Are you Willing to Relocate?
You know relocation means uprooting your life and moving to a new place but do you know all that comes along with a relocation?
This article provides the cons to relocation that not everyone thinks about.
Relocation Assistance is Great but not Everything
Relocation packages could include the following services:
- A dedicated relocation coordinator who helps schedule relocation services.
- Paid moving expenses
- A rental car
- Temporary housing in the new destination
- Miscellaneous expense allowance
- Among other services..
Not all expenses are accounted for though.
Unplanned Relocation Expenses
A Home That Doesn’t Sell
You moved in a rush and didn’t have time to adequately prep your home for sale (or the market is down and you cannot sell).
You now have to pay double mortgage and rent for months while your house sits on the market.
You need to be focused on the new job and now you’re stressed.
A Partner Who Needs to Find a New Job
Your partner may not be able to find a job that they are happy with or that pays comparably to their old job.
The stress could be a drag on your relationship.
A Higher Cost of Living
Did you realize how expensive the new location would be?
Food, daycare, and entertainment costs add up. Now this higher salary doesn’t look as high, when you factor in the cost of living.
Downsizing is hard
Downsizing is hard when you have limited time.
Even if you’re moving to a comparably sized home, you likely have to go through all of your things and decide whether to bring it or sell it.
It’s stressful.
Frequent travel to previous locations
Do you have friends and family in the other location?
Budget for weddings, holiday travel, and family events.
Plane tickets can get expensive depending on the size of your family and how often you travel.
The Truth About A Company Relocation Package
It can cost the company tens of thousands of dollars to relocate you across the country and you would owe that money back should you break the relocation contract.
It’s important for employees to realize what they are signing up for when they accept a relocation package.
If you decide your new job is not a great fit, you’re stuck.
Relocation is kind of like debt that goes away after the terms of the contracts are fulfilled.
Can You Get Out of a Relocation Contract?
You have some options if you wish to get out of a relocation contract:
- You can negotiate with your HR department to only pay pro rata. Meaning if you worked for half the time required in the contract, you only have to pay back 50%.
- You can negotiate with your new company (if you have another job offer) to pay back your previous company with a large signing bonus.
- You can pay the full amount.
Skipping out on the contract is not an option for anyone and many companies with likely much greater resources than you will sue to get that money back.
You have a fourth option though.
Deal with the stress and finish out the contract.
For this reason, it is very important to carefully consider the decision to relocate.
Relocation Meaning
Relocating for a job is more than just packing up and starting a job in a new place.
It can be less complicated if your life is less complicated (single, renting, etc.) but it’s still stressful.
Have you relocated for a job? If you haven’t, would you ever consider it?
Millennial Boss
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The relocation contract is something that can really tie you down. When I was in private practice, I represented a lot of large companies who almost always enforced the terms of their relocation contracts. A lot of people would move, and then naturally, something would come up and they’d be stuck, unable to move for a year or two.
Don’t even think about skipping out on your contractual obligations. You’d think that big companies wouldn’t care to bring suit over a few thousand dollars. But you’d be surprised. Many will bring suit out of principle. It makes sense. You don’t want people to think that your contracts don’t mean anything.
Financial Panther recently posted…Why I Prefer To Pay Off Debt Aggressively
Good to know! They mean business when you sign that relocation contract!
I relocated for my current position with my company. They paid for everything although I took the cheap route and got a lump sum instead of hiring the movers. Next time I move, I’m paying the movers. My friends are amazing but I hated having to depend on them (especially since one of them was flaky).
I will definitely relocate again in the future. I would love to move out of the Midwest and explore another region of the country, but I’m pretty sure that will wait until after I’m FI :/ Hang in there Julie! You can do it!
Gwen @ Fiery Millennials recently posted…My Side Hustle: Revealed at Last!
Thanks! Yeah I’m definitely down for moving again just not signing a contract where expenses are paid on my behalf. Glad that your relocation worked out great! Flaky friends are no good though.
Very timely post for me, as I’m interviewing for a job that would require relocation.
Thankfully we would not have as many hassles, as we rent and my husband would be able to work from home. We would definitely have a higher cost of living, and I’m writing a post now looking into exactly how much extra salary I’d need to just break even on the move.
Ooh work from home hubby that is a great situation! Good luck in your decision. I made out financially in the move and in experience – I just hate having any contract hanging over my head!
When you say you won’t relocate for a job again, I hope you only mean as some sort of contractual requirements?
The way you wrote this post, to me it just sounds like you might not be 100% thrilled with where you are currently. It’s obvious that you see pro’s and con’s, and I think that’s probably normal. I wonder if your partner will be content with the massive pay cut that he took on a long term basis?
Don’t rule out future relocation if it will provide a more optimal life fulfillment for you and your partner . It definitely shouldn’t cost you $89,000 to move yourself somewhere. To decrease the cost of a long distance move, you could utilize one of those PODs where they drop off a container, you load it yourself and then they pick it up.
The good news about living somewhere ridiculously expensive such as California is that you can move a lot of places and live a very similar lifestyle on a lot less money due to lower income taxes, cost of living and everything else. That’s an advantage that people living somewhere super cheap just don’t have unfortunately.
TJ recently posted…Experiences vs Things is a False Dichotomy (…and the Evolution of My Relationship With the Internet….)
Yeah – I definitely plan to move again, just not sign a contract for it. Totally agree about moving somewhere with lower cost of living. I could always move back to where I moved from which is cheap but I really want to go back to the East Coast.
I’m sorry you’re feeling stuck in a bad position right now. My old employer had made me a generous offer to pay for grad school, if I wanted to go; the catch was committing to working there during the summer(s) and full-time for 2-3 years after. One of the reasons I didn’t do it is I didn’t want to feel like I had this massive debt looming if I couldn’t stand the work anymore. That can’t be fun to feel financially obligated to your employer no matter how miserable the work gets. Hang in there; one year isn’t too long!
Matt @ The Resume Gap recently posted…Frugality Confessions: We Love Dining Out and We’re Not Ashamed of It
Sounds like we have a similar mindset – I just don’t like feeling trapped down. It truly does feel like debt! That must have been hard to turn down the opportunity to have school paid for but sounds like it was the right move long term.
This reminds me – I actually experienced something very similar on a much smaller scale with buying my real estate condo back in 2010. I took advantage of the first time homebuyer tax credit where the U.S. government was giving $8,000 to anybody who bought property, but the catch was that if you sold or moved to a different primary residence during the first 36 months, you had to pay the tax credit back….even at month 35, it was still the entire $8,000.
$8,000 is a lot less than $80,000, but I very much felt trapped and it’s why I don’t plan on buying property again until I know it’s somewhere I want to be for a long time, or at least it’s a place that is much smaller percentage of my financial assets.
TJ recently posted…Experiences vs Things is a False Dichotomy (…and the Evolution of My Relationship With the Internet….)
Great point! There is no free lunch in this world anymore! Everything has strings attached.
Sticking it out for the year definitely sounds like the best choice, and a year at the company will look a lot better on your resume than 6 months or so.
Once you get to the end of the year and can decide on your next move, you’ll probably look back and have learned a lot, that the experience is something you’ll always take with you – plus, the years seem to fly by even faster every year!
May it be a smooth and quick year for you 🙂
Jasmin
Dividends Down Under recently posted…Saving for the future: October 2016
Thank you!
Cool article about the cons of relocating for job. Not many people realize the hassle. It is even harder with family. I am all about being my own boss and recently have gotten into the moving business. I like your article. Thank you!
Its nice that you updated this article of yours. I wouldn’t see it if you didn’t. I’m being offered to relocate to another city for our company. On top of that I would get a condo and car. I’m seeing a lot of benefits to it and its really an exciting opportunity but reading your article made me realize the cons of it. Its a hard decision to make.