Relocation Need Not Be Painful
The more management can do to make a transition to a new location an adventure, rather than a hassle, the more likely it is that the worker will settle back in as a productive team member. Managers and human resources departments can take initiatives to ease the burden.
Why companies move employees
There are compelling business and operational reasons for having teams or individuals pack up and go. Certain industries, such as technology firms such as LinkedIn and Spotify, encourage mobility and are most inclined to offer relocation perks. Generally, however, smaller and midsize companies tend to relocate people most.
Companies are driven by a plethora of reasons, such as:
- Building a competitive advantage.
- Improving office efficiencies — such as relocating experienced employees to help boost lagging performance.
- Optimizing growth strategies — launching a new location or expansion where it is hard to staff up teams quickly.
- Developing employee skills — moving workers to where they can receive more training.
- Bringing people closer to headquarters.
- Strengthening a satellite office where specific skills are needed.
- Attracting new candidates from afar.
- Relocating independent contractors, such as health care workers during COVID-19.
Employees themselves are not necessarily averse to shifting locations, especially when they are tempted by a significant quid pro quo. According to a survey of 1,000 adults conducted by Allied Moving Co. in 2022, 37% of respondents said they would move for career advancement and 64% would be willing if they received some compensation.
Although it may be expensive to support a move, it is a cost-benefit calculation to sustain a happy workforce. American Relocation Connections, which provides corporate moving services, estimates the following average costs for a move in 2023: A package for renters typically costs between $19,309 and $24,216 and one for homeowners ranges from $72,627 to $97,116.
Support packages
Employers that seek to keep their most talented workers loyal and compliant should think through a meaningful list of perks, benefits and overall assistance to facilitate the lives of those being relocated. Financial support can be given either as a lump sum or according to a fixed-rate plan (like the type of reimbursement schedules the IRS uses for business travel expenses). It could be provided as a bonus or a pay raise.
Some relocation expenses are relatively straightforward to quantify, such as:
- Airplane tickets and other travel expenses.
- Insurance.
- Meal allowances.
- Packing up and shipping belongings.
- Storage.
- Pet boarding.
- Home selling and buying.
Time is a commodity that does not directly translate into dollars and cents. Consider offering a paid-time-off allowance, either following a partial or full salary model for both the actual relocating days as well as the extra hours involved in chores such as obtaining new driver’s licenses and registering to vote.
Be realistic and flexible about new starting dates. Ask employees how long they need. If they have school-age children, it might be feasible to wait until the end of a semester. You can also support spouses when it comes to their finding employment, home care or educational arrangements and by making introductions to community groups. How about assembling an orientation pack, including tips on local retailers and services?
Make sure to address the diverse logistics of relocating, including tax compliance and legal considerations. Will new laws or regulations apply? Are there outstanding relevant contracts or agreements? Some employers cover costs for breaking a lease.
Overcoming hurdles
Relocation packages tend to vary greatly, which complicates budgeting and forecasting. Individual relocation policies may be inconsistent, or different rules may govern new and current hires. Higher real estate prices may disproportionately impact those relocating to more expensive areas.
Some employees will resist moving because they have issues related to their families, mortgages or insufficient cash benefits. Others will drift over budget or fail to find affordable housing. According to Allied, 25% of those relocating find the main stress is adjusting to a new community.
It makes sense to allow employees a free trip ahead of the move to scout out the new location and to prevent disappointments. Be honest. Don’t downplay the negatives or overpromise job responsibilities. You want the relocation to stick.
One final note: Before making relocation decisions for anyone, consider the new trend in remote working. It may not be right for every company — or every employe — but if it’s right for yours, everyone may be able to save a lot of money and avoid headaches.