Employee relocation: Definition, how it works, and more

Moving house is sometimes said to be among the most stressful things we can do in life, so it’s no surprise that companies don’t make the decision to relocate employees lightly. When employers choose to move teams from one geographic location to another, employee relocation packages are designed to help make the move as smooth as possible.

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In this article, we’ll take a closer look at how employee relocation works, how it benefits both employers and employees, and some of the challenges organizations might face along the way. But first, let’s define what we mean by employee relocation.

What is employee relocation?

Employee relocation is a term used to describe the entire process of moving one or more employees from one location to another. This can be within the same city, to a different city, or even to a different country. 

Employee relocations can also be voluntary or involuntary. In a voluntary relocation, the employee requests the move and the employer can agree to support it. In an involuntary relocation, it’s the employer who initiates the move and the employee will usually need to accept relocation to continue their employment with the company.

Why would a company need to relocate employees?

Companies relocate employees for a wide range of reasons, but here are some of the most common:

• To bring the employee closer to the company’s headquarters, so that they can work more effectively with colleagues in the same shared workspace. 
• To move one or more employees to a new city, state, or country where the company is opening a new satellite office.
• To move the employee to a location where the company needs more workers with the employee’s skills and experience. 
• To move the employee to a location where the company thinks the employee will be happier and more productive.

How does employee relocation work?

Employee relocations can be complex and expensive, so employers need to first consider the costs and benefits. 

Once the decision is made, the employer needs to develop a relocation policy and communicate it to the employee. The policy should outline the moving expenses, housing costs, travel expenses, and family support that the employer is willing to provide. It should also outline the process for relocating the employee, step by step, including any deadlines or timelines.

Once the policy is in place, the employer can start working with a specialist relocation company to plan and execute the move. The relocation company can help with everything from finding a new place to live, to packing and moving the employee’s belongings. They can also provide support for the employee’s family.

Benefits of employee relocation for the employee

Whether the employee chooses to relocate or is asked to by their employer, there are upsides to a change of scenery. These are some of the main benefits:

Career development opportunities

Relocation can provide employees with new opportunities for career development. Moving to a new city or country can help employees to broaden their skills and experience. It can also help them develop new networks and connections.

Improved quality of life

Moving to a new location can provide employees with a new and exciting working and living environment. It can also help them escape difficult or stressful situations where they work currently.

Benefits of employee relocation for employers

There are many benefits of employee relocation, for both the employer and the employee. These are a few of the primary benefits of employee relocation for employers:

Attract and retain talent

Employee relocations can help employers attract and retain talent. In today’s competitive job market, employers need to offer relocation packages that are competitive with other companies. Employees are also more likely to accept a job offer if they know the company is willing to help with the cost of relocating.

Advance business development

Employee relocations can also help advance business development. By moving employees to new locations, employers can ensure that the right talent is in the right place at the right time. This can help the company expand into new markets and grow its business.

Costs of relocating employees

The costs of relocating an employee can be significant and can vary widely depending on the distance of the move, the type of housing needed, and the amount of support the employee requires along the way. These are some of the most common costs an employer might face:

Moving expenses

The most obvious cost of relocating an employee is the cost of moving their belongings from one location to another. This can include the cost of hiring a professional moving company, renting a truck, or paying for storage. The cost will also depend on the distance of the move and how much stuff the employee has.

Housing costs

If the employee is moving to a new city or country, they will need to find a place to live. The employer might need to help with this by providing a housing allowance or paying for temporary housing. The cost of housing will depend on the location, the type of housing needed, and the length of time the employee needs it.

Travel expenses

The employee might need to travel to the new location to find housing or to start work. The employer might need to pay for the cost of travel, which can include airfare, car rental, and hotel costs.

Family support

If the employee is relocating with a family, the employer might need to provide support for the family members as well. This can include childcare, schooling, and counseling. The cost will depend on the number and age of family members, and the type of support needed.

Biggest challenges of employee relocation

Employee relocations can be complicated and emotionally charged, and they don’t always go to plan. Here are some of the most common challenges employers face when relocating employees:

Communication

Employers need to be clear about the reasons for the relocation and the expectations for the employee. They also need to communicate the relocation policy to the employee and make sure the employee understands it.

Legal issues

Employee relocations can also pose legal challenges. Employers need to be aware of any laws or regulations that apply to the relocation, and they need to make sure the relocation complies with those laws. They also need to be aware of any contracts or agreements that might be affected by the relocation.

Economic factors

Economic factors can also pose challenges for employee relocations. The cost of relocating an employee may be significant, and can vary widely depending on the distance of the move, the type of housing needed, and the amount of support the employee needs.

What are employee relocation services?

Employee relocation services are essentially a sophisticated type of moving company, designed to handle the entire process of moving one or more employees from one place to another. 

In very large organizations, employee relocation services can be managed by an internal department. Companies that don’t move their employees around very often tend to outsource these services to third-party specialists.

The services provided can include everything from finding a new place to live and physically packing up and transporting the employee’s belongings, to intercultural training and language lessons for the employee and their family.

Examples of employee relocation packages

Different companies offer different levels of employee relocation packages, some of which can be more comprehensive than others. 

Some companies choose to cover the costs of relocation directly, while others might offer the employee an allowance or lump sum and let them make their own arrangements. These are some examples of employee relocation packages you might expect to see offered:

• A moving allowance to cover the cost of moving the employee’s belongings.
• A housing allowance to help with the cost of finding a new place to live.
• A travel allowance to cover the cost of travel to the new location.
• A family support allowance to help with the cost of childcare, schooling, and counseling.
• A lump sum payment to help with the cost of relocating.
• A job search allowance to help families with the cost of finding work in the new location.

Steve Hogarty is a writer and journalist based in London. He is the travel editor of City AM newspaper and the deputy editor of City AM Magazine, where his work focuses on technology, travel, and entertainment.