Planning A Successful Corporate Relocation

Companies decide to move for a bunch of reasons. It could be that the lease is up and the space is no longer big enough to accommodate the growth, or it could be that another city is offering huge tax credits to lure your company (and your jobs) to it’s city. Sometimes these moves are across town and sometimes they are all the way in another state. In either case, there is a lot to consider and communication through the process will be key to your success.

It's no secret that moving can be a stressful experience. If you're in the process of undertaking a relocation of your office, sometimes referred to as a group move or a corporate relocation, the stress of your move is multiplied by the number of employees you have and each individual's fears and concerns. For local office relocations, things like commute to the new office and lunch options in the area are things employees may start to worry about. If you are moving your headquarters to another state,  concerns about cost of living in the new area and the viability of housing options might start to impact the morale of your workforce.

As with most aspects in business, transparency and communication are vital as you ramp up to the big transition. The more your employees remain informed, the more on board they're likely to be with the entire process. Providing ample advance notice about the timelines for the transition, allows employees to develop moving plans and scout the new area. This is especially important for corporate relocations out of state. You want to provide time for house hunting trips. You will likely want to offer relocation benefits to your key staff that you hope to retain. Relocation benefits such as paying for home sale expenses, a moving company and house hunting trips are all key in getting your employees on board with a corporate relocation. After all you won’t have a company to move, if you cannot retain your talent.

Here are a few common relocation benefits that companies offer to retain strategic employees:

1. Moving of Household Goods

Last-Minute Information Can Be Devastating to Your Team

Moving of an employee’s household goods is the number one benefit that is offered in a corporate relocation. This typically includes arranging payment with the moving company on behalf of the employee. Doing so allows the company to avoid the payroll tax they would incur if they just gave the employee a lump sum.

A quality household goods mover with relocation experience will perform a full pack of the employees home, including preparing appliances for transport and crating fragile or valuable objects. The van line driver will pad wrap all the household goods and perform a full inventory of the goods. Many van lines will offer free coverage as part of their relocation package to corporations, which is another good reason to contract with a mover directly.

A van line will also ship automobiles. It’s customary to ship one car and allow the employee to drive the other car if the employee is relocating under 500 miles. If over 500 miles, then shipping two cars is typical and the employee’s family will fly to destination.

A typical corporate relocation usually takes anywhere from six months to two years. While your leadership team is busy scouting office spaces and signing leases, it's not fair to leave your staff in the dark.

No matter how near or far you're moving offices, the change will almost assuredly impact most of your employees in some way. Someone might need to change his or her household logistics if the family shares a car. Employees might need to search for new day care providers and doctors’ offices if they won't be able to make it to their current vendors' places on time.

Remember, it won't bode well if you spring a last-minute move on your employees if they later learn their executives had months or years to make their own personal arrangements. That's a surefire way to set morale spiraling in the wrong direction. Instead, make sure they feel like partners in the process (as much as they can be) so they feel appreciated and respected.

2. House Hunting Trips

One of the biggest tools in helping an employee buy into a prospective relocation is a generous house hunting trip for their family. Depending on distance, this usually includes flying the family to destination and even possibly contracting with a destination service provider or real estate agent who can provide guided tours of the area. These tours should focus on finding the right school district, and matching the community to the families interests.

These trips are usually a few days. The point is for the family to be able to envision themselves living in their new community and to create a short list of affordable homes that they can place an offer on. You can expect to pay about $150 – $300/day for this service.

If you don’t offer a house hunting trip to your employees, expect to pay for it in temporary living costs in hotels or extended stay furnished apartments. Typically these stays are for 30 – 90 days. Anything longer than two weeks, should probably take advantage of monthly pricing in a corporate furnished apartment. The accommodations are more spacious and it’s typically more cost effective.

3. Homesale Assistance

Most relocation policies still abide by the the 50 Mile Rule and even though the IRS has suspended it’s use, it remains the standard. So if you are moving an office more than 50 miles away from an employee’s old home, then you can expect that your employees will want to move their residence and they should probably be given relocation benefits. 

One important benefit that is often the deal breaker is the home sale. Many employers forget the transaction costs of selling a home are very high. In many cases the seller pays two commissions for a total of about 6% of the transaction cost of their home. On a $300,000 home, that’s $18,000! Any pay raise or cost of living adjustment that is offered to relocate to the new area, can be offset by the loss the employee takes just by selling their home. You can imagine that your employee who are homeowners, will want to be made whole on this cost.

If you are dealing with a Realtor who specializes in relocation, they can offer advice on how to structure a deal, whereby the corporation pays for the real estate transaction costs, and avoids the tax penalty of simply giving a lump sum to the employee. To find a Real Estate Brokerage who specializes in relocation you can reference the Worldwide ERC directory.

Your HR team will be imperative to the success of your initiatives. It's important to integrate HR pros into the operation as early as possible. These are the people you'll want to lean on to help ensure your messages are sent with the type of empathy your staff will appreciate.

Are you planning an upcoming corporate relocation and need some help?  Our team at University Moving and Storage has worked with Fortune 500 companies and can offer a lot of advice free of charge. Whether you are relocating a small office or a entire manufacturing plant, we can provide the advice and planning assistance that you will need to make it a successful corporate relocation.  

Learn more about our corporate relocation services and get your free quote today!