family relocation assistance
For employees with family who’ll be relocating with them, it’s important to consider how your company can make their transition a smooth one as well. Some tools and services to offer can include spousal employment assistance, school search assistance, and a list of local recommendations for common needs like doctors and vets.
Before the relocation takes place, most employees need to do some scouting to find the right home and coordinate other tasks like finding a school for their kids. Most relocation packages cover at least one home-finding trip so they can house hunt and get to know the new city they’ll soon call home.
Resources to adapt
Consider developing fun and interactive move guides that include recommendations on things to do, places to eat, and sites to see. (For an example, check out our move guide for Stafford, Va.) For employees relocating abroad, you’ll also want to offer language courses and training to help them quickly adapt to a new culture.
Methods for delivering a relocation package
There are several avenues employers can take when administering a relocation policy. Here are a few of the most common ones.
Lump sum relocation package
A lump sum gives employees a fixed amount of money to use toward their move.
(Read more about lump sum programs)
This method allows the employee pay for their move themselves and then afterward, submit their receipts and invoices to be reimbursed by the employer.
Especially when employers have relationships with specific service providers, they often will handle billing and payment directly.
For some companies, administering relocation packages is too much of a burden. In these cases, they can hire a third party to handle all elements and logistics for relocating staff. This is common for smaller companies that might not have the HR staff to manage employee moves.
Suffice it to say, developing the right relocation policy is key to recruit and retain top talent. If you have questions about relocation packages or how to find the right moving partner, don’t hesitate to contact us.