CapRelo Blog

One way to help ensure global assignment success is to prepare an effective global assignment letter of understanding that outlines the pertinent details and benefits of the assignment in a way that leaves no room for misinterpretation. 

After your letter of understanding addresses specific information regarding the scope of the assignment, you can delve into the specifics of your global mobility policy and explain the benefits the employee will receive.

Explain Your Global Mobility Policy

Your letter should summarize the portions of your global mobility policy that are applicable to the employee. Among the issues your policy addresses, it is important to include information on the five topics below because they are:

• The most costly components of an assignment or transfer and
• Usually the greatest stressors to an employee, which can cause reduced productivity.

Relocation Expenses

When writing the letter, review your policies to determine what is relevant to the particular employee. While it’s not recommended to copy your policy verbatim into the letter, you should summarize:

• Specific expenses and the amounts the company pays for directly.
• Types of expenses that can be reimbursed, along with any limits. Note whether the employee is required to document each expense, should submit a consolidated summary or will be given a lump sum amount for miscellaneous expenses.
• The ongoing allowances for specific benefits.
• Expenses the employee is responsible for paying.
• Repayment agreement terms.

Moving Household Goods

Household goods shipments can be a significant part of your overall global relocation expense. The moving cost can vary widely depending upon whether the employee is relocating permanently or will be on assignment for a set length of time, the distance between the current and destination locations and the family size.

Global movement of household goods will typically include sea and air shipments and long-term storage. The letter of understanding should be clear on what is covered. Typical benefits include a 20-foot or 40-foot container and 500 pounds for an air shipment. Long-term storage is generally only provided for those on assignment, and for the length of the assignment.

The cost of storage and valuation coverage for household goods must also be considered. Your letter should specify the amount the company will pay for household goods transport, storage and valuation along with any limitations or restrictions.

Tax Implications and Assistance

Global assignments and relocation can have significant tax implications. The letter of understanding should outline the assistance provided, which may include a pre-assignment/relocation orientation with a third-party tax provider, tax return preparation assistance and tax equalization. It should also include details on the employee’s and the company’s responsibilities. The company’s tax provider may also suggest including a tax equalization addendum that outlines the company’s policy to be signed by the employee.

Immigration

The letter of understanding should emphasize the importance of compliance with global immigration laws and should outline the assistance provided by the immigration partner or department. The employee’s responsibilities to provide accurate and timely information and to follow all instructions regarding travel limitations of the host country should be clearly documented. The assignment or relocation cannot begin until required immigration documents are obtained.

Housing and Settling In Assistance

Getting your employee and their family settled into a new residence is crucial because it helps them to return to full productivity quickly. Each employee is unique. Some may need temporary housing while they search for a new residence. Your letter should reflect the level of assistance the company provides.

• Temporary Housing: Summarize what provisions the company makes for temporary living and for how long.
• Home Finding Travel: Summarize the assistance the company provides, such as home finding trips. Include the number of trips allowed, the expenses covered and the family members approved.
• Destination Services: Summarize the services the company provides, which might include home finding assistance, orientation to the new area, contacts with local schools, colleges, medical facilities, etc.
• Long-Term Housing (Assignments Only): Summarize the housing assistance provided, including monthly housing allowance based on family size and location, method of payment, utilities included and employee responsibilities for maintenance and upkeep.

Ideally, your letter of understanding should focus on the employee and the benefits of the new role while creating a positive impression and enthusiasm for the new opportunity. Make sure to outline the expectations and responsibilities in the new role to avoid any possible misunderstanding. Explain and summarize the relevant points from your global mobility policy, paying particular attention to the five topics discussed above.

Relocating globally or going on an assignment for a job is considered a major life event because it often requires an employee selling a home before moving the family to a new country and changing many of their typical routines. Your employee letter of understanding must cover a number of important topics, but without increasing your employee's anxiety.

A letter of understanding outlines the details and benefits of the assignment. This legally binding document basically serves as an addendum to the employee’s regular employment contract and lays out any varying or additional terms that apply for the duration of the assignment. As such, it must be signed by all parties. In addition to the assignment start and end date, job title and location, the letter of assignment must specify all contractual agreements, code of conduct, compensation and benefits, assignment-specific benefits such as moving expenses and repatriation allowance, tax equalization and other fiscal matters.

It’s important that the letter of understanding lay out all pertinent details of an assignment in a way that leaves no room for misinterpretation. Any lack of clarity could lead to misunderstanding, which in turn could lead to costly and time-consuming problems. This can be a drain on resources, and it can create a distraction for the employee and impact the success of the assignment.

The key to drafting effective letters of understanding begins with knowing your employees and focusing on them and their families. You can find sample templates on the internet to help you draft a letter of understanding, but unfortunately, many of them begin something like this:

Dear Mr. Jones,

This letter is to inform you that you will be transferred effective [date] to our location in...

Considering the upheaval a relocation will cause in your employee's life, this approach is rather abrupt. Here are some best practices to help you write an effective letter of understanding.

Discuss the Global Relocation or Assignment First

Your company has made the decision to relocate or send an employee on assignment to benefit the organization in some way. You may need to add talent to a business unit in another city, or to reduce it at the employee’s current location. You may want to move a manager to provide new leadership in another territory. You may even want to give a high-potential employee broader experience as part of a career development plan. No matter the reason, be sure you or the appropriate manager(s) discuss those reasons with the employee long before you write the letter.

Having a detailed discussion provides an opportunity to create enthusiasm about a new role by:

• Increasing the likelihood of an accepted offer.
• Providing a platform to discuss your global mobility policy and company-provided financial assistance.
• Clarifying the specific skill-building and learning opportunities available in the new role.
• Showing that the company values the employee and wants to make an investment in his or her future.
• Demonstrating that the employee is important to the growth of the business.

Holding a preliminary discussion shows respect for the employee and allows you to craft a letter tailored to that individual. In turn, you’re more likely to increase loyalty and productivity — and reduce the chance of a relocation offer being declined.

Outline the New Role

Your employee’s job title and responsibilities may remain the same in the new location. If that is the case, make sure the transfer letter of understanding includes the name of the person to whom the employee will report and the duration of the transfer or assignment. For employees taking on new responsibilities, you’ll also want to include the following:

• The employee's new job title or position.
• A description of any increased benefits, salary or bonuses.

Similar in some ways to an employment offer letter to a prospective new employee, this portion of the letter of understanding focuses on the specifics of the new role. It documents the job title, salary and related matters to eliminate misunderstandings later. The letter should be dated and signed by the appropriate manager, and be sure the letter contains:

• The employee's full name and current home address.
• Department names — both the current department and the new destination department.
• The effective date the employee should report to the new location.
• The anticipated end date in the case of an assignment.
• The name of the employee's new supervisor.
• The date by which the individual relocation and assignment benefits must be used.

After you proved this pertinent information, you can delve into the specifics of your company's global mobility policy and explain the benefits the employee will receive. Check back next week to learn about the five most important topics to include in your global assignment employee letter of understanding.

All successful endeavors are the result of an efficient operation or organization. Coherence, order and precision oil the wheels of process and reveal the value of efficiency. A company with high organizational capacity is one that can deliver. This is especially true for global mobility management.

When you engage with a successful mobility management firm, you reap the benefits of solution-based practices, better focus and a strong and vetted support network. Outsourcing your mobility management services takes the heavy lifting off of your hands so you can spend time and resources on the big picture: continuing your company's success. Ultimately, handing over the reins to a trusted and seasoned mobility company provides faster decision-making capabilities, quicker response times and a significantly reduced exposure to the risks involved in this process. 

A professional and experienced global mobility management company streamlines all internal business processes and becomes your number one resource for a smooth transition.

Efficiency Matters

Citing research that close to 50% of employees are still under the impression that global mobility management services are intended merely for supporting those relocating, HRO Today reported that providing strategic and expert advice to company leaders and stakeholders should now be an expectation in the industry. Rather than waste time and resources on an overly bureaucratic and complex system, you want a mobility management company that gets things done in a smart, fast and practical manner. You also want a provider that can deliver on tactical analysis benefiting your company's business decisions, talent acquisition and bottom line.

Consider the benefits your company can gain by working with a reputable global mobility management company:

1. Response Time

Working with a global mobility management company that understands your organization and its specific needs fosters a trusted partnership. The opportunity to build a relationship with a seasoned single point of contact who identifies with your company's unique strategies can really set a mobility company apart from the competition. Having that single point of contact is not just beneficial for human resources and company leaders, but for the relocating employee as well.

2. Streamlined Solutions

When you're in the midst of a relocation, there can be a lot of moving pieces and important milestones. Regardless of what you're managing, you need a digital solution that offers quick, easy and seamless access to all of your information in one place. It is essential to have data for suppliers and orders, taxes and payroll, and policies and process controls under one roof to manage relocations efficiently. Furthermore, when integrating sensitive data, it is also imperative to ensure the protection of the company and your employees.

A streamlined solution can help automate tasks and processes while keeping your company on track to reach financial goals, deadlines and business objectives.

3. Alignment with Business Strategy

As detailed by Deloitte in its "Global Business Driven HR Transformation" report, global mobility management solutions are no longer effective as a one-size-fits-all formula. Instead, a carefully crafted plan specifically tailored to your business needs is essential to achieve your goals and bolster talent development, helping to ensure success before, during and after the relocation. When a global mobility management company is efficient in its operations, companies can benefit from the focus on unique strategies and goals, as well as most cost-effectively utilizing existing talent.

Global mobility management companies capable of delivering knowledgeable and seasoned guidance to your organization are crucial in matching business and talent development, according to Deloitte's findings. Proper guidance ensures that relocations and assignments are based on insightful research and planning, sending the right employees on the right endeavors.

According to The Society for Human Resource Management (SHRM), talent management ranks as the number one worry among most companies. The data highlights the need for a global mobility management company to work successfully in tandem with an organization's existing talent management program. This supplements the current initiatives to boost productivity and drive competition.

4. Reduced Risk

Rather than trying to navigate compliance, legalities and the fine print on your own, work with the expert itself: a global mobility management company. Collaborating with a group of experienced professionals that will dive right in and get the job done not only increases efficiency, but lowers risk as well.

According to calculations from FIDI (the largest global alliance of professional international moving and relocation companies), failed overseas assignments are not uncommon and they can result in costly financial burdens of up to US $400,000. When you include airfare, salary and bonuses, school tuition, housing costs, transportation needs, visa fees, ancillary charges and the taxes associated with these reimbursements, mobility is an expensive investment for any company to make. To help secure a return on this investment, it's imperative to partner with an experienced, trusted and efficient global mobility management company.

Leaning on the expertise of a global mobility management company can make a positive difference in the moving and adjustment period for employees. As Deloitte explains, professional services and resources that help employees and their families during a relocation are much more likely to reduce the risk of failed assignments.

When you want your company's business to continue full steam ahead during a relocation, engaging with an efficient global mobility management company can help deliver ideal response times, streamlined solutions, alignment with your business strategy and reduced risk. When you choose the right mobility management partner, you can be confident your business will meet or surpass its goals.

We will be attending and/or sponsoring the following upcoming events. If you’re attending, look for us and say hi, because it's a great opportunity for us to stay abreast of the latest global mobility trends, as well as develop and strengthen trusted partnerships. 

Forum for Expatriate Management Dallas/Fort Worth Chapter Meeting

Date: July 25

Location: Verizon, Irving, TX

Attendee: Scott Williamson

The FEM Dallas/Fort Worth chapter meeting will discuss Robotic Process Automation and cognitive technology in key global mobility, HR, payroll and tax functions.

Visit here to check for registration information on or after July 1.

Pacific NOrthwest Relocation Council Summer Workshop and Golf Tournament

Date: July 26

Location: Twin Lakes Golf & Country Club, Federal Way, WA

Attendee: Patrick Cacho

The PNwRC event will include educational sessions, networking and an afternoon of golf!  

Click here to learn more and register for the summer workshop. 

If you can’t attend, please be sure to follow CapRelo on Facebook and Twitter for updates.

Developing a core-flex program can be challenging, especially for organizations that are inexperienced with corporate mobility.

Determining Precisely What Benefits to Offer

The choice of benefits should be competitive – but it should also be financially viable. The included services must be representative of the company culture and the level of employer support employees can expect, while at the same time fitting within the constraints of the available budget.

Balancing Core and Flexible Benefits

Again, this needs to be competitive and realistic. Adding more services to the core component might bring in more talent, but it could also result in a larger financial investment than necessary or even possible.

Establishing Reporting and Metrics Procedures

Organizations need robust reporting and metrics procedures to keep track of the costs and success of the program. Most corporate mobility companies provide client dashboards where this data is collected and analyzed for review. Employers that wish to manage this aspect in-house will need to integrate relocation reporting and metrics into their existing HR management systems.

Ensuring Consistency of Policy Application

It's critical to be consistent in applying the core-flex policy to ensure compliance and employee satisfaction. Establishing clear rules regarding qualifying factors is a requirement to make sure all decisions to provide specific services to employees are based on data, not personal preference or guesswork.

Developing New Processes

Companies should develop new processes to assess employees' eligibility, assign the appropriate services and accurately document each case. Clear and efficient processes reduce the chances of errors and complications. HR should collaborate with the mobility manager and any other stakeholders to establish streamlined processes that facilitate the implementation and periodic reassessment of the core-flex policy.

Creating a core-flex program is a complex endeavor, and one that requires a certain amount of expertise. Yet it’s also one that can yield considerable returns in terms of employee productivity and engagement, as well as improve employer brand reputation. For many companies, it is the optimal policy to blend the employer's strategic goals with employees' unique needs, providing service benefits while containing costs.

It can be helpful to work with a corporate global mobility company that can assist in developing a comprehensive program that contains mobility expenses, while simultaneously offering a competitive set of core and flexible services.

At CapRelo, we value employees with a sense of mission and service, and encourage our team to pursue a greater purpose both in the workplace and outside of it. To learn more about him and is role at CapRelo, I recently sat down with VP of Global Business Development, Pete Larkin. Or perhaps we should be calling him "Deputy Chief." 

Raised in Hartford, CT by parents who both worked for the state, it's no question that Pete was raised to work hard. His resume includes 20 years as an Assistant Professor in Psychiatry at UConn, 21 years of experience in business development and former PGA caddy for Lee Trevino for good measure. Following in his father's footsteps, he has also worked 20 years as a Volunteer Firefighter in CT, earning the rank of Deputy Chief. He and his wife, a Rehab Occupational Therapist, adopted and raised two loving children from Korea as infants. His son, now 30, is living and working in L.A. as an actor and his daughter, now 26, is living and working in NY as a writer.

While much of his personal time involves Irish music, cheering for the Red Sox and reading biographies, his most rewarding pastime is training and recruiting new firefighters. And while the work Pete accomplishes at CapRelo as VP of Global Business Development is essential to forming strategic relationships with our clients, it is Pete's cultivated experience as a businessman, family man and firefighter that makes employees like Pete our biggest asset.

We will be attending and/or sponsoring the following upcoming events. If you’re attending, look for us and say hi, because it's a great opportunity for us to stay abreast of the latest global mobility trends, as well as develop and strengthen trusted partnerships. 

Greater Richmond Relocation Council 2018 Spring conference

Date: June 5

Location: Richmond Hilton Downtown, Richmond, VA

Attendee: Pete Larkin

The GRRC Spring Conference will feature a keynote address on U.S. Immigration in Uncertain Times, panel discussions, industry updates, scholarship award presentations and networking opportunities.

Learn more and register for the conference here. 

New England Relocation Association June Meeting & Mingle

Date: June 7

Location: Four Points Sheraton, Norwood, MA

Attendee: Pete Larkin

NERA's June meeting will include a presentation on immigration issues, an interactive session on negotiation and conflict resolution and a panel discussion on domestic relocation hot topics.  

Click here to register for the meeting and to learn more. 

WISCONSIN EMPLOYEE RELOCATION COUNCIL SUMMER MEETING AT MILLER PARK

Date: June 13

Location: Miller Park Stadium, Milwaukee, WI

Attendee: Christopher Bloedel

Enjoy a day at the ballpark with the WiERC. Attendees will see the Milwaukee Brewers take on the Chicago Cubs and take part in educational sessions on data analytics and the current immigration climate.

Register for the summer meeting and learn more here. 

Greater Washington Employee Relocation council Meeting

Date: June 13

Location: National Union Building, Washington, DC

Attendee: Pete Larkin

The GWERC June meeting will feature an industry/association update and a presentation by International Association of Movers Senior Vice President Chuck White.

Find out more and register here. 

Corporate Relocation council of Chicago Summer Meeting

Date: June 14

Location: Grant Thornton Tower, Chicago, IL

Attendee: Christopher Bloedel

CRC's summer meeting includes educational sessions, including a panel discussion focusing on Life Lessons through Relocation, scholarship award presentations and networking opportunities.

To register for the meeting or to learn more, click here. 

Bay Area Mobility Management Summer Meeting

Date: June 15

Location: South San Francisco Conference Center, San Francisco, CA

Attendee: Patrick Cacho

The BAMM summer meeting will highlight Simplifying the Complex, with a discussion on how to streamline the relationship between mobility, tax, immigration, payroll and equity. 

Learn more and register here. 

If you can’t attend, please be sure to follow CapRelo on Facebook and Twitter for updates.

WHAT IS A RELOCATION PACKAGE?

When a company offers an employee long-term employment in a location more than 50 miles from the current work location, a company may offer a relocation package. This usually covers the employee’s reasonable moving and other work-related expenses. By offering transferees a relocation package, employers provide comprehensive financial and other types of assistance to relieve the employee and their family of the expensive burden of relocation. A well-developed relocation package not only provides peace of mind as well as incentive to accept the job offer for the transferring employee but reflects positively on the company’s reputation for attracting top talent.

Are Relocation Packages Common?

In years past, relocation assistance was offered almost exclusively to higher-level employees or specialized contractors. Today, with a more global economy and better-educated global workforce, the competition for the best talent is stronger than ever; consequently, smart companies are jumping on the relocation benefits bandwagon to attract and keep their best employees.

A recent survey by Atlas Van Lines reported an increase of 13 percent over a three-year period among companies offering relocation assistance. Companies are finally catching on to the fact that having a strong, attractive relocation package in place not only makes excellent business and branding sense, but has become a reality for those companies that wish to remain competitive.

Learn more about relocation packages in our free guide.

- HR PROFESSIONALS ARE OPTIMISTIC ABOUT RELOCATION-

Another recent survey by Worldwide ERC® indicated an upward trend in U.S. transfer volumes: a 4% increase in relocation for current employees and a 7% increase for new hires. And companies anticipated another increase in the next year 

- THE ROLE OF MILLENNIALS IN CORPORATE RELOCATION -

One thing that can be said for sure about this demographic group that is quickly taking over the workforce: they like to be on the go. Already having overtaken the Baby Boomers in the workforce, millennials are arguably the most technology- and travel-adept generation to ever show up on the scene.

Millennials are changing the face of workplaces around the world, as they demand work environments that not only acknowledge their contributions but also their need for flexibility and a good balance between work and private lives. In an Urban Bound study, a full 71 percent of millennials also expressed a desire to work abroad at some point in their careers – a fact that shouldn’t be lost on corporate recruiters.

- Relocation Packages and the Modern Workforce -

Relocation packages are increasingly becoming used not only as a way to keep in-house talent happy in the event of a transfer, but as an effective recruiting tool – particularly for globe-trotting millennials, who often relish the chance to travel and broaden their business and personal horizons. If companies find that they’re losing talent, especially as part of a transfer process, then a review of their relocation policies and strategies may be in order to keep up with the changing faces of the modern workforce.

Components of the Average Relocation Package

The average job relocation package will include the following features. Please note that this is a more subjective, than objective, list. Depending on the industry and their competition’s relocation packages, employers can tailor their programs to offer the most competitive and attractive packages to attract and retain top talent. Many organizations either designate an in-house relocation manager to help oversee the move from beginning to end or, increasingly, turn this complex job over to a professional relocation management company. 

Successful assignments and transfers depend on competitive, comprehensive relocation packages. These should be compliant with IRS regulations, and should also align with the organization's goals and objectives. Regardless of the type and number of relocation package components, those that meet the needs of both the employer and employee will be most effective. Oftentimes, these components can be negotiated. But what are some of the features common to the average job relocation package?

Find more relocation package examples and features in our free guide.

• Full pack and/or unpack services. The employee's household goods are packed by a moving company, saving the employee time and stress. After arriving at the new destination and home, moving company personnel unpack the household goods.

• Quality moving company service with reasonable insurance coverage. Some moving companies are known for quality moves, some are not. Since moving charges are usually based on total weight, insurance for damaged or lost goods should be equal to your goods’ value.

• Home sale or lease-breaking penalty assistance. Home sale help can come in a variety of ways, from company-sponsored reimbursement for money lost on quick home sales, professional marketing help to accelerate the timing of sales to the employer buying the home. Renters can expect employers to pay contractual penalties for early lease termination.

• House-hunting trip, minimum one. Standard relocation programs commonly include at least one, preferably two, company-paid house hunting trips of short duration to give the transferee and family opportunities to find new homes. House-hunting expenses incurred in looking for a new home: transportation, lodging, meals and in some cases, childcare so the kids can stay home (and out of the way) while the parents can house-hunt in peace. (According to the Illinois-based search firm Witt Kiefer, companies are increasingly encouraging families with younger children to leave them home, and reimbursing them for the expense, while looking for a new house.)

• Temporary housing. Standard relocations include at least 30 days of temporary housing for transferees.

• Transportation, including auto moving, to the final destination. Most relocation packages include reimbursement for transporting your transferee and his/her family to the new location. If the transferee can travel by auto, reimbursing for mileage expenses is common. Should the move require plane or train transportation, standard packages often include reimbursing the cost of moving the transferee’s vehicle(s).

• Miscellaneous expenses. As usual the “miscellaneous” category can encompass a lot of small costs. These can include driver’s license fees, pet registration and licenses, cleaning services at the new home, utility hook-ups and other move-related expenses. To keep this category cost controlled, identify or cap most eligible costs.

These are commonly included features of standard relocation packages, which we outline in our guide. Depending on your industry and facility locations, there may be more features in the typical relocation package.

Popular features in a standard relocation program may also include:

• temporary living expenses when transferees must meet hard deadlines to move
• storage costs for household goods before employees can move into new homes
• spousal employment assistance in the new location
• childcare costs and elder help for transferees caring for elderly parents.
• school location assistance for school-age children
• a loss-on-sale allowance in the event your present home sells for less than its purchase price (not uncommon since the Great Recession)
• trips home for those in longer-term temporary housing, usually limited to one every 30 days

Your typical relocation package may or may not include some or all of the noted features. However, in all cases, you should regularly compare your package with those of your competition. If your program is significantly deficient in some area, make senior management aware of the discrepancy, advising them to consider upgrades to keep your standard package equal to your competition’s packages.

While it can be true that the higher the level of an employee’s status within an organization, the more comprehensive and inclusive the job relocation package will be, more savvy companies are offering to underwrite relocation costs even for newer employees as a means of attracting and keeping their top talent. Each company has its own benefit structure and policies vary, so potential transferees need to understand from the outset what is and isn't included (but could be negotiable) to secure the best deal on job relocation packages.

What Kinds of Relocation Packages are Available?

There are almost as many types of relocation packages as there are employees needing the assistance and the companies that hire them. The company’s financial resources and situation, the length of employment, as well as whether the employee is a homeowner or renter also play roles in determining the size and coverage offered in a relocation package.

A core or typical relocation package usually covers the costs of moving and storing furnishings and other household goods, along with help selling an existing home and costs incurred house hunting, temporary housing if necessary and all travel costs by the employee and family to the new location.

Find out more about relocating employees with families in our free article.

Besides the coverage itself, there are a number of ways to administer the package:

• Direct billing: The transferring company hires and directly pays for a moving company as well as costs involved in selling a current home and all other services needed to help relocate the employee and family.
• Lump sum: A set amount of money is given directly to the employee to pay for moving and related expenses. For tax purposes, the government considers this as income and therefore taxable, so to offset tax liabilities, companies often reimburse for those in the form of a gross-up (link to gross-up blog post), which frees the full amount of cash for the move. Another possible drawback is that it may be difficult to correctly estimate the total costs up front, due to unexpected out-of-pocket expenditures. If a mover’s initial estimate is lower than the actual costs, for example, the employee may have to dig into their own pockets to cover the difference.
• Reimbursement: The employee pays for everything up from and is reimbursed by the company after the move. This requires careful record keeping by the employee, including tracking all receipts for expenses. Additionally, employers will likely set a limit above which they will not reimburse.
• Third-party (outsourced) relocation: In this scenario, all logistics related to moving, including real estate or rental expenses are outsourced to a third party that coordinates a comprehensive array of services. Some of these may include marketing and sale of an existing residence, spousal employment assistance, storage of household goods, if necessary, and rental assistance.
• Expatriation assistance: This is additional relocation assistance used by multinational companies for employees relocating outside the country, beyond the typical moving and transport of household goods and real estate help. Covered benefits may include overseas trips to search for suitable housing and assistance with obtaining spousal work visas, finding and selecting schools for employees’ children and finding the way around a city in a foreign country. Language and cultural assimilation instruction offered through a relocation package serve to help the employees’ comfort zone and confidence by adjusting to the new culture and its customs.

Offering employees choices in relocation packages provides incentives for current and prospective employees to remain and pursue careers within a company. With competition among companies for top talent, offering attractive relocation packages is a win-win for both companies and employees.

WHO GETS A RELOCATION PACKAGE?

While it is becoming more common for new, junior-level employees to also be offered relocation opportunities, typically the higher the employee’s rank within the organization, the more extensive the covered expenses of a relocation package. A recent graduate just starting their career may have only the basic expenses of moving, while a vice president will often have additional services covered, such as child care while house hunting, as well as airfare and car rentals, lodging and meals for the employee and his/her spouse.

HOW ARE EXPENSES COVERED?

Assistance may consist of lump sum cash payments toward expenses, direct billing by the company for all moving expenses or reimbursement after up-front payment by the employee.

Relocation is an area where job candidates and new hires may have a bit more ground to negotiate, as it usually costs much less to move an employee than to pay a higher salary. In fact, a Worldwide ERC survey from 2015 reported that companies spent an average of $71,803 in 2014 to move newly hired homeowners and $23,766 to move newly hired renters.

Relocation Packages are good for both sides

Most companies want to save as much money as possible in the course of job transfers while still ensuring that the employees and their families are comfortable and ready to get to work as soon as they arrive in the new location. When used a recruiting tool, a strong relocation package can make a difference in attracting the best job candidates – a critical factor in remaining competitive in a global job market.

 Editor's note: This post was originally published on February 11, 2014, and has been updated for accuracy and comprehensiveness.

A 2017 corporate relocation survey reported that nine out of ten firms that offer incentives in addition to the standard inclusions of a relocation package are far more successful in convincing an employee to relocate than those who don't. 

Some popular incentives among employees—and those that may be most likely to win over an employee who is having a hard time deciding—include the following:

Extended Temporary Housing benefits

While reimbursement for temporary housing is a standard inclusion of most mobility packages, being able to extend those benefits if employees have difficulty locating a permanent home can make a big difference in their decision.

Monetary Bonuses

Monetary bonuses continue to be attractive to executives when making a decision to relocate. Because the bonus is considered taxable income, a tax gross up is necessary to ensure the executive receives the full bonus amount.

Cost of Living Adjustments

Executives relocating from one area of the country to another, or from one country to another, may find their salary isn’t sufficient to cover the cost of living in the new location. Typically this is offset by a separate compensation package and not a relocation benefit, but in some cases, it may be included in the latter.

A comprehensive mobility program is critical to recruit and retain executive talent. If your program includes provisions for bonus incentives, it may encourage more executives to accept a relocation or transfer offer.

A comprehensive talent mobility program is essential to recruit and retain top executive talent. Offering a competitive mobility package is one way to attract and keep the best talent on your executive team.

Addressing concerns about selling a current home and purchasing a new home in your mobility program may play a large part in an executive’s decision to accept a relocation offer. Consider the following for your executive mobility program: