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I Will Accept the Job Offer (if you buy my house)

March 1, 2009
by Tim Tolan
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There are multiple steps in the search process and a very good search consultant should never try to skip steps or take shortcuts. In most cases it will always backfire. When a candidate is dealing with a possible relocation (especially in today’s economic environment) every stakeholder needs to know the facts – and with every detail on the table. There are NO shortcuts when it comes to evaluating and dealing with a possible relocation.

For the most part, it was a completely different world just twelve to eighteen months ago (depending on where the candidate lived) to handle an executive relocation package for a “C” level position. The base and bonus or target earnings from the cash compensation were usually fairly straightforward. Generally speaking it was also fairly easy to provide the candidate with some temporary living expenses – 3 to 6 months was standard. The house-hunting trip(s) with the spouse was generally a standard expense item and just another box to check in a candidate’s relocation. Some organizations offered more relocation perks depending on the position.

That was thenThis is now.

The U.S. housing market has changed the way clients, candidates and yes – search consultants handle job offers that involve relocation. The qualification process is more important now than ever before. We use a third party company to assist us in evaluating the details for any candidate relocation. They have to work hard and peel the onion layer-by-layer to really understand the family dynamics and make sure the entire family is on board with the move. They try to understand the specific market conditions in the candidate’s neighborhood to find out what homes have sold in the past 30-90 days, average sale price, cost per square feet, average days on the market, number of homes in their neighborhood under foreclosure AND …the candidate’s expectation of the price they need to get from a prospective buyer to make the deal work. I tell candidates to do their own homework and become educated about the details on the value of their home. Use websites like www.zillow.com and do a little research on the value of your home and neighborhood. Deal with facts and data – not emotion.

In several cases during the past 6 months the ideal (the best) candidate that loved the culture, the opportunity, had great chemistry with the hiring manager and wanted to accept the new job had to withdraw due to the financial issues regarding the sale of their principle residence. That hurts!

Here are a few things to consider if you have a chance for promotion or want to consider accepting a new position that requires relocation IF you know in advance that selling your home will be difficult:

· Consider renting your home if the rental income gives you neutral to positive cash flow. Not everyone wants to be a landlord - but it may be a short term option until the housing market stabilizes.

· Sell your home on a lease purchase arrangement. Get a down payment from the buyer that you can live with and apply part of the monthly rent to the purchase price of your home. Set a deadline when the buyer must refinance the home and pay off the mortgage to get the loan out of your name. If housing prices in your market are continuing to decline – this may be too risky.

· Consider renting a small condo or apartment for 6-12 months and commute home on weekends. Many employers understand this may be the only way to get you on board and may be willing to help off-set some of your travel expenses until your family can relocate.

There is usually a way to make a relocation work if everyone involved is flexible and a little creative. The housing market will eventually stabilize - and we will hit the housing bottom soon. However… make sure you understand the facts the next time you are ready to say YES in your job search if relocation is required.

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Comments

Tim,
Wonderful and informative post. Thank you.

An important message in your post is the importance and value of negotiating with eyes wide open and in good faith. This is an issue you've informed as about in the past.

Although this isn't about dealing with a home, I've been relocated by a prior HIS vendor. They used Graebel for the logistics of the move; they made it painless (and it would have been otherwise, believe me.)  Aside from packing us (in Boston), they moved our stuff to two locations, in different states.

The employer was also creative in how they allowed me to handle relocation expenses. It was above board, with expenses handled by corporate finance and taxed appropriately.

The point here is negotiations. It was later shared with me by a friend in finance that they had never seen those items expensed before. This was all legitmate under GAAP of the time; I wont share details publicly since GAAP has since changed and, somehow, forensic accounting is a legitimate concept to accountants and regulators (applying rules that didn't exist at the time.)  I've lived through a near-death experience involving this practice; I don't consider it a good memory.

Stacey:
Thanks and you bring up a very solid point relative to the way employees feel when left holding the financial bag. It's just plain ugly! We provide our service to help mitigate the downside and to properly set expectations for all parties involved. Sooner or later this RE market will reach the bottom. Until then - employers and candidates need to have a good understanding of what the financial implications will be - good, bad or ugly!

Gwen:

Thanks. We decided to use a firm once the market went south and candidate's began to experience difficulty in selling their homes. This organization takes all of the guess work out of the equation while keeping everyone informed about the probability of their home actually selling. There are no promises here - just an independent giving us details without the emotional ties that an owner might have to their home. They also book the moving company, deal with real estate agents on both sides, handle all of the details for the big move date + a bunch of little things that our candidate does not have to deal with - which can be a real headache!

Tim,
It's not only a very kind and considerate thing to do, but it's also extremely wise. When a friend of mine who had been job-hunting for a while, finally landed an interview for a gig she really wanted, she foolishly agreed if hired she might be willing to relocate. Fast-forward to three weeks ago when she begrudgingly moved. True, particularly in this economy, organizations hold the upper-hand and employees and home-owners are often left holding the bag. That said if employees aren't happy, their companies won't be either as their work—and the business as a whole—will suffer. You are making things easier (and better) for all parties involved. It's not just good karma, it's good business, too.

Tim,

Anyone who has come home to say (or hear) the words, "Honey, what would you think about..." knows how difficult a relocation can be on the entire family. Kudos to your firm for going the extra mile by using the third party company to assist with the relocation logistics! I'll bet not all firms are that thorough, or frankly, that considerate.

G.

Joe:
Thanks for your message. The devil is ALWAYS in the details. If a candidate is exploring the possibility of a relocation with a new employer and they offer to pick up the cost of the U-Haul truck - RUN and RUN fast! To your point you have to negotiate the details of the relocation up front.
If not...new recruit beware!

Tim Tolan

Senior Partner, Sanford Rose Associates Healthcare IT Practice

@@TimTolan

http://sanfordrose.net/thetolangroup/

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