Relocating? You'll Pay for that Moving Experience
"You want moving expenses? You've got to be kidding!" That's what more and more prospective employees are hearing these days. If you're looking for jobs in a city that's too far to commute, you'd better be prepared to pay your own way.
In a recent Society for Human Resource Management poll, 58 percent of companies have reduced the size of their corporate relocation programs, and 17 percent have eliminated them entirely.
As recently as two-and-a-half years ago, companies routinely offered not only moving expenses, but the cost of temporary housing while a new employee settled in. They might even have footed the bill for an employee to fly back home to visit the family if a spouse and kids were staying put for a few months, say to finish the school year or sell the house. And speaking of selling the house, they'd even offer to cover some of those costs as well.
Moving benefits haven't disappeared altogether, but they are likely to be capped at $10,000 to $20,000. That might sound generous but the average cost of relocating is $60,000 for home owners and $18,000 for renters, according to some experts. Not surprisingly, companies in more remote areas are still willing to cover these expenses because they have a smaller local talent pool and a harder time attracting top employees.
For most companies, it's just easier to spare those extra expenses and hire locally, especially for mid-level managers and rank-and-file workers. Moreover, employers are skittish these days about hiring an employee who might have to default down the road because he can't sell his home. (do you mean default as in turn the job down or quit, or do you mean default on their mortgage?). Many job listings say there are "No relocation" expenses available, so you know what the deal is going in.
Many workers are willing to foot their own relocation expenses. however, because it seems better than staying put and continuing the job search for an indefinite amount of time. After all, moving expenses are tax deductible if they're work-related. Additionally, laid off people living in expensive areas like New York City and Los Angeles see their severance or savings stretching a lot farther in other locations. They sometimes move before they have a new job-maybe even before they start looking.
Those who can still get their hands on a relocation package should remember that they usually come with strings attached. Consider Karen, who negotiated a whopping $100,000 relocation package in 2007 to move from California to New York for an upper management position with a financial company. Once she made the move, however, her kids hated the East Coast, her husband couldn't find work and her company hit such hard times that it fired most of the people who worked for her. She ended up working 14-hour days with no support staff. The catch: Her contract required her to reimburse the moving expenses, which she'd spent moving, unless she stayed for three years.
Most of us will never have to deal with financial obligations of those proportions. However, If you've been laid off in this job market it can be tough to weigh the high cost of moving for a new, unknown job against the equally high cost of continued unemployment. It's a tough call each person has to make for themselves.