In this version of our "Ask Maura" series, our VP of Content and Research, Maura Carey, overviews some of the most common benefits offered for relocation assistance. When moving their employees for work, many companies offer a relocation benefits package. The benefits are meant to cover some - to most - of the expenses and services associated with a company-requested relocation. The key is to offer benefits that are fair and supportive of your company’s larger goals for attracting and supporting essential talent.
What is the Purpose of Relocation Benefits?
The purpose of offering relocation benefits is to support valuable employees, first in making the decision to accept a move and second in moving successfully so they and those moving with them are effectively settled into their new destinations and ready to thrive on day one. While many unique services in the relocation process are evaluated on key performance indicator metrics (KPIs), the ultimate indicator of relocation success is retaining high-impact employees whose contributions are essential to their organizations.
Companies have two primary choices when they elect to offer relocation benefits to their employees: 1) a managed benefit, where the company structures the support for the employee and engages professionals to deliver the services defined as essential to a relocation or 2) a lump sum/cash benefit that the employee uses to offset their costs and manage their own move. There are variations to these core choices, of course, and the employer can define any policy parameters it chooses to. Typically, an employer offers benefit packages that are consistent with its HR policies and practices overall.
Managed Benefits
Many companies offer a managed benefit to support relocation needs. In this scenario, the employer has oversight for the process, either directly or through a relocation management partner, and pays the fees of experts in mobility services firms who coordinate various aspects of the move. In a managed move, the company may stipulate a scope of work to be followed by service providers or may offer a ‘core/ flex’ framework by which certain essential services are authorized as required, while other service choices are flexible to the employee’s individual circumstances. There are many versions of policy and relocation benefit management practice, but the key feature of a managed benefit is that the employee is supported through an ecosystem of related services.
In a managed benefits program, companies may also provide an allowance for employees to cover miscellaneous expenses.
Companies who choose to outsource the service and management of these benefits typically use a third-party partner and a technology platform to coordinate the services and ensure visibility to all aspects of the employee experience.
Lump Sum Benefits
Lump sums can be applied to the entirety of an employee’s moving costs, or for a specific portion of them. Many companies offer a lump sum intended to cover things like the cost of canceling a lease, moving a car, shipping household belongings, and making deposit payments for rental housing in the destination location. Across various employer sizes, the average lump sum offered in the US is between $5,000 - $12,500, per the 2024 Atlas Corporate Relocation Survey. This benefit is taxable income, so companies have the option to gross up the benefit (covering the cost of taxes) or offer a benefit that is net the cost of taxes. In general, smaller companies with fewer employees and relocation requests offer more limited lump sums, but the size of the benefit is not necessarily tied to the size of the business.
Approximately one-third of large employers offer a relocation package that is partially or completely a lump sum benefit. When factoring in all companies that offer a relocation benefit, we estimate at least half use a lump sum benefit. These data points are offered as indicators, and each company makes its own policy and benefits decisions.
Typically, an individual who is offered a lump sum benefit also manages their own move, including:
- finding a mover
- exiting a lease
- organizing their move and transition
- finding a place to live, both temporary and long term
- moving into a new property at their destination
- researching and organizing registrations for essential services
If the transferring employee has school-age children, they also must sort and manage those requirements and choices.
Support Services for Self-Managed Moves
Lump sum payments in and of themselves do not secure service to transferring employees. In a lump sum program where the funds are directly paid to the employee, the decision to seek assistance rests with the employee. The majority of lump sum recipients manage their own moves and if they require additional assistance, turn to their mobility team, HR departments or hiring managers, the relocation management company, and their peers for guidance. Many simply manage the process through internet searches.
To provide services beyond online search and self-management, employees may be referred to preferred providers of their employer or their relocation management company. Some service providers, like Dwellworks, have created easy-to-use digital platforms for employees with lump sum benefits to access relocation services.
Through our Direct.Dwellworks.com storefront, employees managing their own moves can access the same award-winning home search and settling-in services that we provide to employees authorized for managed benefits. Offered at a variety of service tiers and price points, employees can choose the extent of services they want, which provides them access to the content in our myDwellworks online portal and, depending on the support selected, connects them to a Dwellworks Destination Consultant for 1-on-1 advice. You can learn more about these offerings here.
Benefits vs Experience
We will explore the customer service experience of using managed benefits and lump sum benefits programs in detail in a future blog. For information about Dwellworks destination services, temporary living services, and our digital products and platform, contact us at the button below.
