A few years back, employers often would not only pay moving expenses for a new or relocating employee, but also give other perks like a signing bonus. After moving multiple times for different jobs, contractors got to understand the benefits of these lucrative relocation packages. However, these packages aren’t nearly as rewarding lately. In fact, many new job offers come without any assistance to move at all.
The reason for this change is simple: the economy is affecting relocation compensation. Basically, fewer companies today are willing to do whatever it takes to get a candidate in the door. Therefore, most employees are expected to pick up some, if not all, of their own moving expenses.
According to the Employee Relocation Council (www.erc.org), companies are watching the bottom line, especially since the average cost to relocate an employee who owns a home is $60,831. That average drops to $18,564 if the employee rents. For new hires, the average cost is $49,469 for homeowners and $14,001 for renters.
As a result, employers have become reluctant to offer certain moving perks, such as buying a relocated employee’s old home, providing temporary housing for new hires, and paying movers to do all the packing and unloading. Caps on how much an employee can spend to move have become common. Any expenses above that cap, the employee pays.
In another attempt to control costs, many companies have turned to a tiered-policy approach to relocation assistance. This approach is often based on the employee’s grade or salary level, with variances in the relocation package for each tier. For example, even though they’ve lost some perks, relocation packages for top-tier executives are still rather excellent. For mid- and lower-level workers, expensive moves are definitely a thing of the past. On the bottom tiers, a base package might only include the cost of a rental truck.
The change in relocation assistance is an adjustment to workers on the move. But the central question about relocating is still the same: is it worth doing? Employees must be compensated acceptably to make their relocation worthwhile. Compensation to an employee can mean many things: money, the chance to move closer to family, the opportunity to gain skills useful for the future, etc.
If employees don’t feel they’re being compensated enough, they’ll negotiate. This doesn’t seem to be getting them very far, though, as most hiring managers don’t have the authority to change company relocation packages. In addition, companies view relocating someone as a last course of action. Finally, companies know it’s an employer’s market, and they have the negotiating advantage in most cases. Therefore, don’t expect the face of relocation assistance to change much in the near future.
Relocation packages are cyclical, however. So if the census bureau is correct and we’re headed for a personnel shortage by 2012, expect perks to be back in vogue and the companies who give them to again be sweating the cost. IBI