New hires getting less help with moving costs

A 1998 survey by the Employee Relocation Council, or ERC, shows that companies pay more money to move employees who are transferring than they would for new hires moving to new locations.

Companies also provide more assistance for homeowners than they do for renters. The survey also revealed that companies would prefer to reimburse employees for costs rather than give them money upfront.

The ERC found the average cost for transferring a home-owning employee was $51,930; the average relocation cost for home-owning new hires was $37,835. For renters, the cost employees who were transferring was $14,210; the cost was $10,390 for new hires. Companies typically will foot the bill for moving expenses and brokers who can help employees find new homes, but not much else.

“I think you’re seeing more corporations trying to provide benefits to their people, but not the full package,´ said Nan Jesperson, president of Re/Max International Relocation Services. “More employee-generated sales is more the goal.”

Area relocation agents say more companies are giving incentives for people to sell their own homes. In the past, companies would buy their employees’ old homes and put them back on the market, but that luxury is typically reserved for higher management.

“They don’t just do it willingly for everybody,´ said Jim Danzl, a broker associate with Re/Max-Longmont. “They used to.”

Employees are likely to pay more out-of-pocket expenses than in the past because companies have cut back. Those living in interim housing while looking for new homes used to get 60 days, but that has been cut back to 30 days, he said. Some also are cutting back on expenses, such as car rentals, mileage and food.

Companies now are using other options, such as increased component costs, to lure their employees to new locations. Shipping household items was the most expensive component cost. Other component costs can include federal tax liability, closing costs, interim housing, home-finding trips, spouse employment assistance and travel, and lodging expenses.

Others companies will reimburse only their employees’ moving costs, a little more than 11 percent of their home’s selling price, or provide guarantee-against-loss programs. In other words, those companies will make sure the employee gets at least what they paid for their house. The rest is typically left to a broker.

Relocation costs, however, depend on a variety of circumstances, said Nancy Hostetler, relocation director of Century 21 Bernardi Group. Hostetler, who moved to the Boulder area from the East Coast, said she saved money by packing up her own house and paying a company only to move the items. She also noted that costs might be determined by the distance of the move and the amount and weight of the furniture.

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