Relocate and relocation: Definition and examples

To relocate means to move from one place to another. The term can apply to individuals and to businesses. The relocation can be local or distant; domestic or international. Business and employee relocation are major issues for companies.

relocation image of door with house keys

Employee relocation packages often include support with house moving.
Image Photo Mix on Pixabay.

Merriam-Webster define to relocate as “to locate again;” to “establish or lay out in a new place;” or “to move to a new location.”

Individuals relocate for many reasons, perhaps they need more space or wish to downsize, or perhaps they have a new job.

Circumstances and reasons for business relocation also vary. A single-site business may add another local or distant site or may move their single site to another location. Multi-site firms may also add more sites. Companies may also wish to relocate employees, either individually or in groups.

The following sentences are examples of how we use the term:

The company is relocating its headquarters from Boston to New York.
Emma accepted the job because the employer offered her a generous relocation package.
We may have to relocate our factory to an area with more skilled workers.
A good relocation policy helps firms to attract the talent that they need.


Why do businesses relocate?

Businesses may relocate – or expand – into new premises, for a variety of reasons. Atlas World Group have been monitoring relocation trends for more than 50 years. Their 53rd Corporate Relocation Survey for 2020 found that the need for the right people with the right skills remains the number one driver of relocation.

“For the past 9 years,” states the report, “the key external factor affecting relocation volumes was the lack of qualified local talent.”

The survey took in responses from more than 400 relocation decision makers. The respondents worked in small and medium enterprises (SMEs) – as well as large ones – in a range of sectors. The sectors included: services; manufacturing and processing; financial; retail and warehousing; and military and government. The geographical range included the United States, Mexico, United Kingdom, and Europe.


Transport can also be a key factor

A 2018 report for the U.K. government found that access to transport appeared to be the most important driver of business relocation decisions.

Most firms said that their main concern was for staff to be able to travel to and from work. Many also mentioned transport access for customers. In addition, some manufacturing firms said that transport for products was a key factor.

The U.K. researchers also highlighted a difference between how larger and smaller firms decide to relocate. They found that larger firms were more likely to make relocation decisions in a systematic, impartial way. In contrast, personal preferences – such as where their owners live – appear to have a stronger influence on relocation decisions in smaller firms.

Major studies have yet to examine the short- and long-term effects of the COVID-19 pandemic on business relocation. A big factor is likely to be numbers of office staff working from home. Businesses may well revise their office space and layout needs and ideas.


Employee relocation

Sometimes firms wish to relocate employees. Two common reasons for this are as part of career development or to bring expertise to another company site. To support these individuals, employers offer assistance in the form of relocation packages.

The Society for Human Resource Management (SHRM), suggest that firms establish clear policies on relocation assistance.

The policies should be fair and consistent for all employees in order to prevent managers showing favoritism. The rules should spell out what is and is not included in a relocation package so that the individuals concerned can make informed decisions.

SHRM note that, when formulating relocation policies, companies tend to differentiate between new hires, experienced employees, and executives. They also suggest that firms address the following points when deciding the form and extent of their support:

  • Monetary incentives: e.g. pay, cost-of-living adjustments, bonuses
  • Visits: e.g. to look over new site, local community, schools, housing
  • Support with buying and selling homes: including legal and financial assistance
  • Reimbursing costs of house-hunting, temporary accommodation, house moving
  • Support for rest of family: e.g. with spouse’s job hunting, child and elder care concerns
  • Payback: e.g. check whether state law permits payback clauses, if to be included

Not all employees wish to move, despite the offer of relocation assistance. According to Atlas World Group, the main reasons for declining relocation are family issues or ties and spouse or partner employment.


Relocation is a big industry

Many employers hire specialists in employee relocation. These firms can help with policy development as well as the operational aspects of relocation.

Employee relocation is a multi-billion dollar industry. The largest market is in North America. The regions with the highest level of market maturity include U.S., U.K., Australia, and Western Europe. Use of technology and the rise in relocation of female employees are among the most significant trends.