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Changing companies?

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Changing companies?

Postby M.W.S. » Thu Mar 31, 2016 10:34 pm

I have been in the process of interviewing with a major pharma company for a phd level (+ postdoc experience) lab position. If all goes well and I accept the position, my family and I would have to move a significant distance across the USA. I suspect most major pharma companies will pay for the move, but would they assist with selling our current house (I've even heard some people say companies could buy your house so you don't have to worry about selling it... although from my experience this is not always the case even with large companies)? Will they have someone that helps us locate a house in our new location? Do they provide any sort of assistance with down payments (housing costs would increase 5-10 fold)? What other benefits are typically provided at this career level? What relocation benefits would be reasonable to try to negotiate at this career level?

Thanks for the advice in advance!
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Re: Changing companies?

Postby D.X. » Fri Apr 01, 2016 2:38 am

Hi MWS,

This is something you will Need to negotiate as part of your contract. Yes, in General the Company will pay for your move.

Some companies will contract out an agency to help sell your house, the Company then would accept the fees associated with that. The days of companys buying your house or accepting to pay additional amounts to your salary for you to Keep that house (in a sense pay your mortgage) are well gone with the exception of expat contracts where that can be negotatied if the Company really wants to put you in a different Country for a few years.

They would also contract an agency to help you find a new living solution, you would have to be specific and tell them you are looking for a housing purchase. What you can negotate here is Access to an agency (where they pay the costs) and a number of days off so you can find a place (in Addition to your vacation days). Usually a Company will give a 3 to 6 month window where you could use those days. YOu would also Need negotiate "moveing" days.

Be attentive here, althought the Company may pay for the move, you may still be obligated to pay back the amount of relocation if leave the Company before a stipulated time period, usually it is 2 years and there is some from of vesting, maybe 50% per year.

Some companys can provide help with a down payment, usually in the form of a very low interest loan. Another way they can help is to give you the cash that will vest over time. Becareful here, they will give you that cash, but you'll find yourself obligated to work for that employer for a number of years or you'll have to pay it back. Usually it will vest a certain percent per year. As an example, one Person i knew got this downpayment from the Company, the couldn't move from his Position for a number of years despite his unhappyness, basically he was trapped. He could have left, but he'd have to pay back that sizable amount of a cash (he moved to a high expense area near LA for a very well known biotech) - only after i think 8 years did he finally leave the Company. Few other company's will be willing to absorb that cost if you decide to move. So becareful there.

From my view, ask what they are willing to payfor, they should be able to tell you, be clear on what your barriers are to accepting the Position and the move.

In my personal experiences, I or my parnter had a Company pay for our moves, be it within Country or international move, so far I've never had to pay for a relocation since i joined industry. They have help with agency for searching and days off, but all had a payback scheme attached if I or my partner left the company. It's part of those negotiating discussion. Until a few years ago we rented, so we were able to get the various company's to pay for our rental down payment, i.e. that 3 month security, with a 2 year vesting period, so we never had to pay back.

If also you have a Transportation cost you didnt have before, you can try to negoitate that. I did that a few years ago, as my new employer was at distance where I needed a car upgrade, the Company paid 50% the cost of the car. So it was a decent help, and no I don't have the Company Name of my plates and it not a sports car.

The old days gone, I can tell you a Story of friend of mine, he's about 20 years my Senior, but when he entered the industry (after retiring from a Col. level rank in the US Military), his first Pharma Company paid for his house in full, his car (a now collectors sports car, which his vanity plates has the Company Name on it), and he paid nothing back when he left as he was in the Company for about 5 years. He actually got sizable cash from sellng that house which the compmany paid for!! Oh well. C'est la vie.

DX
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Re: Changing companies?

Postby MDM » Fri Apr 01, 2016 3:11 pm

Some elements of the relocation assistance may be more open for creative negotiation than others. For instance, they offered to put my family and I into a temporary living place (furnished apartment)and pay the expenses for 3 months. If you look into places like Oakwood you will see they charge a rather high monthly rate. We knew that it could take a good 6-12 months to sell our house so we realized we could rent a 3 bedroom house for about half the monthly cost of the furnished apartment so we got the company to cover 6 months of the house rental instead. That got us a bigger place and avoided having all of our stuff sit in a storage unit for months on end.

Just realize that if you are going from an area with a really low cost of living to one like Los Angeles, Boston, New York, etc. that your increase in salary at the new company will most likely not make up for a 5-10 fold increase in housing costs. You'll need to factor in being okay with a reduction in your standard of living. I moved from North Carolina to Los Angeles. I will most likely never have the size of house out here that I previously had unless I become a CEO of my own biotech or am okay with a 3 hour commute each way to work.
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Re: Changing companies?

Postby Lydia » Sat Apr 02, 2016 11:26 am

My husband and I have gone through two relocations for pharma jobs. The first was over 10 years ago, and the second fairly recent. Both covered most of the expenses for selling our house, the physical move, temporary housing for a few months, and some of the expenses associated with buying a new house (e.g., home inspection, survey, some loan fees), as well as a hiring bonus and coverage of the taxes associated with the non-deductable relocation expenses paid on our behalf. Someone should go over the relocation packages during or around the time of an on-site interview. I suspect that the most negotiating room is with the hiring bonus.

You will want to look out for both the realtors you may need to work with on both ends and the moving company. (We had one phenomenal move and one that I'm still angry about more than a year later).

It is tough to have a dramatic increase in living expenses, but it is good to have someone pay for your relocation to an area where you will have more choices for continued employment for the long term.
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Re: Changing companies?

Postby Dick Woodward » Mon Apr 04, 2016 4:22 pm

You also should find out from the company how they will treat your move with regard to taxes. Some companies just expense the whole thing and you have no worries. Other companies charge a part of it to you as income, upon which you can take a moving deduction - the only taxable income is that which you cannot deduct. This latter can be a problem if you don't realize that this is the case, and that there are limitations to what (and how much) you can deduct. I had a colleague at my first position - let's call him Joe to protect the guilty - who was blissfully ignorant of anything having to do with taxes. When his family was moved to the midwest from the east coast, Joe thought that it was all on the company. Nothing was too good for Joe - dinner every night at fancy restaurants, etc. Then came the end of the year, and the moving expenses on the W-2, which led Joe to an unexpectedly large tax bill.

While I am not a tax accountant (nor do I play one on television), my suggestion is that you talk to the company to find out how they handle the move, and then discuss with your accountant what limitations that you should be aware of.

Best of luck,

Dick
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