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HR can help create an auto relocation policy that makes sense for employees and the employer.
Did you hear the one about the car that arrived caked in mud? Or the car carrier that caught fire in the desert? Or the decking in the moving van that didn’t quite keep the household goods from crashing onto the roof of an employee’s car?
When employees move, it’s not just a matter of boxing up the microwave, transporting the sofa and relocating the bedroom set. Companies need to consider how to get the employee’s car to the new location. Unlike household goods, cars are typically the most expensive single item a person will move, and the hardest to get by without. You can sit on the floor of your new house if your furniture doesn’t show up on time, but you can’t drive the sofa to the grocery store.
“People feel very strongly about their cars,” says Rebecca Spencer, president of Vision Relocation Group, a global relocation service provider based in Fairfax, Va. “A car is at the top of the list in terms of things they care about.”
HR professionals need to take several things into consideration when setting up an auto relocation policy, such as at what distance will you relocate a car vs. require the employee to drive it, how many cars will you relocate for the employee, and how will you get the vehicle or vehicles to the new location.
Benchmarking Car Moving Policies
More than 80 percent of companies surveyed by Runzheimer International, a relocation researcher and provider in Rochester, Wis., will pay to ship at least one car for an employee who is relocating; 56 percent will ship up to two cars, and 1 percent will ship a third automobile.
After reviewing its auto relocation policy, W.W. Grainger Inc., a facilities maintenance provider in Lake Forest, Ill., decided to increase its shipping benefit last year, says relocation specialist Lauri James. “We just didn’t feel we were competitive,” says James, who helped relocate 157 employees in 2005. The company went from shipping only one vehicle for a move of more than 500 miles to shipping one vehicle for a move between 400 and 800 miles and two vehicles for any move over 800 miles. Regional vice presidents can authorize shipping a third vehicle but must pay for it out of their departmental budget.
Grainger’s enhancement of its shipping benefit counters the trend. In general, car shipping policies have remained fairly stable, relocation specialists say, and companies have tightened up on shipping old or inoperable cars. In some cases, employers have increased the number of miles a transferred employee must move before the company will ship one or more cars.
“Companies are encouraging more of their employees to drive their cars” to the new location, says Dennis Taylor, a senior consultant at Runzheimer. “The threshold is typically 500 miles. If you are under that, they’ll pay mileage rather than ship the car.”
Employees generally accept these parameters, Taylor believes, because of the personal and pricey nature of a car. In addition, people who drive their car to a new location can load it up with items that the moving company can’t take—plants and pets, for instance.
That was the case for Steve Rogers, a relocation manager at Citgo in Houston. Rogers could have shipped both his cars when he transferred from Delaware to Texas last year, but he drove one. “We had pets, so we drove,’’ Rogers explains.
Despite employees’ personal preferences, employers with car shipping policies should consider the amount of time employees will spend driving and the cost to the employer in mileage reimbursements, hotels and meals.
When it comes to moving inoperable and old cars, employers, in some cases, will ask the employee to provide registration information and a printout of the car’s value from a source such as the Kelley Blue Book. If the car is worth less than it will cost to move it, the employer won’t pay. Grainger, for instance, won’t pay to ship a car that is more than seven years old. “You can still drive that vehicle and be paid for mileage,” explains James.
Some companies will offer to buy the old vehicle, says Michelle George, president of Infinity Management, a Flemington, N.J., relocation auditing and consulting firm. “Although,” she adds, “you see that more with international than domestic moves.” Another option: Setting a limit on the miles a car can have on its odometer in order to be moved.
Even if a company is generous about allowing a clunker to be transported, the company hired to transport it might not be able to. “It must be running,” says Mike Filia, president of AutoRelocation Plus, an Irvine, Calif., car carrier service that moves 5,000 cars a year. “The only option for transporting a non-running car is to hire a flatbed truck to move it.” The cost of using a flatbed truck starts at $300.
What’s the Best Way To Move?
There are two ways to professionally move a car—through the household moving van company, which may or may not contract with a car carrier, or by contracting with a car carrier directly. It can be more economical to contract directly with a car carrier to move a car, particularly if a company is moving several people from one location to another. Filia can move a car 1,200 miles for a little more than $1,000, allowing companies to save on the markup if they work directly with him. And he takes cars household movers can’t transport.
For moves involving only one employee, companies are sometimes loath to involve an additional contractor. “They just don’t want another person involved,” Taylor says. In that case, the moving company will typically make the decision on how to move the car. One caveat in dealing directly with a car carrier is confirming the cost if a person is being transferred to a rural area, notes George. Sometimes there is an added delivery fee if the car is delivered to the owner’s door—the cost is about $100 in an urban area and can go up to $300 in a rural area—if the owner doesn’t want to pick the car up at a depot.
Unless the employer has a separate policy with a car carrier, the decision on whether to take the car by van or carrier depends on the wishes of the employee, the type of car and the van line’s logistics. In the summer, putting cars on vans may not be possible because moving companies often combine several households and don’t have room. And there are some types of large vehicles, such as Hummers, that won’t fit on a van and, in some cases, won’t fit on a car carrier. “You need a flatbed truck for those,” says Gene Elkins, vice president of operations support at UniGroup Inc., the Fenton, Mo.-based parent company of United Van Lines and Mayflower Transit.
Some companies believe transporting by car carrier is just the right thing to do. “My belief is putting cars on [moving] trucks isn’t an appropriate thing to do,” says Larry Gersch, manager of residential real estate at Kraft Foods in Northfield, Ill. His group helps move 200 cars a year. Gersch says he has heard of many instances of claims arising when cars moved on vans are damaged.
Even executives at household van lines believe their trucks aren’t the ideal place for a car. “Cars are not made to be moved on household vans,” says Elkins. “We have to build decks for them.”
Decks are designed to keep boxes uniformly packed onto the truck and off the cars. Cars also can be damaged by being driven onto a truck over thin boards. Elkins says the preferable way of loading a car onto a van is to load it at a dock because it can be driven directly onto the truck. UniGroup moved about 13,000 cars by van last year compared with 17,000 by car carrier. One reason the van option remains popular: The car is kept out of the elements and arrives with the household goods.
Indeed, the main drawback of using a car carrier is timing. When a car is moved by carrier, the car won’t necessarily arrive the same day as the employee or his household goods.
Most carriers provide a window of about a week when the car will be delivered and pay for a rental if delivery time exceeds the window. But that window can eat into the allowance for a car rental. Tom Carr, branch manager at Grainger, considered driving one of his cars from Indiana to Alaska in the dead of winter to make sure he had the car when he needed it. “Grainger has an excellent relocation policy but only so much rental car coverage.” Grainger subcontracts directly with car carrier Auto Relocation Plus, so moving the car by household van wasn’t an option.
Auto Relocation Plus needed more than two weeks to move Carr’s vehicle, and a week’s delay was possible if the carrier missed the barge from Seattle to Anchorage. As it turned out, he didn’t need to worry. The car arrived on time, “and it was clean.”
That wasn’t the case for one of Spencer’s clients, who used another service. The family vehicle showed up caked in mud. And although they were offered a free detailing, “the last thing you need to be doing when you move to a new place is taking time to get the car detailed,” Spencer says. “Time is in such short supply.”
Pros and Cons
Experts say it’s important to research all options and set parameters around when it’s appropriate to ship an employee’s car and how to ship it.
Since the muddy car incident, Spencer has been thinking about how to negotiate contracts for her clients in the future. Does a car on a carrier need to be wrapped? Should it be cleaned before delivery?
“You need to get it done right the first time,” she say.
Catherine Traugot is a freelance writer based in Cary, N.C.
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