Mitch McDeere, the Tom Cruise character in the movie The
Firm, interviewed for a job at a Memphis law firm, the
company offered him a dream deal -- a fat salary, a leased
BMW, a low-interest mortgage and paid-off school loans.
maybe you shouldn't expect a Beemer -- even today, when companies
are bending over backward to hire qualified employees. Still,
knowing what others are being offered may help you strike
a better deal when it comes to relocation.
packages vary from company to company, but they're far more
generous than 10 or even five years ago.
Knudsen, manager of relocation services for Bloomington, Ill.-based
State Farm Insurance Companies,
says someone hired 20 years ago would be stunned at what people
are offered today.
never had to go out of our way to attract people to our doorstep.
They were beating down our door. Things have changed. We're
competing for the same tight labor resources as everybody
Farm, new hires and transferees get a pretty sweet relocation
deal. While upper-echelon employees may get a few extra perks
here or there when relocating, generally speaking, says Knudsen,
the company's relocation package is one size fits all.
with home sale
It starts with helping employees sell their homes.
long time, according to Knudsen, the company had one type
of home buyout program. Employees got a couple of appraisals
and, as long as they were within 5 percent of each other,
that was the guaranteed buyout.
point the employee could market the home for up to 120 days
to try to get a better price -- or sell it for up to 5 percent
less than the guaranteed buyout. But Knudsen says the company
wanted to give employees more incentive to help in the marketing
appraisal process took in all trends and could look like a
negative," says Knudsen. "If people lived in a less
desirable area, they'd get an appraisal and say, 'Ugh, that's
$20,000 less than I paid for the property.' So, we wanted
to find a way to avoid the stigma of a negative appraisal."
State Farm came up with is a program that requires employees
to get the house listed right away and lets market conditions
control what the house is worth. Knudsen says the company
saves about $1,000 in appraisals. In return, employees get
an incentive bonus of up to 4 percent based on the sale price
of the home. In addition, they're reimbursed for closing costs.
with home buying
In addition to paying full moving expenses, State Farm also
helps employees with house-hunting in the new location. If
the employee gets sticker shock, State Farm comes to the rescue.
is negotiable. Some things employees will have to ask
for and justify. A lot of companies have standard relocation
packages -- they're not going to deviate from their
policy. If you want something extra you have to sell,
there's a higher cost of living involved in the neighborhood
they're moving into, we'll pay a cost differential benefit
over a four-year period," says Knudsen.
companies are as generous as State Farm. Relocation specialist
Bill Reber of Bill Reber and Associates in
Dayton, Ohio, says some companies will do everything for the
internal transfer candidate and only do some things for outside
is negotiable. Some things employees will have to ask for
and justify. A lot of companies have standard relocation packages
-- they're not going to deviate from their policy. If you
want something extra you have to sell, sell hard," says
Reber. "A lot of companies don't want to set a precedent;
it can get expensive -- do it for this guy and not the last
guy, then he gets disgruntled."
Here's what Reber says employees should feel comfortable asking
for in a relocation package.
fees and closing costs at both ends.
living expenses. Reber says the norm is for 30 days, sometimes
it could be extended to 60.
hunting trip. The standard is one weekend, three days max.
Possibly a second trip after an offer is accepted.
expenses en route to new home.
you're a renter, some companies will pay the lease cancellation
gross-up. This covers any tax liability the employee incurs
for relocation benefits.
Here are some additional benefits companies may -- or may
not -- agree to provide.
buyout of home.
trips to previous home if employee has moved ahead of the
spouse in finding employment.
mortgage assistance. If you're carrying two houses, or one
house and temporary living expenses, the company may be
willing to help.
mortgage assistance is a perk State Farm grants.
pay one of the housing costs through a 45-day period,"
says Knudsen. "They don't have to feel pressured that
they have to buy right away. This gives them time to buy smart.
In essence, we're picking up the mortgage payment on the original
house for a couple of months or we're paying the temporary
Employees who have little or no job experience, perhaps hired
right out of college, usually can't hope to get the same relocation
deal as an experienced employee. Reber says companies may
offer these employees a lump sum payment.
company will usually do one of two things -- pack, move and
pay for temporary living expenses, or give the person a lump
sum. The employee moves himself and pockets whatever is left
over. It's usually $3,000 to $5,000 and is sometimes seen
as a front-end bonus," says Reber.
may be a catch. According to Reber, those employees should
be prepared to pay out of pocket because sometimes the money
isn't payable until 90 days on the job.
line when it comes to relocation expenses is: Find out what
the company's policy is, get a good grip on what it will cost
you to relocate and see if the company policy is adequate.
If it isn't, see if there's room for negotiation. Many companies
will try hard to make it work.
employees are more open to talking about 'I can't make this
happen,' " says State Farm's Knudsen. "If they move
and find the housing is too expensive, they have sticker shock.
Then you have an unhappy family, unhappy employee, productivity
may suffer and, in the long run, the policyholder, our customer,
Posted: Oct. 15, 1999