Program Administration

2024 April 18

How Much Is the Average Employee Relocation Package in 2024? What’s Included?

Relocation can be a major expense for both employers and employees. That’s why it’s important to understand the components of a relocation program and how relocation packages can help offset the costs of moving an employee. But how much is the average relocation package and what’s included?

If you’re considering offering a relocation package or seeking information about creating a relocation program, it’s crucial to understand the comprehensive scope of relocation costs. In this comprehensive guide, we’ll delve into the details of relocation expenses, what they typically encompass, and the associated considerations. Read on to gain valuable insights and make informed decisions about relocation programs.

The cost of an average relocation package hinges on various factors including the destination’s cost of living, the employee’s status, and the level of assistance provided by the company. If the transferee is a renter at the time of the move, the standard cost is generally in the low to mid-$30,000s. If they are a homeowner, the cost will be substantially higher – anywhere between $80,000 and $90,000. In both cases, current employee moves are more costly than those for new hires. Keep reading to find out how to build the best employee relocation package and plan for your business.

What is a Relocation Package?

When a company offers an employee long-term employment more than 50 miles from the current work location, a company may offer a relocation package. This usually covers the employee’s reasonable moving and other work-related expenses, to relieve the employee and their family of the expensive burden of relocation. A well-designed employee relocation package provides peace of mind and incentives to accept the job offer, while also reflecting positively on the company’s reputation for attracting top talent.

What is Relocation Assistance?

Relocation assistance occurs when a company assists new hires or current employees with relocating for work from one location to another, whether it’s a new city, state, or country. It is a benefit designed to help ease the financial burden of moving and get the employee started in their new position as quickly as possible. Relocation management companies provide support in various areas, including packing and unpacking services, transportation and moving costs, temporary lodging, disposition of a residence, acquisition of a new residence, mortgage assistance, cultural training, and language training.

What Relocation Expenses Are Covered by the Average Relocation Package?

The cost of an average relocation package hinges on factors such as the destination’s cost of living, the employee’s status, and the level of assistance provided by the company. Whether the employee is a renter or homeowner, relocation expenses can vary widely. However, in 2024, companies are increasingly offering inclusive relocation packages to attract and retain talent.

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What Does a Standard Relocation Package Include?

A standard relocation package may include full pack and/or unpack services, a quality moving company service with reasonable insurance coverage, home sale or lease-breaking penalty assistance, house-hunting trips, temporary housing, transportation to the final destination, and miscellaneous expenses.

Full pack and/or unpack services

The employee’s household goods are packed by a moving company, saving the employee time and stress. After arriving at the new destination and home, moving company personnel unpack the household goods.

Quality moving company service with reasonable insurance coverage

Insuring goods during the move is essential. Since moving charges are usually based on total weight, insurance for damaged or lost goods should be equal to the goods’ value.

Home sale or lease-breaking penalty assistance

Home sale assistance can come in a variety of forms, including company-sponsored reimbursement for money lost on quick home sales, and professional marketing to accelerate the timing of sales. Renters can expect employers to pay contractual penalties for early lease termination.

The house-hunting trip, a minimum of one

Standard relocation programs commonly include at least one (preferably two) company-paid house hunting trips of short duration to give the transferee and family opportunities to find new homes. House-hunting expenses incurred during this process can entail transportation, lodging, meals, and childcare (according to the Illinois-based search firm Witt Kiefer, companies are increasingly encouraging families with younger children to leave them home, and reimbursing them for the expense, while looking for a new house).

Temporary housing

Standard relocations include at least 30 days of temporary housing for transferees.

Transportation to the final destination

Average relocation packages include reimbursement for transporting your transferee and his/her family to the new location. If the transferee can travel by auto, reimbursing for mileage expenses is common. Should the move require plane or train transportation, standard packages often include reimbursing the cost of moving the transferee’s vehicle(s).

Miscellaneous expenses

As one might expect, the “miscellaneous” category can encompass a lot of small costs. These can include driver’s license fees, pet registration and licenses, cleaning services at the new home, utility hook-ups, and other move-related expenses. These are commonly included features of typical relocation packages. Depending on your industry and location, there may be additional features to consider.

Expenses covered in an average relocation package may also include:

Temporary living expenses when transferees must meet hard-moving deadlines
Storage costs for household goods before employees can move into new homes
Spousal employment assistance in the new location
Childcare costs and elder help for transferees caring for elderly parents
School location assistance for school-age children
A loss-on-sale allowance in the event your employee’s home sells for less than its purchase price
Return trips home for those in longer-term temporary housing, usually limited to one every 30 days

A typical relocation package may or may not include these noted features. However, in all cases, it is a good exercise to regularly compare your package to the current best practices in the industry. If your relocation policy is significantly deficient in an area, you should consider upgrades to keep your standard package equal to your competition’s packages.

While it can be true that the higher the level of an employee’s status within an organization, the more comprehensive and inclusive the job relocation package will be, more savvy companies are offering to underwrite relocation costs even for newer employees, as a means of attracting and keeping key talent. Benefit structures and policies vary across companies. When negotiating relocation package terms, potential transferees need to understand what is and isn’t included to secure the best deal.

Are Relocation Packages Common?

In years past, relocation assistance was offered almost exclusively to higher-level employees or specialized contractors. In today’s global economy and a better-informed workforce, talent competition is stronger than ever; consequently, smart companies are offering the most competitive relocation benefits available.

Companies are catching on to the fact that having a strong, attractive relocation package in place makes excellent business and branding sense and keeps them competitive in today’s market.

What Is the Role of Millennials and Gen Z in Corporate Relocation?

One thing can be said about Millennials and Gen Z: they like to be on the go and are demanding that work environments not only acknowledge their contributions but also their need for flexibility, a reliable work/life balance, and opportunities to move. According to a Robert Half survey, 76% of younger Millennial and Gen Z employees would relocate while 62% of older Millennial (and most Gen X) professionals would relocate for a better position with a company – facts that shouldn’t be lost on corporate recruiters.

How Have Relocation Packages Evolved in the Modern Workforce?

Relocation packages are increasingly becoming used as a way to keep in-house talent happy in the event of a transfer and also as an effective recruiting tool, particularly for globe-trotting Millennials who often relish the chance to broaden their business and personal horizons. If companies find that they’re losing talent – especially as part of a transfer process – then a review of their relocation policies and strategies may be needed to keep up with the changing face of the modern workforce.

What Kinds of Job Relocation Packages Are Available?

There are nearly as many types of job relocation packages as there are employees needing relocation assistance and the companies that hire them. The company’s financial resources and situation, the length of employment, and whether the employee is a homeowner or renter also play roles in determining the size and coverage offered in a relocation package.

A typical relocation package usually covers the costs of moving and storing furnishings, household goods, assistance with selling an existing home, costs incurred with house-hunting, temporary housing, and all travel costs by the employee and family to the new location.

Job candidates and new hires may have a bit more power when negotiating relocation packages, as it usually costs much less to move an employee than to pay a higher salary. A Worldwide ERC survey from 2023 reported that companies spent an average of $36,910 on home sale assistance.

Besides the coverage itself, there are several ways to administer the package:

Direct billing

The company hires and directly pays for a moving company, costs involved in selling a current home and all other services needed to help relocate the employee and family.

Lump sum

A set amount of money is given directly to the employee to pay for moving and related expenses. For tax purposes, the government considers this as income and therefore taxable, so to offset tax liabilities, companies often reimburse those in the form of a gross-up, which frees the full amount of cash for the move. Another possible drawback is that it may be difficult to correctly estimate the total costs upfront, due to unexpected out-of-pocket expenditures. If a mover’s initial estimate is lower than the actual costs, for example, the employee may have to dig into their own pockets to cover the difference.

Reimbursement

The employee pays for everything upfront and is reimbursed by the company after the move. This requires careful record-keeping by the employee, including tracking all receipts for expenses. Additionally, employers will likely set a limit above which they will not reimburse.

Third-party (outsourced) relocation

In this scenario, all logistics related to moving, including real estate or rental expenses, are outsourced to a third-party relocation management company that coordinates a comprehensive array of services. Some of these may include marketing and sale of an existing residence, spousal employment assistance, storage of household goods, and rental assistance.

Expatriation assistance

This is additional relocation assistance used by multinational companies for employees relocating outside the country, beyond the typical scope of household goods and real estate help. Covered benefits may include overseas trips to search for suitable housing and assistance with obtaining spousal work visas, finding and selecting schools for employees’ children, and finding the way around a city in a foreign country. Language and cultural assimilation instruction offered through a relocation package serves to help the employees’ comfort zone and confidence by adjusting to the new culture and its customs.

Offering employees choices in relocation packages provides incentives for current and prospective employees to remain and pursue careers within a company. With competition among companies for top talent, offering attractive relocation packages is a win-win for companies and employees alike.

Who Gets a Relocation Package?

While it is becoming more common for new, junior-level employees to also be offered relocation opportunities, typically the higher the employee’s rank within the organization, the more extensive the covered expenses of a relocation package. A recent graduate just starting their career may have only the basic expenses of moving, while a vice president will often have additional services covered, such as childcare while house hunting, airfare and car rentals, lodging, and meals for the employee and his/her spouse.

Relocation Packages are Good for Both Sides

Most companies want to reduce costs as much as possible in the course of job transfers while still ensuring that the employees and their families are comfortable and ready to get to work as soon as they arrive in the new location. A strong relocation package is a recruiting tool that can attract quality candidates and keep your company competitive in the global job market. CapRelo’s global mobility services ensure you have essential resources to manage every aspect of a domestic or international relocation.