Why Advocate For Relocation Assistance? Because You May Not Be Able To Fill A Position Without It
A good recruiter’s experience will tell them when to recommend a relocation assistance component to their client as part of an overall offer. Clients who aren’t willing to offer relocation assistance may need education on their industry and the local talent pool on the recruiters’ part. Your hiring authority may need to hear this loud and clear: They aren’t going to get the person they need or want if they aren’t willing to widen a search geographically and to offer relocation to make that work for the right candidate.
For example, let’s say a client in Seattle wants to hire a software engineer who has five years of experience on the Kubernetes platform. The client wants someone who lives nearby, won’t require a parking spot, and isn’t going to cost more than $50,000 per year.
A smart recruiter will realize this candidate probably doesn’t exist.
“That’s likely not feasible,” you’ll tell your client. “Kubernetes developers are in high demand in Seattle. Amazon and Microsoft are fighting over them tooth and nail.”
If the hiring authority is willing to provide relocation assistance, the recruiter can broaden their search. What’s more, the cost may not be all that high, especially relative to leaving critical roles unfilled. Some people may be looking to move to Seattle anyway (perhaps their spouse got a job there). And by offering relocation assistance, you demonstrate to out-of-town candidates that you are serious about hiring them.
The earlier you bring up a wider geographic area and relocation assistance as part of a search, the more likely you are to get your client on board, and the better your chance of a successful placement.
Negotiating Relocation Assistance As The Final Piece of the Hiring Process
As a candidate moves into the offer stage, the practical necessities surrounding relocation start to come front-and-center.
You should already have a sense of what’s important to the candidate, and what the hiring authority will expect.
Is this an operational role that requires the candidate’s full attention from day one? Remind your client that the candidate’s attention will surely be divided – and their productivity lower – if they are in the middle of buying a house, or finding a new high school for their daughter.
Does the candidate have children? Elderly parents? A spouse in a niche industry? All of these factors may or may not come up during initial screening – but they are critical to know at this stage. You can understand which details of the relocation package to emphasize, or even which ones you think the employer needs to beef up for a particular offer.
How To Pull Different Levers When Relocation Becomes A Sticking Point
As a recruiter, you may not have the authority to redesign a company’s relocation package, but you can get creative to make the hire happen.
When you’re doing salary negotiations for someone who’s already in high demand, you have a lot of leverage. First and foremost is money. This could come in the form of salary, of course, but signing bonuses and stock options can also be negotiated to help offset the costs of relocation.
If your client doesn’t have a big relocation budget, you may be able to find a candidate who doesn’t need one. LinkedIn and other social networking sites are excellent tools for creative sourcing (e.g., finding an out-of-town candidate who has the skill set you need with a lot of connections in the relocation city. Maybe they used to live there, or went to college nearby.)
The conversation might open: “I’ve got the perfect candidate for you in Kansas City. I know you can’t pay for relocation from there, but it turns out they’re looking to come to Seattle anyway because they have family here. Here’s what they need. They need an advance to help with moving costs, and they’re really excited to get a little extra stock to make up for it.”
If additional money or stock isn’t possible, a good recruiter will find a way to highlight the other benefits of the opportunity.
- How does the new company’s work/life balance compare with the candidate’s current role?
- What new health or financial benefits will the candidate now have access to?
- What does the upward mobility of this opportunity mean for the candidate in 5 or 10 years?
- What educational opportunities might be good for the employee’s family? Is there a unique private high school that would appeal to their child?
- Are there recreational opportunities like golf clubs or outdoor activities the candidate will enjoy in the new city?
- What are the tax advantages the new hire can expect by moving (like claiming a relocation allowance on their taxes)?
A smart recruiter takes a holistic approach to negotiations on behalf of both the hiring company and the candidate. All of these topics and more are on the table for discussion. At this stage, the candidate and the recruiter have a common interest. The recruiter’s role is to try to identify the details that will get the job done.
How Do Relocation Packages Work?
Most relocation packages work one of two ways. Either the hiring company directly reimburses the new employee for agreed upon costs related to the relocation, or the new employee receives a lump sum they can use to cover relocation expenses as they see fit.
How Much Is the Average Relocation Package?
Most lump sum relocation packages are $10,000 or more according to the Atlas 2019 Corporate Relocation Survey.
In the Atlas survey, 47% of respondents said their lump sum relocation package was at least $10,000. A smaller group, 38% of respondents, said they were offered less than $10,000. The remaining respondents either didn’t offer such a package or didn’t know the amount.
But you shouldn’t worry about the average. Relocation assistance packages vary wildly depending on the company and the level of the job. Relocation packages topping $100,000 are not unheard of for C-Level hires.
What’s Included in a Relocation Package?
The three most common components of a relocation package are travel expenses, temporary housing, and shipping of household goods.
The Atlas survey asked companies to name the main components of their relocation assistance program.
- Travel Expenses (final move): 54%
- Temporary Housing: 53%
- Household Goods Shipping: 50%
- Travel Expenses (home-finding trip): 43%
- Real Estate Assistance/Transaction Costs (origin/selling): 40%
- Miscellaneous Expense Allowance: 38%
- Storage: 38%
- Real Estate Assistance/Transaction Costs (destination/purchasing): 32%
- Rental Assistance/Transaction Costs: 29%
Big companies will usually have a standard relocation package as well as an infrastructure built around it. A company that’s frequently relocating people will often own apartments or houses used as temporary accommodation. But smaller companies can’t typically afford that.
Other Components of Relocation Packages
As you can see from the survey results above, the basics of a relocation package involve moving the person’s stuff, the person themselves, and finding them a new place to live
But many, many other offerings and services can be part of a relocation package. Here are some of the perks a candidate might need to convince them to take a role in a new city.
Spouse/Partner Employment Assistance
With 2-income families becoming more and more prevalent, it’s no surprise that candidates are reluctant to take a job in a new city if their spouse can’t find one too. According to Atlas, more than half of candidates who decline relocation do so because of concerns about their spouse’s employment prospects.
According to the Atlas survey, 61% of firms have offered employment assistance for a candidate’s spouse/partner.
Their survey found that, among small and midsize companies, networking assistance is the most popular form of spouse/partner employment assistance. Simply introducing a candidate’s partner to business associates in their field comes at almost no cost to a company – but if that contact turns into an opportunity, it could make all the difference in a candidate’s relocation decision.
Among large firms, paying for outplacement or career firms is the most common benefit. More than half of the large firms surveyed said they paid for such assistance.
Cost of Living Adjustments at New Location
The real estate dollar goes a lot farther in some cities than others. The $30,000 dollar raise a candidate may get to leave their job in Kansas City for a new one in San Francisco won’t be quite as impressive when she starts looking for homes to buy.
A Cost of Living Adjustment (COLA) is a key part of the relocation package especially for companies located in supercharged housing markets like San Francisco, Seattle, and New York City. According to Atlas, 49% of companies have offered COLAs to candidates. Large and midsize firms are more likely to do this.
Alternative Assignments
The most common reason candidates turn down relocation packages? “Family issues/ties” are a factor in 58% of refusals according to the Atlas survey.
Whether it be a daughter’s chance at starting for her high school basketball team, or an elderly parent’s need for frequent care, some people simply can’t uproot their lives.
But what if they didn’t have too – at least, not completely?
Alternative work arrangements can address objections. Some examples might include:
- Extended business travel
- Cross-border commuting
- Rotational work
Use of these arrangements has risen dramatically the last decade according to the Atlas survey. Fewer than half of firms offered such arrangements in 2012. Now 64% of companies do.
An alternative arrangement could mean that an executive transferred from NYC to a job in Eastern Europe has assistance provided so his family can live in Amsterdam.
It might mean a key member of the marketing team working from home in Seattle most weeks — but traveling to company offices in San Francisco for the first week of every month.
Expanded Moving Coverage and Moving Specialty Items
Paying to move a candidate, their family, and basic household goods, can cover many situations. But companies also pay to move specialty items especially for candidates at the executive level. Some common elements of moving coverage include:
- Packing all items
- Providing a containerized shipment service
- Moving one or more cars
- Moving exercise equipment
- Moving pets
- Moving recreation and/or lawn equipment
Renting or Home Buying Assistance
A company’s core relocation package usually includes reimbursement for the costs associated with buying and selling a home. What about the effort of getting a home ready for market and sale while also looking for a home in a new city?
This process can be incredibly time consuming and stressful. Companies may find it worthwhile to help new employees get settled, and move their focus to their new employment role faster.
Renter or home buyer assistance can include offering home buying tips, paying early lease cancellation fees for renters, and providing home marketing assistance.
Caregiving Assistance
One of the fastest-rising areas of relocation assistance is caregiving assistance. The 2019 Atlas Corporate Relocation Survey found that 69% of companies offered child care assistance for relocation employees. That result is the highest mark they’ve measured in the 52-year history of the survey.
The Atlas survey found that 60% of companies offer disability-caregiving assistance, and 59% offer eldercare assistance.
The Right Relocation Package Is Part Of The Overall Fit
The relocation options considered above have become popular because they help candidates settle into their new job faster, and lower the financial and emotional stress that relocation is bound to cause. Recruiters and candidates should consider which will apply, and figure out how to make them happen with the hiring authority – whether through aid, reimbursement, or a straightforward cash payout.
Ultimately, a good recruiter isn’t trying to sell anybody anything.
On the client side, they’re trying to get the best candidate, at the best overall value, in the shortest amount of time, which means taking a knowledgeable but wide view of where to find and land the perfect hire. On the candidate side they’re trying to lay out a great employment opportunity they believe in. By understanding the specific needs of a candidate as it relates to relocation, they can make sure they play matchmaker to create a great opportunity for both sides.
