Goodbye, Gold-Plated Relocation: Hello, Cheap “Build as you Go” Relo…

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Gather round the fire kids, because I’m about to tell you a story about the good old days.  Back when I was an emerging 20-something professional, companies used to really roll out the red carpet in exchange for you agreeing to move.  I’m serious – things like multiple house-hunting trips, job hunting assistance for your spouse and yes (gasp!), a home purchase program that guaranteed to buy your house from you if you couldn’t sell it in 3 months.

Did I mention I also had to walk 6 miles to get to school back then too?  Because that’s how old recounting that history makes me feel.  Dinosaur time, baby, because nobody does that stuff anymore.

NOBODY…

As this Workforce Recruiting article suggests, it’s a hard knock life in the relocation game.  Global pressures on margins, a crappy economy and other factors have eliminated the gold-plated relocation package for everyone but the C-level executive.  These days, you have to negotiate for everything you get.

That’s why I’m here to help.  You need to look smart as your departmental leader looks to you for guidance on relocation for a remote candidate they desperately want?  I got your back.  Tell them the following:

“Jerry, here’s where we’re at with relocation these days.  It’s an incremental game, and we’re out to reduce our cost exposure while at the same time attempting to treat the candidate fairly.  With that in mind, we view relocation as a three-legged stool in terms of what we can do.  The three legs to the stool are as follows:

1. A lump sum bonus that we can live with and is good for the candidate.  Is it 5K? 10K?  More?  Is it grossed up for taxes?  All good questions and ones we need to figure out based on what you can spend.  Our preference is that we provide a lump sum that signifies what we can do to help with relocation, give it to the candidate and then we’re done.  No administration because the candidate takes the lump sum and manages it themselves.

2. Physical Move. If the lump sum won’t get it done, the next thing we can offer is the physical move.  That means we pay for the truck and movers to professionally move our new hire from where they are now to where they’re going.  The cost is variable based on where they’re coming from and how much stuff they own.  We’d prefer that they pay for this out of the lump sum, but we can use this as a fallback to close if we need to.

3. Temp Living.  We don’t buy houses anymore, so one way we can help a home owner accept our offer in this terrible time to sell a home is to offer temp living in the city the candidate is coming to.  Offering temp living is the ultimate hedge to get a homeowner over the mental block of selling their home.  By offering temp living in the new city for 3-4 months, the candidate automatically does the math and figures out how long they have to sell their home, often by combining the months of temp living with the lump sum to determine how long they can keep up a residence in two cities without burning personal cash.

So that’s how the relocation game is played these days.  Remember, your ability to use one or more of these tools is based on what you can afford as a company for the level of position in question. Partition, position, segment and offer the benefits in these stages, and you’ll have the best chance of closing the candidate in a crappy relocation market/environment.

Good luck, grasshopper.  It’s 521 days to sell out there…

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Kris Dunn
 Kris Dunn is Chief Human Resources Officer at Kinetix and a blogger at The HR Capitalist and the Founder and Executive Editor of Fistful of Talent. That makes him a career VP of HR, a blogger, a dad and a hoops junkie, the order of which changes based on his mood. Tweet him @kris_dunn. Oh, and in case you hadn't heard the good word, he's also jumped into the RPO game as part owner of a rising shop out of ATL, Kinetix. Not your mama's recruiting process outsourcing, that's for sure... check 'em out.

3 Comments

  1. Jenn says:

    Your options here are really common these days as far as the lump sum goes. We often times get customers here who have been given a lump sum and told, “move with this” and it could be $5k b/c the company didn’t do any research on what it actually takes for a family of 4 to move a 3 bedroom house. I suggest to always call a company who specializes in relocation services just to gauge what kind of sum you should be giving a candidate. For example, my company, Alliance Relocation, works nationally and internationally, and would probably cut down the price for everyone involved since we know who to go through already for relocating.

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  2. Paul says:

    Unfortunately, the increase of Lump Sum payments have become the norm recently. And, it’s unbelievable to think that a company that moved one individual with the “Cadillac-edition” relocation package two years and now, offering to move the same individual who’s transfer due to a promotion with only a $5,000 lump sum payment that may or may not be grossed-up. Has anyone heard an increase in workman’s comp claims, for example, due to employees who are moving themselves being injured from moving? just curious, because I don’t think companies understand the amount of liablity they are assuming when they require the employee to move himself and partially sponsor the move. Let’s hope things return to normal soon enough.

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  3. Angela Pitts says:

    I worked for a corporation that we did quite a few moves in 2007 and 2008, when 2009 rolled around the relocation program was strongly looked at. I think companies should still offer a relo program, but it should be tailored to the person and position.
    I think offering a “choose your package” so people get what is most important to them. Whether that be move assistance, spouse career help or a lump sum to do as they please.
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