Relocation costs an average of $85,673 for a current homeowning employee. Regardless of the high cost, the rise of the Millennial workforce and their demand for flexible jobs is pushing companies to offer competitive relocation packages. So, how do companies provide attractive relocation packages without breaking the bank?
First, you need to understand what a typical relocation package includes. Once you pick and choose the attributes you want to offer, you can begin creating a budget. Knowing what the “gold standard” is for employee relocation will help you decipher what’s a must and what your company could do without.
Most standard relocation packages offer to cover the reasonable expenses that most employees will incur during the move to a new location. These benefits usually apply when their place of work is over 50 miles from their current residence. You don’t need to offer all of these benefits, but mixing and matching can help you develop a winning final product. These benefits include:
Home Sale/ Lease Breaking Assistance: Many businesses will cover the cost that it takes the employee to get out of their current living situation. If they own the home, this sometimes includes the realtor fees and money that is lost in a quick sale. If the employee is a renter, this would include the fees incurred when breaking a lease.
Finding a New Home: It’s obvious that leaving a home is costly, but finding a new one can be as well. According to NerdWallet, “For a $300,000 home, you can expect to pay $6,000 to $10,000 in closing costs.” Many companies choose to pick up this tab to make the deal more enticing.
In addition to this expense, it’s common for companies to pay for an employee’s trip to the area where they will be working to find a new residence. This includes:
Full Pack/Unpack Services: The typical relocation package will cover the costs of packing the employee and unpacking at their new residence. You could offer full-service moves, but another option gaining traction is moving labor. This plan can significantly cut costs.
Read our Blog, “The Secret to Moving on a Budget”
Temporary Housing: It can take some time to move into a new home, apartment, or condo, so typical packages include housing for at least 30 days. This can be a hotel room, or a temporary home or apartment.
Other Miscellaneous Expenses: These are the least obvious expenses, yet can be relocation package features that add a lot of value to the employee. Some of these features include:
Now that Millennials have surpassed Baby Boomers as the workforce generation, companies must be flexible in how they attract talent.
Millennials expect more flexibility and want to work for companies that respect their need for work/life balance. Companies are realizing that relocation packages can play are large role when an employee is going back and forth on taking an offer.
In order to stay competitive and relevant, relocation packages need to be constantly evolving to meet market demands. If you find that you are losing talent and unable to get your high-performing workers where you need them, it may be time to take a look at your relocation policy.
Sometimes, the first step to developing a relocation package is to know where other employers are running into relocation roadblocks. When you can predict these barriers, you can proactively avoid them. Download our report, “The State of Employee Relocation 2018,” and gain insight into pain points associated with household goods, The Tax Cuts and Jobs Act of 2017, and much more.