The Hidden Costs of Employee Relocation (and Why Employers Should Care)
DECEMBER 27, 2018
Stress at work isn't limited to aggressive deadlines or closing important deals. In fact, work stress can start even before employees show up on the first day, during the relocation process.
According to one report, two of the most stress-inducing life events are moving and starting a new job. When you hire someone who needs to relocate, their stress levels are already high—and if you don't ameliorate that with a good relocation package, you'll add financial stress to the overflowing pot. With so much for a relocating hire to consider, it's almost a guarantee that your employee won't begin their new job on the right foot if you don't offer to help.
It's possible you already offer a standard financial package to your relocating hires, but there's more than money at stake (the emotional cost of moving is a very real concern) and many more expenses than your team has considered. Rather than offer a standard lump-sum, embrace the reality of the myriad expenses and offer a more personalized package that will garner the best performance from your new employee—getting him or her invested in the culture of your company from the start.
Here are some relocation costs to consider and some suggestions for how to address them without breaking the bank:
If your new employee is selling or buying a house (or both!), closing costs can add up to five figures. If the person is moving from one rental to another, they may incur fees for breaking a lease and they may have to leave a deposit on the new apartment—it's expensive! And while it may not make sense for your company to cover the deposit, it may be helpful to front a deposit and have the employee pay it back over a long period via paycheck deductions.
There are many small moving-related costs that you don't think about until you have to pay them—and they add up! Take car inspections, registrations and new driver's licenses. Naturally, a new house means there are probably new expenses for things that weren't needed in the old house, too: like rugs for the home's hardwood floors that were unnecessary in the wall-to-wall carpeted condo.
Provide some moral support to employees for these small costs: direct them to the local DMV or grant them early-access to the company forum where employees sell personal items like rugs or winter coats. This will not only show your investment in your new hire's wellbeing, but also give them a chance to get to know their colleagues on a more personal level.
If your new hire has a spouse, it's probable that they have to quit their job to accompany your new employee. While everyone expects they'll find a job soon, for the time being, your employee has just experienced a huge income cut. Consider offering spousal assistance to find a job. It cuts the stress and is more likely to lead to a successful move. Remember, a happy spouse means a happy employee.
These aren't financial, but they will be if you don't address them. Remember the trailing spouse? Yeah, the new employee just runs off to work every day leaving this person to either look for a job, or to handle home and family on his own, with no friends or social support.
Moving is hard for everyone, and if you don't consider that people will need time to adjust, you'll have an employee who is more likely to quit. Consider the new grad who just moved across the country by herself to start a job in September. She wants to go home for Christmas and you say, "Well, you haven't accrued enough vacation so maybe next year." This may be fair and logical, but it's likely to make your new employee unhappier.
Relocation can be a great solution to finding new employees and creating a great workforce, but make sure you think about the true costs your new hire will incur when you make your offer of employment. Considering each relocation on a case-by-case basis and offering to help can insure a smooth transition and a much less stressed, more highly productive, employee.
Photo: Creative Commons
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