Negotiating a relocation package – what you need to know

16th September 2020
Negotiating a relocation package – what you need to know

There are many reasons why British professionals opt to relocate abroad and take on the expatriate lifestyle. Often, it’s a career-led decision, with an offered opportunity worth moving for. For others, it’s the dream of a different lifestyle, new climate or better work/life balance.

Whatever your reason for a relocation, negotiating the right expatriate employment package for your needs can be key to your enjoyment of the experience. There are certain elements of a package that are fairly standard, but you can negotiate for better benefits and perks that are appropriate for your country of choice and experience level.

In this article, we look at how to negotiate a relocation package, and why knowing the costs of a relocation (specific to the country you are moving to) can help you negotiate the perfect package.

A typical relocation package

No matter which country you’re moving to, the basic elements of your relocation package are fairly standard. The idea behind an expatriate package is to ensure you receive suitable compensation and benefits for your decision to uproot your life at home and move abroad to take the job.

Many companies will have a ‘standard’ relocation package, which you can view to compare across different possible job opportunities. While you may then go on to negotiate the standard package, it can be useful in the initial stages of seeing what different companies offer.

Annual salary

The amount you will be paid in your new job role. This is relative to the country you’re moving too (cost of living, lifestyle expenses, etc) and your position.

Moving expenses

Many relocation packages will include some financial contribution towards the costs of moving abroad. Typically, this should include your travel expenses for yourself and your family. The cost of your international moving service, visas, work, and any temporary living costs while looking for a permanent home. These may be provided as a series of payments or a one-off lump sum.

Housing allowance

Finding a suitable place to live is top of the list when relocating abroad. In some cases, accommodation is provided as part of the relocation package.

Alternatively, you may receive a regular payment towards the cost of your accommodation. This may or may not include the cost of bills and utilities.

Return travel expenses

Some companies offer yearly travel allowance as perk that could cover flights for you and your family back to the UK once a year, or more.

Car allowance

You could negotiate your relocation package to include a car, or a payment towards running a car. This could be in the form of a company car (which are becoming less common), a set fee to cover your own running costs, or access to a driver and car as needed.

Education allowance

Not all relocation packages will cover schooling as standard, however many will have a contribution to the costs of education for your children.

Healthcare

Many countries outside the UK will require mandatory health insurance to cover medical costs. Which makes it attractive to negotiate your package to include health insurance as standard for you and your family. It’s important to check the level of cover, with the aim of having comprehensive cover for you and your family as part of your package.

Hardship allowance

This is a payment that won’t be relevant to all relocations. A hardship allowance is an extra payment made on account of working in difficult conditions. This applies if the country you’re relocating to is considered more difficult or inconvenient to live in. This is usually calculated as a percentage of your salary, which can be 30% or more.

Perks and benefits

Some relocation packages may include other benefits that are not purely financial. This might include things like gym memberships, native language lessons or business travel insurance.

Negotiating your package

You are not obliged to accept a standard relocation package and you can try to negotiate your terms. It’s important the package you receive makes the move abroad worthwhile, but some companies are more flexible than others. Once you have a firm job offer, you can work with your new employer on ensuring your relocation package is right for you.

Before you enter into any negotiations, you will need to do your research. Every country is different and a package that is beneficial in one location, can be less so in another. It can be useful to work out how much the relocation would cost you in total with no package in place as a starting point for negotiations.

A relocation package calculator can be a useful tool to begin with. It’s also worth doing your research into the cost of living in your new location to give context to what you’re being offered. Research things like school fees, healthcare costs and accommodation options, to get a broad idea of what you expect your new living costs to be. There are some useful online forums groups where you can ask questions to fellow expats in a similar industry, to give you accurate comparisons.

It’s also important to think about your priorities. A high salary is certainly worth negotiating, but if it’s swallowed up by extortionate school fees it might be worth a rethink. A fully paid school place at a desirable school can be far more beneficial that a cash bonus, for example.

If healthcare is compulsory in your new location (and it’s commonly advised that expatriates have international health insurance in place), it’s worth trying to negotiate the most extensive policy you can. Health costs can rack up quickly without comprehensive cover, and that can make a large dent in even the most generous of salaries.

Another consideration that can be overlooked is what happens when you contract finishes, if it’s fixed term. Your relocation package might include some post-assignment compensation where relevant.

When negotiating any relocation package, be prepared to compromise with your employer. It’s a two-way process that will involve some give and take.

If you’re planning or considering an international move from the UK, our professional moving services and international storage options can help. Get in contact with us today to find out more and arrange for a free bespoke quote to suit your needs.

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