Relocation Metrics

By Elizabeth Agnvall Mar 1, 2008
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HR Magazine, March 2008 How does your company measure up when it comes to moving employees?

Relocation experts agree that the No. 1 issue during the past two years for domestic relocation has been the real estate market. Changes in home values during this time have had a direct and obvious impact: High housing costs and slowed real estate appreciation have become the top two reasons given for employees’ reluctance to move, according to research by the Worldwide Employee Relocation Council (ERC). (See Charts and Tables sidebar "Reluctance To Relocate")

Cris Collie, chief executive officer of the ERC, based in Arlington, Va., says the downturn in the real estate market has had a big impact on the use of relocation policies. Three-quarters of the 905 ERC members surveyed— representing a majority of the companies that move employees in the United States—will offer to buy an employee’s house at some point in the relocation process, and a majority offer loss-on-sale assistance. These policies have traditionally been in place at large companies, but in the past year and a half, employees and new hires have been using the resulting tools more frequently.

Of the approximately $62,000 it cost to move a home-owning employee in 2007, the ERC estimates that loss-onsale assistance accounted for $15,000. In 2005, that assistance averaged $9,000.

“Trying to keep employees mobile has caused companies to step up policies to help [employees] dispose of their residences, offering to buy their houses from them or to give marketing assistance or bonuses,” Collie says.

Because the job market is still strong in many sectors—despite the nationwide slump in housing—HR managers are offering bigger carrots to workers reluctant to move and potentially sell their homes at a loss. One-third of employers say they have paid to relocate an employee from another area to their company’s location in the last two years, according to a survey conducted by Harris Interactive for CareerBuilder.com and Apartments.com. Fourteen percent of the 2,417 hiring managers in that survey said they are more open to paying to relocate new employees from other areas this year compared to last year.

When asked how much they’re willing to spend to relocate an employee or new hire, 40 percent said more than $1,000, one-third said more than $2,500 and one-tenth said more than $10,000.

Given the right incentives, employees are still agreeable to relocations. Harris also surveyed 5,727 U.S. employees and found that 59 percent say they’re willing to relocate to another city for a new job; 44 percent are willing to move to another state, province or region. Employees are most interested in relocating to Florida, California, Arizona, North Carolina and Colorado.

In addition to extending temporary housing, purchasing employees’ homes and offering various levels of loss-onsale incentives, employers also are letting new hires and employees hesitant to relocate work remotely and commute long distances. (See Charts and Tables sidebar “Extreme Commuting”)

Greg Hoover, senior vice president and chief marketing officer for Atlas World Group Inc., based in Evansville, Ind., says that during the last five to seven years, companies and employees have become more willing to spend money on travel rather than relocation. The prevalence of personal digital assistants, videoconferencing, wireless Internet coverage and other technology has made it easier for sales and marketing employees—who make up a majority of relocating employees—to do their jobs from home, airports or hotels.

“Technology has changed how we do business. We are a much more mobile society,” Hoover says. That means a larger percentage of the sales and marketing workforce are able to stay put.

Written and compiled by Elizabeth Agnvall, a freelance writer based in Washington, D.C.

Charts and Tables

Relocation Benchmarks

Reluctance to Relocate

Average Annual Relocation Costs per Transferee Type

Cost of Shipping Household Goods in the United States

Transferee and New-Hire Expense Reimbursement

Full Reimbursement: Historic Trends

Number of companies provide some type of loss-on-sale assistance

Percentage of Respondents with Self-Marketing Requirements

Percentage of Respondents Requiring Employees To Use Employer-Approved Brokers

Types of Loss-on-Sale Assistance Policies

Percentage of Respondents Offering Loss-on-Sale Assistance

Extreme Commuting

Relocation and Recruitment: Policy Elements Most Useful in Recruiting New Hires

Days Employees Receive to Accept a Transfer Offer

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