One of the most important aspects of hiring employees who don’t necessarily live near your company’s headquarters is managing their relocation package and compensation. Offering a salary across the board without factoring a cost of living increase will making hiring the best talent unattainable and could prevent your company from growing. Companies who decide to keep this process internally have a lot to learn about cost of living increases and proper relocation assistance.
For companies who live in bigger cities such as a San Francisco, New York, or Miami they need to understand that it’s much more expensive to live in these cities and relocation and compensation packages should reflect the higher cost of living. When deciding on employee relocation there are a few things that all companies should take into account and do before providing that final number for your candidate:
Proper research is key.
When deciding on an employee relocation package research is key. PayScale has software and market reports that benefit the businesses who are looking to do compensation right. PayScale’s software automates the process of adjusting for market differentials, and makes manual cost-of-living adjustments unnecessary.
Offering relocation package is a must.
Relocation packages should no longer be looked at as an optional benefit when recruiting candidates who don’t live near your company headquarters or the office you want them to work at. Knowing from a candidate side the amount of work and costs involved when relocation is an issue will help determine which parts of the move you’ll be able to provide benefits.
Relocation packages can be done in multiple ways from offering a lump sum, reimbursement based on what the candidate spends, an employer being directly billed, and even using a 3rd party relocation company if the company doesn’t want to mess with all the moving parts with relocation.
Compensation should match geographical area
Understanding the market rate and how to price a new candidate is extremely important when making a job offer. Top talent will already understand their value and the only way to match is to do your research based on skills, training, location, and benefits. I’ve seen job offers rejected several times because companies are looking to pay candidates a salary that is based on an industry only and not necessarily the geographical location that they’re company operates.
Being a software engineer in Tulsa, Oklahoma is completely different then being a software engineer in Palo Alto, CA. If your company understands this in terms of compensation then you’ll be successful when it comes to making an offer.
Offering relocation packages will not only give an additional incentive to the employee you’re trying to recruit outside your geographical region, but will allow you to recruit better talent.