Relocating: What to expect from your company

Relocating: What To Expect From Your Company

Provided by Jay Burnham, VP
Coldwell Banker Residential Brokerage

What can a relocating employee expect in terms of assistance when he or she is asked to move to a new city?

According to the Employee Relocation Council, standard relocation policy elements are on the increase and usually include the following elements:

1. Shipping of household goods

This generally includes shipping, packing, unpacking and storage.

2. Temporary living

The majority of coverage is offered for the new location rather than the old.

3. Househunting trips

Over the years, it has become more common for employers to offer multiple trips. Today, 46 percent of companies cover one trip and 49 percent cover multiple trips. Most employers offering multiple trips cover two househunting trips. (*1997)

4. Purchase closing costs

Most companies will reimburse all "normal, required" costs associated with the purchase of home at the destination location, but generally restrict coverage to transferees that were homeowners at the old location and/or have attained certain job levels.

5. Miscellaneous expense allowance

With no requirement to itemize or document expenses, the allowance is intended to cover incidental expenses related to the move, i.e., auto registration, appliance hook-ups, etc. It is usually equal to one month's salary.

6. Real estate sales assistance

Nearly all companies offer such assistance, under one of the following programs:

• In-house purchase program, where the company offers to buy the home

• A third party purchase program, similar to the in-house purchase program except the company contracts with an outside firm to purchase and resell the home

• Guarantee-against-loss, where the company does not offer to buy the home but guarantees the market value of the residence (selling expenses are usually also reimbursed.)

• Direct reimbursement, where the company reimburses selling expenses with no attempt to protect the home's market value.

The third party program is the primary form of assistance and is used by 70 percent of companies, followed by the direct reimbursement program and in-house purchase programs, each used by about 10 percent of companies.

About 50% of ERC member companies provide career assistance to transfering spouses, and another 45% provide assistance to unmarried life partners of the spouse. Two-thirds offer this assistance through a formal policy, while the remainder offer it on an employee request basis. Most companies with formal spouse employment assistance policies make it available to the spouses of all current employees, regardless of the transferee's level within the company.

A 1997 ERC survey of its members produced the following breakdown of current employee relocation costs:

Among current employees, the type of assistance available in 1997 averaged as follows:

• Cost Shipping of Household Goods -$7,311
• Federal Tax Liability - $7,185
• Purchase Closing Costs - $6,358
• Bonuses/incentives given for employee-generated homesales - $4,119
• Miscellaneous expense allowance - $4,108
• Temporary living at new location - $3,680
• Duplicate housing costs - $2,596
• Homefinding trips - $1,702
• Spouse employment assistance - $1,319
• Travel and lodging expenses at the time of move - $1,205
• *Averages based on transferees who actually received assistance.

For more information, please contact the The Employee Relocation Center.
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Written by Blanche Evans

JAY BURNHAM, VP
Coldwell Banker Residential Brokerage
PREVIEWS International® Property Specialist
54 Dodge Street
Beverly, MA 01915
978.233.2828

Designations Earned: CRB, CRS, GRI, RECS, SRES