Relocation Benefits Are Often Negotiable

by | March 10, 2009

When Jeff Rohl accepted a job as director of human resources and compensation for Ahold USA Inc. in Bristow, Va., there was only one problem: His relocation package allowed him temporary housing in the wrong location.

Like many companies, Ahold USA offered to cover the costs for Mr. Rohl, his wife and three daughters to live in short-term quarters in their new location, Bristow. But Mr. Rohl and family needed to stay an extra month in Buffalo, N.Y., so that his children could finish the school year there.

"This was one of the quirks of the policy, and they were willing to do something about it," says Mr. Rohl, who was ultimately reimbursed for spending 30 days in temporary housing in Buffalo and 30 days in Virginia. Although relocation policies aren't intended to be open-ended bargaining sessions, exceptions often can be made for clients' special needs, relocation executives say.

For transferees, the difficulty is in knowing where the negotiating room is. In general, says Carmelita Brown, vice president of global policy consulting for Prudential Relocation, employees probably have more leverage now than they think due to an improving job market. With talented leaders in demand, "HR is usually willing to seize the need to negotiate" with a skilled employee being asked to relocate, she says.

Go Ahead and Ask

Employees, with job freezes and payroll cuts fresh in their minds, may be reluctant to test their negotiating power. Of the employees surveyed by the Society for Human Resource Management and CareerJournal.com this year, only 34 % had attempted to negotiate their relocation costs, whereas 56% of the human-resource professionals interviewed said payments for relocation costs were negotiable.

Ms. Brown says many firms are building more flexibility into their policies to accommodate the endless variety of household situations. Several now offer transferees lump-sum payments for house-hunting, temporary-living and other incidental expenses, instead of dictating where the employee can stay and who can accompany them. This allows employees to divide the money between hotels, rental cars and meals in a way that suits them best. "They will get $5,000 to spend, and they can bring their boyfriend or their mother with them to look for a house if they want," says Ms. Brown.

Not all companies have policies flexible enough to meet every family's unique needs, and transferees should know which benefits are most negotiable and the best way to negotiate them.

Each family's relocation needs are unique, so the first step for transferees facing a move is to read and understand their company's policy thoroughly. If they or their family have special needs that aren't covered by the policy, they should bring it up with the human-resources department, says Mr. Rohl. "But when you have that conversation, you should have all your facts ahead of time. If the policy covers moving only two cars but you have three, you should prepare yourself for that discussion. If there is a legitimate business reason, mention it," he says.

In general, companies are most sensitive to family and medical issues, says Cris Collie, executive director of the Employee Relocation Council, an organization based in Washington, D.C. Soon-to-be graduating teenagers, sick children and elderly parents rank among some of the top issues that employers will accommodate with benefits like additional temporary-housing or moving-cost allowances, he says.

Of course, "the person with a vacation home in the Caribbean who asks for help in selling it will have more trouble getting that covered," says Mr. Collie. The most successful exceptions, according to Ms. Brown and other relocation executives, involve swapping one benefit for a comparable one without incurring extra costs to the company. For example, a spouse may need job-search assistance but not eldercare assistance or housecleaning services, and a swap might be suggested.

Executive Privileges

"Make sure to target your needs. Don't ask for more and more and more," says Ms. Brown.

Still, your rank can make a difference. Says Joseph Morabito, president and chief executive officer of Paragon Global Resources Inc., a Rancho Santa Margarita, Calif., relocation company, "if it's a really high-level employee, then everything could be negotiable, everything could be on the table." For example, high-level executives might be reimbursed for the commission on selling a house, "a benefit that's usually not provided for lower-level employees."

Still, companies have to be sensitive to potential issues of discrimination and can't offer the same level of employee different kinds of benefits. "There are employees who ask for exceptions and just want more money; those are the ones that don't get approved. But if there is a compelling reason to give them more money, if the family has medical issues, then the company has a defensible position," he says.

Companies also balk at covering household expenses that aren't necessities. Mr. Rohl remembers one client who wanted the company to move their patio bricks. "They really liked these bricks and wanted to take them. But we have to look at what makes sense versus what's off the wall," says Mr. Rohl. However, if the job-market recovery makes greater strides, policies could shift back to being as generous as they were in the recent boom years, when paying a little extra to move someone's patio bricks didn't seem so off the wall.

"With relocation policies, there is an ebb and flow to them. They were a lot nicer in the late 1990s because there was a huge need to get people," says Mr. Collie. Right now, relocation policies are in the bare-bones phase of the cycle following a severe drop in relocation activity. "If the recovery becomes more employment oriented, we will see relocation policies revised to address the demands of the employers and the supply of labor," he says.

Filed Under: Job Search


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