When an employee relocates to work for your business, there are a few things you can do to help them through the process. Here are ways to support your new employee.
After a lengthy search, you've finally found the right candidate for a key job opening, but they'll have to move. Employee relocation is often a rushed and stressful process, especially for the worker actually enduring the move. Most employees expect financial support from their new employer to offset their moving costs.
If this is your first time hiring an employee who isn't from your area, you might consider whether your business can offer relocation services and, if so, what those services might look like. Here's everything you should know about employee relocation and what to include in your package.
What is employee relocation?
Employee relocation is the process of moving a new or existing employee from one location to another for work-related purposes. Companies often offer services to assist these workers in their transfer.
A recent study from staffing firm Robert Half found that 62% of the 2,800-plus workers surveyed would relocate for the right job. It also asked more than 2,800 senior managers about their relocation packages and found that 34% have increased their offerings, though 30% don't provide this resource at all.
You're not required to offer a relocation package, but it might be more difficult to recruit top talent if you don't, as a candidate might decide that the expense and hassle of moving outweigh the benefits of working for you instead of their current employer.
Whether you offer a job relocation package or not, you should be upfront with this information and communicate it to your candidate early – don't wait for them to ask about it. This lets them realistically consider how much assistance they'll have with the move as they make their decision to accept or decline your job offer.
If you plan to offer relocation assistance, you (or your human resources specialist, if you have one on staff) need to discuss the specifics with your candidate after you extend a formal job offer. You should detail what your relocation package includes in writing, but it's not enough to email it or mention it to your prospective hire in passing when you extend the job offer. Take the time go over it on a phone call to ensure there are no misunderstandings about what is and isn't included.
What does a relocation package include?
Employee relocation packages are not cheap. The average cost ranges from $21,327 to $24,913 for renters and $61,622 to $79,429 for homeowners.
However, the benefits of offering a relocation program are often worth the investment. These incentives increase the likelihood that your top candidates will accept the position with your company and feel good about their decision – and your business – as they start their new job. It also reduces the chance that they'll back out, which saves you the time of looking for a qualified candidate all over again.
Here are some offerings you might include in your relocation package:
- Free visits: Finding a new home – and quickly – can be difficult. This process often requires frequent trips to check out houses for sale or apartments for rent. The Society for Human Resource Management suggests offering site visits for your new hire to get them excited about moving to your city and give them the chance to start looking for housing.
- Relocation allowance or reimbursement: If you can afford it, offer your new hire an allowance to offset their moving expenses. Companies provide this money either upfront as a lump-sum payment or as a moving expense reimbursement after the employee submits receipts for certain relocation and travel costs.
- Flexible start date: Yes, you need your new employee to start as soon as possible, but if they're moving for the job, it's probably going to take longer than the normal two weeks that you would expect from a local hire. Talk with your new employee about what relocating entails and set a realistic timeline for when they'll be on location and ready to work.
- Temporary housing: While most companies don't provide permanent housing for their relocating employees, many offer housing for the first month or two so the worker has time to adjust to the move. The employer typically covers the utilities during this time as well.
- Assistance selling a home or breaking a lease: Whether through loss-on-sale allowance for quick home sales or reimbursement for broken leases, many relocation packages take care of any financial ties to their employee's previous location.
- Packing/moving services and insurance: Your employee isn't going on a two-week vacation; they're uprooting their life so they can work for your company. As a simple repayment for their loyalty and flexibility, consider hiring professional movers and purchasing moving insurance to assist them.
- Transportation reimbursement: While you might not be gifting them a company car, you can at least cover your employees' transportation costs for the move. This includes any flights, Uber/Lyft or cab rides, train tickets, or other means of transportation.
- Help for spouses and children: Some relocation packages include allowances for child care and trips home. You might also help workers find employment for their spouse and schools for their children.
You're not obligated to offer all – or any – of these services, but doing so will show your workers you care about their financial well-being. However, make sure they understand that these reimbursements are considered taxable income.
What if your newly relocated employee quits?
Employee relocation can be very expensive for employers. It's not unreasonable to worry that your new hire will quit shortly after they're settled in your city, wasting the money you invested in their relocation package.
Before you disburse any relocation funds – either as a lump sum or a reimbursement – to your new employee, have them sign a relocation contract or repayment agreement that says if they leave your employment or are fired with cause before a certain amount of time with the company (typically two years), they will be required to repay the money you spent to relocate them.
What if your business can't afford to offer a relocation package?
The lack of a relocation package isn't necessarily a dealbreaker for prospective employees.
"Besides receiving corporate incentives to move, there are a number of professional and personal reasons workers may opt for a change of scenery, including a higher salary, better perks, more affordable cost of living or advanced job title," said Paul McDonald, senior executive director at Robert Half.
If you're lucky, your candidate may have been hoping to move to your city anyway and just needed to have a job lined up before taking that step.
Either way, negotiate a deal that benefits both parties. One way you can make a new hire's relocation easier – that won't cost anything – is to give them local insight into their new city. Here are some examples of the information you could share.
If you know a good real estate agent, introduce them. Also share your own advice about the local real estate market, such as average home or apartment costs, and tips on which parts of the city have good neighborhoods for different demographics. For instance, if they have kids, tell them where the best schools are; if they're single, tell them which part of the city has the best social scene for young professionals. If there are any sketchy areas they should avoid, that's good information to share too.
If your employee won't have time to rent an apartment or purchase a house before their first day in the office, recommend nice extended-stay hotels or help them find an Airbnb rental in a good neighborhood.
Even with the handy navigation apps on our phones like Google Maps and Waze, a local's tips on the best ways to get around are welcome. What are the easiest and fastest ways to get to your office from the employee's new home?
If you live in a drivable city, are there roads to avoid at certain times of day? If there's no parking at the office, what are the best options?
If you live in a city that relies on public transportation, where are the closest subway, bus or train stops to your employee's residence? How far are they from the office, and how much time will it take? Do they need to arrive at a certain time to avoid rush hour? Are there certain subway lines or bus routes that are notoriously unreliable?
Recommendations for nearby stores and services
Sure, your employee could research this on Yelp, but a local's take can save them some time. Share the following helpful information with your new employee.
Restaurants: What are the best options for various cuisines and restaurant types (fast food, takeout, casual, bar, nice)?
Grocery stores: Which stores are the cheapest? Which has the best produce? Which has the best deli?
Malls: Which one is the closest? Which has the best stores?
Banks: Which one has the best rates? Which has the most ATMs or branches?
- Things to do and places to see: Help your employee discover the best of what your city has to offer. Share information about popular venues for upcoming sporting events, concerts, plays, or other cultural events; museums, theme parks, zoos and other attractions; and national or regional parks.
While no laws require employers to assist their new employees with moving, job relocation packages are worth the investment for most companies. By offering perks like this, you will attract a wider pool of candidates and be able to be more selective in your hiring process.
Lori Fairbanks contributed to the reporting and writing in this article.