Continued Use of Multiple Methods, Differentiation Between Transferees & New Hires
The continued use of multiple methods for reimbursement shows how companies tailor assistance to the needs of employees and businesses. For a seventh year, full reimbursement for new hires (36%) remains near the lowest levels historically (36%-39%, 2015-2016, 2020), out of favor in comparison to lump-sum payments (56%). Full reimbursement for transferees returns to levels similar to the highs of the past 17 years (69% vs. 64%-74%), dramatically above the lows (55%- 59%) of this same time frame.
Partial reimbursement for new hires or transferees continues to be highly used among roughly half of firms for the fifth year in a row. This number was closer to one-third during the previous five years; it remains at levels seen for new hires from 2009- 2011 (48% vs. 45%-51%) and hits a historical high for transferees (53%) for a fifth year in a row, even above 2017-2020 (48%). Lump-sum usage for transferees remains near 2019’s record high (54% vs. 56%) and similar to the previous high in 2017 (55%). Usage of lump-sum payments for new hires nearly matches the highest level recorded in 2018 & 2020 (56% vs. 58%). Of note is the addition of direct or managed cap programs—nearly half (47%) say they use them for transferees, and they are only slightly less popular for new hires (41%).
1 in 4 firms surveyed state some relocations (transferee or new hire) receive no reimbursement of expenses.
Before the turn of the century, full reimbursement was by far used most frequently to cover costs for both transferees and new hires. As seen in recent years, firms continue to differentiate between current employees and new hires for full reimbursement (69% for transferees vs. 36% for new hires overall). Current employees have a far greater probability of receiving full reimbursement than new hires across company size, but small firms are less likely to offer full reimbursement compared to midsize or large firms (63% vs. 72% & 71%).
Use of partial reimbursement remains similar for transferees and new hires overall, but it is more likely to be leveraged for transferees at large firms than small or midsize (60% vs. 46% & 51%). Around half of firms use partial reimbursement for new hires across company size at similar levels. Lump-sum payments continue to be popular and offered with equal frequency to new hires or transferees over the past three years. Direct or managed cap program usage for transferees or new hires is also similar across company size.
Companies overall estimate that around half of their relocations were either partially reimbursed or paid by lump sum only in 2020. Small firms are only slightly more likely to have paid entirely by lump sum compared to larger firms (32% vs. 25%+). Only 4 out of 10 relocations were fully reimbursed across firms of all sizes. Less than 1 out of 10 relocations at firms across size were employee-paid and received no reimbursement.