Transferring Work Locations - Cost of Living Decrease?

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BeneIRA
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Transferring Work Locations - Cost of Living Decrease?

Post by BeneIRA » Mon Aug 21, 2017 5:43 pm

Hi All,

I currently work for a mega corp in a relatively high cost of living area. I am considering moving to a lower, 20 percent less, area quite a ways away. It would be a cross country move. This would be me moving and not mandated by my employer. My employer has offices all over the U.S., so I would just move to another office. My question for the group is: have you ever done this and what was your experience? A concern I have is that my employer will say that I am moving from a very high cost of living area to a lower cost of living area and decrease my salary by a certain percentage. Years ago I did this and my employer kept my salary the same, but I don't know how things are now.

I want to post this to the group as well as solicit any tips, tricks, or advice. It is not a done deal yet, I am just in the early stages.

Church Lady
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by Church Lady » Mon Aug 21, 2017 6:03 pm

When I worked for Megacorp, Megacorp paid a 'hardship premium' to employees based in Alaska and Hawaii. That was due to the very high cost of living. If the employee left the HCOL area, he also left the hardship premium. I am not aware of any other US areas that were classified as hardship areas.

I moved from a Megacorp office in a HCOL area (no hardship premium, though) to one in a medium to low cost area. My salary stayed the same. I was going to say I never heard of anyone taking a pay cut (hardship premium excepted) when moving, but it's hardly likely they'd tell anyone.

You might find that you're generously paid compared to your peers in the new office. Pay raises might be low and slow.

Good luck!
He that loveth silver shall not be satisfied with silver; nor he that loveth abundance with increase: this is also vanity.

Topic Author
BeneIRA
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by BeneIRA » Mon Aug 21, 2017 6:23 pm

Church Lady wrote:
Mon Aug 21, 2017 6:03 pm
When I worked for Megacorp, Megacorp paid a 'hardship premium' to employees based in Alaska and Hawaii. That was due to the very high cost of living. If the employee left the HCOL area, he also left the hardship premium. I am not aware of any other US areas that were classified as hardship areas.

I moved from a Megacorp office in a HCOL area (no hardship premium, though) to one in a medium to low cost area. My salary stayed the same. I was going to say I never heard of anyone taking a pay cut (hardship premium excepted) when moving, but it's hardly likely they'd tell anyone.

You might find that you're generously paid compared to your peers in the new office. Pay raises might be low and slow.

Good luck!
Hi Church Lady,

Thank you for commenting. That makes sense in regards to Alaska and Hawaii. I Googled my question and I didn't find too many examples of this happening, but I did find a few where the employer lowered the employee's salary due to the move. The area I am looking to move to is in a boom phase right now, but it still isn't anywhere near where I am now. That's a great point in regards to comparison to peers. When I did this years ago, I knew I was among the lowest paid in my old office, but when I moved to my new office, in a much lower COLA, I found I was among the highest paid. The trade-off was that I got very small raises and the reasons management gave was that they didn't want me to greatly exceed my peers.

Luckily, in this scenario, I would be moving to an office where a different department resides, so they wouldn't be my direct peers. Thank you for weighing in!

runner3081
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by runner3081 » Mon Aug 21, 2017 8:28 pm

It is pretty unlikely they would do this, unless there was a huge equity issue at the site.

Even if there was a adjustment, you will still be ahead. Doubt it would match the 20% lower cost burden. Might be more like 5-8%. Of course, if they did that to me, I would either stay where I was at or tell them to shove it and find a job with another company.

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Cobra Commander
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by Cobra Commander » Tue Aug 22, 2017 7:48 am

This sort of happened to my spouse when we moved from NYC to DC. She was receiving a promotion at the same time and her pay effectively stayed the same due to the increase from the promotion offsetting the decrease as a result of the move. Absent the promotion they would have cut her pay.

mak1277
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by mak1277 » Tue Aug 22, 2017 8:06 am

Why don't you just ask what the policy is regarding your question? If the company always reduces pay, you'll know...if there is no policy for it, it's not like your question will end up biting you.

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BeneIRA
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by BeneIRA » Tue Aug 22, 2017 9:32 am

Cobra Commander wrote:
Tue Aug 22, 2017 7:48 am
This sort of happened to my spouse when we moved from NYC to DC. She was receiving a promotion at the same time and her pay effectively stayed the same due to the increase from the promotion offsetting the decrease as a result of the move. Absent the promotion they would have cut her pay.
Thank you. This is a data point I was curious about.
runner3081 wrote:
Mon Aug 21, 2017 8:28 pm
It is pretty unlikely they would do this, unless there was a huge equity issue at the site.

Even if there was a adjustment, you will still be ahead. Doubt it would match the 20% lower cost burden. Might be more like 5-8%. Of course, if they did that to me, I would either stay where I was at or tell them to shove it and find a job with another company.
I could handle a 5% or so decrease. A 20% drop I wouldn't go for. I really like my job, so it would probably be a consideration of moving or not.

mak1277 wrote:
Tue Aug 22, 2017 8:06 am
Why don't you just ask what the policy is regarding your question? If the company always reduces pay, you'll know...if there is no policy for it, it's not like your question will end up biting you.
You are probably right. I was more so wanting to get the thoughts and experiences of others so I know what to expect and see what is reasonable and what isn't. With a megacorp, it probably is what it is.

Andyrunner
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by Andyrunner » Tue Aug 22, 2017 9:41 am

Another point to consider is if you are moving from HQ to a regional office. There might be some factors regarding that in terms of pay, corp politics and future job growth.

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corwin
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by corwin » Tue Aug 22, 2017 9:49 am

My employer is not a megacorp but we do have offices all over the world and US. We will not reduce salaries when an employee moves to a LCOL area. However, it may affect the size of future increases. This is especially true if you are above the market salary for your position and location.

lostinjersey
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by lostinjersey » Tue Aug 22, 2017 10:11 am

corwin wrote:
Tue Aug 22, 2017 9:49 am
My employer is not a megacorp but we do have offices all over the world and US. We will not reduce salaries when an employee moves to a LCOL area. However, it may affect the size of future increases. This is especially true if you are above the market salary for your position and location.
This was my experience. I left my VHCOL area about 18 months ago for MCOL. My salary remained the same but I have gotten no raises since then (two cycles). Typically we get a 3% COLA. I work for a Megacorp.

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BeneIRA
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by BeneIRA » Tue Aug 22, 2017 10:27 am

lostinjersey wrote:
Tue Aug 22, 2017 10:11 am
corwin wrote:
Tue Aug 22, 2017 9:49 am
My employer is not a megacorp but we do have offices all over the world and US. We will not reduce salaries when an employee moves to a LCOL area. However, it may affect the size of future increases. This is especially true if you are above the market salary for your position and location.
This was my experience. I left my VHCOL area about 18 months ago for MCOL. My salary remained the same but I have gotten no raises since then (two cycles). Typically we get a 3% COLA. I work for a Megacorp.
corwin wrote:
Tue Aug 22, 2017 9:49 am
My employer is not a megacorp but we do have offices all over the world and US. We will not reduce salaries when an employee moves to a LCOL area. However, it may affect the size of future increases. This is especially true if you are above the market salary for your position and location.
Thank you for these. This is exactly the kind of information I am looking for. Did it impact bonuses at all?

lostinjersey
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by lostinjersey » Tue Aug 22, 2017 11:59 am

There was no impact to my bonus as a result of my move.

I should add that I know of another employee who made a similar move at the same time I did. She was at a lower level (not yet manager) and there was talk that her pay would be adjusted down. I don't know if that happened or not.

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corwin
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by corwin » Wed Aug 23, 2017 4:04 pm

BeneIRA wrote:
Tue Aug 22, 2017 10:27 am
lostinjersey wrote:
Tue Aug 22, 2017 10:11 am
corwin wrote:
Tue Aug 22, 2017 9:49 am
My employer is not a megacorp but we do have offices all over the world and US. We will not reduce salaries when an employee moves to a LCOL area. However, it may affect the size of future increases. This is especially true if you are above the market salary for your position and location.
This was my experience. I left my VHCOL area about 18 months ago for MCOL. My salary remained the same but I have gotten no raises since then (two cycles). Typically we get a 3% COLA. I work for a Megacorp.
corwin wrote:
Tue Aug 22, 2017 9:49 am
My employer is not a megacorp but we do have offices all over the world and US. We will not reduce salaries when an employee moves to a LCOL area. However, it may affect the size of future increases. This is especially true if you are above the market salary for your position and location.
Thank you for these. This is exactly the kind of information I am looking for. Did it impact bonuses at all?
Bonuses are based on the performance of the individual and the company so no impact from move.

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Watty
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by Watty » Wed Aug 23, 2017 11:07 pm

BeneIRA wrote:
Mon Aug 21, 2017 5:43 pm
I am considering moving to a lower, 20 percent less, area quite a ways away.
That does not mean that you income will go anywhere near 20% farther.

A lot of things like Federal taxes, Social Security taxes, retirement savings, etc will also not vary with where you are at.

I would be surprised if they made an adjustment for just a 20% change. You may find that future pay raises are less though because you will be higher in the payscale for that job in that area.

As someone else said you need to just ask since they may not have a set policy and their response could depend on how much they feel that they need you.

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RetiredMule
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by RetiredMule » Wed Aug 23, 2017 11:51 pm

BeneIRA,

I used to work for a megacorp that in fact had a cost-of-living adjustment pay defined as a 7.5% bump when employees were transferred(or voluntarily moved) from their usual MCOL sites to HCOL sites - but, limited to certain pay grade and below only.

My question to you: Have you considered team dynamics/working relationships to your fellow team members, *if* you're part of a team? Also, how about the office location of your direct supervisor/manager? I once moved voluntarily and one of the thorny issues for me was the sort-of-mandatory requirement that I travel to my team's primary site often as most of my team members and my immediate manager were located in a different site.

AlohaJoe
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by AlohaJoe » Wed Aug 23, 2017 11:58 pm

I knew many people (more than 20 but probably less than 100) at my previous company that were given a lower salary when they moved to a new location.

I've also been a manager where someone transferred into my group and I saw their (very high relative to everyone else) salary. I figured since he was being paid 20% more than anyone else on the team he needed to be 20% better so those were my expectations for his performance. Within 2 years he was gone from the company.

Topic Author
BeneIRA
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by BeneIRA » Thu Aug 24, 2017 6:49 am

Watty wrote:
Wed Aug 23, 2017 11:07 pm
BeneIRA wrote:
Mon Aug 21, 2017 5:43 pm
I am considering moving to a lower, 20 percent less, area quite a ways away.
That does not mean that you income will go anywhere near 20% farther.

A lot of things like Federal taxes, Social Security taxes, retirement savings, etc will also not vary with where you are at.

I would be surprised if they made an adjustment for just a 20% change. You may find that future pay raises are less though because you will be higher in the payscale for that job in that area.

As someone else said you need to just ask since they may not have a set policy and their response could depend on how much they feel that they need you.
After having done quite a bit of research, this is absolutely the case and you are spot on with this comment. It looks like my rent will be about 10 to 15 percent less and everything else will be about that much less as well.

I am still considering whether I want to move forward with it and so I don't want to bring it up for rematurely. My wife and I are traveling to this location relatively soon and we will be able to more accurately judge it at that time.
RetiredMule wrote:
Wed Aug 23, 2017 11:51 pm
BeneIRA,

I used to work for a megacorp that in fact had a cost-of-living adjustment pay defined as a 7.5% bump when employees were transferred(or voluntarily moved) from their usual MCOL sites to HCOL sites - but, limited to certain pay grade and below only.

My question to you: Have you considered team dynamics/working relationships to your fellow team members, *if* you're part of a team? Also, how about the office location of your direct supervisor/manager? I once moved voluntarily and one of the thorny issues for me was the sort-of-mandatory requirement that I travel to my team's primary site often as most of my team members and my immediate manager were located in a different site.
It's a good point. I have had direct supervisors in my office and outside of my office. My job can be done remotely very easily, so I am not as concerned with needed to travel more. Interesting datapoint on the cost of living increase.
AlohaJoe wrote:
Wed Aug 23, 2017 11:58 pm
I knew many people (more than 20 but probably less than 100) at my previous company that were given a lower salary when they moved to a new location.

I've also been a manager where someone transferred into my group and I saw their (very high relative to everyone else) salary. I figured since he was being paid 20% more than anyone else on the team he needed to be 20% better so those were my expectations for his performance. Within 2 years he was gone from the company.
That's quite a burden for someone, but I understand the manager's perspective as well.

financeidiot
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by financeidiot » Thu Aug 24, 2017 10:38 am

You could just ask your employer's HR department or your boss if the move isn't a secret. Used to work for a company that decreased a salesperson's salary when he moved to Buffalo. He didn't ask before moving and they did it after the move. Had no choice other than to accept the pay cut.

MotoTrojan
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Re: Transferring Work Locations - Cost of Living Decrease?

Post by MotoTrojan » Tue Jun 11, 2019 7:19 pm

AlohaJoe wrote:
Wed Aug 23, 2017 11:58 pm
I knew many people (more than 20 but probably less than 100) at my previous company that were given a lower salary when they moved to a new location.

I've also been a manager where someone transferred into my group and I saw their (very high relative to everyone else) salary. I figured since he was being paid 20% more than anyone else on the team he needed to be 20% better so those were my expectations for his performance. Within 2 years he was gone from the company.
Yikes. Were they not at 100% of everyone else? I hope this isn't why you let them go (unless they turned down an opportunity to adjust things)...

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