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Looking for relocation expenses? Don’t expect much

If you’re looking to get a new job out of town and expect to get moving money from your new employer, don’t expect much.

If you’re looking to get a new job out of town and expect to get moving money from your new employer, don’t expect much.

Housing and relocation assistance provided by corporations across the country to new and existing employees hit the skids this year, after declining steadily since the beginning of the Great Recession. Help with everything from selling a previous home to lump-sum relocation payments and temporary relocation help saw continued declines, according to a recent poll of human resource managers at major corporations conducted by the Society for Human Resource Management, or SHRM.

“Company relocation policies are catching up to the realities of the market,” said John Touey, a principal at executive search firm Salveson Stetson Group, about the cutbacks in moving benefits. “I think employers are balking at the costs.”

But they’re not balking for everyone. High-level executives, he added, including C-suite type positions, are still typically getting all their expenses covered.

It’s the mid- and lower-level employees who are being left high and dry, or saddled with moving expenses they may not have had to cover in the past, he continued.

Share the pain
Just recently, he said, he had one job candidate that an employer wanted to hire but the company refused to pay for the entire move. “They decided to share the pain of relocation,” he said.

The most commonly offered relocation assistance employers provide is a single lump-sum payment, but the benefit is on the decline. This year 26 percent of human resource professionals surveyed said their companies were providing such a benefit, down from 30 percent in 2009, according to the SHRM survey.

The No. 2 spot most common benefit offered is a temporary relocation benefit and that dropped to 25 percent, from 35 percent in 2009 and 42 percent in 2007. Such perks ease the burden of employees who must maintain two households — a temporary location for a temporary job assignment and a permanent home to which they plan to return.

One of the biggest problems related to relocations for both employers and employees has been homes that employees are unable to sell when they take a new, permanent assignment in another town. So many homes are underwater, or worth less than their mortgage, that employees often find themselves unable to sell their homes without a major financial hit.

In the past, many firms were willing to help employees who had to sell their homes for slight losses. Today so many people expect losses and the losses are often so big, employers haven’t been willing to pay, said Mike Gonzales, CEO of Armstrong Relocation, a relocation company and major hauler for United Van Lines. “Companies now place the burden on the transferee,” he maintained.

Help gets scarce
Indeed, everything related to home assistance for relocations declined in the SHRM poll:

  • Mortgage assistance dropped to 3 percent this year from 12 percent in 2007.
  • Down payment assistance on a home skidded to 2 percent this year, from 11 percent in 2007.
  • Reimbursement for a loss sustained from a home sale dropped to 5 percent from 6 percent in 2009, the most recent figure available.
  • Assistance selling a previous home dropped to 9 percent this year, down from 19 percent in 2007 and 11 percent in 2010.
  • But mortgage insurance assistance saw an uptick to 2 percent this year from 1 percent last year, versus 5 percent in 2007.

The poor U.S. housing market has impacted workers looking to relocate like never before. Roughly 28 percent of the home-sale transactions Cartus Corp., a major relocation management company, sees today are short sales, said Matt Spinolo, the firm’s executive vice president, global client service. “Five years ago, there were almost none,” he added. A short sale is when a homeowner sells his property for less than what he owes to the bank.

Many employees, he said, are willing to take a loss on a home or even bypass a cost-of-living increase to land a job. “They just need a job, period,” Spinolo maintained.

And clearly cost-of-living differentials are hard to come by these days. The SHRM poll found that only 10 percent of employers offer the benefit to relocators, down from 22 percent in 2007.

And if you want to check out what could be your new hometown, don’t expect much financial help from employers when it comes to the cost of the visit. The survey found only 18 percent of HR professionals offered that service at their companies, down from 40 percent in 2006. And trailing spouses are also increasingly on their own. Benefits for helping a spouse relocate dropped to 12 percent this year from 21 percent in 2007.

Policies must be fair
If you work for a company that moves to a new location and you’re unable to commute to it, the employer is under no legal obligation to pay for your relocation costs if they offer you a job at the new location, said Marc Mandelman, an employment lawyer for Proskauer.

But employer policies have to be applied fairly and cannot discriminate against a certain class of employees, he said. A company can, however, pay to move workers with certain skill sets they need, or certain levels of employees if they chose to and not others at a company.

In this case, if an employee can’t afford to make the move because the cost of the relocation is too high, or they are upside down on their mortgage, they may be eligible for severance depending on the terms of the plan their company offers. They may also be able to get unemployment benefits, depending on a state's laws, Mandelman explained.

As for getting the most you can out of relocation-stingy employers, job seekers walk a fine line when it comes to asking for moving money, especially early on or late in the process, said Eileen Levitt, president of human resources company The HR Team. You may not have a lot of leverage to negotiate much more than a few thousands dollars towards your move, she maintained.

When to negotiate
“For the run of mill job paying $40,000 to $60,000, there’s probably a local job market of people who can fill that position so they’re not going to give you anything,” she said. “But if you have a unique skill set that’s very much in demand, or you’re a high-level manager, you can negotiate it.”

She advised that job hunters do their homework before they go for an interview and figure out what they realistically need to make a move. Don’t bring up relocation until you’ve had an interview and feel like they’re considering you for the position.

At that point, she suggested job seekers say something like, “I’m not sure if I’ll need relocation assistance but what is available if I do?”

Demanding a lucrative relocation package in this job market, she added, “is pushing your luck.”