Firms tell new hires: 'Move yourself'
After moving twice for two different jobs over the past three years, Kristin knew a thing or two about relocating.
During her first move from Athens, Ohio, to Chicago in 1999, she received $2,800 from her employer for moving expenses, plus a $2,000 signing bonus. The second move 1-1/2 years later was not as cushy. Her new job with a media company in Cincinnati offered her nothing to move.
Kristin, who had worked as a recruiter in Chicago, was not surprised by the lack of compensation. "The amount of [money for relocation] packages we gave out, even for senior executives, decreased," says Kristin, who asked that her full name not be used.
Similar stories are being told by many workers now on the move. Simply put, relocation packages just ain't what they used to be.
"Fewer companies are willing to say '[we'll] do whatever it takes to get this person here.' The economic downturn is hitting every area," says John Challenger, chief executive officer of Challenger, Gray, & Christmas, an outplacement organization in Chicago. "We have moved into an era of co-pays, which means that employees are expected to pick up some, if not all, of the moving expenses."
For lower- and mid-level workers, high-priced moves are a thing of the past. Employers are reluctant to offer all sorts of moving perks, such as buying a relocated employee's old home, providing temporary housing for new hires until they find a new home, 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.
According to the Employee Relocation Council (ERC), 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.
To control costs, "organizations have increasingly adopted a tiered-policy approach over the past 12 years," says Anita Brienza, an ERC spokeswoman. This approach is often based on the employee's grade or salary level, even when relocating existing employees.
Top-tier executives still receive excellent treatment, says Mr. Challenger. He recalls one California company that recently paid for a truck with a special refrigeration compartment to move an extensive wine collection of a new executive.
On the bottom tiers, a base package might only include the cost of a rental truck. Some employers, however, will cover all moving expenses for lower-level workers. Last fall, Chris Gudaitis moved to take a job as an account manager for Sensient Technologies, a food-additive company in Milwaukee. His prior employer in Boston had gone through two rounds of layoffs. Mr. Gudaitis did not want to be next.
When accepting the new job, Gudaitis, who was renting at the time, knew that he would have to break the year-long lease. His new employer, he says, "broke my lease, paid for me to fly out there for a weekend to look at the area and find a place. My boss and co-workers, who knew the area, advised me of where to look." His company footed the bill for packers and movers, and even gave him a moving allowances (half a month's salary) that could be used for anything from furniture to cleaning supplies.
Those who are dealing with less generous employers can try to negotiate a better deal. "There is always wiggle room," says Challenger. "[But] make sure you have the job offer before you start to negotiate. Companies are more reluctant to move someone from out of town when they know they can find someone locally."
Challenger adds that companies in small towns are more apt to "sweeten the deal" for qualified candidates than firms in large cities. "In a bigger town, there are more local seekers and more competition."
In Kristin's case, she decided not to negotiate, since she knew that her future salary would make up for the loss on moving expenses. It also didn't hurt that her father is in the moving business. "With the changing economy," she says, "I felt that it was my responsibility to pay for [moving] and to get there myself."
