Did you know that the average amount spent on company relocations is $16 million—each year? In the US alone, The average cost for a homeowner to relocate is approximately $71,800. Making a large part of this investment your responsibility as the liaison of your employees during a relocation. Here are five areas of relocation expenses you and your team should consider to maximize transfer budgets:
When an employee accepts a formal transfer offer, they typically have 33 days to complete their move and start a new job. That includes the time it takes to find a new place to live, pack up belongings, move into a new home, and begin settling into a community. That is also not a lot of time, but it does cost a sizable amount of money. Before an employee starts their new position, they will need to:
The costs for a house hunting trip is typically part of a relocation package. The total amount given to an employee ranges from $2,000 to $8,000.
Once the employee has secured a place to live, they will need to move their belongings from Point A to Point B. Here are some numbers to know about shipping costs:
One relocation expense that is often swept under the rug is replacements and deposits. This includes everything that will have to be replaced or restarted once the employee moves. Examples of replacements include:
As for deposits, these are for services, such as:
For starters, the employee may have to break contracts early, which is costly. Then they are responsible for paying deposits and charges for starting new services, which is another added expense.
If an employee is unable to move into their new home as soon as they arrive, they may need to store their belongings. In addition, if the employee had to downsize or move to an area that is entirely different in climates, they may belongings which they were unable to sell or give away before the move. Remember, in most cases they only have a month to get relocated.
An employee who lived in Colorado and amassed snow gear and mountaineering equipment will no longer need these high-value items when moving to Florida. For someone who is downsizing when they first arrive, they may have expectations of finding a larger place once they get settled. Either way, this requires self-storage, which can range from $100 to $200 a month depending on whether it is climate-controlled.
Employees should refer to the Cost of Living Calculator to see how far their current salary will carry them in the new location. If there is a huge cost of living increase, this may require that they receive a comparable pay increase. In a worse case scenario, an employee will be unable to afford the new city and end up leaving the job. To help your employees, be transparent with information about the cost of living. Also, plan to include additional funds in the relocation package to help offset the initial cost deficit when they first arrive.
To help employees make the most of their relocation allowance and best manage the process, consider contracting with a corporate moving company. By partnering with a trustworthy relocation company, you can standardize the cost, improve the experience, and minimize the headaches associated with employee relocation. Ready to learn more about custom moving solutions from SML?