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Offering Relocation Incentives

Offering Relocation Incentives
By Mark Swartz

Getting a Canadian to uproot for a job is like pouring thick maple syrup: eventually it’ll move, but it needs heat to speed things up. 

Fewer of us are willing to relocate. The percentage of our country’s population moving between provinces steadily declined since 1977. Today one out of 10 Canadians is readily willing to move for employment-even with all expenses paid and a 10% raise! 


Mobility is important if you’re searching non-locally for the best talent. It's also crucial when you need to send staff to work in a different city or region. Without a relocation package in place as an incentive, you may be stuck.

 
Reluctance To Move
It’s no surprise that many people want to stay put. Transferring to a different location means leaving behind established relationships and routines. For employees with families, that upheaval is magnified. The federal government’s Department of Finance research confirms Canadians are morereluctant to move for a job than Americans. Suggested reasons for our comparatively low rate of mobility are greater distances (and therefore costs) to move between Canadian provinces than U.S. states, language or cultural issues, and inconsistent credential recognition between provinces and territories.
 
What Potential Relocators Want
The Canadian Employee Relocation Council (CERC) commissioned Ispsos Research to survey the workforce about views on moving.
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The top three inducements potential relocators cited were; a 20 per cent raise in pay (48%), a guarantee of return to the current role after two years (39%), and assistance for spouse/partner to obtain employment in the new location (31%). A paid trip to the new city before accepting the assignment was also viewed as highly desirable.
 
Standard Relocation Packages
Bringing in non-local recruits can improve talent acquisition. Shipping an employee off to another destination is a way of improving retention. Either way, there are some typical costs covered in today’s relocation packages:
 
·         Moving and packing costs (storage too, if needed)
·         Temporary lodging fees
·         Travel costs back home if the person relocates before their family moves
·         Assistance for a spouse/partner who has to find a new job (may include job-search reimbursements, referrals to a recruiter and arranging for interviews inside a company)
·         Assistance in selling their existing home, or with carrying costs if they keep their current house while away
 
While there are tax allowances for families that move for work, the limits are not reflective of today’s relocation costs. The last time any changes were made to the limits on the deductions an employee can claim for income tax purposes was 1984. The tax-free allowance for an interest free loan is just $25,000.
 
How Much Relocation Costs
Relocation and compensation packages should reflect higher (or lower) living costs in the new location. The average cost to relocate a homeowner within Canada is pegged at $53,500.
 
For an international assignment, average relocation costs for a permanent transfer jumps to $125,000.The average annual income of a transferee in 2013 was $108,500, up from $95,000 reported in 2011.
 
The Most Likely To Move
CERC reports that the most likely relocating employee is male, aged 28-40. Professional and technical employees account for the largest number of transferees, followed by managerial staff.
 
Younger people tend to move for job opportunities or the adventure of living somewhere different. People with families also move for job opportunities, but as well for advancement, a significant raise, better job security, or a chance to live near relatives.
 
Apply The Heat
As a small business, you need to stay competitive in the talent sphere. Having a relocation package builds on the advantages you can offer employees.
 
Incenting people to uproot is a cost of doing business. You can help make the relocation flow like hot syrup instead of chilled molasses.