In the past, employees generally accepted a relocation policy because it was a step forward in their career. However, 56% of relocations are not promotions in our current landscape.1 In addition, relocation benefits are becoming slimmer and slimmer. When a transferee is asked to make a lateral move without the perk of a raise or comprehensive relocation support, they inevitable pay for expenses out of their own pocket. It shouldn’t be a surprise that many won’t jump at the opportunity.
Employees are back in control of the job market, and this is becoming more evident as we assess their willingness to relocate. While managing group moves over the past 12 months, IMPACT Group noticed current employees are reluctant to move. Open positions are on the rise, meaning employees can more easily find a new position. This enables them and their family to stay put and forgo the unknown financial losses they may incur from moving.
The housing market isn’t doing relocations any favors either.
Home ownership has dropped for younger professionals. They carry tens of thousands – if not hundreds of thousands of dollars in student loan debt. They aren’t willing or able to take on mortgages as quickly as former generations. This has led to a saturated renters market, resulting in not enough inventory to meet demand and sky-rocketing rental prices. When rental prices aren’t affordable and purchasing a home is out of the question, millennials are backed into a corner when contemplating the relocation offer.
For current home-owners, realtor fees, necessary repairs, and closing costs add up fast. Gone are the days of company buyouts when a home doesn’t sell before the relocation date – yet another perk that once gave transferees confidence in accepting the move.
Your valued talent is a valued asset during times of change.
Consolidations and headquarter moves are a business norm. These changing times are exactly when you need experienced, knowledgeable team members who are well-versed in your organization, your clients, and your processes. In addition, the value current employees bring to the new location greatly exceeds the dollar amount that is allotted to alleviate the barriers to their relocation success – if they even accept the relocation in the first place.
While sourcing and hiring local talent is tempting, companies can’t downplay the risks of putting new leaders and team members in a changing business environment. It takes weeks, sometimes months, to fully train a new hire. Furthermore, their fit for the job and the company culture is a question mark in the beginning. And team comradery takes time to cultivate.
Linking mobility and talent development is critical.
There is a strong need to tie relocation opportunities to long-term talent development. Sixty-two percent (62%) of companies report doing “fair” or “poor” when it comes to linking talent mobility and management.1
Eighty-five percent (85%) of millennial workers are willing to relocate domestically and internationally to advance their career.2 But when 62% of companies fail at linking mobility to career growth and 56% of relocations aren’t promotions, younger employees aren’t climbing the corporate ladder like they want to.
What does this lead to? Job hopping. According to a Gallup survey, 60% of Millennials are open to a new job and 21% have changed jobs in the last year.3 Employees need to understand their career trajectory within your company – and how the proposed relocation will get them there – to have the confidence to stay with your organization and achieve the long-term growth they desire.
Finding and sourcing new talent breaks the bank – and eats up valuable time.
Don’t lose sight of your relocation policy changes and acceptance rates, the number of relocations that succeed or fail, and the relocation benefits that affect both of these numbers. In fact, the pressure to reduce relocation expenses must be weighed against this data. You might save relocation expenses upfront, but the cost of training a replacement when the relocation fails will exceed any immediate gains you realized by slimming relocation policies.
A Center for American Progress (CAP) study estimated that the cost of finding and training new talent is 20% of an annual salary for midrange positions (earning $30,000 to $50,000 per year). For highly specialized and educated executives, the number skyrockets to 213%.4
SHRM’s study demonstrates that employers spend six to nine months of an employee’s salary in order to find and train their replacement.5 In addition, they also report the average time it takes to fill a new position is 42 days.6 Those lost days lead to drops in department productivity and results.
What kind of relocation policy will it take to get current employees to move?
It’s critical to understand who your transferees are when building your relocation policy. According to a WERC and CapRelo study1:
- 35% are female
- 55% are married
- 44% are first-time movers
- 44% are receiving a promotion
- 59% are between the ages of 36 – 45
- 43% are making $100,000 – $150,000
IMPACT Group assisted 10,800+ individuals and families through career/relocation transitions last year. Among our customers7:
- 20% are singles
- 80% move with a spouse
- 44% move with children
Their top relocation concerns?
- 46% worry about their spouse/partner’s career
- 45% are concerned about their spouse/partner’s adjustment to the new area
- 36% are stressed about making new friends and connections
- 27% feel uneasy about finding childcare
Can you answer similar questions about your relocating staff?
It’s vital to assess their willingness to relocate, barriers to relocating, and high-priority needs. Remember that your transferees are real people, with real families. They deserve to be heard when asked to make a monumental life decision like moving across the country or the world.
Discover why they move – and what they consider a success!
Our survey respondents accepted the relocation for personal career development, a better compensation package, a spirit of adventure, and necessary step to receive future promotion. Here are the top four positive outcomes they achieved from the relocation:
- Gained new experiences (70%)
- Made new friends (49%)
- Achieved better long-term career opportunities (48%)
- Moved to a better community for me/my family (37%)
Knowing what motivates your employees to move – and what they consider key successes after they are in the new area – should be a critical driver in keeping your relocation policy attractive and relevant to their needs. The relocation landscape is changing fast. Focus on employee growth/opportunities, their unique relocation desires, and their barriers to success to keep your relocation acceptance rates from tanking.
1 Relocation Assistance: U.S. Domestic Moves Survey, CapRelo and Worldwide ERC
2 Millennials See Mobility as Essential for Career Advancement, Graebel Companies
3 Millennials: The Job Hopping Generation, Gallup
4 There are Significant Business Costs to Replacing Employees, Center for American Progress
5 Why Your Next Hire Already Works for You…or Should, Huffpost
6 Human Capital Benchmarking Report, SHRM
7 Internal Survey, IMPACT Group