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New Alternatives to Relocation

September 1, 1999
Related Topics: Relocation Management, Featured Article
Where was a time when employeerelocation was the only option available to employers who needed to move theirtalent from one geographic location to another. If employees were interested inkeeping their careers on track, they’d typically agree to the relocationassignment and accept the trade-offs of success.

    However, in today’s tight labormarket - when the job pickings are healthy - it’s difficult enough to recruitand retain top talent, let alone ask them to pack their bags and deal with thereadjustment. Maybe that’s why some HR managers are more open to the idea ofalternatives to relocation, such as telecommuting, remote offices and rotationalassignments.  

The key is to be flexibleand knowledgeable about your decision.

    And why not? Technology and flexiblework arrangements have provided new ways of working together over longdistances. And offering these types of alternatives may also allow you to keepyour first-choice candidates in the jobs you want them in, and may save you somemoney while you’re at it.

    The challenge is how to determinewhether an alternative is a more suitable solution. You may want to weigh theoptions before investing thousands of dollars to physically move an employee toa new location. HR has an opportunity to introduce alternative approaches torelocation, but it’s also important to know when relocation is moreappropriate. The key is to be flexible and knowledgeable about your decision. 

Hold on to those employees.
   Lately, there are more reasons whyemployers are shuffling people around the country and around the globe - mergersand acquisitions, office consolidations, onsite management requirements, newbusiness start-ups and others fall into the equation. Forty-eight percent ofcompanies cite promotions/resignations as the top internal condition thataffected the number of relocations in 1998, corporate reorganization (40%), acquisitions/mergers (31%) and expansion into new territories(29%) accounted for a hefty portion, too, according to the “1999 Surveyof Corporate Relocation Policies” conducted by Evansville, Indiana-based AtlasVan Lines. 

    And it’s with these types of situations that employers may be alittle more flexible as to whether the employee is physically present at the newlocation. Of course, not every relocation can be substituted by an alternativelike telecommuting. But depending on the industry and the organizational levelof the employee, relocation might not be a requirement, and there are other waysof going about it than “do or die.”

    “There are many, many more jobs todaythan ever before that are suited to telecommuting. It’s not as good as havingemployees make the move, but it’s better than losing them,” says Gil Gordon,president of Gil Gordon Associates, a consulting firm in Monmouth Junction, NewJersey, that specializes in telecommuting and virtual offices. 

    “In the 1970s,if somebody were asked to relocate and turned it down - and I’m talking aboutan internal corporate move - it was almost like resigning. Then in the ’80s,that slowly began to break down. Today, I think the expectation is still that ifyou’re asked to transfer, you will. But there’s more recognition [of otherfactors] because there are more dual-career couples and so on that the decisionisn’t quite as automatic as it had been. It isn’t tantamount to resigning ifyou choose not to relocate.”

    At this point, resistance to relocationisn’t a huge problem for most companies, nor does it pose a threat to therelocation industry. However, employees are declining offers to relocate moreoften - and for personal reasons. In fact, 44 percent of professionals predictthere will be more employee resistance to relocation in the next five years,according to a study conducted by Runzheimer International, a Rochester,Wisconsin-based management consulting firm specializing in transportation,travel, and living costs.

    With a growing spotlight on work/lifein the last decade, many won’t relocate because of personal, work/life balanceissues, including the impact on the employees’ children, disinterest in thenew location, spouse/partner employment concerns and quality-of-life concerns.So it’s not surprising that for the past four years, “employee/familyresistance to move” was cited as the top reason why employees are reluctant torelocate, according to the “1999 Transfer Volume & Cost Survey,”conducted by the Employee Relocation Council (ERC) in Washington D.C.

    “We look at the prospect of losingour talent because they can’t relocate,” says Donna Burke, managing directorof human resources at Randstad North America, a Dutch-owned internationalstaffing company with U.S. headquarters in Atlanta. “We opt to leverage thetalent somehow because intellectual capital is too scarce a commodity right now.You don’t want to lose them just because this job must reside in X location.So the way I look at it is that we’re kind of lucky we’re in this stage nowbecause technology is making it easier, and travel is so much easier.”

    At Randstad, employees are asked torelocate for various assignments, but the company will try to accommodate themif they prefer not to go. One relocation alternative the company offers - and atool for career development - is rotational assignments, in which employees areasked to go to a different location on a three- to six-month cycle. After theassignment, another employee will take over for three to six months and so on.

    “People have a different feelingabout that [kind of scenario] because employees can say, ‘I’m not expectedto put down roots here,’” explains Burke. “In some cases, if there’s afamily involved, it can be an interesting way of getting employees to work atthe other location, especially if it’s in a nice part of the country.” 

A little flexibility can go a long way.
   While shuffling an organization’sresources around makes sense on maps and charts, relocation alternatives arefriendlier to soft issues, such as spousal considerations. For example, at theclient resources division of CHA Relocation, the company didn’t want torelocate an employee who was moving for personal reasons, but they ended upaccommodating her move anyway. 

    “This employee was moving to SouthernCalifornia because of her husband’s job,” says Debbie Ellis, vice presidentof client resources at CHA. “Rather than lose this valuable employee,telecommuting actually worked because we let her work from her new location. Ifwe had said, ‘No, you have to work at our office in Northern California,’she would’ve left the company.”

    Ellis, who is a telecommuter herself,says she understands the flexibility that’s offered at her company is rare.When CHA found Ellis, she was in the process of moving to Tulsa, Oklahoma - alocation that was nowhere near a CHA office at the time. “[The company] said,‘As long as you’re willing to travel, we don’t care where you live.’”Therefore, Ellis was able to start with the company in Tulsa, even though itsheadquarters are in San Ramon, California, with offices in Atlanta and Houston.

    Actually, Ellis’ entire department isscattered across the country, and most of her reports telecommute. She explains,“When we want someone with a particular type of expertise, it’s a case whereas long as you have a fax, computer, e-mail and all that, it doesn’t reallymatter where you live. We can hire that person no matter where they live in theUnited States, as long as they can do the job.”

    Remember that the intent ofaccommodating an employee who doesn’t want to relocate is an effort to keepthat employee, particularly in a position that will make most sense for theorganization. Showing this kind of support and commitment gives the employee agood reason to stick around. “Telework is a work option that many people wantand not so many employers offer,” explains Gordon of Gil Gordon Associates.“If you make it available, even on a limited basis, it can reallydifferentiate your company from competitors in the labor market, so that initself is a plus. It’s one more reason for a potential employee to go to workthere, and one more reason for a current employee to stay there.”

    Yet Gordon advises that usingtelecommuting instead of relocation requires an initial orientation period, inwhich the employee stays at the new location for several weeks to get acquaintedwith the new people and culture he or she will be working with. “No matter howskilled somebody is, it’s always easier to be integrated into the organizationif he or she has some kind of initial contact like that,” he explains.

    Another creative twist on a relocationalternative was brought on by 25 information-technology workers at U.S. Bank inBoise, Idaho, who decided not to relocate when the bank merged with First BankSystems of Minneapolis and closed its Boise office. Employees were asked torelocate to either Minneapolis or Portland, Oregon; those who refused torelocate were laid off. “Most of us are long-term Boise residents,” saysLinda Weis, one of the employees who chose not to relocate, dubbed the Boise 25.“Many are Idaho natives and have roots here. We like the lifestyle here, somoving became a decision we didn’t make.”

    But U.S. Bank’s loss was Sears,Roebuck and Co.’s gain. Based in Hoffman Estates, Illinois, Sears sufferedfrom a shortage of IT workers. “We were faced with understanding that themarket in Chicago was pretty tough to recruit in. And while we were doubling ourefforts to do a better job with that, we decided we’d try to find someplaceelse where there were resources available,” explains Gael Hanauer, seniordirector of human resources, information technology at Sears. “We had to gosomeplace where there were enough technology professionals that we knew we couldget 150 to 200 people and not have to worry that we’d be beating the bushestrying to find people.”

    The sheer number of IT employees thatSears needed far outweighed its ability to relocate workers from outside theirlocal area. However, the company was able to hire the Boise 25 to work at aremote site - a building that the employees helped design themselves. “WhileSears IT operates in a somewhat distributed workplace, it's not somethingentirely new to us. For example, a number of our staff telecommute - some quiteregularly. And if our associates can work effectively from their homes, theycertainly can work effectively from a remote center. These alternatives allcontribute to making Sears a more compelling place to work.” 

Why bother?
   Now, you might think that if you comeacross an employee who won’t relocate, you could just find another internalcandidate who’ll make the move. But you may want to reconsider. The mosttangible reason to introduce relocation alternatives is the cost differencebetween moving an employee and setting up a home office. “Not too many peoplesit down and say, ‘What’s the cost to relocate you versus what’s the costto let you stay where you are - or is it even possible to do the job where youare?’” says Ellis. “I don’t think it’s being analyzed as much as itcould be.”

    Think about all the time, effort andmoney it takes to find the candidate you really want at this other location:recruiting, interviewing with several people, using and paying a search firm, orperhaps researching and selecting from a pool of internal candidates. That’son top of the expense of the move, the home selling, the home finding, thepost-relocation consulting and a dip in productivity during the adjustmentperiod.

    According to the survey by ERC, theaverage cost to relocate a home-owning current employee was $53,696 in 1998.Relocating renters is costly, as well. To move a current employee renter costs$15,604 on average - the more astonishing fact is that the pricetag increasedabout 10 percent from the year before. 

More and more tasks can bedone at a distance.

    That’s not to say telecommuting orany other alternative is a bargain. The expense of supplying equipment for ahome office can add up, and so can the travel expenses. “If we go on theassumption that this person is going to the other location one week a month, forexample, it doesn’t take too long before a monthly plane ticket, four or fivenights in a hotel, a rental car and so on begins to get close to what therelocation costs are,” says Gordon. 

    “There are also technology costs andphone bills. These expenses aren’t major, though it’s certainly hard togeneralize which is cheaper in the long run. If companies look at telework as anoption instead of relocation, they shouldn’t assume that there’s a netsavings of the entire relocation costs. While you do save that, there are someoffsetting expenses to be considered.”

    Nevertheless, there’s something to besaid for the value of getting your first-choice candidate in the position youthink is best - whether that be through a full relocation or a flexiblecompromise you both can live with. “It costs so much to hire, to train, toorient and enculturate employees. Then you finally realize you have your highpotential, your winner. And then somebody else plucks them out because youwon’t [compromise on relocation]? I don’t think so!” explains Burke. “Sowhy to accommodate employees is a really selfish reason - because that talent isour asset; that’s our investment.”

    And convincing first-choice candidatesto relocate seems to be a top concern. A 1997 Runzheimer survey, “EmployeeRelocation Policies & Costs,” says a whopping 70 percent of companies hadtaken action to entice more “first-choice” employees to relocate, and 10percent of companies planned to do so in the near future, by way of increasingthe dollar value of relocation packages, conducting internal evaluations ofrelocation programs, and adding more soft-issue benefits.

    “To keep that key person, companiesare going to have to be more creative because many people may not move, nomatter how good the relocation benefits are,” says Ellis. “Companies arewilling to put in a lot of money to get people to move, but there are certainthings that outweigh anything you can offer them in salary or relocationbenefits.” 

How do you determine if it’s betterjust to relocate?
   So how do you determine whether arelocation situation calls for an alternative, or if you’re better off justmoving somebody else to the new location?

    The first, most obvious thing to ask iswhether it’s even possible to manage the job responsibilities at a distance.“A lot of it is common sense,” says Gordon. “If you’re talking about ajob that requires frequent access to some kind of physical resource in theoffice, or requires frequent, face-to-face collaboration, those are hard to doat a distance.” For example, someone who’s expected to supervise a staffthat requires lots of guidance should be physically present. However, the moreindependent and experienced the staff, the more possible it is to manage thegroup via telework.

    On the other hand, more and more taskscan be done at a distance. Examples of positions that are more “portable”are sales, consulting or writing roles that have less to do with interpersonalinteraction, and are more autonomous. Job responsibilities that involve frequenttravel, meetings that can be done via teleconferencing, or can be easily done ata home office are jobs that can easily be accommodated if an employee decides heor she would rather not relocate.

    Says Gordon: “Things likeengineering, that used to be done on blueprints and stored in cabinets, are nowavailable on computer and over a phone line (if you’ve got the right computerand the right phone line.) So this is a case where technological advances makethis situation much different than it was even five years ago.”

    But before you agree on a relocationalternative, first determine why the employee is opposed to the move. An issuethat comes up frequently when dealing with resistance to relocation is anemployee’s fear of change, or preconceived notions of what the destination islike. “A lot of times, employees may be reluctant to move because they’veheard something negative about the area,” says Ellis. 

    “If the company feelsthe employee must relocate, but he or she is putting up resistance, thenencourage the person to get as much information about the new area because theymay have the wrong information. Let them go on a professionally plannedhome-finding trip before they decide they don’t want to go. They don’t knowwhat the new area is really like if they’re negative before they’re actuallyout there.”

    After examination of the cause of theresistance, and if there are really strong personal reasons for not relocating,then you’ll have to weigh the value of the employee against the necessity ofthe move. So it inevitably comes back down to the issue of retaining yourfirst-choice talent in the place you want them in. Can you afford not to havethat key employee in that important position? As the unemployment rate holdssteadily at around 4.3 percent, according to the Bureau of Labor Statistics,your top talent will continue to be among your most prized assets. Ifaccommodations are reasonable, you should give it some consideration. 

Bridging the distance between home andoffice.
   Relocation resistance can be a bigproblem if your most qualified employee won’t budge. And this is a growingconcern because employees now have more negotiating power over the terms ofrelocation; they realize they’re highly valued resources, and work/familyissues continue to gain more recognition in the workplace.

    “Employers who cling to that 1950skind of workforce model really limit themselves from being able to attract andretain some of the best workers today,” says Gordon. “It doesn’t mean thateveryone’s going to be at home working in their pajamas. It just means thatthese options will become part of the workplace menu, and not the very rare kindof exception. Employers who realize that tend to benefit from it in the longrun, even if it requires some short-term adjustments.”

    That they’ll agree to the move isstill the expectation, but there are exceptions - and surveys suggest moreresistance is on the way. If you really want to place a key employee at anotherlocation, be prepared to offer them alternatives should they request them. Withthe growing popularity of telework and flexible work arrangements, the distancebetween home and the office is becoming shorter all the time.

Workforce, September 1999,Vol 78, No 9, pp. 64-71  SubscribeNow!

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