Relocation benefits are under attack from budget-minded companies. Many of the classic relocation packages are going by the way side in an attempt to avoid some huge expenses generated by trying to hire employees that are underwater with their current homes.
The old-school relocation packages frequently covered losses associated with the newly-hired employees selling their old homes at a loss. With the real estate situation in the U.S., nowadays, this can create a huge burden on the hiring company. A recent Prudential Real Estate and Relocation Services report stated 74 percent of surveyed companies projected relocation program costs to increase in 2011, with 65 percent reporting a "high to extreme" impact of the current real estate market.
As a business owner, you should make sure you understand the total cost associated with hiring candidates being served up from your recruiting staff, or outsource. Taking a $50,000 hit on the relocation for a $80k per year employee, can make the choice very difficult. If you are not directly involved in this process, then make sure your recruiting people are creating some kind of report with the benefits people to understand the total cost of hiring a candidate, before the hiring decision is made.
Review your relocation benefits. Many companies are eliminating the relocation benefits, or at the very least, are capping the relocation benefit. Typical caps are in the $20,000 area.
Consider changing the nature of the relocation. Some companies are helping to get candidates working with property management firms to rent out the old residence, instead of taking a loss on the sale.
Consider letting the employee commute by utilizing corporate housing or hotels during the week. These expenses can pale in comparison to a huge loss on a home sale.
Another trend is to consider creating a process to help the candidate review and understand their relocation financial options that include whether to rent or buy in the new location. This can help to stop investing in pursuing a candidate if their relocation will be too much of a burden on themselves.
Modern Business Associates is an HR company that focuses on payroll and HR outsourcing. We routinely work with clients on benefit plans and recruiting options. As a Professional Payroll and HR outsource organization, our clients rely on us to help them effectively deal with these kinds of topics.
Currently rated by 0 people