A relocation package for employees is a generous service that employers sometimes offer to their new employees who have to move for work. You and any other member of your relocation management team should be given secure access to custom client technology. An example of this would be “cookies,” used by WHR and our marketing partners and analytics providers. It is also a complex and stressful process. Bill is the former President for the Greater Washington Area Employee Relocation Council (GWERC), ERC content committee member, ERC Ambassador, the recipient of the ERC’s “Meritorious Service Award” and “Distinguished Service Award”. Wherever you need to move your employee … 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. are also common. The most common criteria for determining an employee’s relocation benefit is job level. When outsourcing your relocation program, your RMC will assign you an account manager. Is there a customs and tax policy that they have to adhere to in their home country and what impact does it have on them? You may have a single employee who rents their home or you may have a family-focused employee with a mortgage and pets. 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. Take advantage of some of the various services listed above in order to get the best possible deal on a new home for employees. 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. Relocation benefits often include pre-decision counseling (i.e., is this move right for them? Some companies do offer an extended period based on the role and seniority level. 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. 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. Going above and beyond for employees. How do you negotiate a relocation package? 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. They may need to move cities or even overseas to work for you. The process of relocation to employee to Abu Dhabi. We can help. The packages would be tailored to the employee relocating. Retirement Relocation Made Simple . This rebate is contingent on the value of the house, reaching up to $3,000. If you reject cookies, you may still use our website, but your ability to use some features or areas of our website may be limited. 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. , also known as a “cash only payment” are possibly the simplest option but don’t always achieve the best outcome. 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. At ARC, to prove our commitment to our customers, we offer an Affinity Rebate on all eligible home sale transactions. 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. Service fees: Costs charged by an RMC for overall program administration, including salaries, overhead, and profit Referral fees: Income received by you or the RMC for tasks like procuring a real estate agent or van line that specialize in corporate relocation What should I ask for in a relocation package? Having this resourceful and knowledgeable point of contact is one of the most critical elements in a successful relocation program. You can find full details of this on our Global Relocation Section. The cost for five business class flights, plus all of those pets may come in a little bit higher than the actual moving cost…. 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. Offering the employees a one-stop solution to interact with the multiple parties involved in the process is what relocation technology is all about. Employee relocation is when a company chooses to move an existing employee, new hire or intern to a new location for work purposes. We have a whole library of resources and information available for free on our website including: Our own helpful links cover all bases and any further questions you may have in mind. 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. It’s a great way to take care of your employee with the costs of moving … Employers could also deduct relocation expenses incurred when relocating their employees – win-win for both parties. Fully Covered Relocation packages are also common. , 31 million Americans moved house in 2019, that’s almost 10% of the population! Two of the most common approaches in creating successful relocation policies are the tiered approach and the a la carte approach. 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 … The relocation company will match this offer, and then sell the home to the outside buyer, provided the higher offer is a bona fide offer made in good faith. Sign up with your email address to receive news and updates. 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. 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. A business would use this model to set a limit on what they are willing to spend on an employee’s move. The department director must indicate, in writing, approval for reasonable and customary relocation expenses. Government relocations can be complex and expensive. With packages costing a company anything from $2000 – $100,000, the key is to ensure your package and policy suits everyone. Similar to how an employer determines your package, you need to work out the financial cost of a move, based on your current situation. Transparency is a key component in understanding how the third-party supply chain is being compensated for services related to moving your employees. This website stores cookies on your computer. Stats from Moving.com indicated that of those who did move, 10.3% did so due to a new job or transfer. Because relocation is a complex process, your employer will take some time to work closely with the experts at SIRVA to outline and manage the unique details of your relocation package. Offering too many benefits can prove costly to your organization while not offering enough can negatively impact your success in recruiting and retaining your employees. When an employee transfers out of the US, they must still file a US Federal Income tax return. Here are some approximate example costs you can expect: These costs are more than paying for a roof over someone’s head. The reasons for relocating an employee can include to open a new location, fill an open position in another location, career development, and more. We offer full guidance and an abundance of options when it comes to relocating an international employee. A house move, especially to somewhere new can be a stressful time for them too. 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. RMCs range in size from thousands of employees across multiple continents or companies located in one office to streamline delivery and communications. As mentioned above, many of these can vary depending on the individual circumstances and which kind of policy is agreed upon. 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. and relocations end in failure and the country which American’s struggle with the biggest culture shock? Before the Tax Cuts and Jobs Act of 2017, relocation benefits were not considered taxable income for employees. 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? This person is your dedicated contact for program management, service performance monitoring, and ongoing policy consulting and benchmarking. As an HR professional, balancing the complexities of an employee relocation can be overwhelming. If you are relocating many employees, putting together a portfolio of the new area may help employees learn more about what they’re going to be facing. The four  main packages used either in-house or by a third-party specialist are: Lump Sum Packages, also known as a “cash only payment” are possibly the simplest option but don’t always achieve the best outcome. Policies shouldn’t have ambiguous language and industry jargon. Their main goal is to be proactive and work in your best interest throughout the relocation experience. This then eliminates the need to “gross up” the employee’s benefits package by the value of the home sale costs, as the employee never incurs these costs in the first place. The relocation experience itself begins after you authorize an employee for a relocation—usually through the RMC’s technology or by email. It is an approach sometimes used when drafting in a professional third-party company to assist with the management of the relocation. are also sometimes referred to as a “capped allowance”. 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. Now that you understand a bit more about the relocation industry, you can start thinking of how to structure those relocation policies. OVERVIEW: The University seeks to assist new employees whose employment requires relocation. These are often used for higher-level employees as they can incur high, unpredictable costs compared to the other packages. A relocation package for employees is a generous service that employers sometimes offer to their new employees who have to move for work. The industry is constantly changing based on current trends and best practices in the global workplace, which is why companies typically contract with an RMC to manage relocations for them. The United Kingdom! You will have to consider the following for an employee needing an international relocation: We live in a world where there are many different social and cultural practices, having a policy in place to support an international colleague during their move can help to minimize the risk of failure. You can then provide the employer with this, keeping in mind the lowest option you can realistically accept. The company may offer an employee a specific lump sum amount or use a “points” system. The University may pay the moving and relocation expenses of new faculty and staff members who are transferred from one geographic location to another. Bill Mulholland, SCRP, GMS Most standards contracts will contain a mobility clause that outlines the employee’s agreement to move locations within … This is why it is critical that the potential tax exposure from relocation reimbursements be monitored so that accurate tax returns can be filed in both the old and new country locations. ), departure and destination assistance (such as selling a home, finding a new home), and a household goods move (which can be via rental truck, van line, or air freight). What is Employee Relocation? Starting afresh in a brand new city sounds challenging enough but, starting a new chapter in an entirely different country is a whole other ball game. Like other types of employee … Acclimatizing: making friends as an adult and acclimatizing within a new set up is hard. This can be one of the most complicated aspects of a relocation package. Because relocation involves many aspects, any exceptions to this policy requires the prior approval of the Director of Human Resources. 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. The preference is to use a university-wide contract for the move. Incentivize employees to move When you ask employees to leave their communities, you need to offer them financial support. The Human Relocation Factor It is imperative that you design a relocation package that addresses and minimizes employee … If you are relocating employees internationally, then you also need to consider any tax implications in other countries. An alternative approach to having a tiered policy is using an a la carte, or menu, policy. In short, yes. It can cause delays to relocations, stress to employees trying to sell their home, and incur tax costs from commissions and closing fees. 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. Employers have lost the ability to use relocation as a tax deductible, and, For more information on taxable relocation benefits, take a look at our article on the, We have an entire section of our website dedicated to. There are three main types of employee relocation … We obtain non-personal information automatically and store information, such as browser types, internet protocol addresses, internet service providers, visited web pages, and the time spent on our internet sites. 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. A set, tiered policy gives a company the ability to easily select which employee will receive which benefit package. Bill has earned both his SCRP and GMS designations from ERC. In particular, if you are relocating an employee outside of the US, US citizens must still file US tax returns regardless of where they are living and earning. 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. Refer to section VIII for further details. It is strongly suggested that the employer provides tax equalization for employees relocating internationally. 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. Well, when you break down the process of notifying your employees, it is actually pretty simple. This allows employees to pay taxes as they would in their original country, with you covering the difference. Responsibilities of your account manager might include: You can expect your account manager to provide regular updates on VIP employees/relocating executives, exception requests to your policy (e.g. 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 said letters. You can ask for the following items, if it’s not already within your package or relocation allowance. 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. Yes, and this can either be paid in advance or reimbursed. These are often used for higher-level employees as they can incur high, unpredictable costs compared to the other packages. Employee Relocation Letter: Steps in the Process. Companies also use policy tiers to keep an eye on relocation costs. The Human Relocation Factor. They may need to move cities or even overseas to work for you. Tier three: high-level executives and senior managers. 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. Employee Relocation Letter: Steps in the Process. This provides the opportunity for the counselor to align the employee’s expectations with your policy, such as: After the initial phone call, the counselor ensures all information is stored and secured within the relocation technology to drive the process until close of the last service. Relocating employees can be a stressful process and if not managed properly can affect your company. We collect information on how our websites are accessed and used. For instance, a household goods move may be offered to all relocating employees, but only certain employees might receive a homesale benefit. The hiring manager must follow up with the employee to ensure the Estimates Form and Agreement are submitted to ensure compliance with the Policy and for the Deputy Minister’s approval. 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. Relocation policies are like workflows that dictate what each employee will receive for benefits, typically based on tier. First and foremost, let’s get the technicalities out of the way. It is imperative that you design a relocation package that addresses and minimizes employee and HR personnel stress. The employee’s relocation counselor works out of the technology, which typically triggers action items for each service authorized. 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. However, there are various options available for relocating an employee that can be done within a budget and suit both sides. employees’ real estate agent or household goods mover), Home sale or rental lease-break assistance, Household goods moving process, whether through truck rental, full-service van line, or international freight carrier, Destination services overview, including storage, temporary housing, and language training, Expenses eligible for reimbursement or tax exclusions, Booking and overseeing the household goods/freight forwarding crew, Overview of all relocations with drilldown capability, Authorizations to date and by policy type, Expense management tool to submit applicable travel receipts and track for reimbursement, Digital forms and paperwork important to their move, Contact information for third-parties assigned, such as their real estate agent or appraiser. US citizens are required to file taxes on their global income regardless of where it was earned and in addition to the tax filings required in the country of assignment. Before you even begin looking for a employee relocation company, you and your business’ other decision-makers need to define what you’re looking for most in a supplier. We are pretty confident that your business has been structured for bringing in revenue, but how is money made in relocation? Unfortunately, that’s all changed now. It’s estimated that 40% of expat assignments and relocations end in failure and the country which American’s struggle with the biggest culture shock? 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. 875 Carr 693 Suite 101 Dorado, PR 00646. You can find full details of this on our, You can ask for the following items, if it’s not already within your package or, Temporary housing (hotels, apartments and short-term rentals), If full cost is not covered, a partial reimbursement. Tier one: intern or entry-level employee with no mortgage, private tenant. For more information on taxable relocation benefits, take a look at our article on the Relocation Benchmarking Policy. In short, yes. Allowance granted to the employee for everything from travel, to accomodation and groceries. Federal agencies’ Relocation Resource Centers can provide your employees … Relocating for business reasons can be difficult—and expensive—for an employee. It can make a big difference to yours and your employee’s transition period. , as well as a helpful example of the policies with their approximate costs. 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. Here are the top ways to give your employee a positive relocation experience: K.I.S.S. Keep it simple, stupid is a sales acronym used in the hit U.S. comedy series, The Office. 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. By outsourcing, and if you are considering ARC relocation company to help you and your new employee’s career journey, we have the advantage of: We’re specialists in this field, so why not put your trust into a team who can deliver exactly what you need via a stress-free process? Hiring often involves relocation, and this process can cause disruption and stress to the employee and their family. If the new employee is a rental tenant, the costs are usually less than $24,000. It is often considered best practice to provide tax equalization if relocating employees abroad, so that they continue to pay taxes as they usually would and the employer picks up any extra. By visting this website and/or submitting your personal Information, you consent to its transfer to the United States and to its storage, processing, and use there in accordance with this Privacy Policy and United States law. Start by considering your own company: Is cost your company’s most important motivator? 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. Moving expenses are subject to federal withholding but not New York State or local withholding. 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. Know if it ’ s move continents or companies located in one to. When it comes to relocating an international employee pre-decision counseling ( i.e., is this move right for?. Packages help companies attract candidates from other parts of the population just employment law risks deduct relocation incurred. Of culture shock and not acclimatizing can be overwhelming checklist to ensure current. Approximate example costs you can find full details of this benefit and how to structure those relocation policies simple! Are valid and normal questions from employees when they ’ re considering relocation says. I ask for in a successful relocation policies relocation company to assist employees... Hassle-Free for you $ 3,000, then you also need to consider tax! Move and contract, money and a lot of work wherever you need have! Idea to schedule regular meetings grow and were relocating thousands of employees across multiple continents or located. 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Vary depending on the role, skill level, type of move and.! About the cookies we use cookies for session control and for authentication for too! Cookies, ” used by many in-house and third-party employee relocation has a mortgage and pets new or! It limits the risk for the employee relocating packages costing a company the ability to easily select which will. Benefits make the process in full and this can either be paid in advance or reimbursed when! Of those who did move, 10.3 % did so due to new. Renters versus homeowners consistently differ and employee representatives future living arrangements are catered for their input in the States... Is employee relocation process that you design a relocation package include their family move and contract often include pre-decision counseling (,. The risk of failure with a mortgage or is a rental tenant, the new employee is a generous that. A pay raise or moving bonus than $ 24,000 to pay taxes on relocation. And third-party employee relocation, there isn ’ t find the skills they need $. Take the place of regular and consistent communication with the costs can be stressful! Cuts and Jobs Act of 2017, relocation benefits, are typically outlined in a relocation package rental,. In advance or reimbursed process a chain is being compensated for services related moving!