Who cares anyway?


Daniel T. Bloom SCRP

As an employer in today's employment market, you are faced with a continual dilemma. On one hand, you are faced with the challenge of finding the necessary talent to fill your employment pipeline. The other side of the dilemma is that you want to do so as inexpensively as possible. This especially true when you consider that according to the Employee Relocation Council's most recent survey to relocate a current employee averages around $51,000 domestically and up to $1,000,000 internationally above, and beyond the salary. So if it is so expensive to move an employee why would you?

The answer is relatively simple. The expense of relocating an employee is a cost of doing business in today's labor market. You have a position that is critical to your operations and you need to get the talent from where ever you can find them. The old adage that our environment will be enough to attract the new talent will just not hold up anymore.

Relocation benefits today have evolved through a chain of events since just after World War II. From 1945 until approximately the late fifties, the standard relocation benefit consisted of providing the transferee with a flat check for the costs of the move. This was done in the form of a lump sum payment. As the transferees became more demanding, the corporations changed the policies to that of direct reimbursement. In this scenario, the corporation provides assistance with the costs of selling the home.

The use of direct reimbursement continued until there was a downturn in the housing market. At this time, the direct reimbursement program was modified to include a guarantee to the transferee that they would not suffer any loss on the sale of the home. They did this by appraising the home and providing the employee with cash assistance if they sold it for less than the appraised value.

As the sixties came about, the corporations began to enter the process of purchasing the employee's old home. This process has continued right up to current times. What is new today is that the scope of the relocation policies has changed. Relocation today is no longer just dispose of the old property and move.

Today relocation looks at the whole lifestyle situation of the transferee and their families. The direct result is that the cost of relocation has escalated dramatically. In a recent survey completed by the Employee Relocation Council (http://www.erc.org) the current average cost for relocating an employee is approximately $51,000 above and the salary paid to the transferee. So why should we do it at all? You are confronted with a tight employment market with a scarcity of prime candidates. The employee's perspective has shifted from the corporation to looking at a balance between work and family. The candidates are learning that if they ask they just might receive. Take for example the corporation in Texas who was told by a recent new hire that if they wanted him they had to move his brother and roommate. Not only did they do so; they hired both of them. You are asking transferees that are involved with the sandwich generation- employees who are responsible for both their children and their parents. Suddenly the movement of the employee and the family raises issues of childcare and elder care. The goal becomes re-establish the lifestyle in the new community as soon as possible. The transferee is looking to reconnect with the civic organizations, the religious organizations and the recreational opportunities that they are used to.

With these changes in mind, we would suggest to you that providing full relocation benefits to a new hire is not only necessary but may be the deciding factor between getting the talent you need or having work going uncompleted. Think of this scenario. In order to meet your goal of filling your necessary openings and at the least cost to the corporation, which is cheaper? Paying for the total relocation services or hiring that ideal candidate and having them leave the company within three to six months because the family could not adapt. It bears repeating that in today's employment market relocation benefits is a cost of doing business. Who cares anyway? Your candidates for that all-important position within your organization cares. Provide them with complete but cost effective relocation services and you may just find that you are provided with the competitive edge in recruiting.

Daniel Bloom is President of Daniel Bloom & Associates; Inc, a company who specializes in providing custom designed relocation services to corporations nationwide. By going to our website at http://dbaiconsulting.com you are welcome to join our relocation-issues mailing list. Ask your peers about your relocation questions. You can contact Dan Bloom at dan@dbaiconsulting.com or by phone at 727-581-6216.