You’ve been offered your dream job with a new company or an exciting promotion within your existing company. However, there is one catch. The position requires you to move to a new city, state, or even across the country or world.
Unfortunately, relocating can be extremely expensive. However, many companies offer relocation packages as perks to new hires or employees. Not all relocation packages are the same, so you must negotiate the package before making your move to ensure that you’re getting as many moving expenses covered as possible.
Below, we’ll share our top tips on how to negotiate a relocation package and what essential details you shouldn’t overlook.
What’s a Relocation Package?
Relocation packages are provided to new hires or transferred employees who are moving to a new city or state that is not within a commuting distance from their current location. Depending on the new job, a new employee could be offered a relocation package for moving 70 miles away, around the world, or across the country.
Relocation can be extremely expensive. Per the Workforce Mobility Association, the average cost of relocating a current employee who owns a home is just over $90,000. New-hire homeowners are a bit cheaper at approximately $67,000. If the employee is a renter, costs can be much less, with current employee relocations costing a little more than $20,000 and new-hire renters coming in at $17,000 on average.
As a result, an excellent relocation package makes a huge difference in whether or not you should or even can afford to relocate for a job offer or promotion opportunity. Unfortunately, not every new hire or employee asked to relocate is given enough to cover these costs.
In fact, relocation packages are not always offered but are becoming more common, even among junior-level employees. Although relocation packages are provided to some junior employees, they are typically multitiered, meaning that executives or senior employees are usually offered a more generous package than a junior employee or new hire.
Companies will also offer relocation packages in different forms. Some may provide you with a lump-sum payment for the move, while others may compensate you for submitted receipts related to your move. Other companies may directly bill the companies helping with your move, such as realtors, tax professionals, and movers, so that you don’t have to submit expenses or pay up front. If you prefer one of these over the other, make sure to bring this up during the negotiation.
What is Usually Included in Relocation Packages?
Relocation packages vary significantly, and many factors affect how generous the package is, including:
- The company’s current financial state
- If the individual is a new hire or current employee
- The economy
- If the employee is a renter or homeowner
- Age of the employee
- The employee’s skill set – A company may prioritize people with more unique skills or experience.
- How desirable the area is – A large city may be more desirable than a small town in the middle of nowhere.
Commonly covered relocation costs include:
- Storage for a limited period of time.
- Travel expenses such as gas or airfare.
- Packing and unpacking services performed by professional movers.
- Moving service costs, such as the costs of transferring household goods, vehicles, and specialty items like artwork, wine collections, motorcycles, or boats.
- Real estate services, such as realtor fees, home sale and closing costs, reimbursement if your home is sold below the purchase price or market value.
- Home hunting assistance services.
- Compensation for a terminated lease.
- Temporary housing or housing allowance while you’re house-hunting or waiting for your home to be ready to move into.
- Full-value replacement coverage or moving insurance.
- Culture and language education if you’re moving to a new country and don’t speak the language or know the customs.
- Compensation for the cost of meals and eating out while you’re between homes.
- Miscellaneous expenses, such as a cleaning service for your new place, driver’s license fees, and set up costs for new utilities.
How to Negotiate a Relocation Package
The first step for successfully negotiating a relocation package is learning what isn’t included and what you’d like to be included. It’s also crucial that you don’t accept the new position until all negotiations are finalized and in writing.
Start by asking for a written copy of the relocation package and read it carefully.
Do Your Research First
When considering a company’s relocation policy, you should take note of the following details:
- The difference between homeowners’ and renters’ relocation packages
- Difference between transferees and new hires
We recommend looking specifically at the difference between transferees and new hire packages because new hires are often not given as many benefits during a relocation as an existing employee. However, negotiating with the company may help you make up for these differences in benefits, even if the company usually doesn’t extend these benefits to new hires.
If the company provides fewer benefits for new hires, remind them politely that you are excited to work with the company but will not be able to relocate with these lesser benefits. Remember that relocation packages are often used to attract promising new hires. This is a perk offered to entice you to take the job and make your relocation easier, so don’t feel bad for bringing up additions to the relocation package.
Make a note of any sizable differences and consider the following moving costs which you may want to be covered but may not be listed in the company’s relocation package:
- The cost of hiring a moving company.
- Mileage for moving your vehicle or renting a moving van.
- Initial payments for utilities, such as cable and electricity.
- A cost of living allowance if the new city has a significant increase in the cost of living.
- A family trip to the area before you accept the offer. This trip can help you look for homes in person and get a feel for the area.
- Financial support during a spouse’s or dependent’s job search.
Considerations for Homeowners vs. Renters
You’ll also want to consider the difference in relocation packages and costs for a homeowner versus a renter. This is especially important if you are currently renting and want to buy a home in the new area or are a homeowner looking to become a renter.
If you’re interested in buying a home in the new area, ask the HR department about home buying assistance. Some companies will cover closing expenses or other home buying costs. A relocation trip is another crucial benefit to look for within a relocation package. Some companies will cover the cost of a trip to the new area and even provide a tour with a professional realtor in the area to help you find a new home.
If you’re engaged or married, you’ll also want to consider your spouse and any benefits a good relocation package could provide them.
Most major companies offer resources to help your spouse with the relocation and finding another job in the new area. However, this is likely something that you’ll have to speak up about and negotiate for.
If you have children, you may also want to negotiate for childcare expense reimbursement while you are on your relocation trip or in the middle of the move.
Consider the Position
After assessing any weak points or missing items in the relocation package, take an honest look at your current skill set, experience level, and the uniqueness of your position. Look at any records or rewards you may have received for exceptional results. If you can, ask an unbiased party for help with this part.
Then, use any unique aspects of your qualifications as leverage during the negotiation process.
Research Where You’re Relocating
Take time to consider whether you truly want to relocate carefully. Are you interested in starting fresh and having an adventure?
If so, take time to research your new home extensively. Be prepared with facts about the higher cost of living, average salaries, property taxes, crime rates, quality of schools, and more. These points can help you negotiate a more advantageous package that helps with additional costs.
Choose Your Must-haves
Before negotiating, choose your top two or three must-have items before considering the offer.
List these out on paper and number them by priority. During the negotiation process, stand your ground and don’t budge on these must-have items.
Relocating for a job or promotion can be an exciting prospect and a great way to move up the corporate ladder. However, you must settle any missing items that are priorities for you before you accept the relocation offer and make a move.
Stand firm and remind yourself and the company why these add-ons are important based on your skills, new home, and other ways this relocation is inconvenient or expensive for you.
Our Complete Moving Checklist can be a great resource to get you started on your moving process.