Employee moves are on the rise, and so are relocation benefits
FORTUNE — Dear Annie: My boss just told me that my employer, a Fortune 500 company, wants me to take a new job in San Francisco, which is about 1,200 miles away from where I live now. The position would be a lateral move rather than a promotion but, the way it’s been described to me, it does offer more opportunity for advancement than my current job, so it looks like a good career move.
I’m concerned, however, about the move itself, for three reasons. First, the housing market where I live is still so bad (my neighbor’s home has been for sale for over two years with no takers), I doubt that I can sell my house except at a substantial loss. Second, the cost of living in northern California is much higher than where I live now, but is it customary to ask for a raise to cover that? And third, my partner has a thriving career here and would need some help finding a new job. I’ve heard that some companies offer “trailing spouse” job-search assistance, but is it realistic to expect that? Can I negotiate for it? — Up in the Air
Dear Up: You’ve picked an interesting moment to ask. Employee relocations have been on the rise since 2010, according to the latest results of a detailed survey that Atlas Van Lines has been conducting every year since 1967. “Lots of companies are struggling to put the right talent in the right places, and moving someone you know is often less risky than bringing in someone new,” observes Ryan McConnell, an Atlas vice president. “But sometimes you just can’t move an existing employee — which explains why 52% of relocations last year were new hires.”
Almost all big companies have formal relocation policies in place, so your first step should be to find out what your employer typically offers the people it transfers from one place to another. “Usually we see different relocation benefits packages at different levels,” McConnell says. “A C-suite executive will get a different package from a middle manager, a skilled professional, or another category of employee.”
In general, however, the Atlas study shows a marked increase in the amount of help that big companies are willing to give people who pull up stakes — in large part because, as you note, the real estate market in so many places is still in a slump. For one thing, most (79%) companies with 5,000 or more employees have increased the amount of time they’ll pay for temporary housing in your new location while you try to sell your house.
Not only that, but almost three-quarters (71%) offer “loss-on-sale protection,” meaning they’ll reimburse you if you end up selling your current home for less than you owe on it. “This is something new,” says McConnell. “Until recently, you never saw that. It was unheard of. But then, as long as real estate values were constantly rising, it wasn’t needed, either.”
As for your other two concerns, 38% of large companies routinely pay cost-of-living adjustments to people moving to higher-priced locations. More than half (56%) will spring for job-search assistance from an outplacement firm or career counselor for your “trailing spouse.”
Of course, your particular company may or may not be planning to extend these benefits to you, but if not, you can certainly negotiate for them — especially if your employer really wants your talented self in the new location. Fully 90% of companies in the Atlas poll said that they often find “extra incentives” (including relocation bonuses) useful in persuading reluctant transferees.
One further trend to keep in mind: McConnell points out that, while most companies in the past reimbursed people’s moving expenses a little at a time as they were incurred, many now give transferees a lump sum of cash upfront to cover the whole move. “The thing about these lump sum payments is that they are taxable,” he says. “So depending on your income tax bracket, if you get a lump sum of $7,500, you may actually have only, say, $5,000 to spend on the move.”
On the other hand, since you’re moving more than 50 miles away from your current location in order to change jobs, the IRS allows you to deduct “reasonable” moving expenses that your employer doesn’t cover. (For complete information about this, see the IRS website.) So, while you’re weighing the pros and cons of relocating, don’t forget to figure out the net impact on your tax bill.
Talkback: Have you ever been transferred to a new city by an employer? How did it work out for you? Leave a comment below.