CapRelo Blog

What Kinds of Relocation Packages are Available?

Posted by Amy Mergler on Thu, Dec 08, 2016

young businessman with moving boxes.jpgThere 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 standard 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.

The Takeaway

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.

Relocating Employees with Families

Topics: relocation packages, standard relocation package, relocating employees, employee relocation

What You May Not Know About Lump-Sum Employee Relocation Packages

Posted by Amy Mergler on Wed, Sep 16, 2015

productivity.jpgThere's a lot to think about if your company is considering changing to a lump-sum employee relocation package rather than reimbursing moving expenses for relocating employees. Here are a few factors you may not have considered.

Employee satisfaction may be lower when employees are left to manage their own funds, as with a lump-sum relocation package. Employees hoping to save money (and pocket the difference) when they receive a lump-sum relocation package to pay for their moving expenses may end up unhappy with the service they receive if they shop by price for relocation service providers. This could result in a slower return to productivity as well as a lower employee retention rate following the move.

Learn more about lump-sum relocation packages by downloading our free guide.

Employees who are busy organizing and managing their move will not be fully focused on their job. Moving can be a stressful time. When employees are left to fend for themselves when selling their home, lining up household goods movers, and even finding a new place to live, their minds are not on their job. This could result in lost productivity.

A lump-sum employee relocation package may not save your company money in the long run. Letting employees manage their own move can result in relocation delays if a house won't sell, and can lead to lost productivity. While lump-sum packages save your company money in administrative costs and time, they may not represent the significant cost savings you believe, especially if employee relocation packages that reimburse expenses lead to all-around greater employee satisfaction and low-stress relocations.

We're not specifically advocating one type of program over another, but it's a good idea to evaluate your situation – or call on a relocation management company to help – if you are thinking of changing your employee relocation policy.

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Topics: employee retention, Home Selling and Purchase Assistance, Relocation Services, relocating employees, relocation management company, executive relocation package, lump sum package

Trailing Spouse Syndrome

Posted by Shirien Elamawy on Tue, Jun 30, 2015

Global MobilityEmployers often go to great lengths to acquire and retain top talent. They offer competitive compensation and benefits, flexible work arrangements and opportunities for advancement. And when an employee has to relocate internationally for a position, an employer will typically provide relocation services that can include anything from assistance in selling his home and finding a new one to household goods moving and car transportation. This relocation assistance can contribute significantly to reducing the employee’s stress level and accelerate a return to productivity.

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

However, when an employee has a spouse or partner also moving to the new location, that partner can experience challenges, especially if he or she doesn’t have a job lined up or a support system in the new location. According to Expat Info Desk, this phenomenon is typically referred to as “trailing spouse syndrome” and is characterized by one or more of the following:

  • Culture shock: Trailing spouses are more exposed to the new culture than their working partners, since they have to take care of everything with the household and, in the event there are children, schooling. Whereas the working partner usually functions in a more or less international environment where everybody shares one thing in common — the company — the trailing spouse has to manage all sorts of people and situations, ranging from landlords to veterinarians for house pets to shop attendants in stores and dentists for the family. Getting used to new customs while being responsible for the household and family can be extremely stressful for the trailing spouse.
  • Homesickness and isolation: With their jobs, families and friends usually left behind, trailing spouses can find themselves feeling homesick and isolated. Fortunately, modern technology makes it easier to stay in touch, yet it can still be very lonely for a trailing spouse trying to navigate life in a new country.
  • Depression and loss of focus: Especially when a trailing spouse has given up a job to accompany the employee, he or she can experience deep feelings of loss, which can in turn lead to depression. Having a profession gives people a sense of purpose: losing a job can take that purpose away. To complicate matters further, many countries don’t grant the trailing spouse a work permit, which makes it impossible for him or her to get a job.

Trailing spouse syndrome also has a significant impact on the relocating employee, because when the home situation is stressed, there’s a lack of stability. When the employee gets stressed, his or her work is likely to suffer. According to ExpatArrivals, it’s crucial for a trailing spouse to prepare for and take control of the relocation experience. And that’s where a global relocation management company (like CapRelo) can make all the difference. CapRelo can help, in some cases, arrange for a work permit for a trailing spouse; organize cultural and language training; and assist in building a social network. These kinds of services offer significant support for the trailing spouse and make settling in far easier — and that has a positive impact on the happiness and performance of the relocating employee.

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Topics: Family Relocation, relocating employees, trailing spouse syndrome,

What You Need to Know About Relocating Millennials

Posted by Shirien Elamawy on Tue, May 12, 2015

Millenials Moving

Millennials—those born between 1980 and 2000—are far more interested in relocating for their careers than Generation X and Baby Boomer workers. In fact, Mary Lorenz, in her The Hiring Site article “Five Things You Might Not Know About Millennial Candidates,” cites a CareerBuilder and Inavero survey that showed that 83 percent of Millennials are willing to relocate for the right job that provides them with a higher salary or better advancement opportunities. Moreover, other sources show that 40 percent are even willing to move to a different country or continent!

Learn about developing relocation policies to attract top talent with our free guide. 

In addition to this willingness to relocate, it’s important to note that Millennials in general switch jobs more often than their predecessors. Jeanne Meister writes in her Forbes article titled “Job Hopping Is the ‘New Normal’ for Millennials: Three Ways to Prevent a Human Resource Nightmare” that while the average duration of a professional engagement is 4.4 years, 91 percent of Millennials expect to move on to another position in less than 3 years.

When you combine these statistics, it becomes clear that Millennials are a highly mobile segment of the workforce. And with this generation rapidly becoming the largest group of workers, it’s clear that employers will increasingly encounter situations in which they need to relocate Millennial employees.

A Global Mindset and a Desire for Independence

It’s essential to understand that Millennials are far more independent than older generations. Social media has allowed them to develop a global mindset, enabling them to stay in touch with family and friends, no matter where they are in the world.

Additionally, having grown up in an era where information and services are readily available on the Internet, they’re accustomed to solving problems on their own. And this attitude generally applies to corporate relocation, too. Many Millennials believe they can coordinate their local, national or even international moves themselves. Yet however capable they are in many areas, it doesn’t mean they’re prepared to handle such an impactful life change without assistance. The employer, in the meantime, needs to ensure a good relocation experience in order to keep the employee happy, engaged and productive.

Striking the Right Balance

As Julie Cook Ramirez points out in her Human Resource Executive Online article titled “Generation Why Not,” employers need to strike the right balance between overseeing the move and allowing the transferee the flexibility to handle certain aspects him or herself. And this is where the role of a corporate relocation company like CapRelo is pivotal.

The relocation company needs to offer the necessary support and coaching in a manner that appeals to Millennials. Keep the following points in mind:

  • Be open to including the transferee in the decision making process.
  • Schedule an informational meeting up front in which expectations can be stated.
  • Utilizing technology, provide one central hub from which the transferee can instantly navigate to the specific aspects of the relocation process in his or her own time.

Investing in Relationships

Successful relocations enhance retention, helping companies keep top talent within their ranks. Additionally, Millennials will advance into senior decision-making positions, and the relationships they build now will likely be the ones they rely on later. So though adapting the relocation process to cater to Millennials will likely require some capital and effort, the investment promises to pay off both in the short and long-term.

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Topics: employee retention, relocating employees, employee relocation concerns, talent management, millennials

Employees Are Willing to Relocate for a Dream Job

Posted by Shirien Elamawy on Tue, Mar 17, 2015

This way to your dream job

Why employees want to relocate

According to a study by the job website Monster, three-quarters of international workers, including about 48 percent of American respondents, were agreeable to being transferred if the “job of their dreams” was involved. While 23 percent wouldn’t accept a transfer for any reason, 32 percent of respondents would even be willing to move halfway around the world.

Find out more about developing relocation policies with our free guide. 

A breakdown of respondents from another study showed that 77 percent of workers who transferred during the previous year were pleased with the move, reporting benefits that include making a fresh start (30 percent), new experiences unavailable elsewhere (29 percent,) and higher earnings (27 percent).

Millennials making changes

Younger workers (dubbed "Millennials”) who are beginning their careers are more adventurous, flexible, and open to living and working in new locales and often see it as a necessary requirement for career promotions and development.

Millennials tend to be renters; therefore the relocation packages are less expensive than that of traditional expats.

Savvy organizations know that it’s important to get the ‘new hires’ off to a good start if a transfer is in the immediate offering, as this will color their experience with that company. As a result, many companies hiring younger workers are turning to offering less traditional, more flexible benefits packages for the newly hired transferees.

I win, you win

The flexible concept is working well for other transferees higher on the job ladder, as are tiered plans that offer fair relocation packages to employees at all levels. Twelve percent of companies surveyed in a 2013 employee mobility study, offer plans with basic or core benefits, covering final move costs, temporary housing, and house-hunting, with additional benefits – such as guaranteed home purchases or miscellaneous expenses – offered cafeteria-style as the transferee desires.

While the US economy is gradually improving, job markets in many areas are still extremely competitive, making the idea of looking elsewhere for work more attractive than ever. As a result, 44 percent of American workers indicated a willingness to relocate if the right job opportunity came along, according to a Career Builder study. In fact, 20 percent of workers who were laid off during the previous 12 months found new employment after relocating to a new state or city, according to the study.

On the flip side, there are also many employers who are willing to bring needed talent to their location, with 32 percent willing to pay relocation costs. Another 19 percent were willing to offer a smaller salary during the first year for a relocation signing bonus.

And the winner is...

The most popular city cited by potential transferees is London, followed by New York City, according to a recent survey by the Boston Consulting Group and The Network, a recruiting group participating in the study. Both cities offer a large foreign-born population (about 3 million each), and are both flourishing business centers.

Overall, though, the USA is still considered by workers worldwide, including those from developed economies, to be the most desirable country to relocate for work.

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Topics: employee retention, relocating employees, employee transfer, talent management

3 Tips for Selling Relocation to Your Employees

Posted by Shirien Elamawy on Tue, Jan 27, 2015

Watch this video for three tips on selling relocation to your employees.

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Talent Management: Engagement Article

 

Topics: relocating employees

Steps on How to Write an Employee Relocation Offer Letter

Posted by Jim Retzer on Tue, Aug 12, 2014

How_to_Write_anEmployee_Relocation_Offer.jpg

When writing an effective employee relocation offer letter it’s important that you frame your offer in a manner that results in the highest rate of acceptance. Here we outline steps to help you write a great relocation offer letter.

For more information on how to write an employee relocation letter, get our free article.

Start with a Recap

Relocation offer letters are sent to employees who have already had a face to face discussion about the opportunity with their managers. When writing a relocation offer letter, it’s important to begin with a quick recap of that conversation. This serves not only as a reminder of the previous discussion, but also as a means of connecting with the employee on a personal level that will leave them feeling greatly valued.

Create Enthusiasm

In order for an employee to accept a relocation offer, they have to know the pros outweigh the cons. Emphasizing the benefits of relocation - including salary increases and the professional learning opportunities they’ll receive as a result - helps the employee recognize the potential long term value of accepting relocation.

Provide a Summary of the New Position

As a rule of thumb, every employee relocation offer letter should include a summary of the position the employee is being offered. This includes their official new job title, their job duties, the name of the person they’ll be reporting to, the proposed transfer effective date, and any offered financial incentives such as salary increases or bonuses.

Address Key Concerns

Once you’ve provided a recap of the benefits the employee receives by relocating, it’s time to address their next logical question: How will a move impact my daily life? You can effectively nip any objections in the bud by providing information about how your company’s relocation policy covers the following four most frequently raised concerns.

  1. Relocation Expenses. It’s important for the employee to know how much of the bill he or she will be required to shoulder for their relocation. In this section of the letter, briefly describe what expenses the company will pay for, what expenses will be reimbursed, and what expenses the employee will be responsible for.
  2. Moving Household Goods. This is a potentially costly concern that should be addressed in detail by providing the employee with information on how much the company will pay to move their belongings from origin to destination, what they will be responsible for paying, and any restrictions or limitations to the policy.
  3. Home Marketing Assistance. If your company offers relocating employees assistance in putting their home up for sale or for rent, this should also be addressed.
  4. Home Finding Assistance. Provide information on any help the employee can expect to receive with respect to temporary living provisions, house hunting services, access to real estate agencies, and other general orientation assistance.
Download our Article: How to write  an Employee Relocation  Offer Letter

Topics: relocating employees, writing relocation offer letter

Furnished Housing for Relocating Employees

Posted by Shirien Elamawy on Tue, Jul 29, 2014

Whether it’s to a different state or a different country, moving is challenging for anyone, including employees who are relocating. Employees who are moving for a job, have a number of things going on mentally and emotionally – many of them completely unrelated to the job.

apartment.jpg

As an employer, you want to get your employee’s head back into the game as quickly as possible. One way you can help with the process is by providing furnished housing for employees when they relocate. These are just a few of the reasons providing furnished housing benefits not only your employee, but the company as well:

Increases Productivity of Employee

Because employees who are relocated will be provided with temporary furnished housing, they won’t have to be so focused on finding a permanent residence right away in a new town, city, or country. This will allow them to fully focus on the business tasks at hand, while having the ability to take their time in choosing a more permanent residence.

Having your employee remain focused during this transitional period is good for you as most businesses do not go to the trouble of relocating employees who do not have skills that are sorely needed within the organization.

The sooner your new employees settle into the job they’re doing for you, the faster you’ll recover the return on your investment.

More Value

Hiring a CapRelo for furnished housing can ultimately save you money. CapRelo eliminates unnecessary spending like the cost charged to corporations to offset provider vacancy and marketing costs, so you pay for furnished housing only when you need it.

What’s the Takeaway?

It’s often the little things that matter in the eyes of your employees. For an employee struggling to cope with the hassles of a long-distance move, something as simple as providing furnished housing for your employee is a big deal.

CapRelo’s Furnished Housing program takes the hassle out of securing convenient, comfortable, short-term housing, as well as reducing the expense involved. On average, our clients save 10-25% over the cost of a traditional program. Learn more about our furnished housing services.

 

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Topics: furnished housing, relocating employees

Job Relocation: Why Employers Should Invest in Language Training

Posted by Jim Retzer on Tue, Jul 22, 2014

languages

For an employee, being relocated by his or her employer can be an unnerving process. Yet millions of people move every year at management's request, some of them moving globally to a place where the primary language spoken is different. Your employees will likely face language barriers, cultural barriers, perhaps even discrimination depending on where they are moving to and from. An global move must be managed very carefully, paying close attention to the needs of the person(s) being moved; language training is one very important part of the relocation process.

Find out more about managing global relocations in our free article.

Why Language Training?

It is not difficult to imagine what it would be like to be dropped into a country where you don’t speak the language. There is nothing worse than being lost in every sense in a foreign place. At the very least, one should have some idea of the language well in advance of leaving. Learning to speak a new language is a challenge at best for 99.9% of adults but there are accelerated learning programs available if one’s employer is willing to invest in courses for employees being moved.

Who Benefits?

Who benefits from language training? All parties involved benefit in one way or another. For the employee being moved, language training more fully prepares them for living and working in another country. The better they communicate with their new co-workers, the quicker they will be able to resume work and get back to full productivity. Struggling with the language can be costly in man hours spent correcting issues created by poor communication. Employees feel less stressed with fewer cultural and lingual barriers, and employers benefit from increased productivity as a result. There will be fewer complaints if all parties are speaking and understanding local language and culture, lessening the negative effects of an international relocation.

The Bottom Line

Every dollar invested in language training for employees who are relocating to another part of the world is a dollar well spent. The return on investment in cases such as these is profound. Not only does the employer retain an employee, they relocate a well-prepared employee who will be ready to hit the ground running once the relocation is complete. The employee is happy, his/her new co-workers are happy that their new peer speaks their language. Communication errors are less of a risk and productivity can resume without too much culture shock when the employee is prepared for it ahead of time. Language training: it’s a win-win proposition.

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Topics: job relocation, language training, relocating employees, international relocation services, global mobility, global relocation

Steps to Reduce Security Risks During an International Move

Posted by Jim Retzer on Tue, Jun 24, 2014

country signsAs if international relocations weren’t complicated enough with the myriad of country-specific, cultural considerations – the security implications of moving to another country make the entire move even more complex.

As an employer moving one or more employees abroad, it’s critical to be mindful of and take steps to reduce the many security risks your employees face in an international move – like these mentioned below:

  • Conduct a thorough audit of household goods. Make sure to have a list of all the items that will be moved in each and every shipment. Most international moving companies will provide a complete inventory of items being moved. This helps provide accurate records for weight quotes. More importantly, it serves as a record of items being shipped for the household being relocated. This way, it’s easier to quickly identify objects that may be missing or tampered with.
  • Choose tamper-proof seals when packing. Speaking of tampering, when packing up certain household goods, consider using tamper-proof seals or tamper-proof tape so that unauthorized access can be easily identified. This is a great way to help transferees determine if their specified possessions have been tampered with during their move overseas.
  • Verify legalities and restrictions. From a customs perspective, there are many items that can be problematic when making international moves.

The following are among the top items that cause customs issues:

 Medications                                                                                              

 Plants

 Animal Products

 Cultural Antiquitiescustoms image

There are more. Be sure to ask the relocation company to provide a list of current restrictions and prohibitions for the specific country to which you will be relocating.

  • Expect heightened scrutiny depending on the country of origin. Diplomatic relations between nations have a significant impact on the level of scrutiny incoming items must endure. Countries make security measures for items crossing their borders according to these relationships – for better or for worse. Transferring employees should be aware and expect the possibility of greater scrutiny of some household goods and personal possessions.
  • Protect personal information. In the information age, information is universal currency. When relocating employees internationally, consider working with relocation specialists that work within the U.S. – E.U. Safe Harbor Frameworks are designed to prevent the unintentional loss or disclosure of personal information. Take care with tracking information for shipments; allow access to only the people who need this information.
  • Audit shipments while unpacking. This step doesn’t necessarily help prevent loss, theft, or exposure, but it does help movers quickly identify objects that are missing or may have been tampered with. This is where detailed inventories and audits prior to the move prove helpful.

There are many challenges in any employee relocation move, whether it’s down the street, to a new city, or to a new state. But moving from one country to the next opens a brand new scope of challenges. In addition to the logistics of the move, there are new cultures, customs, rules, import and export regulations, security concerns, and laws to learn and a short time to get them all down.

Dealing with the ins and outs of transferring employees across borders can be difficult in the best of situations. Simplify the process by hiring a reputable international relocation company to handle the details for you.

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Topics: how to reduce security risks, relocating employees, international relocation services

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