NegotiatingARelocationPackage
By Jill Hill
Each month thousands of employees move to a new community, to start a new job.
Moves often are more expensive than anticipated. Not only is there the actual expense of
moving, but also, for a home-owner, the expenses connected with selling an old home, and
buying a new home.
Some corporations may offer to cover some or all of the relocation costs for employees who
are moving at the company's request. Larger companies usually offer a more elaborate
relocation package than smaller firms. These benefits become particularly important when
there is a large increase in housing costs. For example, an employee leaving a $150,000
four bedroom home in a small midwestern community may find that comparable housing in
the San Francisco Bay Area may cost around $500,000.
When interviewing for a job, ask your prospective employer whether or not it has a
relocation program, and find out as much as you can about it.
Benefits which may be offered to a relocating employee vary widely. Each situation may call
for a different bundle of benefits; analyze your own situation carefully. It is always best to
negotiate these matters as part of a transfer package, before accepting the new job, to
avoid surprises to either the employee or the company after the move has taken place.
1. Cost of a familiarization and house-hunting trip for the employee, spouse, and
family. (Does your family really want to move here?)
2. Extra time off (with pay) for traveling and house hunting in the new location.
3. Moving expenses, including packing and insurance.
4. Travel expenses (lodging, meals, gas, etc.) while traveling to the new location.
5. Assistance in the sale of your old home:
o Company assumes responsibility for monthly payments, taxes and insurance
until the old home is sold.
o Price guarantee: if sold by the employee, the company will pay the difference
between the net selling price and a specified price.
o Alternative price guarantee: If employee can not sell the house within a
specified period of time, the company will buy it at a specified price.
o Company will pay commissions and other costs of sale.
6. Assistance in the purchase of a new home:
o Company to pay rent of temporary quarters, until a permanent home is
located.
o Buy down the interest rate.
o Company provides low or no interest loans.
7. A salary level commensurate with any increase in cost of living between the new
location and your old location.
You will want to minimize the tax impact of any benefits you receive. For information on
the tax ramifications of your relocation expenses and any reimbursements by your
employer, see the IRS Publication 521, Moving Expenses. Browse on-line or download this
publication from the IRS at www.irs.gov/
How hard should you push for relocation expenses? Try to analyze your bargaining
position relative to the prospective employer. Does the employer have many options? Are
there many qualified local applicants for the same job? Or do you have unique skills
unavailable in the local market? Ask yourself, "If I owned the company, would I be willing
to pay for my relocation?"
As a final check-list before accepting a new job in a new community, consider the effects
on your over-all career goals:
1. Does the move represent a true promotion, or a desirable change in direction, or is
it only a lateral move?
2. Is the new location in the "mainstream" of your industry, or are you moving to a
"backwater"?
3. Would you prefer to live in the new location for personal, life-style reasons?
4. Considering the changes in salary and costs of living, is the move a financial
advantage or disadvantage?
. companies usually offer a more elaborate
relocation package than smaller firms. These benefits become particularly important when
there is a large increase. benefits; analyze your own situation carefully. It is always best to
negotiate these matters as part of a transfer package, before accepting the new job, to
avoid