The Employee Handbook on Relocation Assistance
Health insurance, vacation days, and retirement plans are often the superstars of employee benefit policies, but did you know that your company can also give you relocation assistance?
So you nailed a new job — congrats! Now you just have to figure out how to get there. You may have heard of relocation assistance, and if you don’t know what it is, that’s okay! We’ll save you a trip to the HR office. It’s a term for the financial support a company gives new hires and current employees when they move for a role within the company. But how does it work? Who gets it, and how much is there to go around?
We break it all down for you right here...
What is Relocation Assistance?
A lot of companies offer relocation assistance to employees who are moving for work, whether they’re just starting and moving to the area, or they’re benefits for a new position within the organization in a different city, state, or country. Most people typically think of relocation assistance as an amount of money given by the company to help you move, but it can also include services and recommendations to help make your move easier. Like hooking you up with a trusted moving company, or linking you to a site that can help you find a place to live.
Years ago, relocation benefits were often only given to higher-level employees. But as work culture has shifted toward more robust benefits, and employees are more willing to move for work, more and more companies are offering relocation assistance as a staple in their benefits packages at any level.
If you need help relocating, thankfully, most organizations are willing to help you out, because after all, you’re moving on their behalf.
You might also receive a point person within the company, likely someone in HR, who can guide you through your company’s relocation package and offer advice on what services or products you can use to make your move easier. While every company’s relocation benefits are going to be a little different, you can use relocation assistance as financial assistance or a tool to help kickstart your move if you don’t know where to start.
What Does Relocation Assistance Cover?
It’s no secret that moving isn’t cheap. The average cost to move depends on how much you have to move and how far you’re going, but it can range from a few hundred dollars to a few thousand. So, what exactly can you use your relocation assistance for? Your package may cover some or all of the following:
- Packing and unpacking services
- Moving companies and moving insurance
- Storage services
- Early lease terminations
- Closing costs and realtor fees
- House or apartment searches
- Orientation trips
- Destination services
- Intercultural training
- Temporary housing
- Travel costs for trips home for stays in long-term temporary housing
- Spouse or partner employment assistance
- School-finding assistance for children
- Elderly care search assistance
- Miscellaneous expenses (driver’s licenses, car registration, etc.)
When you’re moving for work, it’s not always planned at a convenient time. Even if you’re not moving that far away, breaking leases or having to put your house on the market and sell it quickly aren’t things that come cheap. That’s where relocation assistance can be a big help.
Let’s say you have to move to a new state for a job, and you have 30 days to find an apartment. While you might be able to make the time deadline, a lot of landlords will require that you keep paying your old lease until they’re able to rent it out again. With relocation benefits, you can use that money to cover those costs, so your bank account doesn’t feel the pain of paying two rent payments each month.
Plus, if your company is working with a third-party supplier to provide relocation benefits, you’ll also get access to a vetted supplier network. These networks are great for saving time because you won’t have to spend hours researching what services to use, and you might even get a deal for using one of their partners.
Types of Relocation Packages
So, how exactly are the costs for your move covered? In some jobs, you might get the money upfront, but in others, you might be reimbursed. There are a few different types of relocation packages that you might run into throughout your career.
Relocation benefits are all going to cover the same essential benefits. The difference in types of relocation packages is that you’ll see variances in how the money is given to you. For example, your company might give you a chunk of cash to spend on your moving costs (lump sums), they might have you send your bills directly to the company (direct billing), or they might pay you back once you’re settled (reimbursement).
First, let’s talk about lump sums. This is one of the options for relocation packages that is growing in popularity with companies across the country. For this benefit, your company will likely have a predetermined amount that they’re willing to give you to help you move. (You might be able to negotiate this amount, more on that later.)
With a lump sum, you’ll get the money right away, so you can kick off your moving process and get settled in your new home faster. This is often a win-win for employers and employees because you have more flexibility with how you’re able to use your funds, and the company can manage relocations easier.
According to Atlas Van Lines’ 2018 Corporate Relocation Survey, one in four companies are using lump-sums for their entire relocation budget, and one in five are using them to partially reimburse employees.
Another type of relocation package you might see is direct billing. In this situation, your company will cover a set amount of moving costs directly. So, for example, if you work with movers to transport your things, they’ll bill your company, not you. Some companies will combine these with another form of relocation package.
The third type of relocation package you might have is reimbursement. Like direct billing, this one is a little obvious. Your company will have a predetermined amount that they’ll be willing to pay for your move, and they’ll reimburse you for that amount. If you’re familiar with getting reimbursed for company costs, you’ll know that you’ll need to collect and keep receipts on file to ensure you get the correct amount back.
The last type of package that you’ll see is outsourcing or third-party relocation. A lot of companies work with a relocation management company to help manage their employee relocations. This is pretty common for larger companies with a lot of moves, or companies who don’t have a big enough team to manage relocations on their own. With outsourcing, you’ll often be paired up with an expert who will provide resources or services that can help you streamline your moving process. This is another option that might be paired up with another type of package, and your expert can offer advice on the best ways to utilize the money you’re given.
What is a Reasonable Relocation Package?
Relocation benefits are designed to ensure you have enough money to cover a portion, if not all, of your moving costs — within the constraints of the company budget. The amount you receive will depend on what level you’re in at the company, as well as how far you’re moving and how big your move is. For example, a vice president moving their family of three across the country is going to receive more than a single person moving to a neighboring state to start their first job out of college.
Along with that, some companies are going to offer more robust assistance packages than others. The size of your company typically impacts the amount they’re willing to give. Where one company might be willing to pay for all your moving costs outright, another might only cover the basics like movers and travel.
What defines a “reasonable” relocation package depends on your situation. Let’s take a look at some benchmarks for what companies are paying.
That same Atlas Van Lines survey found that in the last six years, companies who are using lump-sum payments for relocation are being more generous than ever with the amount they're offering employees.
The national average for a lump-sum is about $7,200, but larger companies may offer packages ranging from $10,000 to $60,000. 54 percent of companies use lump sums to set a cap on relocation costs, so you might run into a situation where you only a set amount of money to work with.
At any level, companies of all sizes estimated that about half of their relocations were either partially reimbursed or paid by lump sum in 2018. 36 percent of companies provide full reimbursement for new hires, and 64 percent provided full reimbursement for relocating employees. 56 percent will provide a lump-sum payment for both relocating employees and new hires.
When it comes to outsourcing, three in four companies will use outsourcing to manage their relocation benefits, so chances are, you’ll be working with someone outside of the company to manage your relocation assistance.
How Long Do Companies Give You to Relocate?
Now that you know the ins and outs of a relocation package, how long do you have to use it? When you change jobs, and you don’t have to relocate, companies will usually give you two weeks. This is typically done as a courtesy to your former company so that you can give them a two-weeks’ notice. If you’re a new hire right out of college, you might get less than two weeks, just because they know you’re ready to start right away.
If you have to move for the position, no matter what level you’re at, companies tend to give you more time to arrive. Companies give anywhere from two to four weeks for employees to get settled and get ready for their first day on the job.
But, whether you have 14 days or 30, it’s still difficult to fit the entire moving process into such a short timeframe. There’s not a lot of time to spend searching and researching your decisions, which can make it difficult to find a place to live that you like and get everything else taken care of. Your countdown clock will start on the day you accept the offer, and that’s also when you’ll find out how to use your relocation benefits. Make sure you’re ready to get started quickly, there won’t be a lot of time to waste.
How to Ask for Relocation Assistance
Let’s say you receive an offer for a job 300 miles away, but the company doesn’t provide any relocation assistance. Now what? Here’s a pro tip: you can negotiate relocation assistance just like you can negotiate a salary. If you need help moving, don’t be afraid to ask! If the company is willing to hire you, there’s a good chance they’ll be willing to help you get there.
But what if your company does offer relocation assistance, and what you’re going to receive isn’t enough? You can negotiate that too. While some companies will set a cap on the amount of money they’ll provide as relocation assistance, others are flexible and are open to discussing an increase. All you have to do is know how to ask for relocation assistance.
You don’t need to write a formal email or letter to ask for relocation as part of your benefits, you just need to have a conversation with someone in HR. It might help to get some quotes from moving companies, storage facilities, or other services you want to use to help establish a baseline for how much money you need. And if your company isn’t going to be able to offer a relocation benefit, you can see if they’ll give you the money you need as a signing bonus instead.
How to Make Relocation Assistance Work for You
Whether you have a relocation package or you don’t, moving is a stressful process to take on — especially when you don’t have unlimited time to do it. That’s why there's Dwellworks Direct. We’re a team of relocation experts, and we know how to help you get where you’re going fast. On average, we save people about two weeks by taking on the hard work for you. Just tell us where you’re moving, and we’ll match you with a local expert who can guide you through the relocation process, it’s that easy! Whether you’re renting or buying, put your relocation assistance toward something that will make your move stress free. Learn more about Dwellworks Direct here.
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