Employee Relocation: Meaning & How It Works

employee relocation
photo by Andrea Piacquadio

Employees that suit your company’s culture and have strong portfolios aren’t necessarily local, and leadership positions aren’t always accessible at every branch. As a result, many businesses contemplate moving personnel who match the standards for critical employment. Employee relocation assists businesses in ensuring that skilled employees are placed where they belong, whether that means finding the proper position for a new hire or ensuring a deserving employee receives a promotion.

We have effectively defined everything you need to know about employee relocation in case you are planning to implement one.

What is Employee Relocation?

Employee relocation occurs when a company relocates employees for business reasons to a different location. This relocation may take employees to a new city, state, or nation.

When an employee relocation occurs, they remain connected to your business. They may remain their current position or start a new one with your company, and their income or perks will almost certainly grow. Financial incentives are frequently used to entice high-performing employees to accept a career with your organisation in a new location.

Why Would a Company Need to Relocate Employees?

Companies move personnel for a variety of reasons, but the following are the most common:

  • To bring employees closer to the company’s headquarters so that they may collaborate more efficiently in the same shared workspace.
  • One or more employees are relocated to a new city, state, or nation where the company is establishing a new satellite office.
  • To transfer the employee to a place where the company requires additional employees with the employee’s abilities and experience.
  • To relocate the employee to a location where the firm believes the employee will be more happy and productive.

How Does Employee Relocation Work?

Employee relocations can be complicated and costly, so businesses must carefully weigh the costs and benefits.

Once the choice has been taken, the company must design and communicate a relocation policy to the employee. The policy should specify the employer’s willingness to cover relocating expenditures, housing costs, travel expenses, and family support. It should also include the entire process of relocating the employee, including any deadlines or dates.

Once the policy is in place, the employer may begin planning and executing the move with the assistance of a specialised relocation company. From choosing a new place to live to packing and transferring the employee’s things, the relocation company can assist. They can also offer assistance to the employee’s family.

Types of Employee Relocation

There are numerous different ways to relocate an employee. Your organisation may elect to relocate temporary employees, potential employees, new hires, current employees, and employees who have dependents such as children or elderly family members. Relocation benefit packages may differ for each of the employees listed below.

#1. Interns and independent contractors

Relocating workers frequently entails employee relocation, but some organisations may pay interns or independent contractors to relocate. This could happen if an intern is following an important employee who is transferring to another branch or if a corporation is closing a branch entirely.

If a company requires personnel immediately owing to a lack of qualified applications, independent contractors might earn relocation reimbursement and other benefits. Nurses and doctors who identify as independent contractors frequently travel from state to state as needed. Many medical personnel flew throughout the United States in mid-2020 to help treat COVID-19 patients in understaffed locations.

#2. New employees

Because talented individuals are dispersed throughout the world, potential employees may live a long distance away. As a result, many businesses consider transferring personnel who are a good fit for their organisation, regardless of their physical location. This is frequent in difficult-to-staff businesses where locating local talent may be difficult due to a lack of educational possibilities in the area.

#3. Existing employees

Current employees want relocation for a variety of reasons. Some employees wish to relocate to be closer to a significant other or a family member. These employees frequently desire to remain their current position and, as a result, do not require new benefits or a pay rise as incentives.

In order to pursue or fill a new position with the organisation, some employees request relocation. For example, you may have limited management prospects in one place while another requires supervisors and executives severely. Transferring these personnel helps them achieve their professional goals while also assisting your company’s growth.

#4. Employees with families

Understandably, many employees are apprehensive to transfer without their spouse and children. Keep this in mind when allowing a present employee to relocate so that you can budget adequately. If you are paying for a family’s relocation, you may need to contribute a larger budget for housing, travel, or meals. You should also consider paying for pet-related fees such as a kennel or pet-friendly hotel.

Benefits of Employee Relocation for the Employee

There are benefits to relocating, whether the employee decides to do so or is required to do so by their employer. Here are some of the primary advantages:

#1. Possibilities for professional advancement

New prospects for job advancement may be available to an employee who relocates. Employees might enhance their abilities and expertise by moving to a new city or nation. It can also assist them in developing new networks and relationships.

#2. Higher quality of life

A new and interesting working and living environment can be provided to employees by moving to a new site. It can also assist them in escaping challenging or stressful situations at their current workplace.

Benefits of Employee Relocation for Employers

Employee relocation has numerous advantages for both the organisation and the employee. Here are a few of the most important advantages of employee relocation for employers:

#1. Attract and retain talent

Employee relocation can assist organisations in attracting and retaining talent. Employers must give relocation benefits that are competitive with other organisations in today’s competitive job market. Employees are also more inclined to accept a job offer if they know the employer would cover the costs of relocation.

#2. Increase business development

Employee relocation might also boost a company’s growth. Employers may ensure that the appropriate talent is in the right place at the right time by relocating staff. This might assist the organisation in expanding into new areas and growing its business.

What Should Businesses Consider When Developing a Relocation Policy?

Your relocation policy should be tailored to the demands of your current and prospective employees. Consider all of the expenses that employees may incur during a transfer, and then compensate them appropriately. This can be accomplished through a lump-sum benefits package or a fixed-rate reimbursement scheme. Here are some expenses to consider regardless of how you divide the advantages.

#1. Travel costs

Travel can be costly for employees who are relocating, especially if they are sent overseas or to another state.

Other expenses that employees may incur when driving, such as petrol, toll booths, or parking metres, should also be considered. Request that employees preserve all receipts for these expenses so that you can provide appropriate compensation.

Expenses for international travel should include the cost of flights, boats, trains, and other modes of transportation. Passport and customs costs may also apply. Do some cost-benefit analysis.

#2. Property sales

Employees may be discouraged from migrating if they own a home and are concerned that they won’t be able to sell it. When employees relocate, consider subsidising the costs of buying or selling a house. This gives workers peace of mind if they are concerned about their ability to sell their present home or find a new one soon. You might choose to collaborate with a local real estate agent to make the process easier for your employees.

#3. Moving expenses

Hiring a moving crew can be costly, but there are other fees to consider. Your staff may require payment for packing items such as tape, boxes, or padding in addition to the truck or team of movers. If the move is unexpected or necessitates fast relocation, a worker may also require packing or shipping services in order to depart the area as soon as possible.

#5. Short-term housing

It’s frightening to arrive in a new city with no place to call home. Instead of expecting staff to stay in hotels during relocation, consider paying for temporary housing such as a condo or apartment rental. You should make these arrangements ahead of time rather than expecting employees to find suitable housing on their own.

#6. Short-term housing

Relocating employees are unlikely to have access to a fully stocked refrigerator during a move. Provide a daily, weekly, or monthly meal allowance to your employees during relocation. You can refund those who buy food at petrol stations, restaurants, airport lounges or grocery stores.

#7. Paid time off work

Even if your firm offers a significant relocation package, preparing for a move can rapidly become tiresome and time-consuming for an employee. Consider providing some more paid time off for a week or two to allow employees to complete all tasks. This makes it easier for employees to pack their stuff and relocate, but it also allows time for vital chores like getting a new driver’s licence or registering to vote.

Costs of Relocating Employees

The costs of transferring an employee can be large and vary greatly based on the distance travelled, the quality of accommodation required, and the amount of assistance required along the route. The following are some of the most common costs that an employer may face:

#1. Moving costs

The expense of transporting an employee’s things from one place to another is the most evident cost of relocating an employee. This could entail hiring a professional moving company, renting a truck, or paying for storage. The fee will also be determined by the employee’s belongings and the distance travelled.

#2. Housing expenses

If the employee is relocating to a different city or nation, they will need to acquire housing. The employer may be required to assist with this by providing a housing allowance or funding temporary accommodation. The cost of housing will vary depending on the location, kind of housing required, and duration of stay for the employee.

#3. Travel costs

The employee may be required to go to the new place in order to obtain accommodation or begin work. The employer may be required to pay for travel expenses such as flight, car rental, and hotel charges.

#4. Family assistance

If the employee is migrating with a family, the company may also need to provide assistance to the family members. This includes childcare, education, and counselling. The cost will be determined by the number and age of family members, as well as the sort of assistance required.

The Most Difficulties of Employee Relocation

Employee relocations can be difficult and stressful, and they don’t always go as planned. The following are some of the most prevalent issues that employers confront when moving employees:

#1. Communication

Employers must be clear about the reasons for the relocation as well as the employee’s expectations. They must also convey the relocation policy to the employee and ensure that the employee comprehends it.

Employee relocations might also present legal issues. Employers must be aware of any rules or regulations that apply to the relocation and ensure that it conforms with such laws. They must also be aware of any contracts or agreements that may be jeopardised by the relocation.

#3. Economic considerations

Economic issues can also make employee relocation difficult. The cost of relocating an employee can be large, and it varies greatly based on the distance travelled, the type of housing required, and the quantity of support required.

Can an Employer Transfer an Employee to Another Location?

There may be a clause in the employee’s employment contract that authorises the company to relocate the employee. This is referred to as a mobility clause.

What Happens to Employees when a Company Relocates?

Your rights are safeguarded by TUPE legislation – Transfer of Undertakings (Protection of Employment) – which ensure that all of your current rights, including contractual rights and redundancy protection, remain unaffected. It makes no difference that the relocation is being introduced by a new owner.

What is a Relocation Allowance for Employees?

Many organisations provide a relocation package to assist employees in covering their expenses and easing the transition into their new home. A relocation package may include services such as packing and moving, temporary housing, help with selling the home, and transportation to the new place.

What is the Difference Between Transfer and Relocation?

Transfer is the process of transporting or removing something from one place, person, or item to another. Relocation is the act of relocating from one place to another.

What is a Reasonable Distance for Relocation?

There is no legal definition of what makes a reasonable daily travel distance. This means that there is no legal maximum distance; instead, examine the scope of any mobility clause and employ common sense, taking into account local traffic or travel conditions depending on the extra commute.


Relocating an employee is a significant undertaking, but the advantages are well worth it. When you design a welcoming, accommodating relocation package, your employees get the help they need at every step, and you gain top talent.


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