Relocation Reimbursement

Continued Use of Multiple Methods, Differentiation of Transferee & New Hire Usage

The continued use of multiple reimbursement methods shows how companies tailor assistance to answer the needs of employees and businesses. For the fourth year, full reimbursement for new hires (42%) remains near the lowest level historically (36%-38%, 2015-2016), out of favor in comparison to lump-sum payments (58%). Full reimbursement for transferees remains notably higher than in 2016 (62% vs. 55%) and similar to highs of the past twelve years (63%-66%). A notable change is the continued resurgence of partial reimbursement for new hires or transferees among nearly half of firms for the second year in a row. This number was closer to a third during the previous five years; it now returns to levels seen for new hires from 2009-2011 (45% vs. 46%-51%) and matches last year’s peak for transferees (48%), similar to the previous high in 2011 (47%). Lump-sum usage for transferees also remains elevated (49%), notably above 2016 (42%) and essentially matching the highs of 2011-2015 (47%-49%), even if it slips a bit lower compared to last year’s record (55%). Usage of lump-sum payments moves upward again for new hires (58% vs. 53% last year) to the highest level ever recorded.

For transferees, close to half of firms across size use partial reimbursement as an option. Large firms are more likely to use lump-sum payments as an option compared to mid-size or small firms (58% vs. 45% & 44%), and mid-size and large firms are more likely to offer full reimbursement (70% & 69% vs. 44%). For new hires, nearly six out of ten firms across size use lump-sum payments as an option. More mid-size and large firms use partial reimbursement compared to small firms (50% & 45% vs. 39%), and mid-size and large firms are much more likely than small firms to offer full reimbursement (44% and 52% vs. 31%).
The percentages of large firms using full reimbursement increase compared to last year, shifting up from historical lows of the past 14 years to the lower mid-ranges for both transferees and new hires. Mid-size firms also report an increase in full reimbursement for the second year (70% & 67% in 2017 vs. 55% 2016), trending higher within the historically normative range and increasing slightly for new hires to within 2006-2011 ranges (43%-48%) although remaining far below historical highs. Among small firms, full reimbursement for transferees sees a sharp decline from the highest level on record (65% in 2017) to a historical low (44%). Full reimbursement for new hires also declines (31% vs. 37% in 2017) to just above the historical low (25% in 2016).
For ten of the past 11 years, roughly half of firms indicated they use lump sums for transferees or new hires. For 2018, use of lump sums for transferees (49%) is near the highest level historically (55%), while at the highest level ever recorded for new hires (58%). Slight dips in usage appear for transferees compared to last year across company size, the largest being among small firms (44% vs. 54%). While usage holds steady or increases across size for new hires, the largest increase occurs at mid-size firms (55% vs. 43%). For new hires, usage is at the highest levels historically among large (60%) and small (59%) firms, and is trending near historical highs for mid-size firms (55% vs. 56%-58% in 2010-2012). For transferees, usage trends near the highest levels of the past decade for large firms. Looking at the past ten years, the use of lump sums for transferees falls in the mid-range for mid-size firms and within lower ranges for small firms.

Companies estimate that roughly half of their relocations were either partially reimbursed or paid by lump sum only. Before the turn of the century, full reimbursement was by far the method used most frequently to cover costs for both transferees and new hires. As in recent years, firms continue to differentiate between current employees and new hires for full reimbursement (62% for transferees vs. 42% for new hires). While use of partial reimbursement remains similar for transferees and new hires across firm size, current employees have a greater probability of receiving full reimbursement than new hires overall and at mid-size or large firms specifically. Additionally, lump-sum payments have grown in popularity and are now offered more often for new hires than for transferees (58% vs. 49%). Last year, mid-size and large firms estimated roughly half of relocations were fully reimbursed, while small firms estimated only a third were.

Question 34-1

Extent company reimburses relocation expenses of transferees/new hires