What is a Relocation Package?
Comprehensive relocation packages
Despite the COVID-19 pandemic restrictions, corporations are still relocating employees to a new city outside of their commute from their current home. Typically, this means moving for distances greater than 60 miles, cross country, or internationally.
Relocation benefits cover expenses related to relocation and housing. Still, a comprehensive relocation package may include other benefits as well.
Relocation packages vary significantly from industry to industry. In some sectors such as medicine, tech, and finance, the package may be very attractive. In general, senior executives and employees with in-demand special skills will be offered greater benefits than other employees.
Moving into a new residence, moving, and reestablishing your support network of schools and doctors can be stressful. It can also be expensive and result in unanticipated costs. When a company covers many of these expenses, the stress can be reduced significantly.
Who Gets a Relocation Package?
While relocation packages were previously offered only to senior executives, more companies are offering them for other employees as well. Sometimes, a company will offer a new hire a package as well. In competitive industries, these packages are sometimes the key to attracting and retaining top talent.
The factors that impact whether a company can offer a relocation package availability include:
- The company’s financial resources
- Strength of the economy
- Whether the employee is a homeowner or renter
- The uniqueness of the employee’s talents
- The desirability of the area they’ll be moving to
Key Relocation Terms
- Transferee–the employee who is moving
- Lump-sum–a fixed payment provided by the company to cover moving expenses
- Reimbursement–the maximum amount the company will reimburse the transferee for all moving-related expenses
- Direct bill–when the company bills service providers like movers, realtors, and tax professionals directly (so the transferee doesn’t have to pay upfront and submit receipts for reimbursement)
- Third-party relocation–when a company outsources its relocation functions to an outside provider that handles management and coordination of all move-related services
Who Manages Relocation Packages?
Some large enterprises have dedicated relocation teams including coordinators and managers who oversee the entire relocation experience. Still, more private companies, NGOs, and government agencies are outsourcing these functions to relocation management specialists.
What Does a Relocation Package Include?
Relocation packages vary significantly. However, here are some common elements to ensure a comprehensive offer:
- Packing and unpacking services provided by a professional moving company
- Full-Value Replacement Coverage equal to or greater than the value of your household goods
- Moving costs for household goods, cars, and specialty items like motorcycles, wine collections, and boats
- Storage for a set period of time
- Temporary housing while you’re looking for a home or waiting for a new one to be built
- Travel expenses like airfare, lodging, and meals for you and your family while looking for a new home and schools
- Real estate services
Extra Expenses that May Be Covered
Meals in restaurants and coffee shops can get expensive when you’re between homes for extended periods
Spousal employment services
Child and elderly care expenses caused by a relocation
Miscellaneous expenses like driver’s license transfer fees, cleaning service, and initial set-up costs for things like cable, internet and utilities
Moving your home and family for your employer has its challenges and stresses. When you know what to expect with a relocation package, you will be better prepared to negotiate the best package for your particular situation.