What Is Employee Relocation and How to Prepare for It

When employers plan to expand their business or open new positions at another location, they often decide to relocate some of their current or future workers there. In most cases, the company organizes a smooth transition with a well-balanced and structured action plan. A team of experts and HR professionals usually prepare workers for this procedure and ensure they take care of everything.

What Is Employee Relocation?

Employee relocation is a common modern age practice where a business owner decides to move a new or existing worker or even the whole team from one place to another. Usually, this relocation brings many benefits for employees, so this is used as a motivation. The company usually assists workers in organizing smooth and efficient moves, which often come with financial bonuses and higher paychecks. The company’s financial support also makes the transition more affordable, so you shouldn’t worry too much about the finances because you’ll be relocating on a budget of the office, not your own.

How Does Employee Relocation Work?

What are the common reasons to move workers? This usually happens when a business owner simply decides to expand to a different market or opens a new position in another state or city where workers should move. If the company’s HR team or person in charge believes that some of the workers are perfect for that position, they can offer them career development and many other benefits, such as promotion, if they choose to accept this offer and move to another city or country.

Other common terms for this are global mobility as well as corporate moving. Many amazing companies offer cross-country moving services and help in organizing safe moves and managing relocation tasks for the best workers and growing talents. Professional cross-country movers will ensure your workers get anywhere they need to be without experiencing any moving stress so that they can stay fully focused on their work tasks and professional development.

What Corporate Mobility Usually Includes?

You might start wondering what benefits this includes and what are the best things you can get from it. The process usually includes the following steps:

Can a Company Force You to Relocate?

The answer is usually no, but it all depends on the details of your contract. They should motivate you in the way that you believe that a potential move is good not only for your career development but also for your private life and the life of your family members if you’re relocating with them as well. If your business owner doesn’t want to offer you any benefits, and you believe this isn’t the most convenient change for you, you are not obligated to accept it. They are also not obligated to provide you with such a package if they want you to relocate.

The only exception to this common policy is when mobility is included in the employee’s contract. In that case, workers need to provide a valid reason why they are refusing to switch locations. If the employer believes that this proof simply isn’t enough, they are allowed to dismiss the worker because they are not following the mobility clause that’s clearly stated in the contract. Employees who do not have a mobility clause in their employment contract, or find the request to be unreasonable, can choose if they wish to relocate.

How to Prepare for Relocation for Work?

Depending on the distance, this can be a minor change that won’t affect your personal life too much, or it can be a life-changing event that requires you to make some lifestyle adjustments. This is not a decision you should make in a rush, so carefully consider these things before you make up your mind:

• Put all the pros and cons on paper,
• Talk with your friends and family, but don’t forget that you’re the one who should make the decision,
• Research the cost of living in your potentially new town,
• If you’re not the only one who got offered to relocate, talk to your coworkers to get their opinion,
• Ask friends if they know someone living in that place so you can get first-hand information.

What Is an Employee Relocation Package?

Moving to another state or a city can be costly, so many companies decide to ease that burden by providing these packages. But what are they? These packages usually help companies to attract candidates to potential workplaces all around the country, sometimes even around the globe. They are very helpful in the recruiting phase but can also be expensive, depending on the type of package and things it includes.

They are usually flexible, and workers themselves can try to negotiate specific details that come with their package. Business owners that want to attract the right candidates know they are supposed to give a quality offer to achieve their goals. In most cases, it comes as a financial benefit that companies provide workers because they are relocating for work. Certain fields and specific positions are known for offering these packages frequently because of the nature of the job, which includes frequent location changes for their workers.

How Much Is a Typical Relocation Package? Costs Depend on Different Factors

As we already mentioned, organizing a move isn’t simple and usually comes with many different expenses. A company’s package that covers all these costs doesn’t come cheap. On the other hand, getting this package can be a strong motivation for a worker and one of the reasons to move – you’ll get a new workplace plus many benefits if you just decide to change location.

On average, these packages cost between $19,000 and $24,000 for renters and between $72,00 and $97,000 for homeowners judging by the American Relocation Connections statistic. The final amount mostly depends on the fact if the worker is currently employed or a new hire.

Even though the final costs might vary and depend on many different factors, companies use some methods to reduce their expenses by creating limited budgets and calculating all the details of a potential move. These calculations include:

• Trip from one place to another,
• Moving and packing services,
• Moving insurance,
• A home sale or purchase,
• Taxes for relocating,
• Short-term housing,
• Storage solutions.

This should also include relocation tax gross-up – this happens when an employer increases the gross amount of payments to a worker to take the withheld taxes into account. This is useful because it stops the worker from having straight out-of-pocket pay. Today, relocations are even more expensive than before because The Tax Cut and Jobs Act of 2017 removed the relocation expense tax exemption and deduction.

Elements of a Comprehensive Relocation Program and Benefits Employees Should Get

When it comes to these packages, there are no strict rules about the things they should include. The more they include, the more they cost and become more attractive to workers. If employers want to achieve success and prepare a good domestic program, it should include some of the following things.

Paycheck Adjustments and Bonuses

One of the first things to discuss is obviously the payment. Monetary incentives are considered the tipping point when it comes to convincing people to move. This will also depend on the health of the job market in the specific area – if it’s growing and opens up many possibilities, workers are more likely to accept to move there.

On the other hand, you should also consider the cost of living in a specific area. For example, moving to a small town generally means lower living expenses, but what if you’re relocating to LA? You can’t expect low living costs, so your worker will need a significant financial push-up when it comes to relocating to a big city.

Everybody knows that the cost of living in LA is way higher than the national average, so you need to make certain adjustments while keeping that in mind. Another thing to consider is high tax rates in some states – the main reason many people refuse to relocate.

A Site Visit Is Crucial

Another important thing to consider and organize for workers is a site visit. This allows workers to visit specific places, sometimes with their spouse, and learn more about the community, schools, safety, housing, local services, and other important information. The length of these visits is mostly short, but two days is usually a minimum.

Payback Clauses Are Also Important

Because of the fact that organizations invest a lot into this, they want to have some type of insurance if a worker decides to leave the workplace shortly after the move is done. A growing number of companies have decided to include the payback clause in their agreement to save themselves from severe financial losses.

With this payback agreement, the worker agrees to reimburse the organization all the expenses for their transfer within a precisely specified period which is usually no longer than 18 months. Some employers are aware that these clauses can be a big downside, so they don’t include them. On the other hand, they also have to check if the specific state law permits payback clauses before they decide to implement them.

Family Support Can Be Very Motivating

If the workers are relocating with the entire family, they will need plenty of support from their employers. In most cases, workers won’t accept an office move if they have to leave their families behind. On the other hand, this is not the end of the problem. Their spouses might need help with finding jobs themselves, children need to switch schools, and so on.

This might affect more than one generation – spouses may leave their old workplace, and children have to say goodbye to old schoolmates and try to meet new friends. All this severely impacts the personal lives of these families, so business owners must be aware of their responsibility. If the family is moving cross-country with elderly members, they might need some kind of health support. Cultural differences in specific states can also affect families’ lives, bringing new challenges.

Employee Relocation Is Much Easier With Professional Long Distance Movers

Companies that relocate employees and want to save money on the whole process always decide to hire professional long-distance moving companies. These companies usually provide quotes, so they know exactly how much the transfer of the entire household inventory will cost them in the end, as one of the important planning factors. Workers are also more likely to accept a relocation agreement that includes professional services since packing and transporting all belongings is one of the most challenging parts of the process.