Relocation costs are rising, even as corporate profits lag. Here’s how to dig into relocation benefit packages and practices to find the items that could be costing you money

Relocation’s hidden costs: relocation costs are rising, even as corporate profits lag. Here’s how to dig into relocation benefit packages and practices to find the items that could be costing you money

Greg Hoover

More and more corporations are depending upon the expertise of relocation professionals to seamlessly and effectively relocate their transferring employees and new hires. The trust placed in a relocation specialist demands a great deal of responsibility. And, with the economy as it is, the need for a keener eye and higher level of fiscal responsibility has become a necessity to maintain that trust.

According to the Employee Relocation Council, its member companies moved, on average, 308 employees last year. Their average cost to move a home-owning current employee was more than $60,000, with the cost for the home-owning new hire averaging just short of $50,000. Costs are rising and corporate profits are lagging. The pressure is on–more than ever–to do more with less.

With so many variables to consider, where do we begin? Obviously, the volatility of pricing the many services provided in a complete relocation package will fluctuate with the ebbs and flows of the economy. Are our relocation policies truly effective and economical?

To answer this question, stricter attention must be paid to obvious costs. What are the gross costs of specific benefits? What are the tiered benefits programs that match employee status? Once questions like these have been answered, and the entire package of benefits is assessed and known costs have been determined, then we can dig deeper to find hidden costs and learn how to avoid them. In the short analysis, one source of hidden relocation costs lies within benefits that create tax burdens. Most benefits are considered deductible under IRS guidelines; however, some benefits are considered to be taxable compensation to the employee. In these cases, it is important to determine who will bear that tax burden. Let’s look at two separate options.

We’ll begin with a $2,000 reimbursement for house hunting costs. If the employee is reimbursed through a payroll disbursement, minus taxes, the employee would receive $2,000 less (at least) $700 in taxes, making the reimbursement $1,300 for $2,000 in expenses. In this scenario, the employee would bear the burden of the taxes.

Our second option would be for the employer to reimburse the employee through a “gross-up.” In this example, the employer pays the tax. Using the same $2,000 example, the employee would declare $2,800 in compensation. After taxes are paid, the employee would receive the full $2,000 reimbursement for out-of-pocket house hunting expenses.

The lesson learned here is to examine all costs with a discerning eye. Dig deeply to find the hidden costs, and to identify any tax burdens or other expenses that might devalue the entire relocation package. Evaluate your relocation policies to ensure that every benefit is actually beneficial and will not result in an undue financial burden. The idea is to provide as many no-cost or tax-free benefits as possible, which, in the long run, generate greater economic efficiencies, higher levels of benefits, and secure the trust relationship between you and the employee.

Of course, some costs cannot be figured in dollar amounts. The stress from relocation is considered by some to be second only to the loss of a loved one. HR and the relocation professionals should try to abate the stress as much as possible by anticipating every obstacle to a successful transition. The cost of failing to do so is one you can’t afford. The benefits of a trouble-free relocation, however, are invaluable to all parties involved.

Culture and Language Services

Society of Incentive & Travel Executives

www.site-intl.org

Destination and Services/Facilitators

Alliance Relocation

www.alliancerelo.com

Apartment Search

www.apartmentsearch.com

Auto Driveaway Co.

Auto Driveaway Co. has over 48 years of Door to Door experience relocating vehicles around the U.S. and Canada through a 60-city nationwide office network. You choose the service that best fits your needs, budget and schedule. Let us show you why ADC is your most economical choice.

www.autodriveaway.com

310 South Michigan Avenue

Chicago, IL 60604

312-341-1900

Leonard Tamburro: Itamburro@autodriveaway.com

Cultural Relocation Services

www.culturalawareness.com

Dependable Auto Shippers (DAS)

www.dasautoshippers.com

DFW Orlentation Services

www.relocationcentral.com

enter berlin Relocation Services GmbH

www.enter-berlin.com

Geary & Associates, Inc.

www.gearyassociates.com

Relocation America

www.relocationamerica.com

Resource Careers

www.resourcecareers.com

Suburban Lodges of America

www.suburbanlodge.com

The IMPACT Group

Providing worldwide Relocation Transition Assistance to corporate transferees and families, including research, spouse/partner job search assistance and transition support, easing acclimation to the new community. Also Recruitment Support Services to help recruitment candidates identify the resources and information they need about the new location to improve the chances of job offer acceptance.

www.the-impact-group.com

12977 N. Outer 40 Dr., Suite 300

St. Louis, MO 63141

800-420-2420

Laura Herring: info@the-impact-group.com

The Relocation Center

www.relocationcenter.com

VanDover

www.vandover.com

Home Financial Services

CitiMortgage

When it comes to moving your company’s employees, you’ve got plenty to think about. Which is why your first move should be to call about CitiMortgage’s Corporate Mortgage Program. We deliver a level of service that not only meets your expectations, but exceeds them.

www.citimortgage.com

12855 North Outer 40 Drive

St. Louis, MO 63141

314-851-6216

Lisa Caravella: Lisa.Caravella@citicorp.com

National City Mortgage Company

www.nationalcitymortgage.com

ProActive Mortgage

www.proactivemortgage.com

Interim Housing

Aimco Corporate Housing

www.aimcol.com

BridgeStreet Corporate Housing Worldwide

www.bridgestreet.com

Corporate Choices interim Housing

www.corporatechoices.com

Corporate Housing by Jerdon

www.jerdonhousing.com

Corporate Lodgings

www.corporatelodgingsneo.com

CorQuest Corporate Accomodations

www.corquest.com

Equity Corporate Housing

www.equitycorporatehousing.com

ExecuStay

www.execustay.com

Extended Stay America

www.exstay.com

Gables Corporate Accomodations

www.gablesres.com

Globe Corporate Stay international

www.glbe.com

Habitat Corporate Suites Network

Habitat Corporate Suites Network, Eight-Time Winner of the Chicagoland Apartment Association Award for Excellence. We specialize in extended-stays of 30 days or more. Choice locations in Chicago and western suburbs. Spacious, fully furnished apartment, expertly cleaned, painted, and shampooed before each arrival. On-site housekeeping staff and 24-hour service desk guarantee timely response to requests. Cable, VCR, health club, voice mail. All this and more, at half the price of a fine hotel. For more information or to reserve a corporate apartment, call 312-902-2092. For a virtual tour of the units at each of our locations, access our website www.habitatcsn.com

www.habitatcsn.com

555 West Madison Street

Chicago, IL 60661

312-902-2025

Kathleen Elmendorf: kelmendorf@habitat.com

Hawthorn Suites

www.hawthorn.com

Homestead Studio Suites Hotels

www.homesteadhotels.com

Homewood Suites Hotels

www.homewood-suites.com

Mandalay Bay

www.mandalaybay.com

Oakwood Corporate Housing

www.oakwood.com

Post Apartments Homes

www.postproperties.com

Preferred Living

www.preferred-living.com

Premier Relocation Solutions

www.premierny.com

Residence Inn by Marriott

www.residenceinn.com

Smith Corporate Living

www.smithliving.com

Suite Net

www.suitenet.org

The Marmara-Manhattan

www.marmara-manhattan.com

Turnberry Isle Resort & Club

www.turnberryisle.com

U.S. Suites

www.us-suites.com

Village Suites

www.alpine-suites.com

Moving and Storage

Above & Beyond Cargo

www.aboveandbeyondcargo.com

ACE World Wide

www.aceworldwide.com

Allied Van Lines

Relocating employees trust Allied to provide the fines quality moving services. Allied uses the Gallup Organization to measure customer satisfaction. These impartial Gallup surveys are part of Allied’s on-going program to continually improve performance. Allied move management systems provide timely information about the status of your employee moves. Our commitment to quality is an important reason why more people move with Allied than any other mover.

www.alliedvan.com

215 West Diehl Road

Naperville, IL 60563

800-GO-TO-AVL

Brian Ooms: brian.ooms@alliedvan.com

Amer-Trans Relocation Services, Inc.

www.Amer-Transrelocation.com

Atlas Van Lines, Inc.

www.atlasvanlines.com

Budd Van Lines

www.buddvanlines.com

California New York Express

www.moveeast.com

Continental Moving

www.dontrentthattruck.com

Covan World-Wide Moving, inc.

www.ccvan.com

East End Moving & Storage

www.eastendmoving.com

Gemini Moving Specialists/United Van Lines

www.geminimoving.com

Graebel Van Lines

www.graebel.com

Mayflower Transit, Inc.

www.msyflowertransit.com

National Van Lines, Inc.

www.nationalvanlines.com

North American Van Lines, Inc.

www.navl.com

Oman

www.oman.ie

Paul Arpin Van Lines

www.paularpin.com

Stevens Worldwide Van Lines

www.stevensworldwide.com

527 Morley Drive

Saginaw, Michigan 48601

989-755-3000

U-Haul international

www.uhaul.com

United Van Lines

www.unitedvanlines.com

Von Sydow’s Moving & Storage, Inc

www.vonsydow.com

Wheaton World Wide Moving

www.wheatonworldwide.com/services/corp.htm

8010 Castleton Road

Indianapolis, IN 46250

800-932-7799

Real Estate Agencies

Century 21 The Gresham Company

www.greshamco.com

HomeBuyer Agents, Inc.

www.homebuyeragents.com

Jack Christenson, Inc.

www.michiganrealestate.com

Relocation Finance Services

Chase Manhattan Bank

www.chase.com

CitiMortgage

When it comes to moving your company’s employees, you’ve got plenty to think about. Which is why your first move should be to call about CitiMortgage’s Corporate Mortgage Program. We deliver a level of service that not only meets your expectations, but exceeds them.

www.citimortgage.com

12855 North Outer 40 Drive

St. Louis, MO 63141

314-851-6216

Lisa Caravella: Lisa.Caravellea@citicorp.com

ClickHome

www.clkhome.com

First Union Mortgage Corporation

www.firstunion.com

Fleet Mortgage Service

www.fleet.com

GMAC Mortgage

www.gmacmortgage.com

MovingStation

www.movingstation.com

Nexstar Financial Corporation

www.nexstarhome.com

Relocation Information Resources (Online/Publications)

Ala Carte Interiors

www.alacerteinteirors.com

City of Henderson

www.cityofhenderson.com

Directmoving.com

www.directmoving.com

First Books, Inc.

www.firstbooks.com

Monstermoving.com

www.craighead.com

ReloGlobal.com

www.reloglobal.com

Runzhiemer International

www.runzheimer.com

Relocation Management/Consulting

A. Arnold World Class Relocation

www.aarnold.net

Access Relocation Services, Inc.

www.accessrelocation.net

Allied Van Lines

Relocating employees trust Allied to provide the finest quality moving services. Allied uses the Gallup Organization to measure customer satisfaction. These impartial Gallup surveys are part of Allied’s on-going program to continually improve performance. Allied move management systems provide timely information about the status of your employee moves. Our commitment to quality is an important reason why more people move with Allied then any other mover.

www.alliedvan.com

215 West Diehl Road

Naperville, IL 60563

800-GO-TO-AVL

Brian Ooms: brian.ooms@alliedvan.com

Americorp Global Relocation Services

www.americorp.com

AmeriCorp Relocation Management Inc.

www.americorp.com

Armstrong Relocation

www.armstrongrelocation.com

ATHENA Employee Relocation Services

www.AthenaRelocation.com

Bekins Van Lines, LLC

www.bekinslocator.com

Capital Relocation Services

www.caprelo.com

Commonwealth Relocation

www.homeinrichmond.com

Corporate Relocation Services

www.crsontheweb.com

Corporate Transfer Service Inc.

www.cstonline.com

Cort Furniture Rental

www.cortl.com

Cross Country Relocation, Inc.

www.ccrelocation.com

316 E. Silver Spring Drive, Suite 302

Milwaukee, WI 53217

800-357-7545 x29

Economic Research Institute

30-Day Trial of software/database tools used by 80% of the “Fortune 500” and thousands of other companies/organizations to set compensation and determine relocation costs. Economic Research Institute software/database tools include information for thousands of positions at locations throughout the U.S./Canada and Internationally, cost-of-living differentials, and proxy-based executive compensation analysis.

www.erieri.com

8575 164th Ave. N.E., Suite 100

Redmond, WA 98052

800-627-3697

Michael Gillie: Michael_Gillie@erieri.com

Edina Corporate Services

www.edinarealty.com

Executive Relocation

www.execrelo.com

Firstline Relocation Services, Inc.

www.frs.com

Global Van Lines Inc.

www.globalvanlines.com

GMAC Global Relocation Services

www.gmacglobalrelocation.com

JK Worldwide Relocation, Inc.

www.jkmoving.com

Meridian Mobility Resources, Inc.

www.meridianmobility.com

Move Management Center, The

www.movecenter.com

National Equity, Inc.

www.neirelo.com

8701 West Dodge Road

Omaha, Nebraska 68114

402-397-8486

NRI Relocation

www.nrirelocation.com

O’Neil Relocation/United Van Lines

www.oneilrelocation.com/htm/welcome.htm

Pacific Relocations

www.chinarelo.com

Paragon Decision Resources, Inc.

www.pdr.com

Pinnacle Group Associates

www.pinnacleonline.com

PLUS Relocation Services

www.plusrelocation.com

435 Ford Road, Suite 365

Minneapolis, MN 55426

888-251-2825

Primacy Relocation

www.primacyrelo.com

Prudential Relocation

www.prudential.com/prm

RCM Relocation

www.rcmrelocation.com

Re/Max International Relocation Services, Inc.

www.remax.com

Reloaction

www.reloaction.com

Relocation Management, Inc.

www.rmirelo.com

Relocation Resources International

www.rriworld.com

Rental Relocation, Inc.

www.rentalrelocation.com

Ryder Move Management

www.RyderMoveManagement.com

Suddath Relocation systems

www.suddath.com

Summitt Mobility

www.summitmobility.com

The Alternative Relocation Management Company

www.relomgmt.com

The Pasha Group

www.pashagroup.com

The Relocation Group

www.michiganrealestate.com

U S Relocation

www.usrelo.com

Viva.com

www.viva.com

WHR Group, Inc.

www.whrg.com

Williams Relocation Management

www.williamsrelocation.com

Rental Assistance Services

OnLine Relocation, Inc.

OnLine Relocation Inc. is corporate relocation division is a unique brand of services and programs designed as an alternative to standard practices. Programs are designed specifically for employees receiving lump sum allowances or direct reimbursement for their relocation expenses as well as those employees who are relocating, but being offered little to no formal relocation assistance from their company. Additionally, we offer a relocation policy for relocating renters www.relopoint.com/PamperedRenter.asp that provides the same high touch service currently afforded home owning employees. OnLine Relocation is your Human Resource Solution to Relocation Services.

www.relopoint.com

500 West Main Street

Lake Zurich, IL 60047

888-234-7356 ext. 1209

Rebecca Levinson: rlevinson@onlinerelocation.com

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