Lowdown on Relo

The housing collapse has made employees wary of relocating, and expense-conscious employers are scaling back transfer plans.

By Bill Roberts Aug 1, 2009

0809cover.jpgU.S. citizens are not relocating as much as they did before the recession—and government and relocation industry numbers confirm the decline.

In April, the U.S. Census Bureau reported that 11.9 percent of the population relocated in 2008, down from 13.2 percent in 2007. Last year’s percentage was the lowest since the bureau began collecting such data in 1948.

In 2008, 35.2 million people, not counting infants under a year old, had changed residences in the United States, a decrease from 38.7 million in2007 and the smallest number since 1962. Just 8.4 percent of those who moved in 2008 gave “job transfer or new job” as the reason to move, the smallest such percentage in this decade.

Relocation industry trends reflect the census. Employers forecast significant declines in relocation for 2009. Slightly more than half expect to make fewer relocations, substantially higher than the percentages of companies that actually saw relocation activities decline in each of the previous six years.

Furthermore, in 2008 relocation industry surveys, managers reported that more employees than ever said “no” to relocation—mainly because of the depressed housing market. It was the first time that prospects for selling and buying real estate surpassed family concerns and spouses’ careers as the most important issue.

Companies still offer an array of relocation benefits. But because more employees decline relocation opportunities, many employers have sweetened incentives. Inducements include bonuses, bigger cost-of-living adjustments and better protection for employees’ losses on home sales.

Surveys highlight changes in the ways organizations reimburse relocating employees for relocation expenses: More have adopted tiered reimbursement policies based on position levels and make lump-sum payments.

According to Greg Hoover, president and chief operating officer of Atlas World Group Inc. in Evansville, Ind., company officials find lump sums easier to budget for and administer than full or partial reimbursement of expenses. Lump sums become simple single budget lines, and the practice makes employees—rather than staff—responsible for finding, assessing and choosing service providers.

The author, technology contributing editor for HR Magazine, is a freelance writer based in Prunedale, Calif.

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