If you’re thinking about relocating for a new job, there’s a good chance you may have to cover your own moving costs, even if you’ve got a job offer.
When you search for openings on the major job boards lately, lots of the ads say: “No relocation assistance is provided.” For those positions that do offer to pay moving costs, the payments are often capped, sometimes below $10,000.
With the typical corporate relocation costing about $60,000 for homeowners and $18,000 for renters, according to Worldwide ERC, such an expense can cause economic hardship for job seekers. That is, if you’re lucky enough to even get a job offer when applying for jobs in other towns, states or countries.
Some employers aren’t even looking at out-of-town applicants these days because there are so many great candidates right in their own backyards, recruitment experts said. Others don’t want to have to deal with an employee who might not be able to sell their hometo move, thanks to the dismal housing market.
That’s bad news for job seekers looking to relocate to a region with more job opportunities.
“A lot of people are landlocked because companies want to pay less, not more, to bring in new talent,” said Nancy Keene, director at recruiting firm Stanton Chase. If two candidates have similar credentials, she added, the local guy or gal is likely to get the gig.
When the economy is strong, employers sometimes go to great lengths to find the best talent no matter where they live. Before the recession, that meant lucrative relocation packages that covered moving expenses, house-hunting trips, and even money toward selling a house or buying a new one, especially for executive-level employees.
But now, such perks are being cut just like so many other employee benefits.
Don’t expect any help
An October poll conducted by the Society for Human Resource Management found that 19 percent of companies had cut employee benefits in the last six months because of the economy. Among those:
- 17 percent eliminated corporate-relocation programs entirely.
- 25 percent froze corporate-relocation programs.
- 58 percent reduced corporate-relocation programs.
And that means more job seekers who want to move to accept a new position are on their own.
“We see a huge trend of people moving for jobs but paying for their own relocation,” said Kimberly Smith, founder of CorporateHousingByOwner.com and owner of corporate housing company AvenueWest Corporate Housing. Many of those individuals who are also homeowners are becoming “accidental landlords,” she said, because they are forced to rent out their home.
Another problem is employers who choose not to hire job applicants or relocate existing workers to other company locations due to the decline in home values, Smith said.
She gave the example of one woman who worked for a major bank in Atlanta who was up for a prime transfer to the company’s London office but didn’t get the job because she was underwater on her mortgage. The bank didn’t want to deal with the financial issues related to the employee’s house, Smith said.
“There are lots of things employers can’t discriminate against you for, but the value of your home they can,” she said.
Industries that have tightened their belts on relocation costs include publishing, manufacturing, some consumer products, banking and finance, said Bill Humphrey with Xonex Relocation, a corporate relocation company.
Midlevel managers and rank-and-file workers are most likely to have to pay moving costs out of their own pocket. Workers hired to fill highly specialized and skilled jobs are still seeing most of their moving costs covered, he said.
Humphrey also has seen some companies offer assistance with underwater mortgages for key executive relocations, but the amount is usually capped at $10,000 to $20,000.
Kate Herrick wasn’t expecting any relocation help when she was searching for a job.
Herrick lost her position as a senior business analyst in financial services and software at a contracting firm March 2009 and had no luck finding other work in Seattle, where she and her husband lived.
“We decided to take a stab at Madison, Wisconsin,” she said. “We vacationed there every year, and my husband was from the area originally.”
She started sending out resumes and almost immediately got two or three phone calls about jobs a day. “I got an offer within two weeks from Beacon Technologies in Madison,” she said.
When negotiating her salary, she diplomatically brought up relocation costs. “But I didn’t want to make it seem contingent on me taking the job. So I said something like, ‘The cost of relocation is steep,’” she said. “Their response was, ‘We’re sure you’ll manage.’”
Indeed, the couple tapped into their substantial savings to cover the cost of the move.
Although they didn't have to worry about selling a house, they had to continue paying rent in Seattle until their lease was up.
In the end, Herrick said, it was worth it. Without a job in Seattle, she would have gone through her savings and faced major financial problems.
Have a plan
Most career experts suggest getting your financial house in order before you start applying for jobs.
Know what you’re going to do if you can’t sell your home or you’re stuck in a lease. And have a backup plan in the likelihood that most of your moving expenses will be coming out of your pocket. Share your detailed plan with a hiring manager if they’re apprehensive about hiring you because you have a home you need to sell or you require major moving expenses, said Smith.
“If you thought those things through, you will stand out among other candidates,” she added.
Recruiter Keene also suggested targeting towns where you have friends or family, so you can stay with them while looking for a job in a new town. Get a local mailbox, and let hiring managers know you’re now based in the area, she advised.
If you really need relocation help, Keene suggested looking for work in secondary markets instead of big cities because smaller towns have a tougher time attracting talent and may be willing to pay some moving expenses.
As Herrick readily admits, picking up and moving to Wisconsin initially made her “nervous as hell.”
“But sometimes you have to take chances,” she said. “Sometimes you fall on your face and fail. But to not try and just stay in one place waiting for something to happen won’t work.”