Principal Employers

Relocating for a new job can be monumental, particularly for private service staff accustomed to working in distinctive settings such as private estates and luxury condominiums. To facilitate a seamless transition and entice top-tier talent, employers of private staff must offer comprehensive relocation packages. These packages assist new employees in their move and underscore the employer’s dedication to their well-being and professional success. Let’s delve deeper into the essential components of relocation packages tailored for private service staff:

Relocation Assistance: Relocation specialists are expert consultants employed by relocation management companies (RMCs) to support employees and their families throughout the entire relocation process.

• RMCs provide tailored estimates to guide employers in drafting relocation package offers.
• RMCs can manage all aspects of the relocation process, allowing staff to focus on their new job and not the worries associated with relocation.

Permanent Housing Assistance: Relocating employees often face the daunting task of finding suitable housing in an unfamiliar location. Recognizing this challenge, employers should extend substantial support in this area, as ensuring a smooth housing transition is paramount.

• Arranging temporary accommodation in a corporate apartment or extended-stay hotel for the employee’s initial stay.
• Providing access to a relocation specialist who can assist in finding suitable rental properties or real estate agents specializing in the local market.
• Offering reimbursement or direct payment for rental application fees, security deposits, first and last month’s rent, utilities, or down payments on a new home.

Temporary Housing and Per Diem: In instances where employees require temporary housing before securing permanent accommodations, offering temporary housing arrangements and per diem allowances for meals and incidental expenses is indispensable. This provision offers peace of mind and stability during the initial stages of relocation.

• Securing furnished corporate housing or short-term rental accommodations for the employee’s initial stay.
• Typically, it ranges from one to three months for renters and up to one year for home buyers.
• Providing a daily per diem allowance to cover meals, transportation, and other incidental expenses incurred during the transition period.
• Offering access to relocation specialists or concierge services that can assist with finding temporary housing options and navigating the local area.
• Costs can range from $100-500/day, depending on the city, venue, and seasonal rates.

Transportation Support: Transitioning to a new location involves logistical complexities, particularly regarding transportation. Relocation packages should encompass comprehensive transportation support to alleviate the burden of relocation.

• Reimbursing the cost of round-trip airfare or providing a stipend for driving mileage based on the distance traveled.
• Arrange for a rental car or car service to transport the employee from the airport to their temporary accommodation or final destination.
• Assisting with shipping personal belongings, including coordination of moving companies or freight services for oversized items.

Moving Expenses: Moving entails a myriad of expenses, ranging from hiring professional movers to covering packing and shipping services. By offering robust coverage of moving expenses, employers can alleviate financial strain while expediting and streamlining the relocation process for their staff.

• Fully cover the cost of professional movers, including packing, loading, transportation, and unloading at the new residence.
• Providing packing and moving supplies such as boxes, tape, and packing materials to facilitate the relocation process.
• Offering a lump-sum allowance or generous reimbursement for incidental moving expenses, such as storage unit fees or utility setup fees.
• Providing paid time off for new employees to unpack, settle in, establish utilities, change their driver’s license, find doctors and dentists, enroll children in school, and navigate a new city.

Cost-of-Living Adjustment: Relocating to an area with a higher cost of living can present financial challenges. To ensure equitable compensation, employers should provide a cost-of-living adjustment to align salaries with the new location’s economic landscape. This adjustment is essential for maintaining employees’ financial stability and overall well-being.

• Conducting a comprehensive analysis of the employee’s current salary and adjusting it to reflect the cost of living in the new location.
• Providing a percentage-based increase in salary to account for differences in housing, transportation, and other living expenses.
• Offering flexible compensation packages that include housing subsidies, transportation allowances, or bonuses tied to the cost-of-living index.
• Forbes hosts a Cost Of Living Calculator that makes these calculations a breeze.

Relocation Allowance: Relocation allowances serve as a lifeline for employees navigating the myriad of expenses associated with moving. From setting up utilities to purchasing furniture, these allowances provide essential financial support and flexibility during the transition period.

• Providing a lump-sum cash allowance to cover miscellaneous relocation expenses, such as travel incidentals, meals during the move, or temporary lodging before permanent housing is secured.
• Offering reimbursement for expenses related to selling or terminating a lease on the employee’s current residence, including early termination fees or real estate agent commissions.
• Assisting with visa or work permit application fees for international relocations, as well as immigration support services.
• Actual relocation costs can range from $2k to $100k, and package types include Lump Sum (poorest outcome), Tiered (by seniority), Managed Budget, and Fully Covered.

Tax Implications: Employees are taxed on any relocation benefits they receive.

• Whether relocation funds are paid to an employee or invoices are paid directly by the employer to a moving company, since 2017, all relocation fees are considered taxable income and are not deductible.
• Employers can offset additional income taxes by factoring the taxes into a relocation package offer, a method known as the “Gross-Up Method.”

Comprehensive relocation packages play a pivotal role in facilitating successful transitions for private service staff. By prioritizing housing assistance, transportation support, moving expenses coverage, cost-of-living adjustments, and providing allowances for temporary housing and per diem expenses, employers can demonstrate their commitment to supporting employees’ well-being and ensuring a smooth relocation experience.