Today’s Relocation Dilemma
Employers have had to deal with varying relocation support requirements over the years. With the expectations and needs of prospective employees ever changing along with the evolution of competitive hiring practices, based on the current real estate market conditions, relocating new employees has become an incredible task.
Employer relocation support programs usually comprise three main components:
- First, direct costs involved in t he physical relocation/move process, i.e., physical move of household goods, house hunting trips, temporary living expenses, etc. These are almost always paid for by the employer through a variety of reimbursement procedures.
- Second, the financial burden of selling and buying homes, i.e., real estate sales commissions, closing costs and miscellaneous costs of financing the new home. These type of costs are commonly covered by the employer, but not always, and are often subject to direct negotiation between the employer and prospective new hire.
- Third, Direct or indirect purchase of the prospective employees’ current home if the employee is not able to sell it independently within a reasonable period of time and market price.
Most employers would very much prefer to stay out of the real estate business – especially in today’s economy. They usually only get involved in home purchase programs when market conditions make it absolutely necessary in order for the best prospective employees to accept a new position.
Many people have to pass on job opportunities in other cities because of the probability of taking a loss on the sale of their homes. They are therefore forced to look for financial assistance and support from a prospective employer in order to at least break even. At the same time, the employers may have limited funds to invest in relocation programs and may fear being stuck “holding the bag,” so to speak.
Regrettably, these are tough times for employees and employers alike!