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How to Make Relocation Industry Conferences Work for You

| June 13, 2018

By Melissa Seitz-Medford, Manager, TRC Consulting Services

Global relocation industry conferenceAt 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

How are Companies Now Treating Employee Moving Expenses for Tax Purposes?

| April 27, 2018

Employee Moving ExpensesThe passage of the Tax Cuts and Jobs Act in late 2017 and its almost immediate effective date of 1 January 2018 took many in the mobility industry by surprise. One key change, the repeal of the employee moving expenses deduction, left many companies wondering about the tax treatment of three common relocation benefits that historically have been tax deductible for transferees:

• Household Goods Shipment (including pet and automobile shipments)
• Household Goods Storage Expenses
• Final Move Expenses Read More

International Relocation Assignments and the Tax Cuts and Jobs Act of 2017

| March 22, 2018

International tax job cuts - scissors with hands and rescue floatThe 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

Relocation Benefits Tax Changes: Key Issues to be Aware of When Completing 2017 Federal Taxes

| March 1, 2018

Relocation Benefits Tax ChangesWith 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.

We outline these changes below and offer TRC’s recommendations on how to treat these benefits going forward. Read More

LABOR 2030: The Collision of Demographics, Automation and Inequality

| February 19, 2018

employee mobility white paperA new white paper from Bain & Company explores some dramatic changes that will affect talent management and the employee mobility function. A brief excerpt follows.

Demographics, automation and inequality have the potential to dramatically reshape our world in the 2020s and beyond. Our analysis shows that the collision of these forces could trigger economic disruption far greater than we have experienced over the past 60 years. The aim of this report by Bain’s Macro Trends Group is to detail how the impact of aging populations, the adoption of new automation technologies and rising inequality will likely combine to give rise to new business risks and opportunities. These gathering forces already pose challenges for businesses and investors. In the next decade, they will combine to create an economic climate of increasing extremes but may also trigger a decade-plus investment boom. Read More

United Van Lines’ National Movers Study Shows Americans Continue to Move West and South

| January 30, 2018

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

Lump Sum Policy Best Practices: Pros & Cons of Supplemental Lump Sums

| January 14, 2018

supplemental lump sumsAs 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

Managed Lump Sum Program: Pros and Cons to Consider

| December 22, 2017

managed lump sumA 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

Lump Sum Policy Best Practices: Pros & Cons of a Traditional Fixed Lump Sum Program

| December 15, 2017

Hands exchanging a fixed lump sumA 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.

Read More

Proposed 2017 Tax Reform and the Substantial Effects it Could Have on Talent Mobility

| November 17, 2017

tax reformOn November 2, 2017, the U.S. House of Representatives Ways and Means Committee released new tax reform legislation entitled the “Tax Cuts and Jobs Act.”  Although currently in review and not yet passed into law, there are portions of the proposed tax law that would bring about a significant shock to the global mobility industry.  Because of the impact that this bill as it stands would have on our industry, it is imperative to understand what the current proposals entail and what the consequences would be as we move forward into 2018.

Elimination of the Household Goods Moving Expense and Final Move Non-Meal Expense Deduction

The household goods move for the employee is currently seen as excludable or non-taxable.  Under the proposed bill, all of these costs will become taxable in 2018 and corporations will need to determine if they are willing to cover the cost of the taxes (or gross-up) on behalf of their transferring employees.   As the household goods move is typically one of the most expensive relocation benefits offered (second only to the sale of the home), the financial ramifications for both the employer and the employee are considerable.  For example, if a household goods shipment costs $20,000.00 and the estimated gross-up to cover the taxes on the shipment would be $13,000.00, the employer would face an additional $13,000.00 in relocation fees, and the employee would see $33,000.00 of additional taxable income in their W-2—just for the household goods shipment alone. Read More

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