Repayment / Payback Agreements
The Act or Process of Paying Back
The definition of payback, the act or fact of paying back from Dictionary.com supports our latest survey results. Eighty six percent of our respondents require a repayment/payback agreement for relocation costs expended on behalf of their transferees.
Based on these results, 56% of respondents state their repayment policy applies to terminations within the first year from an employee’s effective start date in the new job with the amount being owed either a percentage or 100% of the total relocation monies spent by the employer. As far as the success rate, 93% indicate they typically collect the funds although there are variances of monies collected based on the percentage of times which are outlined below:
- 52% of respondents collect money 75% of the time
- 31% of respondents collect 100% of the time
- 13% of respondents collect 50% of the time
- 4% of respondents collect 25% of the time
The majority, or 63%, stated that they rely on various departments to arrange repayment, i.e., Finance, Relocation and the third party service provider, while 41% defer to the Human Resources Manager and 4% turn to their Legal Department for assistance.
The survey results further point out that more companies, 54%, allow negotiation of the amount to be repaid and 46% are not inclined to negotiate a reduction in the amount owed back to the corporation. This question yielded interesting replies with 70% indicating negotiation is subject to review of the individual situation.
What means may an employee utilize to repay the final amount? Survey results show 52% of employers will not allow repayment to come from an employee’s wages, commission, incentive payments, paychecks or vacation pay; however, 48% indicate they would apply these types of funds to outstanding relocation benefit costs with 2 respondents commenting that state law governs acceptability of the type of reimbursement.
Survey Results
Does your company require a repayment/payback agreement for relocation costs expended on behalf of the transferee?
| Yes | 87% |
| No | 3% |
| Other | 10% |
What is the length of time for repayment?
| 1 year | 56% |
| 18 months | 0% |
| 2 years | 37% |
| Other | 7% |
Does you Company typically collect the funds due?
| Yes | 93% |
| No | 7% |
If Yes, please indicate frequency or is repayment dependent upon the situation?
| 100% | 31% |
| 75% | 52% |
| 50% | 13% |
| 25% | 4% |
Who within your Company collects the funds?
| Manager, Human Resources | 41% |
| Legal Department | 4% |
| Other | 63% |
Is your Company willing to negotiate the agreement?
| Yes | 54% |
| No | 46% |
Are final payments (i.e., wages, commissions, incentive payments, paychecks, vacation pay, etc.) applied toward the balance due?
| Yes | 48% |
| No | 52% |
Survey Participation
The data represents results from corporate relocation professionals in the following industries:
| Industrial Manufacturing | 21% |
| Technology | 21% |
| Communications | 10% |
| Healthcare/Pharmaceutical | 10% |
| Retail | 10% |
| Financial Services | 7% |
| Consumer Products | 3% |
| Energy/Utilities | 3% |
| Other | 14% |
Location of corporate headquarters for respondents:
| U.S. | 97% |
| EMEA | 3% |
| APAC | 0% |