Can Your Business Compete Successfully For Out-of-town Talent Without Offering Relocation Assistance

June 26, 2000
You are interviewing a key technical professional who is also considering a position across town.

Job opportunities are comparable, as is compensation. Your company offers a $5,000 lump-sum signing bonus. The cross-town competitor offers approximately the same amount in the form of a "relocation reimbursement" for menu items through approved vendors. If hired at your company, the employee gets the cash and is on her own to make arrangements.

If hired at the competitors, the employee would be offered relocation assistance, which might include a community tour, household goods transportation, temporary lodging, apartment or home search, one-stop address change, and more.

How far does this type of assistance go to sway the deal?

  • Not knowing enough about a new area is cited as one of the top reasons why applicants turn down positions involving relocation. As part of the interview process, your company can easily provide information concerning communities, school districts, crime statistics, and relocation costs. Knowing more often translates to feeling more comfortable with the choice to relocate.
  • The Employee Relocation Council reported in its 1999 New Hire Survey that only 1 in 10 companies offer cafeteria-style or menu-driven options, even though they recognize restructuring their relocation policies to add specific choices would match employee needs better and keep costs in check. 80% of the respondents now experience competition between companies for new hires and an equal percentage believe their recruiting difficulties will increase during the next five years.
  • By developing an Employee Relocation Policy and list of approved vendors, your company is taking steps to set a cap on these expenses, obtain competitive pricing, establish a higher level of service, ensure a smooth reimbursement process, and provide recourse should anything go wrong. At the same time, you are providing a valuable service to applicants and employees, who generally do not know the best resources and potential problems involved in relocations. They can concentrate on their end of the move and get settled into your business more efficiently, making a stressful situation less so.
  • Although it would seem easier to provide employees a lump sum and have them make their own arrangements, companies report frequent bad experiences with this approach. Employees hoping to pocket some of the allowance dollars opt for the lowest cost transportation service or even hire friends, only to find out there are hidden costs or damaged goods and now they are back at your human resource department trying to renegotiate the dollar amount.


Link to other relo articles and vendors.