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0206 HR Magazine: A New Homecoming

By Nancy Hatch Woodward   1/1/2006

HR Magazine, February 2006Vol. 51, No. 2

Gulf Coast employers offer transportation and housing benefits to lure new and returning employees.

Think about the toughest relocation you have ever handled for an employee. Now imagine that you are moving that same employee to a region that is tragically afflicted, one where the infrastructure is crippled and competition for housing is sky-high.

In that kind of situation, old rules don’t necessarily apply, and new lessons need to be learned.

That’s precisely the situation being faced by employers in the Gulf Coast. Take, for example, Space Systems Co.—a Lockheed Martin facility in Michoud, La.—which had more than 2,000 of its 2,800 employees displaced after Hurricane Katrina. When those workers returned to the area, many found they had no homes to come back to.   

“Fifty-three percent of our employees cannot currently live in their homes,” says Toni McCormick, a senior media specialist for Lockheed Martin, who is among those who returned. “Either they have lost their entire home or they have found it uninhabitable.”

Even when homes are habitable, the infrastructure around them may not be very hospitable. Many areas are still without electricity and water; some sections of New Orleans are without grocery stores or gas stations.

As a result, companies in New Orleans are stepping forward to help new and existing workers find and pay for suitable living arrangements. They also are helping workers find transportation to work from wherever they are able to make a home.

It’s a story being repeated over and over again in the Gulf Coast areas devastated by hurricanes Katrina and Rita. The special circumstances these employers face have called for creative and common sense solutions alike, ones that address the unique needs of a variety of employees. And the manner in which businesses have addressed those needs provide valuable lessons for anyone involved in employee relocation. 

Finding and Paying for Housing

Simply finding housing in hurricane-ravaged areas has been no easy feat. One company, in an effort to find housing for a new worker, asked every one of its existing employees for leads on apartment rentals. Even so, it still took more than three weeks to locate housing for the new employee.

Other employers have taken a more active role in helping workers locate shelter. For example, Chase Manhattan Bank secured apartments in a suburb of Baton Rouge, La., and completely outfitted them, providing bedding, furniture and supplies—from cutting boards to coffeemakers. Employees pay rent for the apartments.

Once housing is located, many employees also need assistance paying for it. Lack of supply and high demand have pushed housing costs way up, says Julie Dicharry-Quistgaard, branch manager for the Baton Rouge office of Spherion Staffing, a staffing and recruiting firm. For instance, an apartment that rented for $800 a month before Katrina now costs between $1,300 and $1,500.

Because of this, Dicharry-Quistgaard says, some employers are doing more than paying one-time relocation fees—they also are adding a housing subsidy. “It’s not uncommon now for companies to also help subsidize the cost of an apartment or hotel room for an employee to live in until more permanent housing is available, depending on the client and the level of the position,” says Dicharry-Quistgaard.

An example: Some of Space Systems Co.’s employees are staying in New Orleans’ St. Vincent’s Guest House, which the company has leased for them. At one point, the company discussed housing employees on a sleeping barge it would bring up through one of the levees. So far, that hasn’t been necessary, but it’s still an option.

Getting (Outside) Housing Help

Aramark—a food service provider, like Sodexho—also has gotten housing help from clients. To temporarily provide food services for several large employers in the area, including Exxon/Mobil, the company is bringing employees from its other areas, particularly Houston, for two- to three-week shifts.

“Our clients have told us that they can provide the housing and the electricity,” explains Kevin Gaugush, vice president of HR for the company’s Sports and Entertainment Division.

Other Aramark clients, including the New Orleans Convention Center, may help with employee housing in the future. Gaugush says Aramark is working with the city’s Visitor’s Bureau in anticipation of the Convention Center’s eventual reopening. When that happens, Aramark may need to find temporary housing for workers who will be bused in from Houston or Baton Rouge. “It’s likely that we will use part of the Convention Center for temporary housing of our employees,” Gaugush says, although “nothing has been officially decided at this point.”

Other businesses also are looking for help from outside entities. Strategic Restaurant Acquisition Corp.—the second-largest worldwide franchisee for Burger King, located in St. Rose, La.—has tapped local agencies to help provide housing for employees. Glen Helton, president and COO, won’t name the agencies, which wish to remain anonymous so they won’t be overrun by requests from other businesses.

The company hasn’t fully secured the housing yet, and it remains open to whatever possibilities might work, says Helton. “We may subsidize or we may not, depending on the situation, but we are working with new managers to help them find housing solutions if they are willing to move to the area. We will make sure that they won’t come here without a place to live.”

Transportation Assistance

For many evacuees living outside the New Orleans area, transportation is the most significant and immediate concern, says Stan Stout, chief people services officer at Popeye’s in Atlanta. Even those who have returned to their homes may be without a vehicle or may be sharing one with several family members because they lost theirs in the flooding.

As a result, many businesses are helping existing employees return to work in the area by providing transportation assistance. Popeye’s, Burger King, Space Systems, Chase Manhattan Bank and others run vans from Baton Rouge or areas around New Orleans where schools have opened and families have returned. Even the Department of Labor has provided transportation into the area from Baton Rouge, which is 70 miles away.

In an interesting twist, Dicharry-Quistgaard finds that some of Spherion’s clients have relocated their offices to Baton Rouge and are providing transportation to that city for employees living in New Orleans. She thinks many of these employees will eventually move to Baton Rouge when the housing market there starts to open up. 

Joint Housing And Transportation Solutions

For some employers, keeping the business running has required a two-pronged solution involving both housing and transportation.

For example, Chase Manhattan Bank moved into town temporary workers, who needed both housing and transportation. Starting in late September, the bank provided hotel rooms and meals for 75 employees who volunteered to come from other company locations to work in the Gulf Coast region.

“We fly them in, bus them down to New Orleans, where they have been staying in hotel rooms we have rented, and then we bus them to the different branches” in New Orleans, explains Chris Spencer, regional communications manager in the Baton Rouge office.

The workers are rotated in and out on two-week shifts, and Spencer says the bank will probably continue doing this through the first part of 2006, and perhaps longer, depending on whether it will be able to reopen the 15 branches that have remained closed since the storm.

And Aramark, which has gotten housing assistance from its clients, is adding transportation assistance for workers. The company is contributing vans and buses that take employees from their housing accommodations to the worksite.

Financial Assistance: A Long-Term Solution

To help employees re-establish permanent homes, many large companies have provided financial assistance. For example, Cingular Wireless and its employees raised more than $1.5 million to help Cingular workers rebuild. All employees in the affected areas were given $500 and could apply for more funds, depending on their circumstances.

Sodexho employees were able to apply to two different funds for assistance: the company’s Hurricane Katrina/ Rita Disaster Relief Fund, which provided up to $2,500, and an additional corporate disaster fund that kicked in afterward to provide further assistance if needed.

Lockheed Martin set up a hurricane relief fund to help employees pay for everything from relocation costs to repairs, cars and clothing. The company donated $2 million, and employees gave an additional $3 million.

The company also provided funding to buy the tools for its “deconstruction team,” a group of employees who volunteer in the neighborhoods on weekends to help co-workers take down Sheetrock and gut houses so they can be refurbished. The company also provided safety kits employees can use to go into their homes and assess the damage. The kits include items like gloves, flashlights, goggles and hats.

Will They Stay?

The strides Gulf Coast employers have made thus far in helping bring workers back to a troubled region may be eroded if conditions don’t improve.

Compounding the problem is the fact that some areas, such as New Orleans, still aren’t family-friendly environments. In the Big Easy, children are conspicuously absent. The first regular public school to reopen in New Orleans, Franklin Elementary, did so on Nov. 28. Although it has a capacity for 550 students, only 210 registered and a scant 120 children showed up. Many students are attending classes in other areas, where their families have fled to, and their parents don’t want to disrupt them again in the middle of the school year.

What’s more, with housing at a premium, many companies are able to shelter only employees, not their families. If families aren’t able to come back soon, employers fear their employees won’t stay.

Kevin Kydd, director of HR for the Gulf Coast region at Strategic Restaurant Acquisition Corp., says some employees are temporarily leaving their families in other locations and are coming back to “blaze a trail to get their families back here.” He adds: “Until we have a stable base of people who have a place to live, the future is very fluid.”

Thomas says many of her managers are already starting to look for opportunities with Sodexho outside the area. “A lot of people are going to be making a decision within the next few months about whether or not they are going to stay in the New Orleans area or relocate with their families,” she says.

And if they go, it will spark a whole new round of efforts to relocate new and former employees to the region.  

Nancy Hatch Woodward is a freelance writer based in Tennessee and a frequent contributor to HR Magazine .

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A Tough Sell 

Convincing new workers to move to the devastated Gulf Coast region is no easy task, admits Mike Byrne, senior manager of HR initiatives at Lockheed Martin in Bethesda, Md.

“These are good jobs, high-tech jobs,” he says, “and we are trying to emphasize that their careers don’t necessarily end in Louisiana or Mississippi, that there are opportunities across the country.” But, he acknowledges that the company’s success rate for recruiting for the Gulf Coast region has not been very high.

Many businesses, desperate for workers, have upped the ante with higher wages and signing bonuses.

For entry-level jobs in particular, competition has become fierce. “There is a bidding war going on,” says Debbie Thomas, HR director at the Health Care Division of Sodexho, a food and facilities management company. “We have had to adjust our pay ranges, but someone we hire today might leave us tomorrow for 50 cents more an hour,” says Thomas, who oversees staff in New Orleans.

Burger King has been offering a $6,000 signing bonus, paid in monthly increments for one year, and guaranteeing bonuses for managers; Popeye’s made managers nonexempt so they could take advantage of overtime opportunities.

Higher wages alone won’t do the trick, however. Many employees also need housing and transportation services if they are to get back on their feet—and back on the job. Without such assistance, jobs may well remain open. For example, while recruiting executives to the area has always been difficult, it is especially tough now given the region’s housing shortage. To fill these positions, “we have had to turn into relocation experts,” says Julie Dicharry-Quistgaard, branch manager for the Baton Rouge, La., office of Spherion Staffing, a staffing and recruiting firm.

Relocating Away from the Gulf

Lockheed Martin, like other employers, moved workers closer to their jobs. But unlike other employers, the company relocated workers away from New Orleans while the facility there was closed. The company set up living arrangements for employees in four satellite locations: Houston; Denver; Cape Canaveral, Fla.; and Huntsville, Ala. Many Lockheed Martin employees ended up in Baton Rouge, La., and started a fifth satellite area there.

“These satellite offices provided not only housing opportunities but also work locations for our engineers,” notes Rich Kludt, vice president of HR.

 

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Makeshift Housing Solutions

Starting immediately after Katrina struck, employers were coming up with innovative ways to provide housing for employees who either stayed in the area or were coming back to find homes destroyed or severely damaged.

Cingular Wireless opened up Cingular City at its Ocean Springs call center in Mississippi. It was set up in the parking lot and provided food and shelter for 100 employees and their families for three weeks.

Strategic Restaurant Acquisition leased hotel rooms two days after the hurricane and also sequestered four RVs for its managers and Glen Helton, president and COO, who lived in front of a Burger King for six weeks.

Some employers, especially those involved in construction, have set up tents and trailers on their property to house workers. Wardel David, a general contractor from Biloxi, Miss., put up tents, but still had many workers living in American Red Cross or church shelters as late as early November; Padre Parkman, general manager of Professional Roofers Inc. in Gulfport, Miss., was letting some workers stay in his house and in a trailer in his yard.