Short-Term Domestic Relocations Are on the Rise

Temporary assignments require a clearly distinct policy

By Roy Maurer Aug 2, 2016
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More companies are saving money by sending employees on short-term travel assignments instead of permanent relocations. According to 2015 research from global relocation firm Cartus, 52 percent of employers expect to use more short-term assignments, raising administrative issues for HR. These include tracking employees, complying with tax regulations, managing costs and applying policies consistently.  

Cindy Madden and Jennifer White, director and manager of consulting solutions for Cartus, respectively, discussed with SHRM Online the benefits and challenges in the rising trend of temporary relocation assignments.  

SHRM Online: Why are domestic short-term and temporary assignments becoming more popular, and when did this trend begin?

Madden: Over the last five years or so, domestic short-term and temporary assignments havegained in popularity as organizations' continued cost focus has required some creativity. When budgets for actual permanent relocation were cut to the quick, then both mobility and talent management had to develop new options. Born of that creativity, these assignments allow projects, training and other company initiatives to occur without the cost of selling houses in challenging real estate markets and asking spouses and partners to give up lucrative positions in their careers.

SHRM Online: What are some of the benefits that domestic short-term assignments offer to the employee and the employer?

Madden: The family can remain at home and continue with work and school while the assignee completes his or her project. For the employer, the reduced cost of this type of an assignment can stretch the budget to be better able to support more strategic, leadership relocations.

White: I agree. Not needing … to sell a home, move a family to another location, put children in new schools—these are significant advantages to an employee who would otherwise encounter a great deal of disruption. Additionally, an assignment may be considered a positive career move for the employee. For the company, domestic short-term assignments meet specific business needs for a particular skill, talent or knowledge transfer for a defined length of time without having to bear the cost of a relocation.

SHRM Online: What are some of the challenges with these assignments?

Madden: The primary challenge is that, due to its abbreviated timeframe, the assignment might not allow the assignee to truly achieve the purpose of the assignment in the limited time allotted. In addition, some employees struggle when separated from their families for even a few months. For a single parent, the challenge of being separated from children might be reason enough to have to turn down the opportunity.

White: Tax treatment can be complex, as there are many IRS regulations regarding intent of duration, actual duration, "tax home," and tax implications from state and local authorities. It is important that a company consult with its tax provider.

SHRM Online: Should employers have a separate, formal policy specific to managing these assignments?

White: Absolutely. The benefits provided for a temporary assignment will differ significantly from a standard domestic policy. Also, benefits within a temporary assignment can differ depending upon duration. A standard U.S. domestic policy provides for a permanent relocation—benefits such as home sale, home purchase and full household goods move would be standard. This would not be the case for a temporary assignment. Home sale and purchase wouldn't be provided. Depending on the duration, only a small shipment of personal effects would be typical, as the transferee would most likely be in furnished accommodations, usually preferred for assignments of less than one year. If the assignment exceeds one year and accommodations are unfurnished, a limited amount of furnishings might be shipped or rental furniture could be considered. Temporary housing provisions would decrease with pre-arranged housing. Lease cancellation assistance may be provided at origin if the assignment exceeds one year. It's possible that the employee's family will remain at home. In this case, "home leave" trips would be provided. Tax treatment may also differ, depending on duration.

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