If you’re looking at your current (or potential) relocation benefits, you might be wondering, is this good? Just like with any part of your benefits package, if you don’t have a lot of experience using it, you might not be able to tell the good from the bad. Not every company is going to be able to cover the full cost of your move, but that doesn’t mean that the ones who can’t aren’t offering good benefits. But what is a reasonable relocation package, anyway?
Relocation assistancecomes in many different forms. The problem with defining a “reasonable” relocation package is that every company’s benefits offering is going to be different, and the size of the company along with the size of your move and your role with the company is going to have an impact as well. Every move is different, and since relocation costs can range from $100 to $15,000, what an executive receives likely won’t be the same as what a new hire receives.
How to Know if You Have a Reasonable Relocation Package
So, while what’s reasonable is going to depend on your situation, we can take a look at some of the averages to see how your benefits compare. Who knows, you might even be able to use the information to (negotiate your relocation assistance. link to how to ask for relocation assistance cluster)
One of the most common types of relocation assistancethat you’ll receive is a lump sum. Lump sums can be applied to the entirety of your moving costs, or a specific portion of them. According to the 2018 Atlas Van Lines Corporate Relocation Survey, 54 percent of companies use lump sums to set a cap on relocation costs, so you might run into a situation where you only a set amount of money to work with.
Across the nation, the average lump sum that employees receive is $7200. 56 percent of companies offered lump sum relocation assistance for travel expenses. 44 percent said that lump sums were used to cover the entire cost of the relocation. Of those companies, most companies are providing anywhere from $2,500 to $4,999. If the company was going to cover the entire relocation, they’d offer anywhere from $10,000 - $14,999. So if your company is going to offer you a lump sum, you should expect to see somewhere within that range. Remember, though, that smaller companies are going to fall toward the lower end of those ranges, and the large companies will trend toward higher amounts.
Across the board, small, mid-size, and large companies estimated that around half of employee relocations were either partially reimbursed or paid by lump sum in 2018. In most situations, companies are going to be more willing to give more relocation assistance to an existing employee than a new hire. 36 percent of companies provide full reimbursem*nt for new hires, and 64 percent provided full reimbursem*nt for relocating employees. 56 percent will provide a lump sum payment for both relocating employees and new hires.
When it comes to outsourcing, three in four companies will use a third party to manage their relocation benefits, which means that you could be working with someone outside of the company to manage your relocation process. Most third parties will have a list of vetted moving services suppliers that you can choose from to streamline your process or even take advantage of a deal through their partnership.
You’ve Got a Good Relocation Package, Now What?
If you’re happy with the benefits your company offers, you’ll want to think about the services you’ll need to move, and then create a moving budget that accounts for your expected costs. This way you’ll be able to fully take advantage of your benefits and make sure that none of the money you receive goes to waste. Using services that can streamline the entire moving process for you are one way you can make your relocation assistance go even further.
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FAQs
The average relocation package costs around $50-70k. The cost of relocating is lower when an employee rents, averaging around $20k. However, the average relocation package for employees who own their properties costs around $100k. Companies can structure an employee relocation package in many ways.
Is $5000 a good relocation package? ›
The actual cost of your move depends on your personal situation. $5,000 – $15,000 is an entry level management position or similar. This is a DIY move, you will likely not be able to afford professional movers or temporary housing. These moves often have out of pocket costs, and are stressful.
What is a reasonable amount of time to relocate for a job? ›
What Is a Reasonable Amount of Time To Relocate for a Job? Depending on the distance involved in your job relocation, the timeline will vary. In general, experts recommend one to three weeks for short-distance moves and four to eight weeks for long-distance moves.
What is appropriate to ask for relocation package? ›
Weighing the Components of Relocation Assistance
Assistance buying/selling a home or finding a rental. One or more house-hunting trips. Travel expenses to move the employees and family to the new location. Short-term housing, when necessary, plus temporary storage of household goods.
What is a reasonable amount for moving expenses? ›
Gas, insurance and dollies can increase costs, as well. In total, expect to pay somewhere between $150 to $400 for a local move if you plan to do it yourself. Hiring a professional mover can make moving less stressful, but with prices for an average three-bedroom home costing around $2,200, it does come at a cost.
How do you negotiate relocation allowance? ›
How to Negotiate Relocation Assistance?
- Determine and Outline Your Needs. Write down everything that you might need from a relocation package. ...
- Research Your Options. ...
- Emphasize Mutual Benefits. ...
- Get the Agreement in Writing. ...
- Check Taxes and Cost of Living in Your New Location:
The answer depends on various factors, such as your location, lifestyle, and personal circ*mstances. While $5,000 can be a good starting point, it's crucial to have a clear understanding of the costs associated with moving out and living independently.
What is a reasonable moving budget? ›
You can usually expect local moves to range from $300 to $1,500, while long-distance moves can cost, on average, $2,500 to $5,000, depending on the move's size and distance. Don't forget to factor in additional costs like gas and tolls for transportation.
How to negotiate salary when relocating? ›
What are some effective ways to negotiate a salary when offered a job in a different location?
- Assess your situation. Be the first to add your personal experience.
- Do your research. Be the first to add your personal experience.
- Prepare your pitch. ...
- Negotiate with confidence. ...
- Follow up and finalize. ...
- Here's what else to consider.
The full costs and figures can vary depending on the individual and their package however, as an example, payments are typically between $2,000 and $100,000.
At least 2-4 weeks is reasonable to relocate for a job that's not too far away from a current home, like in a neighboring state or a couple of states away.
How much money should you have to relocate? ›
To ensure that you're financially prepared for this significant transition, a common rule of thumb says you should save on average between $5,000 and $12,000 before moving out, depending on where you are moving to and the cost of living.
What is a generous relocation package? ›
A generous relocation package covers all moving expenses and will give employees ample time to find their new home. ARC Relocation can help with various factors associated with relocation. This includes finding movers to assist with your employee's relocation, packing and unpacking services, and vehicle shipping.
What is the best answer for relocation? ›
"I am absolutely open to relocating for the right opportunity. In fact, I am looking to take on more responsibilities and challenges, and I believe this position is the perfect opportunity for me to do so. I am excited about the possibility of relocating and immersing myself in a new environment and culture."
Do relocation packages cover closing costs? ›
Costs to sell / buy a home – If you will be selling your home and buying a new one, common costs such as closing costs, commissions and any other associated costs are typically included in a relocation package.
How much money is needed to relocate? ›
In general, you should have at least three months' worth of living expenses saved up as emergency funds just in case something unexpected happens during your move. For example, if you're planning on renting an apartment for $1,200 per month, then you'll need about $4,000 in savings before moving out.
What is the maximum relocation incentive? ›
Like a recruitment incentive, a relocation incentive may not exceed 25 percent of the employee's annual rate of basic pay in effect at the beginning of the service period multiplied by the number of years (including fractions of a year) in the service period (not to exceed 4 years).
What is a relocation allowance for a new job? ›
A relocation stipend is a set amount of money an employer provides to cover job-related moving expenses. A stipend can either be pre-fixed based on company policies or calculated based on the employee's actual expenses. Most employers offer a combination of both, with an upper limit on how much they will reimburse.
How to calculate relocation costs? ›
To create a relocation moving budget, start with the facts, such as the distance of your move, whether you plan to hire movers, the size of your move (in the number of bedrooms), and your move date. Then, you can factor in the estimated costs of each moving expense.
