Relocation Reimbursement/Payment

 

Multiple Methods Still Favored; Less Full Coverage for New Hires

Despite the occurrence of budget increases, the Great Recession appears to have fundamentally changed the way relocation dollars are allocated. Even as volumes increased and reimbursement methods for current employees remained similar to recent years, full reimbursement for new hires (38%) is now at historical lows, falling out of favor in comparison to lump sum payments (51%) and partial reimbursement (41%). Full reimbursement for transferees actually moved up (66% vs. 59%). It is significantly above levels seen in 2006-2007 and 2011 (55%+) and more on par with historical levels of nearly two-thirds of firms that have offered this benefit over the past decade. Use of other reimbursement methods are at similar levels, regardless of relocating employee type: around half use lump sum payments and roughly four out of ten use partial reimbursement. One-sixth occasionally do not reimburse transferees and one-fifth sometimes do not reimburse new hires.

  • Small firms are less likely than mid-size and large firms to offer transferees full reimbursement (55% vs. 67% and 75%) or partial reimbursement (31% vs. 45% and 44%). But both small and mid-size firms are more likely than large firms to use lump sum payments with transferees (53% vs. 39%).
  • Over the last seven years, the percentage of large firms using lump sums for transferees has fallen from around half to 39%. Meanwhile, full reimbursement has jumped back to 75%, near the highest levels seen over the past decade.
  • While near the lowest levels historically, nearly half of large firms still use full reimbursement for new hires, far more than the roughly one-third of small or mid-size firms. However, around half of firms, regardless of size, use lump sums for new hires. More mid-size firms than those of other sizes use partial reimbursement (48% vs. 36%+).

Companies estimate that roughly half of their relocations were either partially reimbursed by the company or were paid by lump sum only. Prior to the new millennium, full reimbursement was by far the most frequent method for covering relocation costs for both transferees and new hires. Firms appear to now be differentiating between employee types for full reimbursement: 38% use this option for new hires and 66% use it for transferees. This is a major shift as the frequency of using other reimbursement methods have grown more similar.

Question 31-1
Extent company reimburses relocation expenses of transferees/new hires
Chart Q3
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Question 31-2
Extent company reimburses relocation expenses of transferees/new hires
Chart Q31-2
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Question 32
What approximate percentage of your relocations were...
Chart Q32
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Question 41-1
Are carrier transportation expenses paid directly by the company or paid by the employee and then reimbursed?
Chart Q41
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Question 41-2
Are carrier transportation expenses paid directly by the company or paid by the employee and then reimbursed?
Chart Q41-2
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