By Stephanie Armour, USA TODAY 1/21/2008
In what some analysts are calling the worst housing slump since the Great Depression, employers are paying more to get reluctant employees and new hires to sell their homes and relocate for work.
Employees are more reluctant to move because they worry about their ability to sell their homes without taking a loss.
Fourteen percent of employers say they’re more willing to pay to relocate new employees from another area to their company’s location this year compared with last year, according to a joint survey by CareerBuilder.com and Apartments.com, and conducted by Harris Interactive.
The survey included 2,417 hiring managers and 5,727 employees, and had a sampling error of plus or minus 2 percentage points.
“What’s going on in the housing market is causing an increasing reluctance for candidates to consider relocating,” says Sally Stetson, co-founder of Salveson Stetson Group, a Philadelphia executive search firm. “Employers are much more willing to extend corporate housing on a month-to-month basis.”
When asked how much they’d be willing to spend to relocate an employee, 40% say more than $1,000. One-third is willing to spend more than $2,500, and one in 10 is willing to spend more than $10,000.
What employers are doing:
•Extending temporary housing. Employers are extending temporary housing allowances from two to three months to up to eight months, an indicator of how hard it is today for relocating employees to sell their homes.
•Purchasing employees’ homes. Larger companies in some cases will buy the new employee’s home as a buyer of last resort. Home Depot (HD), for example, will buy a relocating employee’s residence once it’s been on the market for 90 days.
In a different approach, some companies offer to subsidize part of a relocating employee’s cost of renting a home in a new location.
“Companies know it’s a tough time, and they’re willing to make it attractive” to relocating employees, says Karen McRae, a vice president at Jenny Pruitt & Associates, an Atlanta real estate firm.
•Letting employees long-distance commute. Some companies will let a new hire or employee who can’t relocate work remotely, or let them commute long distances, going to the main office less frequently.
IBM (IBM) has a large virtual workforce, which helps employees in today’s market because they can often have the flexibility to work where and when they want. Forty percent of IBM’s global population of 355,000 works from a remote location — about 50,000 in the USA, up from 10,000 in 1995.
Employees with families “can hit the ground running if they don’t have to relocate,” says Dan Pelino, IBM’s general manager of global health care and life sciences. “You can find the best talent, independent of where they live.”