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Masterminding Group Moves

May 1, 1996
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Related Topics: Relocation Services, Relocation Management, Featured Article
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Mary Ann Schleyer wasn't surprised at her male employee's request. The Californian was spoiled by sunshine and the Pacific Coast Highway, where he could ride his motorcycle with a T-shirt flapping against a tanned torso. But when faced with the option of giving up his job or moving to Chicago, he opted for the latter—on one condition: Would the company pay the moving expenses for four of his Harley-Davidsons?

"Typically, we wouldn't move all those bikes," says Schleyer, manager of relocation services for Sears, Roebuck and Co. in Tucker, Georgia. "But as a concession for him not having any furniture, we shipped his motorcycles. That was important to him."

Now multiply this one employee's request by 500, and you can well imagine the responsibilities HR relocation managers face during a group move. "God only knows what they sneak onto the moving vans that we don't know about," she says. And household goods are just the tip of the iceberg.

Although far less common than individual moves, group relocations are on the rise, according to Chris Colley, executive vice president of the Washington, D.C.-based Employee Relocation Council. "We seem to be getting more inquiries," says Colley. "HR managers need to talk to their peers in other industries who have managed group moves, so they can anticipate the issues that will arise." Clearly, in an era of downsizing, a drive for lower costs and efficiencies, and access to improved technology, HR managers may face a group move at least once in their career. If your prayers are answered, will you be prepared?

Anticipate the jitters of first-time transferees.
While most individual moves are prompted by a new job opportunity or a promotion, group relocations usually involve a lateral move. They uproot employees whose positions don't historically transfer and who therefore have deep roots and family ties in their communities. Most are likely to be first-time transferees.Without much choice, they're told their job is moving—with or without them.

The reasons for group relos can vary, according to Jan Dickinson, of Dickinson Consulting Group in Portland, Oregon: contraction or expansion; facility expense reduction to control rental fees or the tax burden; proximity to manufacturing operations, suppliers or the marketplace; improving employee commuting and quality of life; mergers or acquisitions. How companies respond to corporate needs also vary. Some companies may want to realign several regional offices into one location. Another may want to centralize one function or division under one roof. Yet others may want to establish a function in a separate state from corporate headquarters, or even move an entire organization from one site to another. Regardless of the reason or solution, HR professionals must be involved in relocation planning from the very beginning, preferably once a decision to move has been made. To facilitate a smooth transition, survivor, Bloomington, Indiana-based State Farm Mutual Automobile Insurance Co., recommends: plan a group relocation far in advance, develop enhanced group benefits and introduce employees to local service providers at the point of destination. Others, such as the American Psychological Association in Washington, D.C., learned that any group move will spell disaster if employees aren't involved in each phase of a move—especially if you're faced with reluctant candidates who increasingly worry about their quality of life and their familial obligations to aging parents, young children and teens. So keep in mind the human factor: You're not just moving boxes and Harleys. You're moving people—emotions, warts and all.

Be an early-bird planner. About six years ago, State Farm Mutual Automobile Insurance Co. made a decision to expand its services to California. The company already had three regional offices in Southern California. It wanted to open a fourth by 1994. "A decision to open another regional office typically is made five years earlier," says Larry Ingrum, staff assistant for relocation services. Land purchasing considerations forced some early planning. The decision also prompted the need to place experienced personnel onsite by opening day.

But in the midst of such plans, the political climate in California changed unfavorably for insurance companies. Many companies threatened to pack up their bags and leave the state as a result of its Proposition 103, which mandated reforms in the insurance industry, such as rollbacks for customers. State Farm, however, reassessed its situation and shifted gears. Instead of bearing higher costs by opening up a fourth regional office, it announced in 1994 that it would realign the three regional offices in Costa Mesa, Westlake Village and Santa Rosa by moving them to Bakersfield, California. The grand opening was scheduled for late 1995. In addition, State Farm announced it would streamline its life/health function and move that division to Bakersfield as well. About 800 employees were affected. "For a majority of them, it was a first-time move," says Ingrum.

When the company was planning to open a fourth office, the move was presented as optional and voluntary. With the realignment, the scenario changed. "Our employees were faced with the [issue] of their jobs moving," says Ingrum. They had to make a decision to lose their jobs or relocate to this 100-square-mile city—located on the southern end of the San Joaquin Valley. About 40 HR personnel also were included in the transfer.

Most companies about to face a similar situation normally would hire a third-party relocation company. State Farm didn't have to outsource. It utilized its own in-house relocation group. Ingrum says the company created the service group in 1987. "We felt we'd provide better employee services by having our own relocation operation." The division, he adds, is part of the human resources department, under benefits and services. During the realignment process, Ingrum served on a corporate team with members from various departments. The team worked through all the issues of the relocation. HR, he explains, began to work in conjunction with other departments to move management into Bakersfield before the grand opening. In addition, the relocation services group administered and counseled employees on the relocation benefits. Ingrum was one of four relocation coordinators who reported to the relocation group and lived in Bakersfield for several months to prepare for the transfers.

"Employees had to make a decision to lose their jobs or relocate."
Larry Ingru, staff assistant for relocation services,
State Farm Mutual Automobile Ins. Co.

After the decision to realign its California offices, State Farm also set up a Start Team whose mission was to staff the office, build relationships in the community, and set policies and procedures for the new operations. Ellen D'Andrea, senior HR specialist, not only was pivotal on the Start Team, the New Jersey native was a first-time transferee herself.

D'Andrea says she was undaunted by the challenge and opportunity of working on a project of that scale. "I didn't know anything about it at the time. It was scary. But I knew I had the ability to learn as long as somebody was good enough to teach me," she says. That individual was Ingrum, who arrived in Bakersfield on temporary assignment one month after D'Andrea.

Together, they and others on the Start Team had their own individual missions. D'Andrea was in charge of the Welcome Center and the relocation process in Bakersfield; another individual was in charge of the selection process of employees from other regions. Two others were in charge of recruiting local new-hires. Ingrum oversaw the team and served as the point of contact for anyone who had questions about benefits for the group move.

Enhance group benefits as an incentive to prospective transferees.
Getting employees to move from prime areas, such as Costa Mesa, Westlake Village and Santa Rosa, required State Farm to develop a fresh approach to the benefits package. Without one, State Farm wouldn't be successful in persuading its employees to relocate. Ingrum says the company created a few new enhanced benefits. For example, because the employees wouldn't be moving for a promotion or better salary like individual transferees, State Farm provided a lateral move bonus—a flat fee of $1,000. Homeowners and renters were both given appropriate allowances. Renters were given up to $500 for the first month's rent and a reimbursement of the security deposit—also up to $500. Homeowners, on the other hand, also were protected by State Farm. "We enhanced our California loss-on-sale policy," says Ingrum. If the buyout was less than what the employee paid for the home, the company covered a portion of that loss. Normally, with individual moves, the cap is $20,000. With the group moves, State Farm covered a portion of losses beyond $20,000 because of the weak returns on home sales in California.

What the Start Team didn't expect, however, was that 73% of those wanting homes in Bakersfield wanted to build their dream house. That created a lot of builder-related issues. If the homes weren't completed, HR assisted in finding temporary living arrangements and expected productivity to dip until the employees' families were settled comfortably.

Even before building a new home, consider the trauma first-time transferees face when they have to put their home up for sale. Someone who may have had a home with a leaky basement may have lived with it for years. It doesn't bother them. "But it's a necessity to get the home in the right condition [before sale] and remediate any problems," Sears' Schleyer says. HR has the delicate responsibility of educating its new transferees along the way. "People who have never moved don't understand what the big deal is."

HR must also help employees decide whether they want to rent, purchase or build a new home. Owning one's home or land always has been part of the American culture. However, as perceptions of the traditional home change, so will the lifestyle and needs of the relocatee. To assist employees in evaluating their options, HR should have them prepare a list of pros and cons for each option, says Beverly D. Roman, publisher of "Relocation... 2000." "They need to know the existing real estate market, the available interest rates and the types of rental units in the area," she says. People choose rentals for several reasons: They desire the flexibility that renting affords; they may have lost money on a recent home sale and choose not to repeat the mistake; they're encouraged by employers to rent because it's less hassle to move them; or they simply don't want the responsibility of owning a home. Those desiring homes, on the other hand, usually choose that option for two main reasons: They prefer larger and more private living quarters or they want or need the tax advantages of home ownership, says Roman. In either case, HR relocation managers need to provide the information and resources so employees can make the right decisions.

Make community relations user-friendly.
HR also should cultivate ties with the local business and service agencies far in advance. Not just to assist the incoming transfers, but to help establish local businesses' mutual interest in the move. For example, many transferees will arrive as couples and families who will interact with local businesses, service agencies, schools, churches and civic groups. These employees will become new residents and patrons of their new community. Then again, others in a small town may not welcome the additional burden of more children in their overcrowded classrooms and apartments. Therefore, the local media also should be approached by HR to inform the community about the merits of a company's grand opening or expansion. For example, if a company is opening up a new facility, the community might be more likely to welcome the arrival if locals were to be recruited for some jobs. By ensuring an early buy-in, the adjustment for employee and community will be that much smoother. That's why State Farm's relocation was well-received by the city of Bakersfield. "We had meetings with builders, realtors and lenders to explain our benefits package, so they'd know what they'd be encountering with our transferees. At the same time, we explained our expectations in working with them—that they'd be fair and [professional] with our employees," says D'Andrea. "[That being established] people in Bakersfield was excited."

As HR laid the foundation between State Farm and the community, the next step was to alleviate the fears of prospective transferees. State Farm, therefore, set up a Welcome Center. Headed by D'Andrea, the center became a place to bring one's questions, meet the various financial lenders, school representatives and other community service providers. The company provided a three-day visit to Bakersfield, which included food and accommodations. On the first day, the employees were given a presentation about relocation benefits, what they needed for a loan, how to begin the appraisal process for their current homes and what kind of administrative services for moving household goods would be available. Employees were then divided up into two groups—those that wanted to tour the residential areas in order to buy a home or those that wanted to go on a rental tour. On the second day, about 35 community representatives or organizations participated in an information fair. Here, the employees were able to seek answers to their specific questions about the Bakersfield community.

"We explained our expectations - that they'd be fair with our employees.
Ellen D'Andrea, senior HR specialist,
State Farm Mutual automobile Ins. Co.

Had the employees lived out of state, the insurance company could also have used the Internet to introduce employees to the place of destination. The Greater Bakersfield Chamber of Commerce, for example, created a Web site (http:// www. bbol.org/) that presents its city's mission and vision statements; calendar of Chamber events; an historical overview, demographics, weather information and employment statistics—with a list of the top employers of the community. Moreover, users can click to the Bakersfield Californian to read some of the newspaper articles online. By giving their employees several opportunities to learn about Bakersfield, the State Farm relocation went smoother than most because the employees' anxieties were mitigated. "They know their lives are in an upheaval, and they're hungry for information. Don't leave employees on hold," says Ingrum.

Involve your employees in the relocation process.
Imagine being told your entire organization is going to be moved. Not to another city, necessarily. Just to another spot within the same metropolitan area. That's what happened to the 400-plus staff of the American Psychological Association (APA) in Washington, D.C. In January 1992, the APA relocated from three locations in the greater D.C. area to a newly constructed headquarters near downtown. Aside from the cost benefits of selling its property, the APA's move brought everyone under one roof. "Even though we weren't far apart, we could never have the staff together in one space. It also took awhile to get back and forth between buildings and there was duplication of office services," says HR Director Judy Maggard.

Once the decision to move was made, Skip Calvert and another colleague spent an entire two years planning the relocation. "We talked to many other groups that had relocated, learning from their experiences," says Calvert, director of operations and office services.

He and other APA managers also correctly anticipated the emotional trauma associated with the move. Being a psychological organization seemed to work to its advantage: The people factor remained in the forefront of executive decisions. For example, the staff became involved from the time the move was decided. In the summer of 1990, it reviewed current and future space needs. Department heads made lists of their staff members and of current files, workrooms and equipment. They verified and updated current information, and then projected their space needs in the new building. The interior design firm asked department heads which departments they interacted with the most. The APA Monitor, for example, had to be on the same floor as the executive offices because the newspaper staff frequently spoke to the top-level managers.

Another example of employee involvement was the Coordinated Committee for Administration and Management, or CCAM. This group developed the new policies and procedures and recommended them to the executive staff. It was composed of representatives from each of the eight directorates, including the director of human resources, says Calvert. "CCAM's premise was that we needed input to the decision-making process from all segments of the organization," he says.

APA maintained communication with its employees in a variety of ways: focus groups, a newsletter, a moving team and through counseling with the EAP. The focus groups in each division discussed their needs within workstation configurations. For example, they tested five lines of chairs and chose one manufacturer. "We never reached consensus, but active participation went a long way toward achieving acceptance of the final decision," says Calvert. Because face-to-face communication wasn't always possible, the APA published a newsletter to minimize rumors and quell anxieties. With more than 400 employees in three locations, little issues magnified instantly. The newsletter was created about 10 months before the move and was published every six weeks—and in the last few months every three weeks. Staff from all levels contributed articles to address all kinds of worries: whether the move would impact salaries; when computers would be shut down; and if the new location was safe.

Then six months before the relocation, the APA recognized the need to create the Move Committee to handle the logistics: creating file spaces, packing and marking boxes, and implementing CCAM decisions. In addition, a cross-departmental group composed of seven people from each building was formed to develop team spirit. "The committee brought together people who never had worked previously as a team," says Calvert.

Anticipating employee anxieties, the APA enlisted the support of its EAP provider. The EAP executive director attended all of the Move Commitee's meetings and functioned as a resource on stress. She also helped HR develop a staff questionnaire eliciting employee concerns about the move. The survey identified these issues: commuting time and costs, security, postal services, shopping and restaurants. When necessary, the EAP representative also met privately with the employees to discuss their concerns as well. The counselor also was on call immediately following the relocation. That went a long way toward achieving a smooth transition, says Calvert.

Planning and executing the move was successful overall. But the APA didn't drop its relocation responsibilities after the move. "The biggest adjustment," says Maggard, "was nothing official. It was the unofficial aspect. We were now all in one building together. We didn't have the barriers we had before in communicating." The APA staff now had immediate access to each other. And yet, when employees moved into their offices, they didn't interact with those on other floors. HR had to encourage the staff to visit each other's floors and hold "open houses" so individuals would begin to feel comfortable with the new working environment. "Now we have a lot of all-employee activities and brown-bag get-togethers. People are mixing more freely and getting to know each other," says Maggard. Did being psychologists help the relocation? The APA thinks so. "We did a good job. In today's economy, there's mistrust, and people overreact. The main thing is to involve your staff as much as you can," she says. By involving employees, HR managers can better understand their concerns and minimize problems.

Put yourself in the employees' shoes.
When Chicago-based Sears, Roebuck and Co. centralized its merchandise replenishment function five years ago, the company relocated approximately 100 employees from Los Angeles, Dallas, Philadelphia and Atlanta to its headquarters in Illinois. It wasn't easy because the "windy city" was different from the climate, culture and lifestyle of the other cities. Sears' HR, therefore, had to anticipate how these disparities would influence employees' transfer decisions.

"You have a more emotional transferee in these situations," says Schleyer. One employee, she recalls, decided not to move from Dallas. The employee owned a farm and raised horses. "We don't move livestock," she says. He also was helping raise his grandchildren so that was another reason for declining the transfer.

There's also the issue of cost of living and the disparity between employees' home equities. Those from Los Angeles were able to buy better homes than those from Atlanta because of Los Angeles' higher property values. "If you're living in a $70,000 home, and you're sitting next to someone living in a $250,000 home and both earn the same amount of money, it's human nature [to be envious]." Few from Atlanta, she says, ended up making the move. "Once you live in Atlanta, you don't want to leave. To go to Chicago with its intense winters—that's a lot to adjust to, as well as the cost of living."

But Schleyer doesn't measure the success of a relocation by numbers only. She expects a small percentage of employees to bid farewell to their jobs because of family ties, lifestyle choices, cost of living and other personal reasons. What she uses as her gauge is something more qualitative—how those who actually move learn to adjust and become productive again in their new environment. She believes it begins with understanding: "I truly believe you need to experience a move to empathize. If you can walk in their [transferees'] shoes, you can better relate and assist them because you know where they're at—because you've been there," she says.

Personnel Journal, May 1996, Vol. 75, No. 5, pp. 64-72.

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