The Top 10 reasons you should hire a Relocation Management Company to oversee an employee’s relocation.
Without a professional relocation counselor, transferring employees with lump sum only benefits will inevitably have questions as they try to navigate the time and resources needed to plan and schedule their own move.
As an HR professional, you will be the first person the employee calls for support. The employee’s excited and happy smile from the day he or she accepted the offer are gone. HR professionals must now conduct research for the employee and manage their move. Other HR department priorities are placed on hold.
Failing to recognize the benefits of a planned relocation benefit policy, regardless of volume, means lost productivity, challenges in recruitment and retention, tax compliance issues and exposure to financial risk.
Here are the top 10 reasons you should hire a Relocation Management Company to oversee an employee’s relocation.
1. Reducing stress on the employee and family
While death and divorce often lead the list of life’s most stressful events, moving and starting a new job are not far behind. For corporate transferees, they are experiencing both of these stressful life events and in many cases, also include “separation from loved ones.” As an employer with significant time and money invested in recruitment and retention, a few well-placed dollars can dramatically reduce the stress experienced by transferees. The counsel of real estate professionals and labor to assist in packing and loading household goods can help eliminate the stress experienced by employees and their families.
2. “Duty of Care”
The company has spent tens of thousands of dollars interviewing, recruiting, and training employees. Successful onboarding for a corporate transferee should include benefits which ease the physical, mental and financial burdens of relocation. Properly cared for, transferring employees recognize their employer as a caring company who is committed to their well-being. Nothing demoralizes an employee more than the perception that caring stops as soon as an offer letter is signed.
3. Increased worker productivity
The time requirements of moving to a new location can be immense. Engaging realtors and household goods carriers, packing and unpacking boxes, arranging temporary accommodations, house hunting, and final trip planning cannot be accomplished on nights and weekends. Transferring employees spend significant time, during business hours, making moving arrangements and conducting other move related activities. While a professional relocation counselor can’t actually look at new homes for the employee, they can coordinate the search for a new home and will connect the employee with professionals who will help. Saving the employee from drowning in the morass of details allows them to focus on work, while still relocating to their new location.
4. Eliminating the risk and increased costs associated with moving fraud
Unfortunately, transferees left on their own can often fall prey to unscrupulous operators. There are many stories of moving van operators who bid low and then hold an employee’s household good hostage for additional payments at delivery. Once the carrier has the employee’s goods, there is little that a customer can do except stress out and pay up. As if moving wasn’t stressful enough, an employee faced with fraud or shoddy workmanship will have very little energy to focus on work.
5. Reducing the “days on market”, i.e. time needed to sell a home
Our experience shows that the amount of time it takes to sell one’s home greatly adds to the stress and financial costs of a relocation. Working with a professional realtor, skilled in the nuances of corporate relocation, can significantly reduce days on market and get homes sold quicker. For each month a home remains on the market, the transferee incurs costs equaling 1 – 2% of the home’s value for interest, insurance, taxes and maintenance. Having a home on the market is also a distraction for the employee, occupying valuable, productive time with showings, inspections and negotiations. Finally, the longer the home is on the market, the longer the employee is tied to the old location; making trips back home necessary and providing opportunities for the employee to find work in the origin city and reconsider the relocation. The most expensive relocation is a failed relocation.
6. Controlling Costs
The Fees paid to a RMC are repaid fivefold due to the fact that the RMC has negotiated more favorable rates (especially for transportation … a significant cost.) The RMC acts as the advocate for the Employer, ensuring that all expenses are within policy. Costs are monitored and contained.
7. Eliminating administrative burdens for HR, and other staff
Retaining an RMC allows HR leaders to think strategically and not be burdened by administrative, time consuming tasks.
8. Best Practices / Recruitment Competitiveness
Retaining an RMC ensures that the Employer is offering relocation benefits that are competitive in the pursuit of key talent.
The taxable nature of relocation benefits changed in 2018. Retaining an RMC ensures that an employer is compliant with the new tax guidelines incorporated in the 2017 Tax Cuts & Jobs Act. An RMC will ensure that all relocation related expenses are coded correctly and not expensed as business travel. The RMC reports all expenses to Payroll for year-end W2 calculations.
10. True Partner
In choosing an RMC, look to HomeServices Relocation (HSR) as your True Partner. HSR does not accept kickbacks or rebates from suppliers, does not charge interest on expenditures and never marks up pass-through costs. You can rest assured that decisions regarding suppliers are made in an unbiased manner and that costs are not padded in any way.