Article contributed by Weichert Relocation Resources Inc., June 2010
Corporations are becoming increasingly strategic in managing their workforce mobility programs, using innovative measures to keep employees mobile despite a challenging economy, according the Mobility and the Current Real Estate Market survey conducted by Weichert Relocation Resources Inc. (WRRI). The 2010 edition captures input from close to 200 relocation and HR professionals responsible for over 26,000 annual moves.
"Our survey results show a continuing shift in attitude regarding relocation policies," says Ellie Sullivan, WRRI’s Director of Consulting. "Six to ten years ago, policies were implemented and then remained virtually untouched because there was little reason to adjust them, since markets were stable and employees were typically ready and willing to move. Today, there are more challenges to contend with, including a recession, the velocity of business change, shifting workforce demographics and depreciating home values."
"The fact that the vast majority of our survey respondents changed their policies over the past year to control costs and motivate employees indicates that despite the current economic picture, companies still realize the importance of maintaining a mobile workforce."
Among the strategies being used to help employees overcome real estate-related difficulties, 75 percent of respondents provide alternatives to traditional homeowner benefits, either formally or on a case-by-case basis. Some of these include offering delayed home sale benefits, delayed home purchase or allowing homeowners to become renters. Additionally, 33 percent added or increased loss-on-sale assistance, with the most common maximum dollar cap rising to $50,000.
The study also found that pre-decision programs—seen as an emerging trend in WRRI’s 2008 survey—are gaining in popularity, with 65 percent of companies currently offering pre-decision and 11 percent planning to offer it this year. This shows a more proactive approach on the part of companies, as pre-decision programs can help gauge the probable success of a relocation before any significant financial investment is made.
Other noteworthy findings of WRRI’s survey included:
Companies are wresting greater control of the home sale and marketing processes to minimize costs and avoid inventory. Seventy-one percent of respondents enforce list price guidelines for employees, with the most common guideline, implemented by 65 percent of respondents, restricting employees from listing at more than 105 percent of the appraised value or broker’s price opinion. The study also found that 70 percent of respondents require employees to work with company- approved brokers, while 96 percent will evaluate offers below the appraised value of their employees’ homes.
Forty-two percent of companies are adopting tiered levels of home sale benefits for their employees, up from 25 percent since last year’s survey. At the same time, fewer companies are offering employees only a traditional guaranteed buyout program, down to 25 percent in 2010 from 34 percent in 2008. In most cases, the guaranteed buyout is reserved for senior-level executives.
Although companies strive to avoid policy exceptions, market volatility and lengthy home marketing periods are making more employees hesitant to move, forcing companies to offer exceptions. The most common exception, cited by 42 percent of respondents, is extended temporary living.
"Despite slowed markets and economic hurdles, employee mobility remains a critical part of most companies’ growth and talent management strategies," explains Sullivan. "The difference today, according to our survey results, is that companies are being more strategic in managing their programs. Rather than casting a wide net of similar benefits for all mobile employees, they are taking a more targeted approach, offering specific packages to specific employees and new hires to convince them to accept moves."