In a gig employment relationship, companies do not employ workers directly and permanently. Instead, they contract workers as needed to complete a specific project or to serve for a defined term. When the contracted project work or term is completed, neither the worker nor the employer has any further obligation to the other party. The worker is free to move on to another gig. Subsequent projects might be with the same employer, a different company or sometimes even an industry competitor. Read More
Category: Corporate Relocation
“Global nomads” have been a fixture in talent mobility almost from the beginning: employees who left their home country years ago and have progressed from assignment to assignment and country to country. While they traverse the globe for their companies, moving from assignment to assignment and operating almost like gig workers, they are nonetheless permanent employees and managed as such. These individuals do not localize, but remain attached to their home country for the majority of their compensation and benefit coverage. Read More
Recent Worldwide ERC® data shows that the average cost for a company to relocate a current homeowner employee within the U.S. is $79,425. International assignments are more complex, and not surprisingly, more expensive, sometimes costing employers $1m or more.
It has always been important for companies to protect this substantial investment, but the continuing talent shortage has added another imperative: your best and brightest employees—the ones you are most likely to relocate or to send on assignment—are prime targets of your competitors. They would be happy to capitalize on your investment in your employees, particularly when it comes to international assignment experience. Read More
By Melissa Seitz-Medford, Manager, TRC Consulting Services
At the recent Worldwide ERC® Americas Conference in Dallas, I couldn’t help but notice how many individuals were wearing “first time attendee” name badges. Although this was not my first time at a WERC conference, I thought it was interesting and exciting to see how many new faces there were, and I looked forward to hearing what they had to say.
Forums like WERC provide a wonderful platform for relocation industry veterans and those who may be looking at global mobility with “fresh eyes” to share thoughts, professional challenges and solutions. Given all of the work that goes into producing these conferences, and the substantial investment companies make to participate, it is worth considering how you can make the most of your time at them. Read More
The passage of the Tax Cuts and Jobs Act of 2017 has had far-reaching effects within the domestic sector of the global mobility industry, however, international employee relocations have been impacted as well. All of the benefits that are affected from a domestic perspective will have the same implications on international moves if those benefits are included in an international relocation package. For example, household goods shipments and final move benefits are typically included in both international and domestic employee mobility packages. As of 1 January 2018, both of these benefits have been deemed as taxable, with no distinction between the benefits being administered domestically or internationally. It will be up to companies on an individual basis to determine if they are going to consider grossing up the taxes for both of these benefits going forward. Read More
With the passage of the Tax Cuts and Jobs Act of 2017, there are key changes to the tax treatment of several common relocation benefits. Whether you are an employee moving domestically or globally or an employer who relocates employees, it is important to be aware of these changes as we head into tax season.
So where are Americans moving these days, and why are they moving there? United Van Lines’ recently released 41st Annual National Movers Study holds a few surprises. The study tracks United customers’ state-to-state migration patterns during the previous year.
According to the study, Americans are moving westward, flocking to the Mountain and Pacific West, while the Northeast and Midwest continue to lose residents. In 2017, more residents moved out of Illinois than any other state with 63 percent of moves being outbound. Surprisingly, Vermont had the highest percentage of inbound migration in 2017 with nearly 68 percent of moves to and from the state being inbound Read More
As the name suggests, companies offer supplemental lump sums to cover part of an employee’s relocation costs, not all of them. About one-third of TRC’s clients utilize the supplemental lump sum to cover benefits such as the home finding trip, temporary living and the final move. Companies usually tailor supplemental lump sums to each employee’s move, often by pricing accommodations through preferred providers and including pre-determined amounts for mileage and meals.
According to the Atlas World Group 2017 Corporate Relocation Survey, 50% of companies are using a supplemental lump sum to cover temporary accommodation costs, up from 38% – 43% in years 2011 through 2014. In its 2017 Workforce Mobility Benchmark Report, Runzheimer noted that nearly 50% of the organizations they surveyed manage home finding expenses via a supplemental lump sum. Read More
A managed lump sum policy is similar to a traditional fixed lump sum except the company specifically defines the benefits covered by the lump sum in its policy guidelines. These benefits are sometimes presented as menu items, allowing the employee to choose benefits that best suit his or her needs. Other companies calculate the lump sum based on the benefits they intend to provide. Either way, the company typically provides relocation counseling (either in house or through a third-party provider) to help the employee use the funds most effectively. Unlike the traditional fixed, any unused funds revert back to the company. The company calculates the managed lump sum amount using the same methods as the traditional fixed, sometimes with the assistance of a third-party data provider.
Pros of a Managed Lump Sum Program
This model allows companies to track benefit usage and spend much more reliably than the traditional fixed. This closer control will also help the company to manage costs better with a vetted network of relocation service partners to ensure optimum pricing and quality. From a tax perspective, the employer can make direct vendor payments, allowing it to treat each of the components individually as taxable or non-taxable. Read More
A traditional fixed lump sum policy approach provides the relocating employee with a flat amount of money that he or she can use to pay relocation expenses. Under this program, the employee is usually responsible for coordinating the move details and allocating the available funds. Companies can use several criteria to determine the amount of the lump sum, including: 1) Job or grade level of the employee; 2) Homeowner versus renter status; 3) New hire versus current employee; 4) Historical averages for similar types of moves; 5) Distance of the relocation and family size; and 6) Discretion of the employee’s manager.
Companies can also engage a third-party data provider to determine the amount of the lump sum. The provider will consider current costs, distance, family size and any other parameters set by the employer in calculating a lump sum amount.