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How to Negotiate a Relocation Package

When interviewing for a new job, make sure your relocation needs are met

Negotiating a relocation package involves understanding what is covered, discussing expectations with your employer, and being willing to compromise. Read on for a comprehensive look at arranging a relocation package with your employer so you can confidently navigate your move with ease and peace of mind.

Understanding what is covered in a relocation package is crucial before negotiations. Typically, a relocation package includes moving costs, temporary housing, transportation, and even assistance with selling or renting your current home. It is essential to clearly understand what expenses will be covered and what will not be so that you can plan your budget accordingly.

Negotiating a relocation package requires a certain level of flexibility and compromise. While it is essential to advocate for your needs, it is also crucial to understand that your employer may have limitations or constraints. Be open to discussing alternatives or finding creative solutions that benefit both parties. For instance, if your employer cannot cover certain expenses, they may be willing to provide a higher salary or additional benefits to compensate.

Remember, maintaining a positive and collaborative attitude is critical to successful negotiations. Approach the conversation with a willingness to find common ground and reach a mutually beneficial agreement. Be prepared to provide supporting documentation or evidence to justify your requests, such as cost estimates for moving services or rental prices in the new location. This will demonstrate that you have done your research and are making reasonable demands.

Here are some points to cover when negotiating for relocation assistance:

Understand What Relocation Expenses are Covered

Employers typically offer a relocation package to assist with the costs associated with moving. This package can encompass various expenses, such as:
– Costs relating to travel, including transportation and hiring professional movers.
– Assistance with selling your current residence or purchasing a new one.
– A lump sum of money is provided to cover general moving expenses.
– Support in obtaining a work visa if necessary.

It is crucial to clarify which expenses will be covered when negotiating your relocation package with your employer. Understanding the specifics beforehand will allow you to plan accordingly and ensure a smoother transition during the relocation process. Whether you must pay for these expenses upfront or are eligible for reimbursement, having this information beforehand is essential.

Discuss Your Expectations

Being honest and open with your employer regarding your expectations and desired outcomes is crucial. Communicate the specific assistance you require from them, and provide any relevant information that could impact their decision-making process. Additionally, it is advisable to inquire about the company’s policy on relocation and the usual support provided. By clarifying these details, you will better understand the extent of their offer and determine the level of additional support you may need. For example, you might need extra time off for the relocation or other funds to cover temporary living expenses.

Do Your Research

After you have clearly outlined the particulars of your relocation and thoroughly discussed your expectations with your employer, it is crucial to delve into the specifics. Take the time to research the cost of living in your prospective new city, and be ready to request additional assistance if it significantly surpasses your current location.

It is advisable to be upfront and straightforward about your specific requirements for the relocation package, whether it be extra time off, a salary increase, or supplementary funds to cover expenses.

One crucial aspect to consider when negotiating your relocation package is the cost of living in the new location. Research the average housing prices, groceries, transportation, and other essential expenses to understand how far your relocation package will stretch. This will help you determine if the financial assistance provided by your employer is sufficient or if you need to negotiate for additional support.

Be Open to Compromise

After you have clearly outlined the particulars of your relocation and thoroughly discussed your expectations with your employer, it is crucial to delve into the specifics. Take the time to research the cost of living in your prospective new city, and be ready to request additional assistance if it significantly surpasses your current location.

It is advisable to be upfront and straightforward about your specific requirements for the relocation package, whether it be extra time off, a salary increase, or supplementary funds to cover expenses.

One crucial aspect to consider when negotiating your relocation package is the cost of living in the new location. Research the average housing prices, groceries, transportation, and other essential expenses to understand how far your relocation package will stretch. This will help you determine if the financial assistance provided by your employer is sufficient or if you need to negotiate for additional support.

Final Negotiation Tips

Additionally, it is crucial to familiarize yourself with the local laws and regulations of the new city or country. This includes understanding the visa requirements, tax obligations, and other legalities affecting your relocation. You can avoid any surprises and ensure a smooth transition by being well-informed.

Furthermore, don’t hesitate to reach out to colleagues or contacts who have previously relocated to the same destination. They can provide valuable insights and advice based on their own experiences. They may also recommend reliable real estate agents, schools, or other services to assist you during your move.

Lastly, remember to take care of yourself throughout the relocation process. Moving to a new place can be emotionally and physically draining, so prioritize self-care. Stay organized, maintain a positive mindset, and lean on your support network for assistance.

In conclusion, negotiating a relocation package requires thorough research, practical communication, and a clear understanding of your needs. By following these steps and considering all the necessary factors, you can ensure a successful and stress-free relocation experience.

Global Mobility Solutions (GMS) has provided clients with the best relocation services since 1987. Our expert team can assist in getting employees from point A to point B, no matter how far the move is. Contact us today to set up a free policy review!

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Are you ready to talk to a Mobility Pro? Learn how GMS can optimize your mobility program, enhance your policies to meet today’s unique challenges, receive an in-depth industry benchmark, or simply ask us a question. Your Mobility Pro will be in touch within 1 business day for a no-pressure, courtesy consultation.

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Common Employee Relocation Packages

A Look at Typical Relocation Packages

Relocation packages, also known as relocation benefits, are policies and support that companies offer employees who are transferring to a location for a position. Each company will have different needs when it comes to relocation benefits, and it can be difficult for companies to know exactly what should be covered in these policies and what the employee should be responsible for on their own. In order to make the chosen candidate a qualified and competitive offer, it’s always a good idea to have a competitive and comprehensive relocation package to offer moving employees. 

Companies typically have the ability to tailor relocation programs based on each hiring situation. Some companies choose to have their HR department handle employee transfers, but if the company is looking to be consistent with their relocation packages on each hire, it’s probably a good idea to use a reliable relocation management company.

What Does A Standard Relocation Package Include?

Most relocation policies outline some sort of reimbursement or coverage for many of the common needs of moving. Relocation benefits often include full packing and unpacking services along with a quality and reliable moving company to get the employee’s household goods from point A to point B. 

On top of moving expenses, home sale assistance is another common benefit offered to transferees. This can include selling programs using vetted real estate agents who specialize in the relocation process to help assure a quicker and more successful home sale for the moving employee. Some policies may offer lease-breaking assistance for those employees who rent, in the event that the employee has to pay a penalty for breaking a lease early. House-hunting trips can also be included in the real estate portion of the relocation package. This means the company might cover a trip or two for the moving employee to scout out their new area and tour some homes or apartments before making the full move. 

Corporate housing options, or temporary housing, are usually included in most relocation policies. This gives the employee a place to stay short-term after they’ve moved in order to find a full-time home in their location, without having to miss their desired start date for the position. 

Many companies also offer transportation coverage or reimbursement in their relocation offerings. This might cover airfare for the employee and their family or expenses for driving across state lines. In some instances, companies will cover the employee’s vehicle transportation as well.

What Expenses Are Typically Covered During Relocation?

While not an exhaustive list, the below are common relocations costs for which many companies provide support to their relocating employees:

  • Corporate housing options 
  • Household goods transportation (HHG)
  • Storage facility (temporary storage of the HHG shipment
  • Miscellaneous expense allowance
  • Home sale costs
  • Spousal employment assistance
  • Travel-related costs, such as airfare, meals, hotel nights

As every company has different goals and objectives for their relocation program it is common to see many relocation policies that are tiered, offering different levels of support for each employee. 

Here is a breakdown of the most common U.S. domestic relocation policy tiers per GMS research:

 

chart of relocation policy tiers

What Types Of Employees Receive Relocation Packages?

This aspect will depend upon the company’s need for each position and how important it is to get that employee to the new location. The best practice for relocation programs is to build a tiered system based on employee level. These tiers are commonly built around entry-level employees, professionals, directors, and vice-presidents. Additionally, many companies have executive relocation packages to cover most executive-range employees. For some companies, they may also have international relocation package examples for employees moving globally.

Common Methods to Address Costs in Relocation Packages

Different policy tiers within your relocation program may necessitate different strategies for paying for your employee’s relocation costs. It is important to understand the advantages and disadvantages of these common methods.

Direct Billing: On your behalf, the relocation company sources, coordinates, and directly pays the vendors used in the relocation of your employee. Invoices are audited, consolidated, and then passed through to you for payment. While potentially more costly, this method ensures that your employee is getting the most out of their benefits and is able to make it to their new destination on time without the need to stress over the costs of the move. 

Expense Reimbursement: The employee pays for the cost of moving expenses up front and the company cuts a reimbursement check toward the end of the process. While not generally intended to be used to cover an employee’s entire move (few families have the cash on hand to pay tens of thousands of dollars for a move), reimbursements are commonly used for miscellaneous expenses as outlined in the company’s relocation policy. Typically, reimbursements are used for items such as travel costs, or other related items.

Lump Sum: As opposed to an expense reimbursement, a lump sum is commonly used as the primary financial benefit provided to a relocating employee. In a lump sum policy, a set amount of money is given upfront to the employee so that they can handle the moving expenses as they see fit. 

Generally provided to entry level or lower level employees, the lump sum itself is commonly the only relocation benefit provided. While the lump sum is seen as an excellent cost control tool for companies, it places additional burdens on the employee as they are left to their own devices to manage their move. This is in addition to the lump sum typically qualifying as income which is taxable. Employees who receive their relocation benefits in the form of a lump sum should be sure to note the payment for tax purposes. Employers should consider adding a tax gross up to the lump sum to help mitigate the effects of the income tax on the employee’s benefit.

Ready to Set Up Relocation Packages for Employees?

Global Mobility Solutions is a full-service relocation management company who specializes in assisting companies in creating comprehensive relocation packages that benefit both the company and the employee. For more than 30 years, GMS has helped companies get their new employees situated in a new place, assuring the process is seamless for the transferee. If you’re ready to set up or update your relocation policies, reach out to us today

We're Here to Help! Request a Courtesy Consultation

Are you ready to talk to a Mobility Pro? Learn how GMS can optimize your mobility program, enhance your policies to meet today’s unique challenges, receive an in-depth industry benchmark, or simply ask us a question. Your Mobility Pro will be in touch within 1 business day for a no-pressure, courtesy consultation.

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Best Practice for Relocation: Multiple Bids for Mortgage Services

Very few people will walk into a car dealership, point to a vehicle, and say “Let’s sign a contract.” Most of us will compare the prices offered by a few area dealerships. When the salespeople know that they have competition, they begin reducing the initial price of the vehicle.

However, a lot of relocation management companies (RMCs) either own, or are owned by, mortgage companies. Therefore, when a client company wants to move its employees, the employees do not have a choice of lenders. The RMC and the mortgage lender know that the transferee is at their mercy with regard to price, scheduling, and customer service.

On the other hand, some RMCs use a multiple bid process in order to ensure that transferees are getting the best price and service. There are some significant benefits to going through an RMC and having their mortgage lenders compete for relocation business:

  • It encourages the lenders to provide the lowest reasonable rates and closing costs
  • Lenders provide very lenient underwriting guidelines to applicants coming from an RMC
  • Access to discounted rates and programs only offered to RMC-referred borrowers

This is all accomplished by having at least three lenders provide bids for the transferee to create mortgage estimates based the transferee’s ability to repay the loan, the amount borrowed vs. the cost of the property, and the terms of the mortgage programs available, as a best practice.

Each lender understands that its objective is to win the business. Therefore, they try to provide mortgage estimates that are fair and accurate with relatively no cushion to the costs.

When utilizing multiple bids for mortgage services, transferees save an average of .32% on their mortgage rate. What does this mean for transferees? Based on information at the time of this article, the average 30-year fixed mortgage rate in the United States is 4.16%. Having lenders compete can get that rate down to 3.84%. Let’s see what happens with a $285,000 home loan:

Global Mobility Solutions - Savings realized through multiple mortgage bids

The lower rate will allow transferees to explore more options like larger houses, better neighborhoods, or simply enjoying the monthly savings.

While cost is very important, so is the transferee’s experience. By allowing the transferee to meet with multiple mortgage lenders, he or she will feel more engaged in his or her relocation process. This promotes an overall good experience, because transferees tend to be happier if they feel that they are being heard throughout the relocation process. And we all know that happy employees are productive employees.

Global Mobility Solutions (GMC) is the pioneer of the “Freedom of Choice” model in relocation. By providing multiple bids for an array of providers, client companies and their transferees have saved money on services like household goods movement and, of course, mortgage loans. GMS continues to be an innovator of best practice workforce mobility programs in an effort to make relocations easy and practical for clients and their employees.

Learn more about the multiple bid process for mortgage loans, as well as other relocation services.

Need to include multiple bids in your relocation policy? Ask for a complimentary policy review.

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