Guest post by Elaina Spitaels Genser
One ripple effect of a tough economic climate is that organizations struggle to land top candidates when selling a residence and relocating to a new community are issues. In response, hiring organizations are becoming more creative offering relocation benefits to for C-suite and vice presidential candidates. Here are some relocation options that have been used successfully by not-for-profit healthcare organizations:
• House-hunting trips. Covering the costs associated with two trips of up to four days for a candidate and his or her spouse is becoming a standard allowance.
• Movement of household goods. Hiring organizations are footing the bill for relocation costs including packing, storage, and unpacking. Most are grossing up these allowances to avoid negative tax impact on the new hire.
• Sign-on bonus. Ranging from $20,000 to $100,000, sign-on bonuses are often tied to longevity at the hiring organization with a prorated portion to be repaid should the candidate resign voluntarily within a defined window of employment.
• Extended living subsidies. The single biggest change since the economic downturn has been the lengthening of temporary housing subsidies from six to 12 months with options up to 36 months if the individual’s home does not sell in that time period.
• Travel allowances. Organizations are covering travel costs for six months to a year for new hires to visit their families who haven’t yet relocated.
• On-going housing allowances. In higher-cost-of-living areas, we’ve seen an increase in housing assistance programs. These include a set monthly allowance for up to five years.
• Bridge loans. These loans of up to $250,000 allow a new hire to buy a new principal residence even if the former home hasn’t sold. Generally, bridge loans are repaid in full 30 days after the former residence is sold.
• Mortgage assistance programs. Longer-term loans are made available at a lower rate of interest that is repaid upon the future sale of the new home.
• Real estate commissions and closing costs. Increasingly, organizations are paying full real estate commission costs so that the full value of the home can be realized by the seller. We are also seeing clients pay loan origination fees of up to one percent of the loan value of the new residence, as well as other costs including appraisals, city and county taxes, title insurance, title transfer, etc.