Moving for work isn’t uncommon these days, and a lot of companies are willing to cover relocation costs if it means getting the right person for the job. This is a pretty common incentive today.
For example, when a large enterprise opens a new operation in a remote town, it needs to attract talent, and part of that is offering things like relocation assistance.
It is important to know that the relocation package you are offered is not the one you absolutely have to accept. Everything is negotiable, including your salary and your relocation assistance package.
Relocation Packages
Relocation packages are a benefit that many companies offer in order to get talent to come to a new location. Each company is different in terms of what it offers, but no matter what is offered, you always have room to negotiate.
Typical relocation packages include perks:
- Help buying or selling your home, particularly if your employer covers things like commissions and closing costs, or reimbursement for any fees that you have to pay for breaking your current lease;
- Travel expenses like airplane tickets, transportation, hotels, and dining, especially if you are moving across the country;
- Spousal job assistance, which can help your spouse find a new job in the new location;
- Temporary housing to cover the cost of a temporary living situation, like a hotel or rental home, so that you are able to start work right away while still looking for a house;
- Moving expenses like packing supplies, movers, or storage units.
If you are being offered a relocation package, look over the terms and decide what areas might be most important to you so that you can negotiate for something that better suits your family.
These are my quick tips for successfully negotiating your relocation assistance package.
#1: Know Your Company
The most important thing is to do your homework, and that means knowing what your company typically offers for relocation assistance.
You need to know exactly what it is that your company typically offers. If you can, reach out to the HR Department and ask them if they have a standard written policy for relocation assistance. Knowing what they typically offer can give you some idea of the benchmark.
Equally important is knowing what the payment structure is for your relocation assistance.
- Some companies will utilize a third-party service and handle all of the costs directly, but you have no say in the company they use.
- Some companies offer direct reimbursement for documented expenses, which means you have to pay out of pocket first and then get compensated.
- Some companies do a lump sum where you get a lump sum at the start of your move, and you can apply that toward your costs, but if you go over, you have to pay out of pocket.
Note: If your company uses the first option, you might not be able to choose the moving company you use or the real estate agent. If part of your relocation assistance package involves buying and selling a home, because a lot of company policies specify that you only get reimbursed if you use the brokers or movers they specify.
There are a lot of things to consider when it comes to the type of reimbursement they are giving, and your main negotiation might be changing how that package is delivered.
For example:
If you are reimbursed for your moving costs, let’s say the company gives you $10,000, your next tax season is likely going to reflect that as additional income. The same is true of a lump sum paid to you up front. So if your income is normally $80,000 and your company gives you $10,000 as a lump sum or reimbursement, you have to report $90,000 and pay taxes on $90,000.
If this doesn’t seem appealing to you, you might negotiate for your company to pay directly for full-service movers.
While doing research, consider what competing companies are offering as part of their relocation packages. If you have found a competing offer that has a better relocation package, you can mention this as you present your case. Your company might be willing to meet you at least partway if they know that there is a more attractive offer elsewhere.
#2: Know Your Costs
Before you can present a case as to why you want a different payment arrangement or why you are requesting more money for your relocation assistance package, you need to have the data to back this up.
Use a solid moving calculator that can give you a breakdown of estimates for comparative options like:
- Full-service movers
- Freight shipping
- PODS
- Moving truck rentals
This can be very useful when negotiating for added costs like moving supplies for a DIY move, presenting to a company how you arrived at those cost estimates. I’ve used Move Buddha’s calculator for this and like that I don’t have to leave my email, or personal information, unlike others.
You will need a detailed list of things like:
- Moving expenses
- Housing costs
- Utilities
- Per diem while house hunting
- Temporary living expenses
- Moving supplies
- Travel costs
Having real-world quotes can help justify any request. If your company is offering a reimbursement or lump sum as the only option, you might note your particular tax bracket as well and what you will have to pay in taxes on that lump sum or reimbursement income, and then add that on top of your expenses when negotiating.
Moreover, as you make this list, prioritize the things that are most critical to you during this move, like coverage for spousal job assistance if you absolutely need your spouse to start bringing in income right away, or temporary housing costs while you are searching for a new home.
If you have everything listed in terms of your personal priorities for this move, you’ll be in a position to present all of the items, but then compromise on those things that are less critical.
There are so many things that you can ask for as part of your relocation assistance package, based on what it is you are going to need during that relocation:
- Childcare
- Spousal job assistance
- Furniture allowance
So take time to estimate your moving expenses with a moving calculator, research that area so you know what the taxes or the real estate market will be in the area. All of this will help you design your case and present facts and figures as to what the company has to offer in order to make this a smooth transition.
#3: Know Your Case
When it comes time to make your case, communicate what it is you need and why. Explain to your company how this would benefit them as well.
If adding things like spousal job assistance as part of your relocation assistance package is a priority to you, explain to your company that having that particular benefit would offer the security or family needs to move faster, so you can start sooner.
If your company can’t offer the full coverage you are searching for, come at them with those proposed compromises, like a slight salary adjustment to cover the uncovered costs. You might be asking for an extra $6,000 that they can’t give you up front, but they might be able to add an extra $500 to your salary for the next year.
Consider alternatives like a lump sum payment. If, for example, your company is offering a certain level of coverage but only through their designated third party, you might be able to negotiate for a lump sum payment up front instead and then save money by doing some aspects of the move yourself.
Ask about partial reimbursements. Perhaps they can’t give you the full $6,000 you are asking for, but they can give you $3,000 with the spousal job assistance feature, which might make things more attractive for your family.
If, for example, you have children who are currently in school, you might negotiate for your job to start a few months later so that your children can finish their current school year in exchange for partial reimbursement.
Worst case, if all you can get is partial reimbursement on some items but not all the benefits you want, talk with your family and consider whether the job comes with a significant enough bump in salary or other benefits to make it worth eating that cost out of pocket. After all, some relocation assistance is better than none, especially if it gets you to a better job or a better career.
#4: Know Your Contract
Once you have come to an agreement, everything has to be secured in writing. Make sure that you get all the new details, amounts, conditions, and time frames written into your contract right away. This should be signed and dated so that there are no potential conflicts in the future.
Most companies will have a designated liaison who handles this, and it might be the HR department. Either way, make sure that all of the details in your contract are exactly as discussed and agreed before you sign it or any other work contract.
Summing Up
Overall, there are a lot of ways that you can negotiate your relocation assistance package. Start by knowing what the typical packages are from your company. Use MoveBuddha to calculate your actual expenses and document what those might be so you can make a good case to your company.
When presenting that information, make sure you communicate your needs, and if they are unwilling to meet some of those requests, have alternatives in mind, like partial reimbursements or lump sums, as a mutually beneficial alternative.
Be sure to communicate how your proposed package benefits the company with things like a faster transition or being able to start at the office sooner. Once final negotiations are completed, get everything in writing.