Doesn’t Anyone Just Relocate Anymore?
In the not too distant past, the climb up the corporate ladder for many executives included a couple of strategic relocations. Most companies assumed that for the right position, executives would move their families wherever the job required. That assumption is no longer accurate. A variety of factors are contributing to the unwillingness or inability of many executives to relocate. In order to attract the top executive talent, companies have been forced to review their relocation packages and, in some cases, to consider alternatives to relocation such as “extreme commuting” or executive telecommuting.
A Variety of Explanations
There are a variety of explanations for the decrease in relocations over the last few years. One factor is the wide range of affordability in the housing market in different areas of the country. There is often a mismatch between income and housing prices in the areas that have increasing salaries. Many candidates do not want to take that risk.
Family concerns or issues are also frequently cited as a reason for declining an opportunity that requires relocation. Executives have become less willing to uproot their families and move to a new community, and school aged children are not the only issue. Many families are dual income families, and one spouse may refuse to relocate if it means that his partner will also have to find another job in the new location. Also, there are more baby-boomers who must care for their elderly parents and moving those parents (or moving away from them) is not always desirable, feasible, or advisable.
In addition to family concerns, some executives just do not want to leave. The new locale may not afford the same quality of life as the current hometown. For example, an executive, who enjoys hiking, camping, and other outdoor activities, may not be willing to leave her home near the mountains. Also, many executives are very active in charities, clubs, churches, and other organizations at the local level and thus, have strong ties to their communities that are not easily broken.
Solving Relocation Issues
When considering relocation benefits, corporate leadership must carefully consider what resources are available and what strategies may be necessary to attract executive level talent. However, these policies should not be written in stone, because competition for the top talent may require flexibility in addressing individual issues.
While it is certainly easier to implement, just providing a lump sum allowance is probably not going to persuade a potential candidate with housing/mortgage issues to relocate – unless it is a very significant allowance. Many potential candidates will be unwilling or unable to risk incurring additional expenses over the allowance. Therefore, in addition to providing an allowance, a company may need to consider providing temporary housing for longer periods (12 – 18 months) or making additional resources available to aid a candidate in finding a buyer, or even a renter, for the candidate’s current residence. Loss-on-sale assistance to cover the out-of-pocket payments owed by candidates to their lenders at closing is another common incentive in the current marketplace.
Next week’s blog post will continue to examine relocation issues and explore ways to successfully navigate the process.
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