Do you know the percentage of people moving within the same country has decreased from the last few years? You might be surprised to know the fact but this is true. But do you know the reason behind it? One of the main reasons could be the unsatisfactory job relocation packages offered by the companies which employees do not accept. It is very much obvious because the cost of living in Orlando would be different from Texas or any other state.
Therefore the companies that want their employees to move to other locations, need to get more creative with the relocation packages they offer to their employees. In this case, for different employees, different packages have to be customized that can make the employee get ready to move.
Types of relocation packages generally offered by companies are:
1: Direct billing
In this, your company will pay the entire moving cost directly therefore you don’t have to worry about the expenses of your move. All you have to do is just focus on the job at the new location without worrying about the expenses making it a great relocation package. Because these expenses are excluded from taxes therefore it is also a great option for the company.
2: Third-party relocation
The third party’s moving companies which are helping people to move for work. The companies work with these moving companies that can help their employees in moving. The moving companies take the entire responsibility of the employees therefore the HR team of the company does not have to worry. All they have to do is just to connect with the third party to make the entire move smoother. Oftentimes, these third parties store your possessions in a self storage unit while the employee gets settled in. Once the accommodations are complete, they move the possessions inside.
The lump-sum is one of the most popular relocation packages in which the company provides a lump sum amount to the employee which he/she could spend during the move process as per his/her choice. The amount is decided based on the estimated expenditure over the move. In this type of relocation package, a person can use the money as per his/her choice. Most of the employees choose lump sum over direct billing because they can pocket the amount and can spend at their convenience. In this case, employees move on the least possible amount and save the last.
What is the average lump sum amount?
Many employees prefer to get a lump sum amount which is paid as an incentive to move. It is usually a one-time deal that an employer gets after he/she agrees to move at that location. But remember that when an employee is not moved in real then how he/she will get to know the moving costs therefore you should estimate a little more the amount you think will spend in the move.
Reimbursement is also one of the most important relocation packages. It is like an expensive travel cost on business trips. It is a set of a certain amount considering all the costs included in a move. You can easily shop around to get the best deal from the movers and can make the entire move within budget and can save the amount from the reimbursements. Once you collect all the moving costs, your company will pay you back.
Core flex is the recent model through which the companies are paying to their clients for relocation. In this method, the needs and the priorities of both the employee and the employer has been considered therefore, a mutually beneficial relationship is created. In this method, companies made a deal with the employees like they will help the employee spouse to get a new job at the new location through which both the business as well as the employee got happy which also makes the employee get ready for the move.
So, what generally included in a job relocation package?
Generally, all the costs regarding the moving process are included in the relocation package. It includes the cost spend in the search for the right home, cost related to move like transportation cost, full packing/unpacking cost, lease break coverage, storage unit rental cost, and new house rental cost. Though it is not necessary that in all the packages, all the costs are included, some are excluded in some types of packages offered by the company.
How a relocation package is created?
First of all, the company will decide how they will cover the cost like whether they will send a lump sum amount to the employee with their check? Whether they will pay the moving cost in the reimbursements? Whether the company will make the direct billing of the move? Or will they choose any other option to pay you? It is a strategy customized by companies according to employment needs. Depends on several factors, amenities and different relocation packages are provided to the employees.
Each of the customized plans has its advantages, for some employees lump sum could be a better option than the others and for some, it could be the worst. It all depends on the needs of the employees. Whatever relocation package you offer, you must ensure that it reduces the moving stress for your employees to help them move easily to the new location.