How To Negotiate A Relocation Package

moving truck on map

When you get a job, it might not always be within your city. In this case, you may have to relocate to a new town or a new state entirely with your family. 

Having to relocate and start a new life elsewhere usually comes with a lot of emotions. It is nerve-racking, challenging, and exciting as well. Many logistics are involved in a move like this, and many companies offer a relocation package to help their new employees. 

A relocation package is an offer from the company to cover the cost incurred during the relocation of existing staff or a new employee. Not all companies offer a relocation package because it isn’t mandated under any law. However, companies do this as a perk to attract the best prospects from different countries to work for them. 

Relocation packages differ across other companies based on the companies’ sizes, employee relocation policies, and the frequency of their staff relocation.

Types of relocation packages

There are different types of relocation packages:

Reimbursement

In this type of relocation package, the company does not give out a large sum of money to the employee without an idea of whether they moved or not. Many companies place a cap on the amount they can reimburse and have the employee show them receipts of the amount spent during the relocation. If the employee spends over the amount cap, the company doesn’t compensate for the extra sum. 

Lump-sum

In this method, the company gives the employees the money upfront to organize and fund their move. But the company doesn’t add extra funds, so whatever monies are incurred after are at the employee’s expense. The lump-sum is usually negotiated between the employee and the company before they start to relocate. This is why it is crucial to do your research to determine how much you will spend on relocation before going to the negotiation table.

Third-Party

Instead of giving out a lump sum or trying to reimburse employees, they outsource all logistics involved in relocation to another group or third party that handles the entire process. Sometimes the company also offers guidance to the new employees in a new city.

Direct Management

This method is used by large companies whose employees relocate regularly. It’s a combination of reimbursement and lump sum, while they are also organizing logistics and moving services and paying for it.

Negotiating a relocation package

It is necessary to negotiate a deal that suits all parties when talking about a relocation package. The employees must make sure that they and their families are happy with the offer. The company must also be happy to pay the price to get their new employee closer and ready to work quickly without shooting over their budget. 

To help you negotiate a good relocation package, the following tips are going to come in handy for you:

Research relocation costs.

Before you start negotiating, you must have done a lot of research about the costs involved in different phases of your relocation. This will put you in a stronger position during negotiations. For instance, if your relocation doesn’t involve unpacking, disassembling, and reassembling furniture, you should find out the cost of these tasks and include them in your negotiation. If you can show cost examples to back your requests, you are likely to get your asking price significantly if these tasks don’t add excessively to the total. 

Write out the relocation agreement.

You can do this with an email, not necessarily with a formal letter. First, however, you must make sure that you write out the price of your employer. With this, you have something to work with when organizing your time and thinking about the expenses you are covering. 

Consider the cost of living and taxes in the new location. 

There are certain things that you shouldn’t forget amidst the excitement of getting a new job and moving into a new city. It may be a tedious detail to put to heart, but tax is an important one to look out for. It would help if you looked up the difference between the property and state taxes in your current location and the city you are moving into. Does that difference reflect in your new salary? It would help if you also considered the cost of living. It is not enough that you have a raise in salary; does the excessively high cost of living not offset the increase? These are things that you have to consider. If the cost of living and taxes are higher, then you can ask for a disturbance fee to offset that. 

Place emphasis on mutual benefits.

It would be best if you pointed out the different ways that the company benefits from your ideas, as much as you do. For instance, you could emphasize how much work you can complete if you live closer to the company than when you live far away.  

Your employers may be looking to offer specific items to you but hold them back so that it doesn’t become a precedent for other staff to make a similar request. It would be best if you are able to convince them to think about that element in a different way. 

What the relocation package covers

As mentioned earlier, relocation packages vary across different companies. So relocation packages may not necessarily cover the same things across other companies. However, here are some of the things that you should generally consider:

  •       Financial assistance for buying and selling homes: you may need to buy a new home in the new city and sell the house you live in in the old town. Your company may assist you by handling fees such as real estate commissions, closing costs, etc. 
  •       Travel expenses: you are likely to have numerous visits to and from your new workplace before you finalize the deal, and your company may be the ones to pay for it. By the time you are ready to make the final trip to your new destination with your family, the company might pay for that trip too. 
  •       Moving costs: it is not just you and your family that are moving. You’re going to be disassembling, packing, unpacking, shipping, and reassembling your furniture. Your relocation package has to include the cost of moving your items down to your new location.
  •       Temporary housing allowance: if you’re moving into a new city, you may not immediately figure out where to live. Even when you find a house, it may not be available at that instance, so you have to wait a while. This is why you need the temporary housing allowance. This allowance would cover the amount incurred on accommodation while you hunt for a house. 

Negotiating a Relocation Package: Conclusion

There are a lot of challenges involved in relocation, but if you’re relocating to get your dream job and you have a good relocation package, then it’s all worth it. While different companies may offer other relocation packages, it’s essential that you can negotiate a good package for yourself. 

Author Bio

Jake S. Platt is 31. He has a master’s degree in marketing and currently started his way as a content writer at Australian Writing. He wrote his first story at age 15, and he brings his decades of experience to inspire people to explore.

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