How Big is the Relocation Industry?

by Administrator 12. April 2014 02:52

As the president of a niche provider of relocation services, specifically vehicle transportation, many of my friends, family members and even non-relocation based business associates are curious about the industry itself. For many outside of relocation and human resources, they are intrigued when I detail the services that my company provides and how they compliment an overall domestic transferee move or global assignment. Even more surprising to most is the size of the relocation industry and how much companies invest each year to relocate or transfer their employees.

So, how big is the relocation industry? According to the Worldwide ERC, their member organizations spend over $9 billion annually on relocation, and that’s just domestic (U.S.) activity. While the number seems staggering at first, you have to take into consideration that Fortune 500 companies alone represent nearly 600,000 domestic relocations annually. And, with the following average costs for U.S. domestic transfers (2012), you can easily validate the $9 billion annual number.

  • Current Employee (Homeowner) = $91,528
  • New Hire (Homeowner) = $71,786
  • Current Employee (Renter) = $24,714
  • New Hire (Renter) = $22,493

Those averages may be shocking to some, but those not familiar with the relocation industry have to understand that there are several expenses that comprise homeowner relocation including:

  • Loss on sale assistance
  • Household goods and vehicle shipping
  • Temporary living expenses
  • Home finding trips
  • Duplicate housing assistance
  • Miscellaneous expense allowance
  • Gross-up (federal tax liability)
  • Final move travel and lodging

For corporations, the silver lining, if there is one, has been that relocation expenses have not risen greatly in the past few years. For example, in 2009, the average cost to relocation a current employee (homeowner) was $90,017. In three years, the average cost increased just 1.7 percent.

Relocating employees, whether new hires or existing, isn’t cheap. It’s a costly and comprehensive process and critical to the overall talent management strategies for the vast majority of leading companies.

 

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About the author

As the President of ReloTrans, Frank Peditto is responsible for the vision and growth strategy of the company as well as overall leadership. A veteran of the transportation and logistics fields, Frank possesses more than eighteen years of leadership and thirty years of customer service experience.