What are Relocation Services?

Let’s face it; relocation can be daunting. When you think about the gazillion things you have to do before the whole move is completed, it is understandable if you just want to throw your hands up in defeat.

Between picking a home in the new location, deciding what to pack and what to leave behind in the old location, and the cost of doing the whole thing, things can get overwhelming. 

Moreover, if you are a family person, the logistics of the entire move can get to a nightmarish level real quick. 

This is why it is crucial to get every bit of information regarding your relocation, and using it, determine whether changing locations will be favorable for you or not. For this reason, this article discusses what you should know about relocation, whether to the USA as an expat or from one U.S. state to another. You will also learn about how we can serve you in our relocation agency.

What is a relocation package?

A relocation package is an offer that an employer makes to an employee when they offer them long-term employment more than 50 miles from their current location. 

It usually covers the employee's reasonable moving and other work-related expenses. This way, the employer relieves the employee and their family of the cost-intensive burden of relocation. 

If thoughtfully designed, a relocation package gives employees (whether a transferee or a new hire) peace of mind and incentivizes them to accept the offer. Additionally, it reflects the company's reputation in a positive light and helps them to attract top talent. 

The cost of an average relocation package depends on whether the employee is a renter in their current location or a homeowner. It also depends on whether the employee is a new hire or a transferee (and how much time they've spent with the company).

Notwithstanding these factors, however, a standard relocation package should cover the following:

• Moving costs, such as packing and unpacking, moving household goods, automobiles and specialty items, disassembling and reassembling relevant equipment and home entertainment centers. 

• Moving insurance (valuation) – this is usually a full-value replacement coverage that is equal to or greater than the value of your property. It typically has no deductible and ensures that your goods get to the new location in one piece, or failing that, insured. 

• Storage – most relocation packages provide storage for a given period, or indefinitely, depending on the following: 

• How much notice the employee had before the move,

• Whether the employee is moving to an area with limited housing,

• Whether the employee is waiting for a home to be built.

• House hunting costs and assistance – this applies especially to senior or VIP employees and those relocating with families. Employers recognize the significant time and effort that will go into finding a suitable home for them in an unfamiliar area. Thus, they typically cover expenses and or provide professional assistance.  

• Temporary housing – this ensures that employees don't rush into making significant housing decisions. Instead, employees can take a little more time to get a housing solution that works for them by providing temporary housing. 

• Travel costs – costs like transportation (plane, car rental), meals, lodging when house-hunting and the actual move should be covered in a standard relocation package.

• Real estate – this should cover realtor fees, closing costs, compensation for selling a home below market value or perceived value, reimbursing fees associated with breaking a lease, and losses that come with getting out from an upside-down mortgage. 

• New city integration services – this is especially important if the employee is an expatriate. 

Types of relocation packages

There are different types of relocation packages, and though they essentially contain the same essential elements, a company’s choice depends on:

• The kind of company, 

• The industry in which the company operates, and 

• The employee (their skill, experience, and potential to impact the company’s bottom line).

The common types of relocation packages are:

Direct billing

The transferring or hiring company hires a moving company and pays them directly for their services. Also, the employer makes direct payments for other costs the move incurs, such as selling a current home (early lease terminations, closing costs and realtor fees) and any other services required to make the relocation smooth for the employee. 

Lump-sum

In this package, the employer gives the employee a predetermined amount of money to cover moving and related expenses. However, this package has a few drawbacks such as: 

• The government views this sum as taxable income. So companies need to offset these tax liabilities by reimbursing them in the form of a gross-up, thus freeing up cash for the move.

• It is often difficult to correctly estimate the total relocation costs upfront, as unexpected expenses do crop up. If the mover's initial estimate does not cover these expenses, the employee may pay the out-of-pocket difference.

Reimbursement

The relocating employee pays for everything out of pocket, and the company pays back after the move. The challenges with this package are: 

• The employee must make sure to keep careful records, including tracking all expense receipts.

• Employees need to be mindful of their spending, as employers will likely set limits above which they will not reimburse.

Third-party relocation

In this package, employers commit all the logistics related to moving to a third party that provides a comprehensive array of services. These services may include real estate or rental services, marketing and sale of an existing residence, spousal employment assistance, storing household goods, and rental assistance, to name a few. 

Expatriation assistance

The benefits may include:

• Overseas trips to search for suitable housing and orientation

• Settling in such as SSN, Driver license, consultant registration or installing the utilities and other connections.

• Assistance with obtaining spousal work visas

• Finding and selecting schools for children

• Sponsoring intercultural training, e.g., language and cultural assimilation instruction

• Temporary housing

• Travel costs for trips home from long-term housing

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.

Expat U.S. is a prime relocation agency that provides you with all you need for your relocation to go smoothly and stress-free.

Our relocation agency has provided relocation services for clients for over 15 years. We offer an efficient, safe, and smooth relocation experience to individuals and professionals, including expatriation services to those relocating to the USA.

If you are considering relocating to the U.S., or you are an employer looking to relocate your employee to another location in another state, Expat U.S. can provide you with all you need to make the move smooth and stress-free. 

Our services include:

• Area orientation/Look and see trip

• Household goods Move management

• Home Search/Real estate services

• School search

• Seamless payments to providers

• Settling-in services

Also, because we understand that every customer is unique, we take the time to thoroughly understand your individual needs before recommending the bouquet of services that serve you best. Please contact us to schedule a free consultation where you can freely discuss your project with us.