Month: March 2016

Getting real about relocation costs

There is a plethora of deterrents when a relocation is required to accept a new position. And, for hospitals to have access to the highest caliber of candidate, candidates must relocate.

At Hunter Ambrose 90% of all candidates relocate more than 500 miles. And, over 75% of all leadership candidates relocate over 1,000 miles.

There is no standard relocation policy for hospitals across the United States. A few of the Fortune 500 healthcare organizations won’t pay a dime for anyone besides a C-Suite to relocate. So if you live in Pasadena and want to work in West LA- You’re either going to relocate yourself, suffer the 27 mile/ 2 hour commute in rush hour or just decline the position.

A common staff relocation policy is $2,500.00- No temporary housing and the funds can only be used for IRS approved expenses, (as in a moving truck , employee paid temporary housing, boxes, etc.) and this does not include a deposit or first months rent. Anyone who has moved in the past 5 years knows you can’t relocate for less than 5k unless you’re moving one zip code over. How can we expect staff employees earning less than $30.00 an hour to relocate for a new position if it’s going to cost the equivalent of one months pay? 

Every hospital should reevaluate their relocation policy to the standard, “Would I relocate to this community and accept this position with our current relocation policy?”

A good relocation policy has 5 components: 

  1. Budget by distance 
  •       100 miles – $1,500 and no TH
  •       500 miles $2,500 and 1-2 weeks TH
  •       1,000 miles $2,500 – $5,000 and 2-4 weeks of TH
  •        Over 1,000 miles  $5,000 for a staff position and 10-15k for a management to C-          Suite position with 2-4 weeks of TH

Everyone needs to participate. We coach every candidate to downsize and if they have a large home, Grandmother’s grand piano and or a couple of jet ski’s- Don’t expect a relocation budget to cover the cost of moving  non-essential household items.

2. Temporary housing  (TH)

Unless a candidate magically finds an available home to rent during the on-site interview and that unit will be available 30 days from day when the candidate arrives Temporary Housing (TH)  is a must. We cannot expect people to rent apartments or houses over the phone sight unseen. Nor do we want candidates moving to a new community without having a day or two compare neighborhoods and make an educated decision. Therefore, 2-4 weeks of temporary housing, (depending upon the availability of housing in the area) is a must. TH  is defined as a motel with a microwave and a fridge. No frills, free wi-fi, free parking and paid for by the employer.

3. Direct Bill option 

Should the candidate opt to use the relocation funds and request a moving truck, the employer can arrange for a direct bill with the candidate’s credit card to cover any overage. Relocating and driving a moving truck across the Great Plains or the Rocky’s just isn’t feasible for every candidate.

4. Non IRS expenses allowed

Allow the candidate to use the relocation funds for non IRS approved expenses by providing a 1099 form. If the candidate provides a lease, the hospital can write a check for the funds. Getting into a new home is one of the most stressful parts of relocating; a new employer can make it less painful by simply being flexible with the funds.

5. Payout and protecting the funds 

Any relocation funds should only be paid after the first paycheck whenever possible, (hence the value and safety net of offering TH). If the candidate and family are flying cross-country; that might be a different conversation. However, the hospital should make every effort to not pay $1.00 in relocation until the candidate arrives, passes his/her pre-employement requirements and works a full day or pay cycle.

The offer letter and the follow-up employment agreement should have specific langauge stating, “In the event the candidate resigns and or is terminated from his/her position prior to 18 months of employment, the candidate shall repay the employer for the relocation budget, (including temporary housing) pro-rata. Any funds due the hospital shall be deducted from the last paycheck.” A committed and engaged candidate won’t blink twice to agreeing to this payback policy.

As August 1st is the busiest day for movers across the United States and the recruitment busy season officially starts Memorial Day Weekend; this is a perfect time to reevaluate your organizations’ recruitment policies and create a fair and flexible relocation policy that every every current employee would accept.