How to negotiate a relocation package
“I once negotiated a relo package that included the cost of moving my client’s horses across country and paying for a stable at the new location,” reports Lee E. Miller, Negotiationplus.com, career coach and author of Get More Money on Your Next Job. If you’re about to negotiate your own relocation (or “relo”) package, odds are, you’re not worrying about about what to do with your horses, but you’ve got plenty of other issues on your mind.
So to help you navigate the conversation, here are some industry trends and helpful tips to consider as you ask for the resources you need to get settled, happy, and productive in a new city.
The most important thing to remember is that in the end, you and your employer share the same goal: to relocate you in a way that will make you (and your family) happy so that you will be free to focus completely on the job you’ve been asked to do. Everything about negotiating a relo deal, whether you’re “fresh-out” and moving on your own to a first job, or someone who is taking your spouse and two kids with you, is about making the move as stress-free as possible.
What’s the state of relocation in 2013?##
We asked Jill Heineck, a veteran of the relocation industry, what’s happened lately to relocation packages. “Simply put, they have shrunk,” she told us. “Real estate buy-outs and reimbursement of loss on home sale are hard to find right now unless you are a C-level candidate.”
A full relo, from origin to destination, averages just under $97,166 for a current employee and $72,672 for a new hire homeowner. Considering the price tag, it’s easy to understand why carefully managed negotiations are key; companies must be made to understand that the pieces of the package you are asking for are both reasonable and necessary.
More and more companies are asking their employees to make a move, and more and more employees want to make that move. “Millennials these days are not only open to relocating, they’re asking for it,” says Heineck.
A survey put together by the Society for Human Resources Management is a useful measure of the relo mood in the country: – 29% of companies surveyed give a lump sum for relocation – 19% reimburse shipping fees – 12% offer help with spouse relocation – 6% reimburse for loss from home sale – 3% offer mortgage assistance. Looking back, the survey authors report that “the prevalence of a number of housing and relocation benefits declined over the past five years.”
After attending a relo industry conference in February, Heineck noted some other up-to-the- minute trends: “From what I’m hearing, corporate policies are being modified to reflect changing family dynamics. There’s an uptick in dual-career couples, more split families where the employee starts out ‘commuting’ from the new location until the house is sold or the kids finish school… Corporations don’t want to publicize the ‘extras’ they may be allowing but they are willing to be flexible.”
The basics of negotiation
What you are going to ask for in your relocation package depends on your situation. Heineck again: “A recent college graduate in California taking a job in Boston is going to require a lot less than a family of four making the exact same move. The college student may require a household goods move (maybe the contents of a one bedroom apartment), cross-country car transport and temporary housing in the new location for 30 to 90 days. The family of four needs a lot more. They’re going to sell their home, go across country with two school-age kids, buy a new home, look for a job for the spouse and they may have an elderly parent moving with them.”
What are the most basic items open for negotiation? Lynda Zugec, managing director ofTheworkforceconsultants.com, lists:
- family and spousal assistance
- travel expenses
- temporary living arrangements
- pre-move visit (to check out housing and schools)
- moving costs
- housing costs (in the new and old location) which may include the cost of breaking a lease
- for international moves, immigration assistance
According to Heineck, some of the “extras” may be:
- elder care
- school choice assistance
- cultural training
- moving expenses for special items like pianos, artwork… and that horse, of course.
As you approach negotiations, remember the “it-never-hurts-to-ask” principle. As Heineck says, “Go for it all, but know what your absolute bottom line is. And remember that your move is not just about a new job, it’s about ‘futuring’ and your personal career goals… Forging an open relationship with the hiring manager is key. Let him/her know your familial situation up front. They’re not mind readers.”
Miller thinks that mutual interest is what will make your negotiations succeed. That, and being reasonable with your requests. “If they want you, relocation issues shouldn’t be a stumbling block. The company wants to spend right and make everyone happy at the same time.”
Know that just because a relocation package isn’t offered, or isn’t what you need,
doesn’t mean the hiring manager can’t change their position.
Do your research
Karen Van Bergen, CEO of global public relations firm Porter Novelli, relocated to New York from Amsterdam last year and says that “you need to do your homework to avoid any unpleasant surprises. I had no idea how difficult it would be to arrange schooling for my son when I first moved. And the high cost of health care. But, it’s all been worth it.”
“My experience has been that 90 percent of the game is to get as much information as possible regarding the decision maker, the decision limits, the alternatives the company has, local employment laws, and details at the destination,” says Martin Collins, managing director of Geneva-Eduction.com, a training/coaching/consulting company. “Find out who the decision maker is — HR or line manager? Department or business unit? What are the company’s relo policies? What drives the decisions? Budget? Policy? Company principles? People will be surprised how easy it is to get answers to most of these questions simply by asking around.”
Getting this information is key to knowing what the organization considers a reasonable offer in a relocation package. Knowing this helps you gauge the size of your ask, and frame your approach to the negotiation.
Research the cost of living (or “COL” to the pros) in your new location by checking theCost of Living Index, money.cnn.com, Sperling’s Best Places and/or Expatistan. Suz Garber, chief networking officer of International SOS, recommends: “At a minimum, check out the index prices for groceries, gasoline, utilities and rent. Failure to fully understand what you are getting into might actually cost you more than the raise you received to take this new job — assuming that you received one. Some cities and states also charge differing rates of income tax, which could work for or against you.”
Want to see how competitive the package you’re being offered is? Review the vendor/exhibitor list for the annual conference of the Worldwide ERC: The Workforce Mobility Association and contact any that may help you answer that question.
So that your negotiating can be as focused as possible, Miller wants you to find out just what the company’s relo policy is — what have they done for others in your same situation? “But don’t feel limited by ‘can you?’” Miller urges. “Make certain your circumstances are compelling.”
He warns that “Although it’s important to research COL, keep in mind that the numbers don’t accurately reflect the sticker shock you may get when you actually begin to look for an apartment or a house in the new location. Housing is huge.”
What about your ‘trailing spouse’?
This is, for better or worse, the term used in the relo world for the co-head of household: your spouse or partner, the person who is probably going to be most impacted by the move. Heineck reports that employers “want your spouse in on the first phone call or the first meeting.” She reports that several have developed a checklist of issues for you and your spouse to carefully consider.
Help finding “trailing spouses” a new position is often key to the move. If they can’t find work, they will be unhappy and if they’re unhappy, the relocation will fail. Job counseling assistance may not be formalized but it can come in the form of references from the guy in HR, contacts of the CEO, or introductions from your future teammates. “Small firms are most likely to be impacted by the employment status of a spouse or partner,” says Heineck. “Most small firms offer informal networking assistance; mid and large sized firms are more apt to offer outplacement career services.”
Negotiating and gender
On this topic, Miller, who co-authored A Woman’s Guide to Successful Negotiating with his daughter, Jessica, cites a recent working paper commissioned by the Bureau of Economic Research. In the study of 2500 job seekers, the authors, both professors, concluded that “when there is no explicit statement that wages are negotiable, men are more likely to negotiate than women. When it is said that they are negotiable, the difference disappears and even tends to reverse itself.” It is important for women (actually, everyone) to understand that relocation isnegotiable and that they should go for it.
Getting to a win-win
Keep in mind that your employer would like you to feel wanted and valued but that he/she is running a business and has to keep an eye on the bottom line. If all your requests are not granted, even if you are going to lose money at the real estate level of the deal, consider what you’re gaining. The boost to your career may be worth the tradeoff.
In negotiations, always be flexible. If you’re told that something is not covered by the relo policy and no exceptions can be made, bring up the idea of a “signing bonus” instead. Be ready with workable alternatives, and be able to justify your requests with convincing evidence of need. Collins advises, “Find out what’s easy for the employer to give but worth a lot to you. A company car or home office may come from a separate budget… Or try to get items that may be less visible but valuable, such as flights back to the home location or furniture storage. Even non-monetary awards: added vacation days, adjusted working hours, permission to work remotely while traveling back to your home state.”
Finally, Miller says to remember while you’re negotiating, that “if they can’t do X, that may be okay if they can do Y instead. An example: If the company says it can’t buy your hard-to-sell home. You say ‘fine’, as long as you’ll extend my temporary living allowance until the home sells because I can’t afford to carry two homes at once.”
Need to know how much your move will cost? Moveline can help. Visit our homepage to get started.
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