How can an employee negotiate a relocation package?
From using real world data to breaking down your cost, here are six answers to the question, “I am getting an offer from a company in another city. How can I negotiate my relocation package?”
- Use Real World, Accurate Data
- Ask for a Disturbance Fee Based on Cost of Living in New Area
- Be Transparent About Needs and Priorities
- Point out the Employer’s Benefits
- Ask Around
- Break Down Your Cost
Use Real World, Accurate Data
One issue I commonly see when employees are attempting to negotiate a relocation package is they rely on outdated or incomplete data. You’d be shocked at how many workers end up taking a lesser package than they deserve, just because they haven’t done their homework. In this day and age, there’s no excuse for estimates or guesses.
Do your research. And remember: the cost-of-living is rising rapidly around the country, so make sure you’re applying scrutiny to any information older than a year. It’s hard to argue with facts, so focus on verifiable numbers and keep emotions out of it so you can land the best possible relocation package for yourself.
Ask for a Disturbance Fee Based on Cost of Living in New Area
In the midst of the excitement over a new job with a potentially higher salary, it’s easy to forget to factor in the cost of living and other variables such as local and state taxes. You’ll want to compare income and property tax in your current location to the city you’re relocating to. Also, compare the general cost of living, which includes housing, healthcare, insurance, schooling, transportation, food, and entertainment. Ask yourself, if you can comfortably afford these things while leaving enough money for savings and emergencies.
If the cost of living is significantly higher than your offered salary can afford, you should consider asking for a disturbance fee. This fee is compensation companies pay for making their employees move for a position, and it’s meant to cushion you against the vagaries of a higher cost of living. You’ll build a strong case for a disturbance fee if you do in-depth research about the differences in costs of living and present your employer the need for a safety net in addition to the salary they’re offering.
Joe Coletta, Founder & CEO, 180 Engineering
Be Transparent About Needs and Priorities
When preparing to negotiate a relocation package for a job in another city, the most important step to take is assessing your needs and priorities going into it. Consider the cost of living in the new city, and any additional expenses you may incur, such as temporary housing, spouse loss of wages, or storage costs.
Whether the company is offering a flat stipend or reimbursement for costs, it’s important to lay everything on the table because if you don’t bring it up, chances are the company won’t offer. Ultimately, the key to successfully negotiating a relocation package is to be prepared, do your research, and clearly communicate with the company.
Point out the Employer’s Benefits
When negotiating a relocation package, don’t make it about yourself. For the employee, relocation means incurring huge costs that sometimes the employer can’t cover, no matter the amount of reimbursement provided. However, in the eyes of the company, it’s mainly the employee who gains when the business incurs costs. Thus, when negotiating a relocation package, it’s imperative to show what advantages it’ll have for the company.
Note that living closer to where you work is always a plus, especially in the case of emergencies when your employer would like you to come into the office. Less time spent commuting also means less fatigue and greater employee productivity and motivation. Think about what else about your specific situation can be a boon for the company. Present as many arguments as possible, but make sure they’re reasonable requests. Your employer will more likely agree to this expense if it sees the advantage for doing so for itself and its business.
Oftentimes, people relocating for work blindly go into benefits conversations (taking place around the move). They don’t know what to ask for and what requests will seem over the top. Make sure you leverage the knowledge of other people in your network who’ve gone through the relocation process themselves, and ask if they’ll share what was involved in their own package. This expands your knowledge-base, while giving you more negotiation power.
Break Down Your Cost
Relocation negotiation is part art and part science. It’s helpful to consider the new locale, industry, importance of your role to the organization, scarcity of your expertise, and other similar factors. Then, let the company know that you’re willing to move, but you’ll require relocation assistance.
Moving is expensive, so break down your costs (whatever those are to your particular scenario—temporary housing, storage, selling a house, spouse relocation, etc.) and add 13% for the surprises that will inevitably pop up, no matter how much planning you do. If the business wishes to remain competitive in its sector, it’ll see your relocation package’s importance as part of your overall compensation plan.
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