Typical Relocation Package: Costs and What to Include in 2024

The thought of relocating for a new job can be exciting but equally daunting. Have you ever wondered how much it costs to move across the country or even overseas?

Relocation expenses can add up quickly, from moving furniture to finding temporary housing. That’s why many companies offer an employee relocation package to help ease the financial burden on their relocating employees.

In 2024, with rising costs and evolving business needs, understanding the employee relocation packages cost and what to include is essential for both employees and employers.

What is a relocation package?

A relocation package is financial assistance provided by a company to help an employee move from one location to another for work. The goal is to cover moving-related costs, making the transition easier and reducing financial stress.

Companies offer various types of attractive relocation packages depending on the employee’s position and the distance of the move. Packages can range from covering basic expenses, such as moving trucks and temporary housing, to more comprehensive plans that include everything from home sale assistance to cultural training.

Different types of relocation packages

Companies offer different packages based on the role of the employee and the complexity of the move. Each option helps address different employee needs and positions, with Salary.com’s Compensation Consulting team available to assist in determining the best structure.

Here are some common types:

• Lump-sum packages: Employees receive a fixed amount of money to cover their moving expenses. The benefit here is flexibility, allowing the employee to decide how to spend the funds. However, this typical relocation package may not cover all relocation costs if the move is complex.

• Reimbursement packages: In this case, the company reimburses the employee for moving-related expenses, but only after receipts are submitted. This ensures the company is only paying for actual expenses, though it requires the employee to pay out of pocket first.

• Direct bill packages: Some companies arrange and pay for services directly, such as hiring a moving company or booking a temporary housing. This type takes much of the planning off the employee’s plate and makes the relocation process easier.

• Full-service packages: The most comprehensive option, full-service packages cover everything from packing and moving to selling a home and finding a new one. These packages are usually reserved for senior-level employees or international relocations.

What do relocation packages include?

A typical relocation package will cover essential moving expenses. Here’s a breakdown of the most common relocation package components:

Moving costs

This includes transportation of household items, often via a professional moving company. Some typical relocation packages may cover packing services to ease the burden.

Temporary housing

Finding a permanent place can take time, so companies may offer stipends for short-term housing.

Travel expenses

This covers transportation costs for the relocated employee and their family to the new location. Whether it’s airfare, gas, or even car shipping, these costs are generally included.

Storage fees

Sometimes relocating employees need to store their belongings for a period before settling into a new home. Employee relocation packages may cover these fees for a specified amount of time.

Home sale/purchase assistance

For relocating employees who own a home, some companies offer help with selling their current property and buying a new one. This could include paying real estate agent fees or providing a home-buying assistance bonus.

Miscellaneous expenses

In some cases, companies may offer a lump sum payment for smaller costs like utility hookups, vehicle registration, or pet relocation.

Benefits of offering employee relocation packages

Offering support during a move allows companies not only to attract top talent but also boost employee satisfaction and retention.

Here are some key benefits:

1. Attracting talent: It can make it easier for companies to hire the best candidates, even if they live far away. A well-structured package reduces the financial strain on candidates, making them more likely to accept a job offer.

2. Increasing employee loyalty: Providing assistance shows employees that the company values their well-being, promoting job satisfaction and loyalty.

3. Reducing stress: Moving is stressful, but a good job relocation package can make the process smoother. Covering basic expenses like movers, temporary housing, and travel takes a significant burden off the employee.

To maximize the strategic value of relocation assistance, companies can consult compensation experts.They can design a package that aligns with the company’s goals while being competitive in the current market.

Cost breakdown of a relocation package

The costs associated with average job relocation packages can vary greatly based on several factors, including the distance of the move and the employee’s position. Here’s a rough estimate of common relocation expenses in the U.S:

• Moving household goods: $1,000 - $10,000, depending on the distance and volume of items.

• Temporary house: $1,500 - $4,500 per month.

• Travel expenses: $500 - $5,000, depending on the number of family members and the mode of transportation.

• Storage fees: $100 - $500 per month.

• Home sale/purchase assistance: Varies significantly based on the housing market and the company’s policies, often ranging from $10,000 to $50,000.

Relocation costs are often significant, highlighting the importance of thoughtful compensation strategies. Salary.com's Consulting services offer tailored guidance to help businesses optimize their relocation packages, leveraging in-depth market insights and expertise.

FAQs

Here are some common questions about relocation packages:

How much relocation assistance should I ask for?

The amount of assistance you should request depends on the specifics of your move. If the company offers a lump sum, aim for enough to cover moving, travel, and temporary housing. For a typical domestic move, the average relocation package might range from $20,000 to $50,000, depending on the level of support provided.

Be sure to ask about real estate cost assistance, relocation bonuses, or any other needs relevant to your situation.

Are relocation packages common?

Yes, relocation packages are common, especially for higher-level positions or when companies need to recruit specialized talent from other locations. Relocation assistance is important in today’s competitive job market to secure top talent without geographic limitations.

Is a relocation package negotiable?

Yes, many companies are open to negotiating these packages. If your relocation involves unique circumstances or higher expenses, you can discuss additional assistance. To make a strong case, provide an estimate of your moving costs and explain any specific needs, like visa and immigration assistance or a flexible start date, that may require extra assistance.

Understanding the costs and components of a typical employee relocation package is crucial whether you're an employee planning a move or an employer looking to attract top talent. Salary.com's Consulting service offers solutions that align with evolving needs, providing guidance on relocation packages, compensation, and beyond.