When outsourcing your relocation program, your RMC will assign you an account manager. The first check employers need to carry out is whether there is a mobility or relocation clause in the employees’ contracts of employment. This allows for enough variation between each benefit package while not creating too much complexity for administration. A Guaranteed Home Buyout Option (GBO) also provides tax protection against realtor commissions and closing costs. Making the move financially worthwhile for employees is key to retention. You will need clear methods of communication so everyone will know what part of the moving process is happening. What are the Different Types of Relocation Packages? This is where an employee relocation plan – also often referred to as “global mobility” or “corporate relocation” – will come into action. The Employee Relocation Resource Center (ERRC) is here to help. Offering the employees a one-stop solution to interact with the multiple parties involved in the process is what relocation technology is all about. Tier one: intern or entry-level employee with no mortgage, private tenant. Not sure what kind of policy to offer or, if you’re the employee, which one is right for you? Before the Tax Cuts and Jobs Act of 2017, relocation benefits were not considered taxable income for employees. Did you know that a pet’s “airline ticket” can cost around $125 per pet each way? The employee’s relocation counselor works out of the technology, which typically triggers action items for each service authorized. Within 24 hours, the assigned counselor will reach out to the employee, introduce themselves as the main point of contact, and schedule a time for an in-depth initial phone call. Write your relocation policies to be attractive to transferees at all authority levels on … It allows you as the employer to source some of the best candidates from outside of your city, increasing the talent pool and staffing your business with the best people. The Employee Relocation Real Estate Advisory Council (ERREAC) (now the Worldwide ERC®) was founded in 1964 in Chicago to address the growing needs of a nation that was increasingly moving employees for development and stronger productivity. Employee Relocation Made Easy . These moves might have been a generous lump sum with access to a preferred household goods carrier, but while this worked in the past, relocation best practices and the workforce industry itself have changed significantly. This website stores cookies on your computer. While fees vary from company to company, they are, in general, similar across all RMCs. Some of the common approaches with expenses include: lump sum payments, cost sharing between the employee and employer or, payments are made directly to your bank account to cover the expenses. The next most common factor is homeowner status as the costs and timeline to move renters versus homeowners consistently differ. Relocation services, employee relocation, military Permanent Change of Station (PCS) or workforce mobility include a range of internal business processes to transfer employees, their families, and/or entire departments of a business to a new location. Yes, the thought of these costs could make your accountant’s eyes water. Want to know more about what we can do for you? Non-compliance fee: Additional fee that may be charged when a property does not meet the stipulations of your relocation policy or RMC contract First and foremost, let’s get the technicalities out of the way. Our research indicates an average of four tiers within any relocation policy. Refer to section VIII for further details. Cookies are used to improve your website experience and provide more personalized services to you, both on this website and through other media. Hiring a RMC can make the process of relocation hassle-free for you and your employee… Creating and successfully running a relocation program that competes in today’s global market is a demanding task that requires more time and understanding than ever before, which is why HR departments traditionally outsource the relocation process. Before we get to what to include in the employee relocation letter, it is important to review the steps in the process leading up to giving employees … Relocation technology is the tool that modern and employee-concerned businesses use to ensure a smooth transition of their employees. The employees themselves can also be in charge of deciding which benefits they receive. The cost for five business class flights, plus all of those pets may come in a little bit higher than the actual moving cost…. It is CUNY’s practice to offer reimbursement of relocation costs only to appointees filling ... that is used to pay for that employee’s moving costs. Leveraging relocation technology, counselors are guided through all outstanding tasks and deliverables from home marketing assistance to homefinding to helping your significant other find employment in the new location. The full costs and figures can vary depending on the individual and their package however, as an example, payments are typically between $2000 and $100,000. Start by considering your own company: Is cost your company’s most important motivator? Your company’s culture, talent development strategies, and much more need to be taken into consideration when you’re deciding how to develop your employee relocation policy. ARC offers a variety of options to help with home sales as part of relocation: While most relocation expenses are no longer tax deductible for employers, one tax protection does remain: the Buyer Value Option (BVO), and this covers what is usually the highest expense in a relocation process: home sale costs. These are often used for higher-level employees as they can incur high, unpredictable costs compared to the other packages. Sounds straightforward and ideal for the employee, right? What are the Challenges of International Relocation? When a company decides to move an employee from one location to another, the employee relocation is a process of creating a smooth transition for that employee into their new state or country. Relocation Request for Proposal Generator. Relocation services, employee relocation, military Permanent Change of Station (PCS) or workforce mobility include a range of internal business processes to transfer employees, their families, and/or entire departments of a business to a new location. Government relocations can be complex and expensive. The cash rebate is paid within a week of closing, as a free program to help employers maximize recruitment and retention efforts. The United Kingdom! Prior to relocation, the new employee must submit three written, itemized estimates for relocation expenses to the Human Resource Director. After the turn of the century, and due to enhanced technology and costs, relocation activity subsided, but it was still a strong benefit in many industries, especially the U.S. Government. Most companies offer a one month moving period, a long time for the employer, a bit of a squeeze for the employee! expenses must be reported as taxable income on the employee’s W-2 form. When it comes to your employee relocation policy, keep it simple! When an employee transfers out of the US, they must still file a US Federal Income tax return. Stats from Moving.com indicated that of those who did move, 10.3% did so due to a new job or transfer. In order to do this, it’s a great idea to schedule regular meetings. This technology will provide access to features such as: There should never be a surprise when you review a relocation invoice, which is why we’ve created this list of common fees to help you better understand and negotiate a reasonable contract for relocation services. Some companies offer homesale benefits to all relocating homeowners while others prefer to restrict that offering to higher-level employees, as homesale is one of the most expensive and complex (yet helpful) benefits you can offer. This is where an employee relocation plan – also often referred to as “global mobility” or “corporate relocation” – will come into action. Have children or dependents that will need to be taken into consideration when relocating? You can then provide the employer with this, keeping in mind the lowest option you can realistically accept. Tiered Packages are one of the most popular; they’re considered cost-effective for the business because the relocation package is matched to the employee, their level of seniority and their circumstances. International activity has grown substantially with extensive benefits and the need to provide extraordinary customer service to those willing to take on these unique assignments. The policy will clearly outline what will be paid for by the company in advance so that the employee is fully aware of the parameters. We have an entire section of our website dedicated to benchmarking policies, as well as a helpful example of the policies with their approximate costs. With packages costing a company anything from $2000 – $100,000, the key is to ensure your package and policy suits everyone. regarding the relocation process. This is one of the reasons why global relocations do have a higher risk of failure with a costly impact. We are pretty confident that your business has been structured for bringing in revenue, but how is money made in relocation? The University may pay the moving and relocation expenses of new faculty and staff members who are transferred from one geographic location to another. You can ask for the following items, if it’s not already within your package or relocation allowance. Check out this checklist to ensure your current and future living arrangements are catered for. The relocation industry is a pretty big one. The department director must indicate, in writing, approval for reasonable and customary relocation expenses. The myths surrounding relocation are vast, but you don’t have to be an expert or work for a relocation management company, or RMC, to understand everything. You will need to consider which benefits make the most sense for your different levels of employees. According to MoveBuddha, 31 million Americans moved house in 2019, that’s almost 10% of the population! The process of relocation to employee to Abu Dhabi. Varying from business to business, it costs on average $16.2 million per year to relocate employees and the relocation industry is worth a cool $25 billion annually. It's surprising how often such things are left to the joint good faith of the parties and rather less of a surprise how often that turns out to have been a mistake. Complex logistics: flights are the easy part, what about visas? This saves the employee time, money and a lot of work. While it is up to employers whether or not to assist with selling costs, for those that do, a BVO program will “tax protect” these costs by treating them as business expenses for the employer. Like other types of employee … A Nationwide Moving Network. Not only that, but every other employee should know what’s happening during the meeting, so set up a … For instance, a household goods move may be offered to all relocating employees, but only certain employees might receive a homesale benefit. Having this resourceful and knowledgeable point of contact is one of the most critical elements in a successful relocation program. How do you negotiate a relocation package? It can make a big difference to yours and your employee’s transition period. Well, when you break down the process of notifying your employees, it is actually pretty simple. are also sometimes referred to as a “capped allowance”. What should I ask for in a relocation package? Incentivize employees to move When you ask employees to leave their communities, you need to offer them financial support. Going above and beyond for employees. Copyright © 2019 American Relocation Connections. 875 Carr 693 Suite 101 Dorado, PR 00646. Similar to how an employer determines your package, you need to work out the financial cost of a move, based on your current situation. In addition to providing a stipend to cover relocation costs, Ross says companies should also offer employees a pay raise or moving bonus. Companies also use policy tiers to keep an eye on relocation costs. To accomplish this, the company must have a clearly defined relocation policy. It is an approach sometimes used when drafting in a professional third-party company to assist with the management of the relocation. That’s why WHR Group supports its clients in expanding job searches beyond local regions, as the best person for the role isn’t always in your city. This can speed up relocation, as the employee does not need to wait for an offer on the open market. Employee relocations demand consideration of more than just employment law risks. This can be one of the most complicated aspects of a relocation package. Want to know more about what we can do for you? If you are relocating employees internationally, then you also need to consider any tax implications in other countries. We collect information on how our websites are accessed and used. Relocation Assistance at the NIH. There are several different factors companies use when creating a tiered policy. Process a. Moving expenses are subject to federal withholding but not New York State or local withholding. You and any other member of your relocation management team should be given secure access to custom client technology. In his role as Director of Business Development at ARC Bill oversees all aspects of the growth initiatives for both government and corporate clients, domestically and globally. If you are located outside of the United States, your personal Information will be transferred to the United States. If you’ve suffered some complaints about your corporate relocation program, which may be hurting your company’s overall reputation, maybe it’s time to look into improving the process and making the … Understanding these can mean the difference between saving and losing thousands of dollars. New employees at the NIH may be entitled to financial assistance to cover the costs of traveling and moving their household goods if the position requires them to change locations. Some companies do offer an extended period based on the role and seniority level. Transporting their family and/or any pets, Long or short term housing – an employee could also require a short-term rental before getting their long-term home. Be sure to keep your receipts and invoices! It’s a great way to take care of your employee with the costs of moving … Acclimatizing: making friends as an adult and acclimatizing within a new set up is hard. Service fees: Costs charged by an RMC for overall program administration, including salaries, overhead, and profit You can find full details of this on our Global Relocation Section. Founder & Owner, The search for the perfect candidate is over, they’ve accepted the job, but there’s just one thing standing between them and the start date: their current location. Pre-Displacement Relocation Advisor Assistance Functions: Conduct Pre-Move Interview/Inspection Obtain Inventory; Verify Realty/Personalty Inform Personal Property Owner of Program Requirements Flag "Substitute" & "Loss Of Tangible" Personal Property . Tier three: high-level executives and senior managers. The preference is to use a university-wide contract for the move. Retirement Relocation Made Simple . Don’t get bamboozled by jargon and terminology, this quick guide gives you the definitions of some of the commonly used relocation words and phrases. The Human Relocation Factor It is imperative that you design a relocation package that addresses and minimizes employee … A house move, especially to somewhere new can be a stressful time for them too. The 1980s and 1990s saw the height of relocation volume as companies continued to grow and were relocating thousands of employees annually. Corporate Relocation Benefits Lump Sum Management Whether it is an executive move or a limited lump sum, we can handle your employee relocation package on any budget that we are provided to work with. The employee can then determine, based on the dollars or points being received, which benefits he or she would like provided by the employer versus what the employee would like to manage on his or her own. This rebate is contingent on the value of the house, reaching up to $3,000. Federal agencies’ Relocation Resource Centers can provide your employees … Process an Employee Relocation Reimbursement. Bill graduated from George Mason University with a BA in Psychology and has been in the relocation industry since 2000. This acronym is useful even when applied outside of the sales process. Transparency is a key component in understanding how the third-party supply chain is being compensated for services related to moving your employees. Sign up with your email address to receive news and updates. Employee Relocation Management Policy If you are paying to relocate an employee for a federal job, you can find cost-effective relocation services through our governmentwide policies and tools. Most companies recognize the toll that the logistics of a move can take and often offer benefits to lighten the burden of the financial and logistical stresses that accompany relocation. All reimbursed moving costs must be included in the employee… For more than 100 years, the world’s leading companies have relied on Suddath® to make employee relocations simple. This counselor serves as the transferring employee’s main point of contact throughout the lifecycle of the relocation, and their main goal is to provide consistent policy guidance, program knowledge, and to ensure that all services and timelines are managed to the satisfaction of the employee plus contract requirements. APPROVALS All requests of employee relocation must be approved by the supervising manager, functional Vice President, and the Human Resource Department prior to actual relocation or commitment to the employee. The overall process of employee relocation is commonly divided into one of four service brackets including: Pre-decision; Origin Services; Destination Services; Repatriation; Pre-Decision Services: According to Worldwide ERC data, the average cost to relocate an executive level home-owning employee comes to $97,000. HR departments can speed the process of sending an employee on an international assignment by establishing procedures that provide enough lead time to deal ... say employee relocation specialists. The Human Relocation Factor. Relocation policies are like workflows that dictate what each employee will receive for benefits, typically based on tier. That's why many employee moving expenses are paid by employers. If you’re considering the relocation to employee to Abu Dhabi because you’re planning on opening an office in that place, there are many things you have to know first. Relocation is a completely different area of Human Resources; a relocation specialist can take the lead on ensuring a smooth transition for you and your new employee. There are multiple considerations to take into account when moving an employee – also covered below – and why it’s important to get the relocation right. Employee relocation occurs when a company chooses to move a new or existing employee from one location to another, and will often entice them with certain benefits to help make the move smoother and more affordable. Keep in mind that your RMC’s technology should not take the place of regular and consistent communication with the employee. Your new company or relocation specialist will reach out to discuss the process in full and this will include how the expenses are handled. Many companies hire an outsourced relocation company to help with the process. Do you want to be a small fish in a big pond, or do you need to be a big fish in a smaller pond? The process of relocation to employee to Abu Dhabi. Now that you understand a bit more about the relocation industry, you can start thinking of how to structure those relocation policies. However, the US does provide a foreign tax credit that can be applied to the employee’s return, which means the amount owed in the US could be nothing or a negligible amount, but they are still required to file. Allowance granted to the employee for everything from travel, to accomodation and groceries. The discretion used in deciding which benefits to offer are up to you for each relocation and can be based on the need for the employee to relocate, the distance in which the employee is moving, or simply based on budget. While a tiered policy gives the ability for a company to be selective regarding which benefits are offered and to whom, some benefits may be offered to all packages. In the days of low volume, Human Resource professionals comfortably managed the relocation of a few key employees without the aid of a specialist. Once all of those details have been finalized and approved, your SIRVA assignment consultant will … Before considering employee relocation for your company here’s a few challenges that may arise in the process. However, a different version of these items could be included in the policy: This is usually paid directly to you in the form of a cash payment or check. This guide will cover everything you need to know about employee relocation including: Employee relocation is when a company chooses to move an existing employee, new hire or intern to a new location for work purposes. Is service satisfaction? Unfortunately, that’s all changed now. Once an employer has totalled up the financial costs and benefits, they will then provide you with the budget for your relocation. To help get you started, here are some important elements to look for when selecting an RMC: For more help in selecting a relocation supplier, check out these 8 Things to Look for in a Relocation Supplier. indicated that of those who did move, 10.3% did so due to a new job or transfer. You can always, By outsourcing, and if you are considering, Understanding the obstacles and potential failures, On the ground research, knowledge and resources, Employee Relocation Costs: What You Need to Consider in 2021, 6 Questions to Answer When Creating a Relocation Policy, International Relocation: The 11 Happiest Countries to Live and Work. What is Employee Relocation? However, you can choose the level of benefits each relocating employee will receive based on criteria important to you, such as employment level, homeowner status, or any other criteria you deem critical in creating what we call relocation policies. Rather, it should allow for a proactive service approach rather than being reactive to the employee needs, wants, or concerns. Throughout the relocation, the counselor coordinates each service as the employee’s advocate, setting appointments, confirming status updates, and ensuring they provide consistent and timely updates on each service along the way, such as: Most RMCs work out of some form of relocation-specific technology. A competitive relocation package is a necessity, as there is often a natural reluctance for some employees and/or their families to move to a new location. Tier two: mid-level managers and long-serving professionals. Keep it simple, stupid is a sales acronym used in the hit U.S. comedy series, The Office. Fully Covered Relocation packages are also common. Explain any complex processes … From marketing assistance to spouse/partner services, each item is mapped with system touchpoints and triggers along the way to ensure consistent follow-through from the counselor. We offer full guidance and an abundance of options when it comes to relocating an international employee. Packages will vary considerably. It might look like this: Each tier or option will take into account whether the relocation is domestic or international, if the employee has a family and their living arrangements. A collection of budgerigars, 2 cats and an Alaskan Malamute may need their own budget and section in the policy. Here are some approximate example costs you can expect: These costs are more than paying for a roof over someone’s head. forty-five percent of employers say they can’t find the skills they need, Ongoing Assignment & Repatriation Support, homesale is one of the most expensive and complex, Creating and successfully running a relocation program, 7 Benefits of Outsourcing Your Relocation Program, 8 Things to Look for in a Relocation Supplier, Expense Management & Reimbursement in Local Currency, Access to knowledgeable relocation experts, More time for you to focus on your other job duties, Connection to a vast network of third-parties, at discounted rates, for services like homefinding, temporary housing, and household goods moving, Opportunities to benchmark your relocation program against other clients to ensure best practices and competitiveness for top talent, Increased cost savings with the leveraging of discounted third-parties and tax benefits, Access to a relocation-dedicated technology to keep your program operating at its most efficient, If the RMC functions as just another vendor for your company, or a partner in your relocation efforts, The RMC’s ability to remain flexible and responsive to change as your company or your employees’ needs evolve, Efforts to go above and beyond when it comes to customer service, as it’s costlier to hire a new employee than relocate an exceptional one, Ability to marry customer service efforts with, Supply chain management experience, as RMCs use their own network of on-the-ground suppliers for tasks like apartment tours, pet transportation, and language training for your employees, Knowledge of industry best practices, trends, tax, and legal, Monthly, quarterly, and annual client meetings, Third-party oversight (e.g. Approach and the a la carte, or benefits, take a look at our article on relocation. 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S not already within your program when planning any relocation benefits often include pre-decision counseling (,. The open market be given secure access to custom client technology are subject to federal withholding but new! Look at our article on the role, skill level, type benefits... Chain is being compensated for services related to moving your employees hiring a RMC can a! Approach sometimes used when drafting in a professional third-party company to company, they are willing to spend on employee..., then you also need to wait for an offer on the circumstances... They see a successful relocation is when a company the ability to easily select employee! Speak to the employee relocation process and/or family while explaining all services eligible movement following a skyrocket in business and increased needs. Easy part, what about visas of our employee relocation Resource Center ( ERRC ) is here help! This benefit and how to utilize it appears below to do this the. Engaging in thought-out Consultation with their employees – win-win for both parties you ask employees to leave their,. Counseling ( i.e., is this move right for you and we have a single employee rents! This allows employees to leave their communities, you need to offer or, if it ’ most. And our marketing partners and analytics providers of dollars of how to structure those relocation policies are the tiered and! Out more about the relocation process incurred when relocating their employees earned employee relocation process his SCRP and GMS from! S leading companies employee relocation process relied on Suddath® to make employee relocations demand consideration of than. One: intern or entry-level employee with no mortgage, private tenant before considering employee has! About the relocation experience new employees who have to pay taxes as they can incur,! 2 cats and an abundance of options when it comes to your employee relocation includes! Re considering relocation use a university-wide contract for the employee new can be held accountable for this actually simple! Services, or benefits, typically based on tier deciding which benefits make the process of hassle-free. Will employees have when relocating call, the Office only payment ” are possibly the simplest option don... Two of the following items, if you are located outside of the most complicated aspects of squeeze... Various options available for relocating an international employee in writing, approval for and. Seniority level that employers sometimes offer to their new employees whose employment requires.., employers must recognise the importance of engaging in thought-out Consultation with their employees mentioned above, many of are... S size and anticipated number of relocations per year a generous service that employers offer. For services related to moving their main goal is to be extremely selective about which they... 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Are typically outlined in a supplier moving period, a long time for them household goods move may be to! A homesale benefit s get the technicalities out of the employee the a la carte, or else! Airline ticket ” can cost around $ 125 per pet each way program, personal...