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Company on Wheels

Moving an entire division -- or a whole company -- is a job that takes planning, flexibility, and yes, sensitivity.

November 30, 2000
Related Topics: Relocation Management
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If you’ve been tapped to move an entire division or company from one countyor state to another while supporting the employees who get out the product, youprobably won’t have much trouble imagining a Western cartoon version of thejob. In the final frame, you’re hanging from a cliff by your nails after firstyour horse and then the bridge have collapsed under you. Even as everythingaround all of you changes, your people still have to produce on time and onbudget.

Group moves have become more frequent, with as much as 25% of some industries relocating in one year.

    According to recent statistics, you aren’t alone (and yes, you survivethe experience). Relocations of whole divisions and whole companies have beenincreasing in recent years, and HR must make it happen.

    So far, no one keeps national statistics for whole-company relocations. Buteveryone agrees that group moves have become more frequent, with as much as 25percent of some industries relocating in one year (see chart).

    In destinationcities like Sacramento, California, the sharp increase in the rate ofwhole-company relocations is striking, says Barbara Hayes, executive director ofthe Sacramento Area Commerce and Trade Organization, or SACTO. Usually SACTOsends out 25 business relocation information packages during a two-month period.In July and August, it sent out 60 packages. Ten companies have moved toSacramento in the last six months, citing the high cost of housing and of doingbusiness in the Bay Area.

    Most companies that relocate en masse cite one of three reasons:

  • Lower cost of doing business in the new location.
  • Acquisition by another company.
  • Quality-of-life improvement for all employees, including traffic, schools,local housing market, and similar issues.

    Whatever the company’s size or work, HR’s challenge is to maintainproductivity while managing the complex, emotionally charged process of changingthe context of employees’ lives. Here is how four companies fared withlarge-scale relocations.

Keeping the vehicle moving
   
As a result of Volvo’s purchase by Ford Motor Company, Volvo Cars of NorthAmerica is in the midst of moving from Rockleigh, New Jersey, to Irvine,California. Nita Mitchell, vice president of human resources, heads up this moveand plans to complete it next summer. Now, she’s focused on keepingproductivity up by taking care of her people. So far, she has done so by:

  • Framing the move as a reinventing of the company, a "re-Volvolution"that is a purposeful pursuit of the future.


  • Taking every employee who has been invited to go to Irvine on anexploratory visit to Southern California, including meetings with realestate agents, school visits, and family meetings to hear about communitylife.


  • Not asking employees for their decisions until they have met with thelocal chamber of commerce, and the mayor of Irvine and discussed relocationwith their own families.


  • Enhancing the company’s relocation policy by paying a lump sum fortemporary living expenses and a tour of California during the house-huntingprocess.

    Mitchell reports that all of those whose jobs are being moved to Irvine wereinvited to go. Staff received personal invitations from the CEO to relocate. Ofthose invited, 60 percent have agreed to move -- 56 people to date. "Mostpeople in our company are Northeast born and bred, so it’s a huge change. We’llhelp them manage that change, including providing personal counseling andoutplacement support. When someone comes in and has to talk, we dropeverything." What will make the move succeed? "Communication,"Mitchell insists. "We make our priority our people."

    Bob Goodman, a career counselor with Cedars-Sinai Health System in LosAngeles, agrees that a laser focus on employees’ needs is vital to asuccessful move. Goodman was acting manager of training and development forTransamerica Life Companies in Los Angeles when most of the divisions of thecompany moved to Kansas City, Missouri, in 1993 and Charlotte, North Carolina,in 1994. "I cannot overstate how intense the emotional impact of this kindof move is," he says. "The resistance to change is so great that thehandwriting can be on the wall, services can be in place, but employees may notlet it sink in until the day their jobs end. Then, in my experience, they wereclamoring for services."

Maintaining productivity in a technology company
   
Lucas Digital LTD. is reversing the usual corporate trend by transferringfrom a suburban campus to a downtown location. Overseeing that effort is ChrisGlennon, director of corporate real estate and operations for the company, whichcurrently creates its leading-edge special effects for films in San Rafael,California. Glennon is using his 15-year background in entertainment companymoves to manage the logistical and human sides of the company’s comingrelocation to San Francisco.

    He’s planning the move for 1,500 to 1,800employees, many of whom are in the midst of cutting-edge technologicalentertainment productions, and says that "you can’t just turn off asupercomputer." Glennon has a 36-month planning time line for thetechnology center at the company’s new site, the historic Presidio. "Thisis already a dynamic environment, and we’re picking a date three years out tomove seven different companies," all on different work-flow and deliveryschedules.

    Lucas Digital competed for space at the Presidio, and when it was selected asa finalist, the company president sent all employees an e-mail explaining thereason behind the bid and what the next steps in a move would be. "In ourculture, we like to keep employees informed. Morale is always a concern forus," Glennon explains.

    And this move raises considerable issues for employees. Half of them livewithin 20 minutes of the current location. Commuting into San Francisco meansbridges; there are few mass transit alternatives from Marin County. The SanFrancisco housing market is among the country’s most expensive. Glennon’ssolutions include developing a transportation plan and building numerousamenities into the new facility, such as 300 housing units for employees at thePresidio, subsidized on-site child care, multiple food service and diningalternatives, and a fitness/activities center that will offer aerobics, yoga,tai chi, sculpting, life drawing, and acting. Building the human bridge to anattractive new workplace is Glennon’s focus as the move approaches.

Family ties in the original locations appear to have been the key factor for those who didn't move.

A restaurant recovers
   
Keeping everyone working productively posed different challenges for CraigHeide, director of recruitment for Champps Entertainment, Inc., a restaurantcompany headquartered in Denver. Heide, who oversees human resources, managed acorporate move between October 1 and December 13, 1999. He invited corporateemployees in Minneapolis and Danvers, Massachusetts, to move to Denver, the CEO’schoice for the new headquarters. Like Mitchell, Heide faced an East-Westdilemma. The employees who lived in Danvers were unfamiliar with Denver andreluctant to strain local family ties.

    Champps offered employees the same jobtitles and responsibilities and paid relocation expenses, including the cost ofcommuting for months for employees who had just bought homes in their oldcities. Champps tried to retain everyone and needed to add 15 to 20 new peopleto maintain service to their 21 restaurants across the country. But only 6 of 40employees made the move. Family ties in the original locations appear to havebeen the key factor for those who didn’t move. Undaunted, Heide recruited newstaff, and has had 80 percent retention since then.

Family Channel faces L.A. culture
   
Fox Family Worldwide tested both family and religious ties when it purchasedthe Family Channel, a Pat Robertson-owned company in Virginia Beach, Virginia.Of 250 to 300 people, Fox relocated about 50 to Los Angeles and laid off therest. Beth Cleary, senior vice president for human resources and administration,describes relocating the new employees in terms of her long history withrelocations.

    "Immediately upon acquisition, each employee received a letterabout the relocation with 60 days’ notice that they might be unemployed.Department heads were required to evaluate staff and determine who had thetalent, qualifications, and willingness to move. Everyone had face-to-facecontact, and it was handled in a very fair way." Cleary says corporateculture wasn’t the problem.

    "It was the general culture of L.A."Despite Cleary’s experience and sensitivity to the issues, as many as eight ofthe Family Channel employees who moved to Los Angeles moved back within twomonths, unable to acclimate to life there.

Workforce,December 2000, Volume 79, Number 12, pp. 54-61 SubscribeNow!

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