When originally conceived, the typical domestic relocation package was a generous suite of benefits. Companies tailored these relocation packages for senior level managers who owned an often-expensive home, planned to buy a new one at the destination and had considerable personal effects to move. They frequently centered on a Guaranteed Buyout Program, where the company would buy the employee’s home if s(he) could not sell it in a timely manner. Because these were executives, the objective of getting them in place at the destination as quickly as possible trumped cost considerations.

Typical Relocation Packages Today

While some companies still deliver this white glove treatment, particularly to their executive employees, today’s domestic relocation packages are as variable as the relocating employees who receive them, making relocation policy examples and best practices extremely useful. Most companies that have enough employee relocation volume to warrant a formal relocation program tend to offer tiers of relocation benefits. Companies usually base these tiers on job level, homeowner/renter status or both.

In general, the objective of a domestic relocation package is to assist the employee who is moving for his/her job. In the bygone era described above, employees expected their employers to keep them financially whole, with the company covering all relocation-related expenses, and employers largely complied. Today, it is typical for employers to help defray relocation costs, but there is no promise that companies will keep employees whole. In fact, as part of corporate cost-cutting initiatives, most companies have been trimming relocation packages over the years, and many now include a monetary cap to these types of benefits.

Regardless of the amount of financial support, the company’s overarching goals are to help the employee separate from the current home (sell a house or break a lease), move the household goods and find a new home (to purchase or rent). Companies can include additional benefits depending on how competitive a talent market they face and some companies have introduced more flexible programs that allow employees to choose specific benefits. Learn more about relocation policy examples using flexible relocation programs and download the Core-Flex Relocation Programs eBook.

Relocating Entry-Level/College Grad Tier Employees

For entry-level employees, who are often single renters with few possessions, the relocation needs are relatively simple. A popular solution today is a simple lump sum, which companies usually gross up to cover the employee’s taxes on the benefit. Most companies do not require receipts and allow the new employees to use the money as they see fit. Lump sums tend to be popular with employees because they allow them to spend money on the areas that are most important to them. Learn more about lump sums with TRC’s Lump Sum Policies Best Practices ebook.

Transferring Employees in the Professional Level Tier

More established professionals tend to expect more significant relocation support. They likely have a house to sell, more household goods to move and all the costs associated with buying a new home. Even at this level, some companies are opting to provide a lump sum (for the sake of simplicity of administration and cost control). The lump sum in this case is a much larger amount, and it includes assistance in managing and budgeting the money.

Companies with more formal programs might offer a Buyer Value Option homesale program, reimbursement of home selling and closing costs and reimbursement of home purchase costs. Usually, these companies will pay for a several day home finding trip to the destination area as well, and a full pack and move service.

Supporting the Executive Level Tier in Relocating

The executive tier resembles the professional tier, but with more generous allowances overall. Rather than a Buyer Value Option program, the company might offer executives a Guaranteed Buyout program, where the company buys their home if it does not sell within a prescribed marketing period. This supports the company objective of getting the executive in place at the destination as quickly as possible, albeit at a higher cost. Benefits tend to be more negotiable at this level, with companies frequently granting “exceptions” to the standard benefits and terms to meet the employee’s unique needs.

Learn More About Typical Relocation Policy Examples

To learn more about relocation packages and the current best practices for companies optimizing their relocation policy, download the 2020 U.S. Domestic Relocation Policy Best Practices eBook.


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