Relocating for a new job can be an exciting yet daunting experience. To make the transition smoother, employers often offer relocation packages to cover the costs of moving and other expenses. But what exactly is a typical relocation package? And how can companies manage their relocation policy?A typical relocation package generally covers the costs of moving and storing furniture, household items, assistance selling an existing home, costs incurred with finding a home, temporary housing, and all employee and family travel costs to the new location. This type of relocation package specifically refers to employees moving to company locations in different countries.
In this type of relocation package, employers cover expenses beyond moving and transportation. They could help employees and their spouses obtain work visas and provide paid travel to their new workplace to find housing before they move. They could also help employees with cultural assimilation once relocated. For each moving expense that is covered, ask if there is a specific amount allocated for each item or if there is a lump sum that will be fully reimbursed as the amount of the relocation package. Common relocation packages include a lump sum, refund, direct invoice and third-party relocation.
Moving can be an expensive experience, but if you know what to order and what to expect from common employee relocation packages, it will help you feel more comfortable with your final decision. If a relocation company is used to purchase the home through a GBO (Global Business Opportunity) and a third party buyer offers a higher price, a modified value option (AVO) can be used. It is an approach that is sometimes used when hiring a third professional company to help with relocation management. Therefore, companies use research data to ensure that the financial gain of hiring a new employee outweighs the cost of relocation. While the final cost of an employee relocation package varies widely, there are ways that companies can estimate and reduce these costs. Employers have lost the ability to use relocation as a tax deductible, and employees have to pay taxes on any relocation benefits received.
The last thing you want during your relocation for a new job is an additional stressor of underestimating relocation expenses and then staying with additional expenses that are ultimately not covered. There are several different ways to manage an employment relocation package and manage a relocation policy. Another important component that can be included in a relocation package is a paid moving company to help transport your belongings and adequate insurance coverage to cover the cost of any of your personal items that may be damaged during the moving process. When an employee is offered a promotion in another city or the perfect candidate lives somewhere else, companies often offer a relocation package. But perhaps more important than saving you money, a relocation package is a recruiting benefit that your company offers as an investment in you. By providing a relocation package, employers provide financial and other assistance to relieve the employee and his family from the costly inconveniences of relocation. If you take the time to review the terms of your relocation package, you can identify possible areas that you feel your company is not adequately covering.
There may be certain aspects that you consider important to your relocation experience that are not included in your relocation package. Another area that a company could cover in a relocation package is temporary housing for a transferred person. While it is difficult to know the details of the relocation assistance package until you know the employee and the assignment, it is important to have an idea of what you want the relocation package to include. By understanding what's typically included in these packages and how companies manage them, you can make sure you get all the benefits you need for your move.