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Domestic Relocation: How Do Relocation Packages Pay Off? 

Woman's headshot with blurred background By Denise Oemig September 8, 2021

Categories: Location Services

For many companies, moving employees is a frequent occurrence and has become second nature. Other companies may not be big enough to see the value in it or they may not be as well versed in the process of relocating employees. Still more companies are familiar with the process but are looking to control costs. These companies are wondering how domestic relocations actually benefit the business. In this post we’re going to dive into the ways companies benefit from relocation programs. But first, what is domestic relocation? 

Domestic Relocation 

Domestic relocation is, put simply, moving an employee from one area to another inside the same country. While companies with a global presence may have international relocation programs, those require a few more factors than we’ll be going over in this post. Domestic relocation may sometimes be referred to as just “relocation,” but the destination being within the originating country is an important qualifier.  

Attract New Talent 

While looking at the description of benefits on a job listing, you’re likely to see health and dental plans, 401K match and a number of PTO days. Some positions may list a company-provided vehicle or device. Some may list a health incentive program. One benefit you may not see listed is a relocation package, but that doesn’t mean the listing won’t attract new talent to the company. 

Consider how listing this benefit would change the draw to your company from the potential hire’s perspective. If they must move to take the job, the company will be helping them with those costs. Considering how expensive moving from one city to another can be, a relocation package is a massive incentive. Even if the potential hire doesn’t have to move, and doesn’t intend to move anytime soon, it’s still an attractive benefit.   

Employee Engagement 

Low employee engagement can be an expensive problem for companies, costing them $450- $500 billion each year. A good relocation package can attract new talent, but it can also help with employee engagement. Employees that believe their employers care about them and their quality of life were more engaged with their work and, according to a study by Glassdoor survey, 87% of employees expect employers to support them in balancing work and personal commitments. How do employees measure how much their employers care? It often comes down to the policies the company has in place. 

Depending on the relocation package, moving employees may receive a stipend that covers the costs of their move. That gives them autonomy to spend the stipend where they need it most, and it financially helps them with a likely stressful transition. If the employee is relocating to a location with a higher cost of living, companies can also provide a cost-of-living allowance (COLA) to help them adjust their household budgets and spending patterns in a more expensive setting.    

Cost Control 

Companies that move employees without relocation packages may instead reimburse employee expenses. That means employees must keep receipts and submit expense reports. It also means the employer has to go through and approve these expenses.  

Relocation packages save companies time and money by offering stipends employees can use at their discretion. This eliminates the need for submitting receipts and the administration work involved with expensing.   

Some companies provide relocation packages, but offer the same amount to each moving employee, regardless of origin or destination. Without input from accurate location data, these stipends will likely result in overspend or under-compensating employees. Cost control is dependent on stipends being provided specific to individual employees and their moves. 

How Motus Can Help 

If your company is looking to provide current and potential employees with a fair and accurate relocation package while controlling costs, Motus can help. With comprehensive and geographically sensitive intelligence, the Motus Platform delivers calculated insights for relocation allowances, living-cost-comparisons and more. Interested in learning more? 

Learn More Here

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