Report: 2019 to Be a Good Year for Employee Relocations
May 3, 2019
Corporate relocation volumes and budgets are increasing, helping employees to more easily make a move for a job. In particular, 60% of mid-size firms with 500 to 4,999 salaried employees reported relocation budget increases, according to national moving company Atlas Van Lines’ Corporate Relocation Survey. For comparison, about 40% of small firms (fewer than 500 salaried employees) and 40% of large firms (5,000-plus) saw employee relocation increase over the past year.
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Companies are optimistic that 2019 will be a good year for relocations. Overall, more than 40% of organizations say they expect increases in relocation volume and budget this year, and they’re using multiple employee reimbursement methods for moves. Full reimbursement for new hires (36%) remains near historically low levels, the survey shows. On the other hand, lump-sum payments to cover costs of a move are most popular (56%). Lump-sum payments have increased in popularity and are now offered with about the same frequency to new hires and transfers, according to the study.
Companies surveyed—regardless of size—estimated that about half of their relocations were either partially reimbursed or paid by lump sum in 2018. Large firms estimated that about half of relocations were fully reimbursed, while mid-size and smaller firms estimated that only about a third were. One out of seven relocations at mid-size or small firms were not reimbursed at all.
Companies are reporting an uptick in international relocations, too. Forty-eight percent of firms that relocate employees internationally say they saw increases in international volumes last year, and 47% expect to see increases in 2019.
The majority of the companies surveyed also indicated policy changes were made in 2018 in response to the Tax Cuts and Jobs Act. “While the most common move last year was to gross-up taxable relocation benefits (70%), only 49% of firms plan to do so in 2019,” the survey notes. “Fewer mid-size firms plan to implement a policy change to gross-up on taxable relocation benefits (35%), while more than half of large and small firms plan to do so.”
About 50% of firms say they plan to restructure their relocation policy, withhold taxable relocation benefits, and streamline relocation processes to reduce costs this year, the survey showed. “With further changes needed to adapt to tax reform and increasing costs, there is acknowledgement that firms are having to ensure their budget covers the greater numbers of relocations projected in the coming year,” the report notes.
Updated: June 27, 2019