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Everything Candidates Need to Know About Relocation Packages

11/17/2016

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According to the “2012 Atlas Van Lines' 45th Annual Corporate Relocation” survey, 87% of firms have a formal relocation policy. Two weeks ago, I provided tips for employers offering relocation packages (read post here). It is time to flip this view and provide advice from a candidate and/or current employee perspective. Here are a few things you need to know before asking or considering an offer for a relocation package.

Know what to ask for
You need to know what types of support and assistance are required. A single person will not have the same needs as a homeowner with a spouse and two kids. Take the time to assess your personal situation, being realistic about the services you think should be covered. Then, conduct research to see how much everything will cost as you will use this information in the negotiation phase. Some items typically offered in relocation packages are noted below.

According to the Atlas survey, more than 50% of companies will reimburse or pay directly to:
  • Pack all items (82%) and unpack all items (49%)
  • Move exercise equipment (52%)
  • Provide transportation to the new location: Most relocation policies include assistance for transporting the employee and his/her family to the new location. Mileage reimbursement is most common. If traveling by plane or train, standard packages offer auto moving support.
  • Provide temporary housing and storage: If your new home isn’t ready or you’re moving overseas for a short assignment, companies will provide temporary housing (typically 30 days if permanently moving) that is furnished and will pay for a storage unit to place some of your larger items in the meantime.
  • Provide location scouting trip: Standard relocation packages commonly include at least one house hunting trip. Companies will pay for your visit to your new location (paying for airfare, hotel, rental car and even meals) so that you can find a home, schools or any other items needed for your family.
  • Offer home sale or lease-breaking penalty assistance: Employers will help with closing costs, home marketing assistance or commission on the sale of your home. If you lease, the company will even pay the penalty fee for breaking the lease. Some employers will go as far as to help with the buying of the new home by paying closing costs or other fees associated with the purchase.

Additional services to consider:
  • Family relocation assistance: Childcare or elder care assistance is sometimes provided and offered in special situations. Sometimes even spousal job support is given either through financial means or through job placement.
  • Cultural training classes (on proper etiquette) for those moving internationally
  • Miscellaneous expenses: Out-of-pocket expenses like vehicle registration, utility hook-ups and other incidentals are sometimes covered.

Be prepared to negotiate
As mentioned in my previous post, it is normal to go back and forth when running relocation package numbers. However, you must be prepared to make your case. Start by explaining why spending money on your move is a win-win for both parties. For example, if you are expected to move in a short period of time, explain how the assistance would help you focus on the move while ensuring you are able to reach your start-date. Additionally, support your request with research. Know what is standard in your location, industry and even your type of role/title so you can validate what you are asking for. Remember to mention all risks and costs associated with your potential move.
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Negotiating relocation packages is like an art. Having that said, sometimes negotiation does not work or both parties cannot seem to come to an agreement. Make sure to have back up ideas of ways the potential employer may provide support. The employer cannot offer child care? Ask for a sign-on offer to be able to afford child care. However, remember that you might walk away with not everything you asked for. It is a matter of give and take.

Document everything

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You need to document everything for two reasons:
  • Avoid contract issues: Relocation contracts will eliminate any potential miscommunication while keeping communication between both parties transparent. Make sure to include everything discussed down to payment type (typically reimbursement, lump sum or direct billing) and payback timing (so you can properly plan for any delayed payments). Also, read the fine print as some contracts include non-compete clauses, payback clauses in case you leave the company, reimbursement metrics and other important details to be aware of. 
  • Tax purposes: Payments made directly by your new employer do not need to be reported on W-2s. However, lump sum payments are taxable as earnings. Make sure to keep all receipts and figure out which expenses are tax-deductible.
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Moving to a new location can be stressful not only for you but your loved ones. At the end of the day, research is your best friend during this process. Thorough research and data to back up your ask is needed if you are going to obtain the assistance your desire and the time needed to move/find the right place for you and your loved ones. 
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    Andrew Gagen

    Founder & Lead Recruiter

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