How to Negotiate a Relocation Package: Tips and Tricks

Understanding Relocation Packages

A relocation package is an agreement between an employer and an employee to cover the costs associated with the employee moving for work. The specifics of what is included in a relocation package can vary greatly depending on the company and the position, but here are some common elements:

1. Moving Costs: This can include the cost of hiring professional movers, shipping belongings, or even the cost of a moving truck if the employee chooses to move themselves.
2. Travel Expenses: This typically covers the cost of travel to the new location for the employee and their family. It can include airfare, gas, hotel stays, and meals during the travel period.
3. Temporary Housing: Many companies will cover the cost of temporary housing for a certain period of time while the employee finds a permanent residence.
4. Home-Selling or Lease-Breaking Fees: If the employee owns their current home, the company may cover costs related to selling the house, such as real estate agent fees and closing costs. If the employee rents, the company might cover fees for breaking a lease early.
5. Job Search Assistance for Spouse: Some companies offer job search assistance for the employee's spouse or partner if they are also relocating.
6. Miscellaneous Expense Allowance: This is a catch-all category that can cover various unexpected costs of moving, such as replacing items that were damaged in the move, utility setup fees, or even buying new items for the new home.

A "generous" relocation package might include additional benefits, such as:

1. Full-Service Move: The company might pay for a full-service moving company to pack, transport, and unpack all of the employee's belongings.
2. Cost of Living Adjustment: If the cost of living is higher in the new location, some companies will adjust the employee's salary accordingly.
3. Home Buying Assistance: This could include covering closing costs, down payment assistance, or even a home-buying bonus.
4. School Search Assistance: If the employee has children, the company might provide assistance in finding suitable schools in the new location.
5. Cultural Training: If the relocation is international, the company might provide language classes or cultural training for the employee and their family.
6. Long-Term Housing: Instead of just providing temporary housing, a generous package might include assistance with finding and paying for long-term housing.

Remember, the specifics of a relocation package are often negotiable. If you're offered a job that includes relocation, make sure to discuss the details of the package thoroughly with your prospective employer.

Knowing Your Worth

A crucial step in negotiating a relocation package is understanding and articulating your worth to the company. Your skills, experience, and potential value to the company are all parts of this negotiation. If you're in high demand, you'll likely have more leverage. Here is an action plan to help you:

• Assess Your Skills and Experience: Take stock of your professional skills, accomplishments, and experiences that make you a valuable asset to the company.
• Research Market Rates: Before you start negotiating, it's important to understand the costs associated with relocating. This includes moving costs, housing costs, cost of living in the new location, and any other expenses you might incur. Use this information to build a case for the relocation package you need.
• Highlight Your Unique Value: What unique value can you bring to the company? If you're in a high-demand role or have unique skills, you may have more leverage in negotiations.

Remember, knowing your worth is key to negotiating a relocation package that truly reflects your value.

Negotiating Effectively

Negotiating is an art. Here are some techniques that can help you be more effective:

• BATNA (Best Alternative To a Negotiated Agreement): Know your BATNA before you start negotiating. This is the best outcome you can expect if the negotiation fails.

Let's say you've been offered a position at Company A with a salary of $80,000 per year. However, you're currently employed at Company B, making $75,000 per year. You like your current job, but you're open to new opportunities.

In this case, your BATNA (Best Alternative To a Negotiated Agreement) is staying at your current job at Company B with a salary of $75,000. This is the best alternative you have if negotiations with Company A don't result in a better offer.

Now, during the negotiation with Company A, you might ask for a higher salary, say $90,000. If Company A refuses to meet your request and sticks with their original offer of $80,000, you would then compare this with your BATNA.

If the benefits of the new job (like better career growth, more interesting work, etc.) outweigh the $5,000 salary increase, you might decide to accept the offer. However, if these benefits don't justify the small salary increase, you might decide to stick with your BATNA and stay at your current job.

Knowing your BATNA in this situation gives you a clear benchmark to compare the new offer against, and it can give you the confidence to walk away from a negotiation if the offer doesn't meet your needs.

• Aim High, but Be Realistic: Start with a proposal that's higher than what you expect to receive. This gives you room to negotiate down while still achieving your desired outcome. However, make sure your initial proposal is still within the realm of possibility to avoid appearing unreasonable.
• Use "I" Statements: Frame your requests in terms of your needs and perspectives to avoid sounding confrontational. For example, instead of saying "You need to provide a higher relocation allowance," say "I would feel more comfortable with a higher relocation allowance because..."
• Win-Win Approach: Aim for a solution that benefits both parties. This can help maintain a positive relationship and lead to better outcomes in the future.
• Don't Be Afraid to Walk Away: If the negotiation isn't going in your favor and you have a good BATNA, don't be afraid to walk away. This can sometimes lead the other party to reconsider their position.
• Get It in Writing: After your conversation, send an email summarizing the main points.  This helps avoid any misunderstandings and ensures both parties are on the same page.

With these techniques, you will be better equipped to negotiate a relocation package that meets your needs.

Common Mistakes to Avoid

When negotiating a relocation package, there are common pitfalls you should be mindful of:

• Accepting the first offer: Companies often expect some negotiation, so don’t feel pressured to accept the initial offer straight away.
• Overlooking potential expenses: Consider all the costs associated with relocating, including temporary housing, travel expenses, vehicle shipment, and the cost of living in the new location. Remember that some relocation expenses are considered taxable income. Ask if the company offers tax gross-up, which is additional compensation to cover the taxes you'll owe on the relocation package.
• Insufficient research: Knowledge is power in any negotiation. Understand the cost of living in your new city and the standard relocation packages in your industry.

Remember, it's not just about getting more; it's about ensuring your transition is as smooth and stress-free as possible.

Negotiating a relocation package can be a complex process, but with thorough preparation and effective negotiation skills, it's possible to secure a package that meets your needs. Keep these tips and tricks in mind to ensure you're well-equipped for this important discussion. If you’re looking for a role with a relocation package, Remocate’s job board has a wide range of vacancies like that, be sure to check them out!

FAQs

What should a relocation package include?

A relocation package typically includes moving and travel expenses, temporary housing, and language courses, among other elements.

What should I do if the company refuses to negotiate a relocation package?

If a company refuses to negotiate, you'll have to decide if the move is financially feasible for you. It might be worthwhile to seek advice from a mentor or career coach, or consider exploring other job opportunities.

How much time should I take before accepting a relocation offer?

This depends on your personal circumstances, but it's typically advisable to take a few days to consider the offer thoroughly. Use this time to conduct more research and possibly seek advice from a professional or trusted individual in your life.

Ready to embark on your relocation journey? Visit Remocate's job board for a curated selection of vacancies with relocation packages, and take your career to new heights today.