top of page

The Benefits of Offering Employee Relocation Packages to Candidates

Any time your business has an open role you need to fill, you’ll naturally want to find the best possible candidates to fill it.

What happens, though, if you find a great candidate who lives on the other side of the state? What if they live on the opposite end of your country? Can you entice them with your company culture, brand recognition, or pay and benefits package? Or will they turn away at the thought of having to pack up their lives and move thousands of miles?

The solution to this problem is often straightforward: a relocation package.

What is a relocation package, and what benefits does it have for hiring? Let’s discuss.

What’s Included in a Relocation Package?

A common perception is that a relocation package is simply a bunch of money given to the candidate to cover the costs of moving from one location to the other. It may be for any job-related move, or it may only apply to those moving greater than a certain distance. Either way, it’s just money, right?

Wrong. A relocation package includes more than just money. Here’s a list of what most common relocation packages could include.

 Reimbursement for transportation and moving costs.

First up is the money, of course. Some companies provide a fixed budget to cover most or all moving costs, and some will instead ask for receipts and reimburse the candidate.

This part of the package is often flexible. It may cover:

  1. A pre-defined contract between the company and a moving company, which the candidate would be required to use to get their reimbursement.

  2. The cost of renting moving trucks or PODs if the candidate is moving themselves.

  3. The cost of gas for the move.

  4. Car rentals while the candidate is scouting for a place to live, attending interviews, and other parts of the hiring and moving process.

  5. The cost of overnight stays, meals, and moving supplies like boxes.

Every relocation package is different; some will be a preconfigured package, while others are entirely flexible. Most fall somewhere in between. Often, the candidate may need to cover their first interview and get reimbursed once they’ve made it beyond the first round, though this can vary as well. Many different companies offer considerably different relocation packages.

 Orientation trips.

Some companies will offer a guided orientation trip and tour to any employee moving to the city. This trip can be free-form, in that it pays for the employee to spend a few days in a hotel while they explore the city, search for housing, and get to know the area.

Others may have informational packages that provide lists of restaurants, local businesses, and even contacts for specific services. Still others may be guided tours, where a native resident and employee of the company – possibly a job mentor or manager – will help show the candidate around according to their interests.

 Real estate and temporary housing costs.

The housing market is part of a massive bubble, with rising costs increasing year over year. This bubble makes relocation a tall ask for many. One common facet of many relocation packages is covering housing fees, including real estate agent commissions, closing fees, listing fees, and other costs.

Essentially, the goal is to facilitate selling the candidate’s old house and buying a new one in the area. You don’t need to pay the difference in values, nor do you need to buy the house for them, but covering agent fees and closing costs can be a significant weight off the candidate’s shoulders.

In cases where the candidate cannot shop for a home until after they’ve relocated, your company may offer to pay for temporary housing while they search, either in a hotel or a month-to-month apartment.

 Income assistance for a spouse.

In some cases, a company may offer an additional, temporary increase to the candidate’s income to support a dual-income household while the spouse searches for a new job in the new location.

Since over 60% of U.S. households are dual-income, even the increase in salary and benefits of one spouse might not outweigh the lost income from the other moving with them.

The Types of Relocation Packages

Relocation packages vary greatly, but they typically take one of four forms.

  1. Lump Sum. You give the candidate a fixed amount of money based on expected relocation costs. If the employee doesn’t spend all of it, the rest is a bonus. If they need to spend more, well, you covered most of the cost. You don’t have control over how they spend the cash.

  2. Reimbursement. The candidate pays the costs of relocation while saving receipts. They give you the receipts, and you reimburse them for the costs. This process allows you to filter what you pay for, though full reimbursement is recommended to keep an employee happy and loyal.

  3. Core-Flex. This method offers a basic relocation package, often via one of the other methods, with the option for a second tier of further benefits, payments, or reimbursement for high-value employees like executives.

  4. Managed Relocation. Your company handles the entire move from start to finish. It takes control out of the candidate’s hands but streamlines much of the process.

Some potential employees will prefer one kind of package over another. In fact, in some cases, they may have been burned by scant reimbursement or by an awful low-cost, low-quality mover in the past and may shy away from reimbursement or managed relocation, respectively. It’s up to you to determine the most effective format for the package and negotiate with your candidate.

Frequently Asked Questions About Relocation Packages

Let’s go over some of the most common questions about relocation.

1. Are relocation packages the domain of large companies?

No, not at all. According to a survey from Allied, 22% of candidates moving for a job are joining a company with under 50 employees.

2. What drives a candidate to move for a job?

The most common driving factors for relocation are career advancement and higher pay. Many people will choose to move to a new location if their new pay, job title, or both are significant enough increases to be worthwhile.

That said, the majority (70%) of people relocating for a job are under 34 years of age. The older a candidate is, the more likely they have already set down roots with a family they may not want to uproot. Children in school and with local friends are the most significant factor.

3. Are relocation packages broadly available?

Not often. Most companies that offer relocation packages may only do so for middle and upper-level employees or very hard-to-find employees with specific, niche skills. Typically, the higher level the employee, the better the relocation package. A mid-level employee might get a lump sum stipend, while an executive might get a full managed moving solution.

Lee West, Founder, and CEO at Tidewater Capital Service, says:

“If they are moving from a regional director role to an H.Q. vice president role, the package would have to be robust and complete. Even to the point of buying their existing house.”

Entry-level employees rarely receive a relocation package or, if they do, it’s token at best.

What are the Benefits of Offering a Relocation Package?

Giving candidates more value as part of being hired can be a great benefit to attract more talented candidates from further afield. There are many specific benefits to offering such a package.

 You can attract candidates from a larger geographic area.

The most significant benefit of offering a relocation package is being able to tap into a much broader geographic candidate pool. Suppose you have an open role to fill, and you’re limited to people who are already within commuting distance of your office (or who are planning to move to the area). In that case, you have a relatively small number of people available to hire.

Conversely, if you offer a relocation package, the world is your oyster. Often literally, you’re not restricted to just candidates in your country. Many companies can use a relocation package to assist in hiring international candidates, whether it’s relatively domestic like a Canadian employee or further afield like a European, Indian, Chinese, or Australian candidate.

 You can build a larger candidate pool for hard-to-fill roles.

Related to the above, the larger candidate pool means you’ll be able to find people to fill harder-to-fill roles much more easily. For example:

  1. Developers or programmers with experience in a niche, rare, very old, or very new coding language.

  2. Mechanics specializing in working on specific factory machinery.

  3. High-level executives, particularly those with reputations for significant business growth.

The harder a role is to fill, and the more specialized the skills a candidate needs to have to fill it, the more you can benefit from a broader candidate pool. Offering a relocation package – and more importantly, making it known in your job posting that you offer one – is a critical part of broadening that pool.

You build more loyalty to your company since you helped so much in getting the candidate established.

Offering a relocation package encourages your new employee to stick around and be more loyal to your company in two ways.

The first is that offering benefits like a relocation package is indicative of a higher degree of loyalty from the business to the employee. It helps show that you care about your employees, you want them to integrate into the culture of the city and the company, and you’re willing to invest in them. This makes them feel more valued and sets a high bar for another company to meet or exceed to poach them from you.

Don’t get us wrong; that can still happen, so you can’t slack on the ongoing benefits. However, it’s still setting a precedent that other companies will find more challenging to reach.

Secondly, moving is a massive investment for a candidate to make. When you pay for that move, it ties them to the area until they can either save the money to move again or find another company offering a compelling relocation package of their own.

 You positively grow your employer brand reputation.

Finally, becoming known as a company that offers a relocation package can benefit your employer brand, which helps attract more candidates to your company, even if they’re already local or aren’t high-level enough to warrant a full relocation package.

Are There Downsides to Offering a Relocation Package?

With all of the benefits, there have to be some downsides; otherwise, every company would offer relocation packages, right?

Indeed, there are a few.

  1. It’s expensive. The more you cover, the more expensive it is to offer a package. Of course, it’s a drop in the bucket at the executive level, compared to their salary and benefits, but it’s still an expense that otherwise wouldn’t need to be paid.

  2. It’s time-consuming and intensive. Depending on how you’re managing your relocation package, oversight and verification of receipts can take up a significant amount of time and effort for your HR staff.

  3. The employee can still leave later. Some companies minimize this by adding a repayment clause, if the employee leaves within a year of their hire date, but this isn’t always possible.

Overall, these drawbacks are relatively light, but they still exist enough to make a relocation package require a cost-benefit analysis for various open roles and potential candidates.

Again, this is why relocation packages are mostly offered for executives, C-levels, high-level managers, and extremely niche employees, and not simply anyone working for the company.

Is it worthwhile to offer a relocation package? There’s no good answer to that question. It depends too much on your company, your other hiring practices, the open role, and the rest of your benefits package. Often, it’s valuable to many candidates, but whether or not that value transfers into value to your company is another story.

After reading about today’s topic, do you have any questions or concerns regarding employee relocation packages? Anything you’re just not quite getting? If so, please feel free to drop a comment down below, and we’ll get a conversation started! We’d be more than happy to answer any questions you may have. 

0 views0 comments


bottom of page