Improving Job Market Bringing Down Need to Relocate?

By Roy Maurer Feb 19, 2016

The number of job candidates who relocate for employment is on the decline, according to one source, falling 4 percentage points in 2015 from a post-recession high just the year before.

The latest data on relocation rates released by global outplacement consultancy Challenger, Gray & Christmas, based in Chicago, shows that, on average, 11 percent of new hires in each quarter of 2015 pulled up stakes and moved for their new position. That’s down from an average of 15 percent during the final two quarters of 2014. The relocation rate in the last half of 2014 was the highest since the first half of 2009, when an average of 16.3 percent of employees moved in the immediate wake of the recession.

John A. Challenger, chief executive officer of Challenger, Gray & Christmas, attributes the drop to widespread economic improvements at the local level, reducing the need to move for jobs.

Challenger explained that even with the recent employment difficulties within the oil industry, there are more metropolitan areas with unemployment rates below the national average. “Obviously, some pockets of the country continue to struggle, but for the most part, job seekers were able to find employment opportunities in their own region,” he said.

“Relocation activity plunged after the first half of 2009 as home values continued to decline, which made it virtually impossible to sell an existing home without taking a significant loss. The housing market improved in enough places by the second half of 2014 to, once again, make relocation a [feasible possibility for more people when conducting a] job search,” Challenger said.

Other industry data has projected a softer drop in the number of people moving for a job. The trade group for the relocation services industry, Worldwide ERC, based in Arlington, Va., is projecting that the U.S. transfer volume results for 2015 will continue to show increased new-hire relocation compared to the past few years, albeit at a smaller rate of increase.

“Projections for both current employees and new-hire transfer activity in 2015 are positive; however, increases for both groups are expected to be minor,” said Sarah M. Albus, a research consultant for Worldwide ERC.

And other industry representatives don’t see the reluctance to move that the Challenger data depicts. “Our relocation clients experience little, if any, refusals to relocate due to an improved local housing market at origin,” said George Bates, senior vice president at Graebel Relocation, based in Aurora, Colo. “The improved real estate market has led to homes selling quickly. And interest rates that remain at historic lows are also a key contributing factor that has enticed homeowners to sell and to buy properties.”

Employee reluctance to move continues to be dissipating significantly, according to Worldwide ERC. “Presently, 35 percent of organizations report expe­riencing some problems with employee reluctance, down from 49 percent in 2014, 61 percent in 2013, and 78 percent in 2012,” Albus said.

The growth in temporary assignments may be another reason for the lag in relocations. “U.S. companies are offering more temporary assignments than they used to, not necessarily because employees will not relocate, but rather because it is a less expensive option for the company,” said Cindy Madden, director of consulting services at Cartus, a global relocation service provider based in Danbury, Conn. “If they can impart knowledge or continue to develop an employee by offering a six-month stint to headquarters, it may not be necessary for them to move permanently.”

Roy Maurer is an online editor/manager for SHRM.

Follow him @SHRMRoy

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