The Problems with Relocation Incentives Today

Relocation Incentives

Businesses must have the right talent in the right locations. While some of that can be handled through savvy hiring procedures, there is not always an easy solution. To combat this problem, businesses often relocate one employee to another area of the company to boost performance, productivity or to explore expansion. Employees are not always happy about this, so businesses offer relocation incentives to “sweeten the pot”. It sounds like a good thing, at least superficially, but there are significant issues at times that should be considered. What are some of the most common problems employers see?

Lump Sum Payment Management

As part of a relocation incentive, a company might offer an employee a lump sum allowance. It seems like a good trade – the employee gets a significant amount of money and the company gets talent where they need it. However, many employees struggle to manage their lump sum allowance, often running through their funds in a very short period of time.

Travel Complications

With any relocation, there is going to be a need for travel. The farther away the destination, the more complex the travel needs will be. If a company is leaving travel up to the employee, they can expect them to encounter holdups and hassles – and the company might end up paying more for rental cars, airfare and more.


Chances are good that the employee who is relocating is doing so on a temporary basis. That means they will need rental housing. Housing needs to be affordable, but also located convenient to the office or place of employment. Finding the right housing can be a mind-numbing task. Then there is the question of what to do with the employee’s current housing in the location from which they are relocating. Will they sell it? Will they rent it out? Will it sit empty until their return?

Service Requirements

One of the most common elements of a relocation incentive is that in exchange for certain benefits and funds, the employee agrees to remain with the company for a specific amount of time. There is nothing wrong with this if the information is provided to the employee upfront and with plenty of time for their consideration. However, if it is left until the last minute or slipped in under the radar, it can become a deal breaker.

Relocation incentives and programs can be difficult to administer, manage and handle for both the business and its employees. The best option is to work with an experienced company like VERSA Relocation that can handle all the details correctly and keep everyone on the same page.

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