Make your relocation offer competitive by including these policies
Every year millions of people move for new jobs. Relocating for your professional career is familiar, but the relocation industry has changed since the Covid-19 pandemic. When it comes to offering relocation packages to employees willing to move for a new position, studies show that employees are more reluctant to move if there is a higher cost of living in their new destination.
Another factor for employees not wanting to relocate is the start date. Companies often ask employees to be in their new seats within 30 days of signing the offer letter. So, what can companies do to work around these distresses?
Companies who are asking talent to relocate for a position should look into offering employee relocation packages. These packages help offset the stress of moving by providing financial assistance and corporate housing so that the employee can relocate as seamlessly as possible.
While every company has different opinions on what should and should not be covered regarding talent mobility, a few basic policies should be included in every relocation package. Here are five terms to make your company’s relocation package appealing to applicants so that they cannot refuse your offer:
1) Real Estate Programs or Lease-Break Assistance
A survey by Worldwide ERC showed that selling a home for less than it is worth is the most expensive part of relocating. When time is limited, employees are often forced to accept a lower sale price or pay a financial penalty for ending a lease. Often, employees are scared they will get stuck paying two mortgages or rent payments for multiple months, which could hurt them financially.
If companies want a shot at landing top talent for an open position, they will include financial aid coverage for breaking a lease. If the employee can get out of their current rental at little or low cost to them, they are more likely to accept your relocation offer.
For applicants who are homeowners, offering home sale assistance and home-buying assistance programs in the relocation package would be a massive perk for them. Standard relocation real estate programs include BOV, GPO, or Direct Reimbursement. Each of these programs has different pros and cons. But every moving employee will have different needs, so options can make any offer even more appealing.
2) Moving Expenses
This one may seem too easy to list, but it is essential. Very few people save thousands of dollars regularly if they may have to move unexpectedly. So, if an employee is mulling over your offer, the price of moving may be daunting in the back of their mind. But if your company were to cover or assist in the moving expenses, it could quickly put those thoughts to the rest of the employees.
There are numerous ways to assist an employee with relocation costs. Most companies go the route of reimbursement programs, but there are packages where the company will handle everything on behalf of the employee so that they do not have to worry about it. Again, each different kind of program will have its pros and cons.
It’s worth noting that no matter which method your company chooses to use for handling relocation expenses, some relocation technology can help keep spending within a budget.
3) Transportation Costs
Moving can be costly, by car or plane. Visiting the new spot before relocating is necessary to find housing and get to know the area. Relocation packages typically include reimbursements for two or three trips. This can also be a chance for the transferring employee to search potential neighborhoods and schools for their family.
4) Tax Implications
Relocating employees can face an unanticipated problem with taxes concerning relocation benefits. An employer may give a ‘relocation lump sum’ to cover relocation expenses, which is taxed as extra income at the employee’s ordinary tax rate.
Employees with a 25% tax rate will be taxed $2,500 on a $10,000 lump sum. This can be a financial strain, so many companies increase the lump sum to cover taxes.
5) Miscellaneous Expenses
One last suggestion to make a solid offer to a potential candidate is to have a miscellaneous expenses policy in your relocation package. Employees may incur costs when relocating. Ask them what expenses they anticipate and offer assistance to cover them, such as vacation days, spousal income loss, and packing services.
GMS Specializes In All of These Terms and Conditions
Look no further if your company needs help updating or creating employee relocation packages. Global Mobility Solutions (GMS) has been helping companies with their relocation services needs since 1987. Our expert team will listen to your wants and needs, then assist you in putting together the best relocation policies to make all your offers to new employees appealing for them to accept a relocation assignment. We specialize in helping companies provide their employees with the terms mentioned above.
Reach out to us today to set up a free consultation. Within 24 hours, one of our business development managers will be in touch to get you started on setting up the most competitive relocation package in your industry.
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Sam Hoey | CRP, GMS
Senior Vice President, Global Account Management Sam joined Global Mobility Solutions in 1996 and has a unique perspective with her 25 years of industry experience. Samantha offers her clients relocation expertise and a commitment to excellence in her. Her proficiency in orchestrating the BVO and GPO Programs, as well as relocation policy design and implementation, are invaluable assets to the accounts she manages. Her experience in administering Pre-Decision Relocation services to enhance the recruiting process further demonstrates her unique abilities to service her clients. Samantha’s diverse experience, leadership, and outstanding communication skills enable her to manage the relocation process for her clients with finesse and polished professionalism.
