What Expenses Should a Corporate Relocation Cover?

Relocation assistance

Did you know that the United States’ corporate relocation industry is worth over a whopping $25 billion? It’s no surprise considering how much a relocation costs between time, money and human capital. However, these relocation costs are paltry in comparison to the results that they could yield. A company often uses relocation services because a company needs to use an employee as a resource in a new location, and because it gives that employee the opportunity to bolster their experience with a relocation.

This of course requires that a company somehow strike a balance between an offer that entices the employee to accept, but can also minimize the relocation cost.

The first thing to consider is the actual cost of moving the employee. This could include the cost of packing, transportation, and storage. Offering a bare-bones moving service could put undue pressure on the employee, but white-glove moving and transportation services may be a little excessive. The idea here is to offer enough support for the employee so that the transition is easy, which doesn’t necessarily require extravagant moving services, but does require more than simple, basic services.

Of course, before the employee actually relocates, he or she will have to find a home for their family. These trips can start to make the relocation cost add up, so it’s best to pay for two trips to the new city that the employee will spend house hunting–one for the whole family, and one for just the employee.

A company should also provide the employee with an adjustment fee to help them settle in. These adjustment bonuses are meant to cover such expenses as utility company deposits, vehicle registrations, and the like.

The relocation cost should also account for the employee’s salary. While a raise isn’t necessary, the employee’s salary should be adjusted to account for the new city’s cost of living. If the area has a higher cost of living, the salary should be adjusted so that it remains competitive. However, if the cost of living in the new area is lower, than keeping the salary the same will do just fine.

These are just a few of the relocation cost factors that a company needs to account for. If you have any questions about what a relocation costs, feel free to ask in the comments. Good references here.

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