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Should My Company Pay Employee Relocation Expenses?

Aug 17, 2007
The cost of employee relocation expenses can seem enormous, in particular when competing for top level executives. However, there are many ways of avoiding getting your company involved in a relocation package that will not recover in executive talent the amount expended. Technical employees are typically are not granted extravagant relocation packages, so there is usually very little that can be reasonably trimmed from such packages.

To begin with, there are several real estate related expenses that have proven very costly for some companies. For instance, in the 1980s it was very popular to buy a new employee's old home if it wasn't selling. These sorts of employee relocation expenses is not only very costly, but can also look a bit shady when these expenditures are scrutinized. It's almost impossible grant your employee a fair price for their home and not be faced with the accusation of paying too much. If it's your company's business to make paper envelopes, why would the company invest in an Italian Villa?

Other employee relocation expenses are less clearcut. For example, should your company provide a moving stipend, or authorize an expense account that must be clearly documented? While it may seem troublesome to begin with expense accounts right away, professional relocation firms will handle all the particulars. On the other hand, the family of an valuable executive may not use wise judgment with such an account or might be afraid to use it. After all, what happens in case where a legitimate moving expense isn't covered. Clearly, discussing such particulars of employee relocation expenses is paramount.

It would definitely be a wise decision to talk with the employee in question and find out what her or his personal circumstances are before your company makes any offers to cover over-generous employee relocation expenses. If your employee is single, even a very nice condo in a downtown area can be far less costly than a 3-bedroom home in the suburbs. By preferentially locating your employees near the work site your firm just might save you the expense of paying for and garaging a company car.

Finding the right amount to spend on employee relocation expenses is certainly a delicate balance. But if there is any sort of art to it, it is to offer little and agree to much. You do not don't want there to be any problems along the way that might ruin the relationship right off the top. Always opt for quality rather than quantity if given the choice to offer fewer benefits and use a more highly recommended relocation services company to oversee the process. Your company and your employee will greatly benefit from the attention to detail that makes relocation go smoothly.
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For more information about Relocating/Moving and the Relocation industry visit our comprehensive website at "Everyting You Wanted To Know About Relocation"
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