How much does employee relocation cost?

Last updated on February 14th, 2024 at 07:13 am

Employee relocation refers to the act of companies moving one or more employees from one town/city/country to another. 

In most cases necessitating employee relocation, the employer initiates the move and the employee complies to continue their employment, or the employee requests to be relocated and the company agrees to offer the necessary resources and support.

Companies may often entice new and existing employees with certain benefits to streamline the relocation process and make it affordable. Reasons for employee relocation include;

• To retain employees and move them closer to the company’s headquarters, strengthening teamwork and productivity.
• To move new or current employees to a new location where the company has launched satellite offices.
• To move employees where more skill and experience are needed.
• To move employees to a new location where they are happier and more productive.

Read more: 29 Questions to ask before Hiring an International Employee Relocation Moving Company in Kenya

Services Provided under Employee Relocation

A full-service employee relocation company offers comprehensive assistance and support to individuals and their families who are moving for work purposes. While the specific services provided may vary between relocation companies, here are some common activities undertaken by a full-service employee relocation company:

• Relocation consultation

The company consults with the employee and their employer to understand their specific needs, budget, and timeline. They provide guidance on the relocation process and available services.

• Destination services

The relocation company assists with various aspects of settling into the new location. This can include providing information about the destination city, neighborhood tours, assistance with finding housing, schools, healthcare providers, and other essential services.

• Home-finding and rental assistance

The company helps employees find suitable housing options in the new location. They may offer assistance with property searches, scheduling and conducting home viewings, lease negotiations, and providing guidance on local rental markets.

• Temporary housing arrangements

If needed, the relocation company can arrange temporary housing for employees and their families during the transition period. This can include booking furnished apartments or temporary housing accommodations for a specified duration.

• Moving services

The company coordinates and manages the physical move of household goods and personal belongings. This can involve packing, loading, transportation, and unloading at the new destination. They may also handle customs clearance and international shipping logistics for international relocations.

• Expense management

Full-service employee relocation companies often assist with managing and reimbursing relocation expenses. They help track and process expense claims, ensuring compliance with company policies and relevant tax regulations.

• Immigration and visa support

For international relocations, the company may provide assistance with immigration and visa processes. This can involve guidance on obtaining work permits, visas, and necessary documentation for the employee and their family members.

• Cultural and language training

Some relocation companies offer cultural orientation and language training programs to help employees and their families adapt to the new culture and environment. This can include language lessons, cultural awareness training, and intercultural support.

• Spousal and family support

Recognizing the importance of family integration, full-service employee relocation companies often offer support services for accompanying spouses and family members. This can include assistance with finding employment opportunities, educational resources, and social integration support.

• Settling-in services

The company helps with the logistics of settling into the new location. This can involve assistance with utility setup, local registrations, obtaining driver’s licenses, and other practical matters.

• Ongoing support and counseling

Some relocation companies provide ongoing support and counseling services to employees and their families throughout the relocation process. This can include access to dedicated relocation consultants who offer guidance and assistance during and after the move.

Employee Relocation Management for Human Resource (HR) Professionals

Employee relocation may present risks and challenges to staff and employers. Among the mandates of HR is the duty to keep employee relocation costs low while ensuring that all relocating staff receive the necessary information and assistance throughout.

Employee relocation costs cater to the required type of housing, the distance of the move, and employee support along the way. Understanding the cost of a corporate move will help your staff and organization plan their budget well.

Types of Costs Incurred During Employee Relocation

Real Estate Costs

Employees may need a new place to live if they move to a new city or country. The employer can provide their support by covering the costs of temporary housing or giving a house allowance. Housing costs will depend on the type needed, length of time, rent or sale conditions, and location.

Moving and Travel Expenses

The cost of travel and moving employee property from one location to another is straightforward. It hinges on factors such as the relocation distance and the volume of the employee’s load. The expenses may include hiring a professional moving service, storage, and renting a moving truck. 

Travel expenses include car rental, airfare, and temporary accommodation costs.

Family Support

Depending on employees’ living arrangements, they may have to move with their families or leave some support through schooling, childcare, and counseling.  Family support costs will depend on the age and size of the family unit and the kind of support they need.

While it may be challenging to forecast the cost of employee relocation (mainly since it depends on where employees are moving to and from), a comprehensive employee moving checklist and budget can help accurately estimate the expenses. Consider the following additional costs in your budget;

• Packing and moving costs
• Travel expenses to the new location, including hotel accommodation
• Moving insurance
• Storage services
• Temporary housing
• A home sale or rent expenses
• Tax implications of benefits
• Paperwork processing

Budgeting for Employee Relocation

Tracking employee moving expenses in real-time can help your organization stay within the budget for the whole process. By calculating everything in advance, surprises and mishaps are less likely to occur. Should they happen, you may have a contingency plan to compensate from other areas within the budget. 

These costs may be split into moving-associated expenses and costs of living after the move.

Costs Associated with Moving an Employee

They include;

• Boxes and moving resources
• Rental moving truck if employees prefer a DIY move
• Hiring professional movers
• Utility deposits in the new home or arrears in the old home
• Renting a temporary storage unit
• Professional cleaning
• Short-term housing
• Travel expenses
• Moving insurance
• Shipping fees
• Security deposit

Living Costs After Relocation 

Living costs after relocation may also figure in the total relocation cost. You should be able to account for increases or decreases in the budgeted expenses after the move and how the expected remunerations or allowances will cater to these expenses.

If you are moving employees to an area with high living standards, they may need to catch up on non-essential spending such as neighbourhood welfare charges. Similarly, a tighter budget may limit one’s freedom to frequently reconnect with family and friends in the old hometown.

Comparing individual costs and services with the market price can help you secure the best service and support or fine-tune your budget even better.

How to Minimise Employee Relocation Costs

Employee relocations can be sophisticated and costly, hence the need to consider the benefits and budget constraints. 

Once a decision is made to relocate an employee, the employers must develop a moving policy and communication strategy for a smooth transition experience. The policy should address the housing costs, travel and moving expenses, and the kind of family support the employer is willing to offer.

Reducing the relocation cost may benefit the employer’s bottom line. The objective should be to reduce and control moving expenses while ensuring a smooth transition experience for the employees. Significant savings can be derived from simple changes that reduce costs without compromising the quality of service delivery.

Set Cost Caps on Some Benefits

Expense caps on benefits such as loss on a home sale may be necessary. This could be a significant expense on the employer’s company as many homeowners encounter real estate depreciation. The relocation policy should declare the maximum loss reimbursable while accounting for capital enhancements when valuing the house.

Establish Clear Parameters for Lowering Expenses in the Employee Relocation Policy

Use straightforward language in the relocation policy, as ambiguities may result in additional expenses. The policy should facilitate a smooth and efficient transition without unforeseen issues.

Employ Relocation Management Software

Companies can track spending and pay for benefits using relocation management software. They may also reimburse employees, disburse lump sums, or pay for associated services via direct bills using the software. Relocation applications may also integrate different payment methods, offering flexibility and convenience for employees and employers.

Popular Employee Relocation Policies by Companies & Multinationals in Kenya

Just as there are different approaches to relocation depending on the mover, companies have different relocation policies for their staff. Often, it is in the employer’s interest to provide a relocation package to support the employee with settling down so as to adjust to their new environment and quickly get back to work

Most employer contracts indicate that employees could be transferred to any region within the company’s geographical jurisdiction. 

In Kenya, most organizations cover the subject in their HR policy rather than employment contracts. Popular relocation packages include;

• Lump sum package – the employee receives a set sum to use on their relocation and may keep any change. 
• Reimbursement package – the employee caters for their moving expenses and is later reimbursed by their employer. Some companies may have a cap on how much an employee can spend on relocation expenses. Copies of all receipts are typically required for costs to be appropriately reimbursed.
• Full cover – The company pays for all relocating costs. This package is typically offered to senior-level workers making expensive migrations.
• Tiered package – With a tiered package, an employee’s degree of experience, circumstances, such as having children, and other factors are considered when developing a package. These offers are made with the employee’s financial needs in mind. Since there is a tiered package option for everyone at all business levels, it is frequently a very popular relocation policy.

Benefits of Retaining Reputable Movers for Employee Relocation

Chosing the right moving company for the task of relocating employees has several benefits:

Rapid Migration

Your employees are relocating for work. It’s important that they move and settle quickly so they can report to work in the shortest possible time.

Using a reputable moving company ensures that no time is wasted, and you can install your resource quickly at the new premise. 

Peace of Mind

Nellions will help ease the stress and hassle of a hectic office move by employing the appropriate resources. We have modern equipment, tools, and resources for heavy lifting, reducing risk for staff and employers.

Some firms also implement workplace technologies while moving goods from one point to another for a seamless relocation. Typically, it would take 3 days or less to relocate an employee from Nairobi to Kisumu or 5 days from Kenya to Uganda from the day packing begins to delivery.

Skilled and Experienced Workers

Business owners may handle complex challenges working with a professional moving company with reputable expertise in managing client property. They provide practical solutions for moving a business with qualified staff for a smooth experience. Organizations may quickly transfer their property and materials by working with a skilled and experienced mover.

Experts rapidly and safely disassemble all furniture in your workplace, including cabinets, cupboards, tables, storage lockers, displays, seats, and others, using the appropriate equipment. They will keep your possessions secure and protected. They’ll also decide how best to organize your workplace transfer.

Selecting a reputable moving company will guarantee you can rely on a team to provide the assistance you want. They will pay attention to all crucial information too. They’ll let you know if there’s anything you forgot.

Additional Services

Moving companies may offer add-on services, such as cleaning or storage, depending on the client’s requirements. A moving business should provide insurance coverage to safeguard products from accidents and other unforeseen incidents.  

When transferring an office, reputable movers offer protection for priceless valuables. However, the office manager or employer should know all the terms and conditions before signing anything.

Cost Management

When clients wish to move their offices to new sites, a reputable moving company will present them with choices. After assessing them with skilled professionals, it creates practical transport options. Additionally, the business offers a range of financial options for customers to use when paying for services.

Relocating Employees with Nellions

Are you planning to relocate your employee(s) to another town, city, or country? We have comprehensive knowledge and experience in inter-county, cross-border, and international removals.

Contact us at +2547000000002 or email us at move@nellions.co.ke and let us help you with the move.

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