Companies Tighten Up on Relocation
May 4, 2017
Fewer companies are offering mortgage assistance as part of their relocation packages to employees, The Wall Street Journal reports.
Just 4 percent of employers say they’re offering mortgage assistance to their relocating employees, according to a survey of 3,490 human resources professionals in January 2016 conducted by the Society for Human Resource Management. Just 3 percent say they offer down-payment assistance, while 8 percent offer reimbursement of fees paid to real estate professionals. Relo packages vary widely and can largely depend on the employee’s seniority in the firm.
Read more: Make the Move Easier for Relocation Clients
In the past, companies would commonly offer employees a “mortgage interest differential allowance,” which they would subsidize the difference in interest rates between their old and new locations, says Crystal Abbey, director of strategic business solutions for Danbury, a relocation-management company.
But with mortgage rates remaining relatively low, “that’s one thing companies are not including in their relocation policies right now,” Abbey told The Wall Street Journal. “But they will cover the normal and customary closing costs in the new location.”
The size of the company may have a big influence in how much employees may get reimbursed for a relocation. A separate survey earlier this year conducted by Atlas Van Lines of 471 relocation professional companies showed that more than one-third of large companies who have more than 5,000 employees reimburse employees for losses they have when they sell their current home. On the other hand, just 10 percent of companies with fewer than 500 employees will reimburse employees.
“We’re actually seeing a larger movement toward paying a lump sum to employees who relocate,” says Tom Dempsey, vice president of relocation lending for Quicken Loans in Detroit. “That has to do primarily with the attitudes on housing in the millennial generation and allows the relocating team member the opportunity to allocate those funds to what will be most efficient for them to move.”
Source: “Relocation Packages Slim Down,” The Wall Street Journal (May 3, 2017) [Log-in required.]
Updated: October 29, 2020