HR Uninterested in Substituting Cash for Relocation Despite Lower Cost

Question

I got my first job with a company on the East Coast and am currently planning my move. I'm currently living on the West Coast with my parents as a recent grad.

The East Coast company offers a relocation package, which includes full-service packing and shipping of my goods.

As a recent grad, I don't have more than a suitcase or two of stuff, but intend to buy new furniture for my new studio. Right now, to utilize the moving service, I plan to buy furniture on the West Coast and then have it shipped with the moving truck to go to the east coast. This is substantially more convenient than trying to buy the furniture while shopping for a car, buying winter clothes and doing everything else needed between my move date and start date, and having to live without a bed, dining table, desk, chair, lights, etc. before this furniture arrives. I have no desire to cause any grief to my company in this decision and only seek to use my relocation for its intended purpose of helping me get ready to work earlier by moving furniture from my old home to my new home and thereby reducing start-up time in the new apartment.

I have estimates from my real estate agent that the company might be expending about $5000 to move my intended suitcases of house supplies. I feel like I'm under-utilizing the resource, as it's substantially cheaper, if more inconvenient, to buy pots, pats and the like on the east cost. It seems that this policy is intended for families that need to move several rooms. I'd be more than happy to reduce the company's expense and buy these goods on site, negotiating to keep some of the difference as incentive.

I asked HR if I could substitute cash for the relocation package, but they repeated that it's their policy to only reimburse moving expenses, even if it's 10x more expensive for them than letting me buying new stuff locally.

I'm a bit surprised, as I genuinely believe that HR was bargaining hard during salary negotiations and was very incentivized to keep my salary down, but now that they have a chance to save that money back through lower moving expense reimbursements, they don't seem remotely interested.

Am I just a bad negotiator in being unable to communicate how this is a win-win, or is this corporate America to focus on policy and I need to get used to it? Would it be too persistent to call my rep again to discuss?

To clarify, I'm being offered a full-service move, which could be anywhere from a bedroom to a whole house. This is not in the form of a reimbursement, but my company hired a moving company, which is expensing them directly. I never see how much my move is costing my company.

Answer 1

Combination of the fact that they do not pay the same as if you opened a phone book (read: web browser) and picked a moving company to call, and the fact that they sort of count on some people costing more and some less.

If they wanted to give everyone a $2000 or $5000 or whatever relocation bonus and say "This is what we can offer," which means "Use it however you want, and if it is not enough for your move then too bad," they would.

General advice: With perks, it is OK to ask if there is an alternative ("Thank you for having catered lunch on Fridays. Could you check if the caterer we use has a vegetarian option for next time?") but don't look at them as an entitlement with a cash equivalent ("I'm on a diet, so can I have 15 bucks instead?").

Answer 2

Am I just a bad negotiator, or is this corporate America and I need to get used to it? Would it be too persistent to call my rep again to discuss?

Your new company likely already has an agreement in place with the moving company that is less costly than your estimate. If they were to make an exception for you, they may end up losing more money than simply sticking with the moving company. Of course, from their perspective you either agree to use their moving service or you decline. Creating a new option just for you, would be more work for this new company and they would probably lose more money.

I would not bother trying to push the issue. The company has this policy in place for a reason which is most likely their benefit. If you had any objections or concerns with this arrangement, you should have brought them up before accepting the position.

Answer 3

Am I just a bad negotiator

The HR person may just not have the power to do what you want.

In other words, a VP or the CFO could probably override such a policy, but the HR recruiter is not going to want to bother them with it.

It's also possible that you tipped your hand too early and hinted that you would take the job, even before finding out about the size of the relocation package. In which case, the negotiations had already ended by then.

As a recent grad, I don't have more than a suitcase or two of stuff, but intend to buy new furniture for the new apartment. Right now, to utilize the moving service, I plan to buy furniture on the West Coast and then have it shipped with the moving truck to go to the east coast.

That's kind of a dick move.

No one would blame you for using that full $5,000.

But if that's the way you phrased it to them during your talk with them, you're essentially telling them to give you cash, because if they don't, you will potentially go from having $0 worth of moving expenses to $5,000 of moving expenses, even if it means buying furniture on the west coast that you would never have intended to buy otherwise.

And while you make some good points about having to buy furniture locally and needing to pay for local deliveries anyway (that they won't reimburse if you do that), I do hope for your sake that you don't plan to use the full $5,000 (after what you've actually told them).

Again, this really depends on what you told them and how eloquent you were at making your original point, but if you did say that you were a recent graduate still living with your parents, with no furniture and only two bags. Using the full allocation at this point could be interpreted as a little bit vindictive.

And don't get me wrong, I don't see anything wrong with buying a queen size bed and frame and getting it moved over there, and buying a little bit of furniture at Ikea and getting it shipped before you try to unbox any of it.

But as a recent grad with a new job and a new apartment of your own, I do think it will take time for you to build up your furniture. After all, good furniture is not cheap. It also takes time to browse and properly select. And free delivery can often be negotiated, assuming you spend enough money on the furniture itself.

Again, it's not so much you using the full allocation that I have a problem with, but it's using the full allocation after telling them what you've told them that I have a problem with. That being said, this is only my opinion. Take it for what it's worth. Managing one's own reputation is a highly personal matter. And I wouldn't blame you if you still disagreed with me on that expense issue.

Answer 4

it seems that my company could save money this way by waiving the moving truck and instead giving me cash to just order furniture from the local Ikea

You are grossly misunderstanding the purpose of the relocation benefit. This is your company offering to move your furniture not to buy you furniture if you don't currently have furniture that isn't their problem and it's certainly not their responsibility to provide it. I think you are way out of line here expecting your company to furnish your new apartment.

Additionally it seems like you're trying to shake your company down for money by threatening to buy stuff on the west coast and pointlessly increase the cost of relocation. This is dangerous ground and if I were you I would not pursue this route. If I were them I would already be reconsidering hiring you.

Answer 5

The thing about saving your company money is that it's not really your business or concern what your company spends money on, so long as your salary is being paid. If the company is big enough that they're paying your relocation, the extra $1000 or whatever that you'll "save" them by doing this relocation your way is probably so insignificant to them that they would just as rather light the cash on fire for kicks. You think you're doing them a favor because a couple grand seems like a lot of money to you as an individual, but really it's a rounding error on their balance sheet; they really don't care.

You did the right thing by suggesting to them that it would be cheaper for them to do it another way, and that's a show of good faith for you. Among other reasons such as, perhaps this company has a preferential rate with the moving company, perhaps this is how their workflow is decided and changing it would be difficult, perhaps there are legal implications (e.g. taxes) for giving you a cash payment, or any number of things, in addition to all of that, they decided for whatever reason the money isn't worth it to them. So don't push the issue. You did your good faith effort, they said "thanks but no thanks", so just drop it and let them splurge on your relocation, and don't think about it.

Answer 6

having been through this recently, I feel obligated to mention three things:

1. All (~10) people (in various fields) I know that have taken advantage of a relocation package have been taxed on the amount that they spend on moving, which they had to pay come tax season. Depending on the bracket you are in this can be a lot, 22% of 5,000 is $1,100. Although you are 'saving' money, it will only help your bottom line to shop around for better deals.

2. I think you are confusing a relocation package as a signing bonus. All people I know had to submit receipts of all their expenses, and all non relocation related expenses will likely be denied reimbursement.

3. If you spend $5,000 dollars, and you leave the company after 6 months or so, depending on the contract, you will be liable for up to 100% of that $5,000, usually reducing to 50% of the $5,000 after 1 year (sometimes 6 months). So in case you don't like your job I would definitely try to keep expenses low.

Answer 7

...it seems that my company could save money this way by waiving the moving truck and instead giving me cash to just order furniture from the local Ikea...

Yes, but then you're spending the next few weeks buying and setting up furniture, maybe even longer if you have to send things back. As you say in a comment:

I explained to HR how their package's structure incentivizes me to buy goods West and send them East, and they seemed to respond that that's the intent...

It may be that one of the reasons they offer this particular relocation benefit is so that their new employee isn't having to immediately take time off or work remotely to wait for their furniture to be delivered, deal with having to send stuff back¹, possibly sleeping on the floor if the mattress/bed is one of the items they have trouble with.

If you already have everything you need when you move and the white glove service means it all gets set up for you, then none of that happens. Their new employee isn't stressed out from a cross-country move or distracted for the next month as they try to finish getting setup in their new home. After all, the big expense in a cross country move is getting across the country, not the un/loading. Unless you get so much stuff that they're going to need a bigger (or second) truck, adding a few more items isn't going to change the cost that much.

Reach out to HR again and explain that you aren't trying to take advantage of the company but to get clarification on whether this is actually what they want you to do.

¹Slightly off topic advice but if you do buy furniture before the move, don't wait until after the move to unbox it. Check to make sure there are no problems before the move even if you immediately put it back in the box.

Answer 8

Please keep in mind that your company probably has a standardized and agreed process in place for that perk. Deviating from that process by giving you cash would probably require additional internal discussions and authorizations, which has no benefit to the HR rep.

That you don't have that many expenses for your moving compared to a 4 person household (by the way others moving from the next town also have less expenses than moving from West Coast to East) is also not unfair. Perks often apply only to some people, e.g. my company pays a bonus for daycare costs, so employees without kids in daycare don't get any of that.

You shouldn't buy furniture and move it just to get the moving reimbursements, that could make you "that person" in your company from the beginning, which is bad.

Answer 9

Am I just a bad negotiator, or is this corporate America and I need to get used to it?

There is a lot to unpack just in this one sentence. “Bad negotiator”? Yes, I think you are, but not quite in the sense you are thinking of. Rather, your whole approach here seems to be regarding the situation as a zero sum game where you are trying to use the leverage you have over the situation to extract as much money from the company as possible in a way that’s clearly not beneficial to them. Rather than just say thank you and ship over your two suitcases (which obviously won’t cost the company anywhere near $5000) and then buy new furniture from the local IKEA in your new location, which would be the sensible thing to do, you’re hinting to them that you’ll use your shipping privilege in a different way that costs them as much money as they will let you spend, even though this has nothing to do with your actual needs.

So yes, behaving in this way is short-termist, a bit immature, and will give you a bad reputation. Definitely not a great negotiating strategy if you ask me.

As for “is this corporate American and I need to get used to it”, with that phrase you seem to be expressing the view that the company is behaving irrationally by refusing to see the light about these supposedly cost-saving measures you are so kindly pointing out to them. But again, you are conveniently ignoring the fact that from the company’s perspective, they would save the most money by paying for you to use the relocation privilege in the way it was intended to be used and ship your actual property (as opposed to the property you are threatening to buy before your move). The company is quite rational in not agreeing to your scheme. In game theory terms, they are treating the discussion — very correctly — as part of a repeated game whereas you are expecting them to treat it as a one-off decision that’s isolated from any other situation that will arise in the future. That’s simply not how the world (and the workplace in particular) works. “Corporate America” is indeed often irrational and stupid about many things, but this isn’t one of them.

Answer 10

I agree with Simon. Companies, especially larger companies, rely on processes to handle things efficiently. The existing relocation process is fully funded whereas there is never a process to dispense actual cash in hand.

Even if it might save the company money (or it might not - it is likely that they have an agreement to pay just the actual cost of the move), HR has no access to cash money and you have no invoicing team to send an invoice to their billing department, even if your HR rep wanted to take the effort to escalate for approval of a process exception.

It takes time for new hires to get used to counter-intuitive processes. Start by assuming that while the process may not be optimal in your case, it probably comes out best for a large number of cases. If you still cannot believe that is possible, then suggest an alternative process to them, but expect that they will resist - it takes effort (=time -> money) to change anything in a company. The effort may not be worth the savings.

Side Story - Early in my career I was a stockboy and hated to throw away things that could be fixed or had value, but taking them home was considered stealing since in the larger number of cases it's easy to imagine someone "throwing away" something valuable only to rescue it from the trash and take it home.

Answer 11

They have a policy to cover moving expenses, but do not have a policy to cover buying furniture. While your dedication to saving the company money is admirable, in this case it's misguided or is at least equivalent to tilting at windmills. They can't pay you cash to buy furniture because that's not an approved expense. They can pay to have your newly-purchased furniture moved because that is an approved expense. Buy your furniture on the west coast and have it shipped east. If you're going to spend your career in or around big corporations I can assure you that this is not the last time you'll encounter such things - start getting accustomed to it. Don't complain, don't gripe, don't take it personally, and above all do not criticize the company's policies once you're there. You'll be happier and will last longer.

And best of luck with the new job.

Answer 12

It just may not be worth the hassle to them

$5000 is a good chunk of money to you. To your new employer, it may be nothing more than a rounding error. But, offering you an alternative requires special handling. Instead of collecting your receipts and re-reimbursing you, they now need to change their process and issue a check (which probably involves bringing in other people to approve it). So it could just be that its not worth the hassle to them to save a few thousand dollars.

Answer 13

You aren't understanding what a relocation package is according to their policy. It is to reimburse/cover the employee for moving expenses. $5K is their budget allocated for this, it isn't actual money sitting there to throw at you. Stop trying to game the system, they know more about this than you do, and could end up withdrawing your offer because you can't follow simple directions.

Answer 14

You want to take advantage of the furniture delivery aspect of relocation without the actual relocation, thinking that this is cheaper and saves the company money, which should be shared as an incentive.

Unfortunately you're misunderstanding the purpose of the relocation package. The point is to offset the additional costs of accepting a distant position instead of a local one. If you were accepting a local position, you would still need to buy and move furniture, so it isn't an additional expense.

It's true that you can abuse the system by buying furniture locally, having it shipped across the country, to benefit from the side effect of having it moved into your new apartment. However, offering to not abuse the system in this way won't be seen as a favor to the company.

As other answers mentioned, the relocation budget is probably based on some average cost that's considerably below $5000. This relies on the fact that some relocations are cheaper than average, allowing the company to offer a higher maximum than they could if they offered a cash alternative.

Answer 15

How common is it for new college grads to buy a whole house-full of furniture, prior to starting their first job, and prior to moving into their first apartment or home?

Not very common, I'd wager. All of the friends I knew moved into their first apartment with hand-me-down partial furniture at best. In some cases just a mattress or something like that. Few people have the interest, knowledge, or resources in going on a furniture-buying binge at that point. And few people are able to gauge the space requirements before they move into a new place. I've read stories in recent years of younger people trending towards less stuff, maybe even living out of a suitcase; and the new apartment buildings near me, with mostly recent-college-aged tenants, are making smaller units all the time. Perhaps you're in a different situation.

But here's a likely thought process from the other side: "We always save money on moving expenses from new college grads because they never have any furniture. It's clearly cheaper to not-pay for their none-furniture moving costs than handing over a cash benefit. This one person now threatens to buy a house-full of new furniture before the move? Don't believe it."

Answer 16

Any of the answers could be valid for some companies, but there are also those companies (and government agencies) that are just incapable of tolerating, much less considering, a suggestion.

When I worked in health care, I learned that Medicare pays according to their price list, and we had to accept that amount, usually far below our cost. (Commercial insurance, in spite of its well-deserved reputation for greed, paid enough to keep our non-profit from dying.). For one specific procedure, Medicare paid ten times what we billed, and we were “forced” to accept it.