How to Design The Perfect Relocation Package for Tech Employees
Attracting and retaining top talent in the tech industry is crucial for excelling in today’s global marketplace economy.
A big part of building a strong team is onboarding. The first 90 days of a new hire can greatly influence your company’s ability to secure a top candidate. The 2018 Job Seeker Nation Study revealed that almost 30% of job seekers have left a job within the first 90 days of starting and of those that left, 32% cited company culture as a reason for leaving within the first three months.
Consequently, designing a competitive relocation package is an indication of a supportive company culture and a vital part of engaging potential candidates. Its content allows you to connect with a potential hire and develop a relationship based on mutual understanding.
That’s why we’re here to help.
What Is a Relocation Package?
A relocation package should compensate the future employee for the major life disruptions associated with the move to join your organization.
There is no one-size-fits-all option when creating it. The compensation package may look different based on the employee’s location (interstate or international), the position being offered (entry-level or management) and the future hire’s family status (single or married, with or without children). The most important aspect when designing a relocation package is that it should assist with the specific needs attached to the move of the future employee.
Relocation Package Types
There is no standard for relocation support and so as an employer, you have leeway in determining what will be offered. Whether you are a young and scrappy startup or a large, well-seasoned company, there are industry practices that are considered basic for relocation assistance. In addition, some companies offer special concessions that a potential employee will be on the look-out for when reviewing a more specific relo package.
A basic relocation package should include:
- A one-time bonus to cover moving expenses. This is usually offered for an entry-level position. The bonus amount should allow the prospective employee to arrange and pay for their move (rent a moving van or company), and locate and secure accommodations (place a deposit on an apartment or acquire short-term housing until their first paycheck).
- Visa application and resident permit sponsorship and paperwork. For international moves, it is standard practice for the prospective employer to sponsor and assist with the filling out of visa application documents. This may entail simply providing the prospective employee with the information necessary for the documents, or it could involve providing legal services to assist with the documentation and application filing. Help with securing a resident permit is also customary. (Note that some companies are stipulating reimbursement on the part of the employee for these costs if the employee quits within the first 90 days)
- Work permit and tax forms filing. For interstate transfers, this may simply mean providing information on tax forms adjustments. However, for international moves, the employer will be expected to assist the potential employee with the work permit application and any fees involved, along with the filing of tax forms.
- Flight tickets purchase. Typically when international relocation is required, a potential employee is offered coverage for a one-way air ticket for the employee and their entire family (if applicable).
Specific or Advanced Packages
Additional relocation perks that may be offered to complement a relo package and make your company more competitive to top-quality hires are:
- A sign-on bonus. Unlike the one-time bonus in the basic package, this bonus is not related to or expected to cover moving expenses. It is a financial incentive to the employee for signing on with the company.
- Coverage of moving expenses. This compensation is reimbursement of expenses incurred from the prospective employee’s physical move. It is meant to cover, for instance, packing and moving, storage of their belongings for a period of time in the destination location, short-term lodging at the destination location, meals and transportation costs during the move. It also includes replacement of furniture and appliances at the destination location.
- Housing support. A relo package that offers free assistance with apartment hunting and reimbursement costs for a short-term rental until permanent accomodations can be found is highly attractive to a potential employee. In addition, payment of a rental deposit which may later be deducted from the new employee’s income is also an option.
- Reimbursement of property transactions associated with the move. As a new employer, you should cover part or all of the commission of the real estate agent who sells the employee’s current home and any other costs involved in the transaction. You can choose whether or not you will extend that coverage if the employee is buying property in the destination location. You may decide, for instance, to pay some or all of the closing costs on a property bought by the new employee at the destination location. The cost of terminating and initiating power services across both ends of the move is also something you could cover in your relo package.
- On-location assistance. Providing a new hire with guidance at their new location will help them adjust quicker and easier and will streamline their inclusion into your organisation. Integration tips such as assistance with opening a bank account, clarifying insurance needs, the location of mailing services, etc., will give the new employee a sense of support. Language courses, sponsorship or recommendations will also facilitate a smooth transition.
- Other miscellaneous costs. Offering to pay to move an employee’s vehicle or to reimburse them for school or activity fees for their children–which were already paid and cannot be refunded–are additional incentives that can make your relocation package appealing.
- A free plane ticket home. Some companies will extend a one-time opportunity to the new employee during the first year of employment to return home for a visit.
As the world becomes more global, the trend in hiring international candidates will continue to grow. For the new hire, relocation can be an uncertain and stressful venture filled with frustrations and for companies, importing talent can come with various challenges.
Having a relocation package that addresses the concerns of the potential employee can make the move more efficient and mitigate setbacks for the employer. Finding the right balance for both parties will ensure that your company’s next hire will be a lasting investment.