Relocation incentives refer to the money and logistical support companies provide to new employees moving for a job. This can include reimbursement for relocation costs, temporary housing, home sale support, and other perks to make the move more affordable.
The goal is to remove obstacles to saying yes to a job in a new place. Offering relocation incentives shows new hires and existing employees they’re valued and sets them up for success.
What a Relocation Incentive Looks Like
A relocation incentive refers to the money and logistical support companies provide to new employees moving for a job.
This can include reimbursement for moving costs, temporary housing, home sale support, and other perks to make the move more affordable. The goal is to remove obstacles to saying yes to a job in a new place. It shows new hires they’re valued and sets them up for success.
Why Companies Offer Relocation Help
There are a few really good reasons for companies to cover moving costs:
Wider Talent Pool
With remote work options everywhere now, organizations can recruit nationally or globally. Covering relocation costs expands the talent pool companies can fish in. For hard-to-fill roles, it can give an edge over the competition. Candidates are way more likely to accept jobs that cushion the moving process.
Employee Retention
Moving is a huge hassle and expense. Providing relocation incentives shows employees they’re supported through major life changes, often helping employees stay with your company. This feels good and makes workers more likely to stick around long-term. The upfront investment pays off through lower turnover down the road.
Happier Employees
The hiring process alone is draining for people contemplating a big move. Stepping in to handle logistics and costs shows workers they’re valued and cared for. Happy, supported employees tend to be more engaged and productive.
Cost Savings
While relocation help requires upfront money, it can save costs later on. Turnover is pricey, often 1-2 times an employee’s salary. Relocation support boosts retention, reducing turnover costs. The one-time spend is worth it if workers stay longer.
Types of Relocation Incentives
If a company decides to provide relocation support, some common options include:
Financial Help
The most straightforward type of hiring incentive or relocation incentive is financial. Some offerings:
- Reimbursement for moving expenses – packing, truck rental, movers
- Temporary housing stipend – corporate housing or hotels during transition
- Home buying/selling support – commissions, fees, closing costs
- Miscellaneous costs – mileage, meals, car rentals, etc.
Housing Assistance
In expensive areas, housing is often the biggest concern. Some companies provide rental stipends or discounts to help with cost of living. Housing bonuses, home finding services, and buyout guarantees add assurance.
Career Growth Opportunities
Some packages include career development like training, extended benefits, or promotion eligibility. This keeps employees motivated with opportunities to advance.
Family Support
Workers with families have extra considerations in relocation programs. Offering job help for spouses, family counseling, childcare, and school resources provides stability. This support system keeps the whole family happy through the transition.
Crafting an Effective Relocation Package
If a company offers relocation incentives, customizing it to workers’ situations is key. Some tips:
Figure Out Company Needs
Decide which roles make sense to invest in relocation for. Are niche skills needed? Any upcoming projects requiring expansion or restructuring? Identify priority jobs and set budgets.
Learn Employee Needs
Ask candidates about their specific relocation situation – concerns, family factors, budgets, preferences. This allows companies to tailor help.
Explain Policies Clearly
Communicate rules, limits, terms upfront so people know what to expect. Be clear on relocation reimbursement eligibility, caps, timelines and processes. This prevents confusion.
Mind Tax Rules
Some relocation benefits are taxed as income. Finance and legal teams can ensure compliance and minimize employees’ tax burden.
Provide Ongoing Support
Assign someone to coordinate logistics, answer questions, and assist employees before, during and after relocating. Don’t just hand over a check – facilitate the transition.
Review and Tweak
Regularly assess participation rates, costs, policy effectiveness and retention. Make adjustments as needed to meet changing business and talent needs.
Relocation Incentive: FAQs
What are the most common relocation perks?
The most common relocation perks include reimbursement for moving costs, temporary housing stipends, and help selling a home. Career growth opportunities, family support services, and housing assistance are also popular.
How much should we budget for relocation?
It varies based on the role, cost of living, family size and other factors. For moves within the US, many companies estimate anywhere from $5,000-$15,000 per person. International is usually higher.
When should we mention relocation help to candidates?
Early in the process – during initial interviews or offer talks. This allows people to consider the benefits when deciding on a job.
What expenses are typically covered?
Common reimbursements are mover fees, mileage, flights, temp lodging, lease termination costs, and household setup expenses. Some companies provide lump sums for relocation expenses. You should always check your relocation policies first to ensure these expenses are covered.
Is relocation help taxed?
Relocation incentives are often taxed. Exceptions are reimbursements for moving personal belongings. Finance and legal teams can structure policies to minimize employees’ tax burden.
Does relocation help boost retention?
Yes, offering relocation help or incentives can boost retention. Companies offering relocation support have higher retention among relocated workers. The assistance creates goodwill and loyalty.
How can we support relocating families?
Offer resources like job search help for partners, family counseling, childcare stipends, and help finding schools and activities. Making the move seamless for families means happier hires.
Conclusion
With remote work expanding, skilled candidates have options. Offering relocation incentives and support makes hiring and onboarding out-of-towners easier on both sides.
The investment pays off through wider recruit reach, better retention, and employee goodwill. Assess needs, craft policies, communicate clearly, and evaluate often. With strategic planning, relocation packages can yield real returns in acquiring and retaining top talent.
ARC Relocation can help with your employees’ relocation. Contact ARC Relocation today to set up a free consultation call.