Relocating for Work 1
How Cost of Living Effects
Relocating for Job Transfers
Brandi Moyer
Friends University
Relocating for Work 2
Introduction
In the last few decades, it has become very common for individuals to be asked to
relocate for the company they work for. Employees and their families are often being sent
to live and work in different towns or states in order to start up new branches, provide
training in new locations, or just to fill an open position in another area of their company.
With the cost of living varying greatly from state to state in our country, changes in
benefits and pay are often made during these relocations. Cost of living comparison
calculators are a helpful tool in determining what pay cuts or raises one might endure
after a relocation. I decided to use the calculator to determine what percent difference pay
and cost of living would be from Dallas, TX to Chicago, IL. Both are very large,
desirable, and developed cities, but prove to be very different when it comes down to cost
of living and reimbursement for work.
Dallas, TX to Chicago, IL
If I lived in Dallas, TX, made $60,000 a year, and was asked to relocate to
Chicago, IL, I would be faced with very different circumstances when it came to income
and costs. According to Bankrate.com’s cost of living calculator, the cost of living in
Chicago is 27.16% higher than it is in Dallas (ACCRA www.costofliving.org, 2011).
This means, that in order to maintain my current standard of living, I would need a
27.16% raise before moving to Chicago, changing my income from $60,000 per year to
$76,298.30 per year. Though such a significant raise seems like I am getting an awesome
deal, by the time I figure in the higher housing costs, higher grocery bill, higher utilities,
Relocating for Work 3
and just about higher everything in Chicago, I wouldn’t be making any more money after
the move than I was in Dallas.
Additional Circumstances in Relocating
In any relocation, negotiating between the employee and company would take
place. Making sure that the company is offering sufficient raises to cover higher cost of
living would be very important to determine before a move. The moving employee might
also need help with costs related to selling their current house, searching for a new home,
and getting their belongings from Point A to Point B. Challenger, Gray, & Christmas
have been keeping track of job relocations since 1986; in 2009, a record low of only 7.3%
of workers were reported to choose to relocate for work (Lu, 2010). This is believed by
some to be a result of companies’ unwillingness to compensate properly for moves. It
would be important for both parties to remember how expensive these things can be, and
make sure the costs are worth it.
In some cases though, workers are asked to move from areas of high cost of living
to much lower cost areas. Again, negotiating would take place, but a pay cut would
probably be the fair solution in these cases. As long as the relocating employee would be
doing the same type of work, a percentage of the lower cost of living would be a fair way
of determining how much of a cut an employee would take. Incentives for costs
associated with moving would still be beneficial, but if the area being moved to had a
cost of living rate 25% lower than the current area, a 25% pay decrease would still allow
an employee to uphold their current standard of living.
Relocating for Work 4
Conclusion
If I were working in the human resources department of a company that required
employees to relocate for job transfers, a cost of living calculator would be one of my
most helpful tools. Providing information about housing prices, energy costs, and as
detailed as the difference in the price of a dozen eggs, the calculator proves to be useful
in many ways. As long as the calculator being used was kept up to date and accurate,
employees could see that offers were fair and based on current rates and facts about the
cities involved. Meeting with employees to compare the locations and show results would
help both parties make an educated decision on what fair pay and benefits upon moving
would be. Whether the relocation involved a pay increase or decrease, maintaining the
employee’s standard of living would be the most important factor. Remembering that
there would be many more changes involved than just pay would also be important, but
relocating can be very successful if the proper research is done. Paying attention to the
percentage given by the calculator and having the employee do their own research would
be key.
It is very interesting to look at the great differences in prices of things throughout
the country. One could use the information given by the tool for many other reasons
besides job relocations. Finances are one of the first things people look at before making
a move, using a calculator such as this would make decisions much easier for companies,
families, and individuals everywhere for deciding where to reside.
Relocating for Work 5
References
Cost of Living Comparison Calculator (2011).
Data soure: ACCRA www.costofliving.org. Retrieved from
http://www.bankrate.com/calculators/savings/moving-cost-of-living-
calculator.aspx
Xin Lu (2010, February).
What Would It Take For You to Relocate for a Job?
Wise Bread: Career and Income. Retrieved from
http://www.wisebread.com/what-would-it-take-for-you-to-relocate-for-a-job