Inside Recruiting: Navigating Relocation Benefits in a Remote-Work World

Inside Recruiting: Navigating Relocation Benefits in a Remote-Work World

Author: Sean Rae, Managing Director at Workforce Genetics

The pandemic changed—and continues to change—how people work, how they think about work and how employers and job seekers negotiate employment offers and compensation packages. Employers were forced to accept remote work during the pandemic; now and perhaps moving forward remote work has silently become an embedded and expected part of most employer operations and many people’s work lives.

So what has this sea of change done to relocation benefits? One might think that relocation or “relo” benefits have gone the way of the Dodo bird given this new openness to remote and hybrid work environments. It’s important for job seekers to understand that relo benefits are still available and can be negotiated even though many traditional workplace norms have vanished and others remain in flux.

We reached out to Sean Rae, recruiting veteran and current Managing Director at Workforce Genetics, to get a sense of how the relo game has changed and how a job candidate can best negotiate a relo package that makes sense for their specific situation and needs.

What’s your general sense of how employers and candidates are looking at relocation packages in this new remote/hybrid work environment?

Employers need to avoid approaching relo as a ‘one size fits all” and candidates need to look at relo this way, too. Everyone’s situation is different. With the remote and hybrid work environment, companies need to decide if they want people in the office, depending on the job type and industry, or do they want to be more competitive and give them the chance for remote work. If they need them in the office, an employer needs to be ready to invest in relo.

Candidates have the upper hand right now. Candidates are interviewing recruiters and employers, not the other way around. While we’re seeing layoffs in other sectors and in biotech, talented candidates still have leverage. These candidates have the power to negotiate for relo benefits or even to choose not to relocate given this leverage.

So, for employers, understanding the current remote work environment and that the best candidates have choices should drive how relo packages are deployed. And for top candidates, they need to understand what is important to them and go for it in negotiations. Solid relo packages are still out there, it’s more of a question for the employer and candidate about alignment and fit for each.

For job seekers, what are some things to avoid and things to do when addressing the relocation issue?

This issue is quite complex. It depends on the stage of a person’s career and what it is that they do. 

For example, a scientist just starting their life sciences career might not need relo as much. They are more likely to be renting and be single, so their relo needs should be significantly less than a mid-career professional that likely owns a home and has a family. This changes the relo calculations. An early career candidate might not even address relo until the very end of negotiations and that might be appropriate because it’s not as much of a priority. 

On the other hand, I’d recommend that a mid-career pro address relo issues early on in the interview process to avoid getting to the end only to realize the relo package isn’t there or is totally insufficient. Recruiters and employers expect the relo issue to come up, especially today because the remote/hybrid or in person issue arises very early. This then becomes a very easy segway into the relocation benefit conversation. 

Why go through multiple interviews, panel interviews and all this time to get to the end and find that the relo you need isn’t there and the whole process was a waste of time? It’s like a person earning $250K going through a complex, time consuming interview process only to find out that this potential new job only pays $75K. 

Candidates have the leverage right now and they can use the hybrid/remote/in person conversation, which as I said happens early these days, as an easy way to find out if relo is there and if it will potentially meet their needs. This isn’t confrontational or inappropriate; these days it’s an expected and natural part of the process that can ultimately make the process faster and more efficient for the candidate and the employer.

What is typically included in a relocation benefit?

Again, it’s complex and is case-by-case, though some companies still take a one-size-fits-all model. Often companies say we’ll give you $5K in cash or we will help you pay to break your lease or pay for your moving vehicle. Some companies have this baked in regardless of the candidate’s circumstances.

The most common relo package is a lump sum payment that will cover getting your house on the market, getting it packed up and moving you from one state to another. The amount allocated differs, obviously, but that’s typically what occurs. But this should be flexible from an employer’s perspective. 

I worked with a client that wanted an experienced machine operator with highly specialized skills to move from Florida to New Jersey; they paid him $10K in relo benefits to get him to make the jump and his salary per year was $80K. That relo investment was substantial, but because his skills were desired and hard to find, the relo package was an enticement and made sense for both parties.

For a candidate, you need to calculate what your relo will cost so you go into the negotiation informed and then ask for what you need.  However, your ask needs to be informed by how experienced you are and what size company you’re negotiating with. Larger biotechs will tend to have more robust, established relo programs that have dedicated relocation support teams that will help you through the entire process. On the other hand, mid-sized life sciences companies might just give you the cash and you have to handle the rest. 

Another approach to negotiating relocation is temporary housing. This applies to higher level professionals for the most part. But instead of a lump sum relo payment, some employers will pay for travel and apartment housing a few days a week, allowing the new hire to remain at home and ‘commute’ to the employer’s office location. 

The broader point is that a candidate needs to do their homework and be prepared to know what relo support they need and what an employer is likely to be able to offer. You never want to be in a situation where you relocate and it costs you money out of pocket. 

What are a few lesser known relocation impacts should candidates consider?

Like I’ve said, every situation is different, but candidates should always consult their insurance and tax advisors when making a big change like this. Always talk to your accountant. I’m not a tax expert, but relocation payments are considered taxable income by the IRS.

I think the most important tax implication to understand is that when your relo payment is disbursed it will very likely be taxed before it gets to you so your $10K relo payment might be $7K post tax. You can ask an employer to ‘gross up’ your relo payment to cover for the tax loss; that’s negotiable as well. On the other hand, if your relo isn’t taxed up front, you could get hit with the taxes when you file your returns. 

Again, I am not an accountant, so I strongly suggest you ask the employer how they disburse/tax relo benefits and then consult with your tax advisor to cover your bases.

No candidate should put themselves in a spot where accepting a new opportunity costs them money out of pocket because of taxes or relocation costs. Lean on your recruiter, ask your potential new employer inf